Tag: efficient markets

zombie economics

I have just received a copy of a fabulous new book by Australian economist, John Quiggin: Zombie Economics: How Dead Ideas Still Walk Among Us (Princeton). I have so far had only an opportunity to dip into parts of the…

more on socialized finance

Last week I posted about the massive tax breaks enjoyed by hedge funds managers, among others. This morning David Weidner puts more numbers around this outrageous tax subsidy for some of the richest people on earth: For example, the top…

some reality about really big "rational actors"

In efficient markets the mistakes of individual participants are corrected by the aggregate performance of the market as a whole. But when companies become so large that their mistakes spill out into the pubic arena, requiring some kind of public intervention to repair or salvage the situation, the pubic has an interest in reducing the likelihood of these mistakes and decisions on risk management cannot be left to the companies themselves. So when it comes to regulation, size really does matter in important ways.