The assumption of perfectly rational, maximizing behavior won out until recently in the art of modeling, not because it often reflects reality, but b… - Didier Sornette

The old Wall Street saying " buy on rumors, sell on the news," is alive and well, as can be seen from numerous sources in the media and the Internet. Rumors can drive herding behavior strongly.

The point is that humans are rarely at their best when they use rational reasoning.

At another level, market crashes constitute beautiful examples of events that we would all like to forecast. The arrow of time is inexorably projecting us toward the undetermined future. Predicting the future captures the imagination of all and is perhaps the greatest challenge.