My friend David R. sent me the link to a paper from the investigating the effect that international footbal competitions have on the stock market. The authors found a statistically significant decline in stock returns after losses in World Cup elimination matches. Their model attributes the loss effect on reduced productivity or loss revenues. Curiously, they found no uptick corresponding to victories.

One reason they chose to investigate this phenomenon was as a way to see if just overall investor mood, independent of market information and conditions, alone has an effect on market reactions.

Using a cross-seciton of 42 countries, we find that losses in international footbal matches have an economically and statistically significant negative effect on the losing country's stock market.

The World Cup draw is tomorrow! The US barely missed being one of the eight seeded teams (but rival Mexico was seeded), chiefly because of the poor showing at the 1998 Cup. The FIFA rankings have a long memory, unfortunately. On the flip side, another strong run in Germany would go a long ways towards beeing seeded in 2010.

Don't forget to set your Tivo to record it oon ESPN2 at 3pm EST if you can't skip work to watch. Hmmm, I wonder if there's a webcast to follow? Remember to get the official World Cup Draw Worksheet and Beer Coaster.

Update: you can follow the draw online.

Went out with Greg, Sandy, Nyk, and Corey to hang out and have a beer or more this evening. Some notable quotes from the evening:

Sandy

Oh was I drunk? Sometimes I'm a virgin when I'm drunk

Nyk

Greg, why do you have to be so f*cking belligerent

Corey

Five or six long island ice teas sounds pretty good right about now.

Schnippy aka Greg

Should I be watching Family Guy?

Me

It's not named after the ship. It's named after the ship's class.