Efficient Markets (not!)
Yet Another Takedown (this time by SMBC )
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Efficient Markets? Really? Anyone seen AOL?
The Chicago School has a lot to answer for, and the Efficient Markets BS is probably right up there on the top of the list. Exhibit A is the recent purchase of 800 AOL Patents for $1 Billion , which promptly caused AOL's stock to shoot up 45% . Sooo, there are a bunch of analysts watching AOL's stock, and they are (theoretically) intimately aware of AOL's assets, revenues, blah, blah. And none, none of them predicted this. Ditto for the public. Ditto for the market. In short, our oh so rational and efficient market bit the big kishko on this one. I know, I know, the Chicago apologists are out there right now saying " on average the markets are rational ", " in the long run its efficient ", etc., etc. And, to quasi-quote Keynes (oooh, that should piss of the Chicago-ans), "In the long run, we are all dead ". A theory that doesn't actually work all that well, and which is pretty useless at making any form of predictio...