K-Contagion: Sound, Space and Speed in Psy's 'Gangnam Style'

Park Jae-Sang’s (otherwise known as PSY) bewilderingly successful pop contagion ‘Gangnam Style’ needs no introduction. As of January 2013, it has become the most watched video in YouTube’s history and has garnered over 1.23 billion hits since. ‘Gangnam Style’ has also become a rapid global pop phenomenon with multiple parodic reproductions, imitations and adaptations; Rapper PSY himself has become an international name and styled as the ‘anti-hero’ of the glamour-driven K-pop scene. His fame has transcended the social sphere and permeated the political stratosphere with politicians such as Barrack Obama and David Cameron being among the many whom PSY has exchanged pleasantries with. Apart from breaking ground and creating social and media history in many ways, ‘Gangnam Style’ has even been purported by UN Secretary-General Ban Ki Moon to be a “force for world peace” – cultural barriers are demolished as the world dances. Underlying this sentiment is the video’s almost universal appeal that assumes a supracultural yet equally paradoxical translatability: Korea’s neoteric ‘K-Wave’ phenomenon is at once local yet global, and where the latter is predicated on the former quality. The paper’s concern is thus two-fold. It will consider the dromological aspects of this musical contagion as it exemplifies and performs quite literally Paul Virilio’s thesis that the modern condition is driven by speed yet arrested to a dictatorship of movement. While many theories have been put forward for this astounding pop peculiarity, this paper would also examine the intercultural currents that advocate such a global (pop) cultural response. Through an analysis of sonic qualities – digital techno-beat rhythms, synth-based musicality, cyclical lyrics, horse-galloping movements – and acoustic receptions, it will consider the simultaneous and dichotomous currents of glocalisation and globalisation as it relates to the ways in which sonic ‘hyper-links’ establish new concepts of global-cultural identities even as these seem to be interrogated in the borderless worlds of hyper-mediatised realities and cultural technologies.

Mutual Funds and Mispriced Stocks

We find a strong negative predictive relation between the propensity of active mutual funds to hold overpriced stocks and their subsequent performance. High-propensity funds, or overpriced funds, display poor stock picking skills as they further purchase overpriced stocks during episodes of fund inflows. Interestingly, overpriced funds attract considerable capital inflows during high sentiment episodes, after controlling for the effects of past fund performance. The overall evidence is consistent with the notion that overpriced funds, unable to improve their stock picking skills through time, target optimistic investors by engaging in marketing activities and catering to preferences for skewed returns.

Housing booms and media coverage

This article analyses news media coverage of the housing market. Building on theories of media influence where word of mouth is the final mechanism of opinion change but media initiate discourse, I examine the relationship between news media and the recent UK house price boom. Over 30 000 articles on the UK housing market from the period 1993 to 2008 are analysed, and it is found that media Granger-caused real house price changes, suggesting the media may have influenced opinions on the housing market. However, media sentiment on the housing market did not change with the secular increase in house prices in the 2000s, suggesting that the media did not contribute to the UK’s housing boom and may have helped constrain it.

Optimal Time Series Momentum

We develop a continuous-time asset price model to capture the timeseries momentum documented recently. The underlying stochastic delay differentialsystem facilitates the analysis of effects of different time horizons used bymomentum trading. By studying an optimal asset allocation problem, we find thatthe performance of time series momentum strategy can be significantly improvedby combining with market fundamentals and timing opportunity with respect tomarket trend and volatility. Furthermore, the results also hold for different timehorizons, the out-of-sample tests and with short-sale constraints. The outperformanceof the optimal strategy is immune to market states, investor sentiment andmarket volatility.

Time-Varying Liquidity and Momentum Profits

A basic intuition is that arbitrage is easier when markets are most liquid. Surprisingly, we find that momentum profits are markedly larger in liquid market states. This finding is not explained by variation in liquidity risk, time-varying exposure to risk factors, or changes in macroeconomic condition, cross-sectional return dispersion, and investor sentiment. The predictive performance of aggregate market illiquidity for momentum profits uniformly exceed that of market return and market volatility states. While momentum strategies are unconditionally unprofitable in US, Japan, and Eurozone countries in the last decade, they are substantial following liquid market states.

Scaling Up Market Anomalies

This paper implements momentum among a host of market anomalies. Our investment universe consists of the 15 top (long-leg) and 15 bottom (short-leg) anomaly portfolios. The proposed active strategy buys (sells short) a subset of the top (bottom) anomaly portfolios based on past one-month return. The evidence shows statistically strong and economically meaningful persistence in anomaly payoffs. Our strategy consistently outperforms a naive benchmark that equal weights anomalies and yields an abnormal monthly return ranging between 1.27% and 1.47%. The persistence is robust to the post-2000 period, and various other considerations, and is stronger following episodes of high investor sentiment.

The direction of media influence: Real-estate news and the stock market

This paper uses a novel identification strategy to test the influence of news media on the stock market. Because the stock market does not impact the media coverage of the housing market, a relationship between real-estate news and shares of companies engaged in the housing market is attributable media influence. I find that the content of reporting exhibits a significant relationship with stock returns, and the amount of news with the number of trades. These relationships exist even after controlling for known risk factors, housing market performance and intra-week correlation. This finding is consistent with the function of the media as a source of information and sentiment in financial markets.