A Curious Little Blog

"How Markets Fail" by John Cassidy The first two-thirds of this book cover the history of economic thought.  It is interesting, and useful, but the author has some fundamental misunderstandings about market theory that undermine his argument. The idea of the efficient market does not mean -- and would be stupid if it did mean -- that every stock is priced correctly.  Humans don't know the future, so they cannot be expected to anticipate the future of a corporation.  What the efficient market theory says is that the price of a stock reflects all information available at any given time.  This doesn't even mean that the price is the "correct" one for a given stock (if one could distill a correct cost based on a company's future profits).  It only means that, were any more information to come to light, people would adjust the price they would pay for a stock to account for it.  This is basically true by definition.  If someone thinks a sto

Those who spend a lot of time around me might suspect that this post is another attempt to drag the Peace of Westphalia into anything and everything, but in this case I am entirely innocent.  The idea of linking Syria and Westphalia had never occurred to me until I stumbled across it on an unrelated search last week.  I found that it was not a new or isolated connection, but one that has been going since the beginning of the Arab Spring and has been raised by several people from different angles. The earliest reference that I have seen (without spending much time trying to ferret out exactly how far back this goes) is this article by Henry Kissinger in the Washington Post nearly two years ago.  He approaches Westphalia from the traditional standpoint of sovereignty, which is kind of depressing because I would hope that people would start getting over that mistake by now, but hardly surprising.  Most other references I have seen link Syria and Westphalia in a similar fashion:  interv