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Friday, January 02, 2009

Each sunspot is, in effect, an eruption of magnetism. The Sun is a giant dynamo, filled with thrashing waves of energy in the form of magnetic fields. Like the rubber band that powers a model plane, now and again they become wound too tight and a distorted mass of high-tension material pops out to form a visible blemish on the solar surface, or a flare that shoots into space.

As the Sun's interior writhes, a storm of charged particles called the solar wind shoots towards the Earth. When it reaches us, it interacts with the outer atmosphere to form the ionosphere, the layer of charged atoms and molecules that marks the edge of space.

A burst of spottiness on the Sun can lead to problems with long-distance radio, which bounces its waves off that layer of the atmosphere. An overexcited ionosphere also causes communication blackouts, destroys the solar panels used by satellites to generate electricity, and may even force them to plunge to the ground before their time, as the heated atmosphere slows them down.

Records of spots – like those of stocks – go back a long way; over the past two centuries and more, the Sun has been even more agitated than is Wall Street (and for reasons almost as obscure). As of now it is spotless, proof of a deep slump in its activity. Its immaculate state in this season of rebirth is in stark contrast with the millennium year, when on some days the spot index (whose level, like that of the market, depends on quite what is being counted) hit over 200.

Solar physicists still speak with awe of the Bastille Day storm of July 14, 2000, when so much energy was emitted that the Northern Lights were seen in Texas, and the Global Positioning System was thrown out of action for hours.

The current calm, however, means that the solar wind is less powerful than it has been for half a century. In turn, that has caused the ionosphere to sink to levels never before measured. At night, the atmosphere now ends – and the void begins – about 250 miles above our heads; which is far less than its average of around 400 miles. For all of us, space is a lot closer than it was at the start of the Space Age.

When will the Sun's internal economy pick up again, and when will its energy exports once more heat up our own chilly atmosphere? Studying the records, which began in 1755, some see an 11-year cycle, although there is much argument about quite how regular this is.

Yet even though the sunspot count does seem to be less chaotic than the stock market, there is an unexpected tie between the two. In 1879, Professor Jevons, an ornament of my employer, University College London, and inventor of a philosophical machine called the Logic Piano, suggested that from "the Sun, which is truly 'of this great world both eye and soul', we derive our strength and our weakness, our success and our failure, our elation in commercial mania, and our despondency and ruin in commercial collapse".

Jevons saw a close fit between commercial activity (and stock prices) over two centuries and what he identified as a solar cycle lasting 10.466 years. The Times looked hard at the figures, and was (rightly) dismissive. The fit was coincidence – as, probably, is the one we see in these depressed times.

But the sunspot effect could nevertheless turn out to be real: if everyone believes that the economy does depend on these mythic blemishes, then the FTSE will indeed begin to move with the state of the Sun. In fact, the phrase "sunspot economics" refers to any widespread, and mistaken, belief that some random variable is influencing the market: a healthy bank may crash because, by chance, too many people withdraw money on one day, the rumour goes round that it is in trouble, and a crowd of panicked depositors arrives on its step. Self-fulfilling pessimism can be a dangerous thing.

The coming year is expected to mark the start of a new season of solar activity – so will there be a burst of economic dynamism to match? A year ago, Nasa predicted that the next magnetic attack should have started last March, but there is no sign of it – indeed, just before Christmas, the authorities issued an "All-Quiet Alert" about the state of the Sun (which sounds like a contradiction in terms). My financial advice for the next 12 months is to stop picking at the spots.


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