Re: Re: market "socialism," etc.

[Jim Devine <jdevine@xxxxxxxxxxxxxxx>]

At 03:15 PM 7/19/00 -0400, you wrote:
> Excellent stuff, Jim.

thanks! (In the long version, I told Justin to go read Zizek. Never having
read the dude, not only did I probably misspell his name, but I haven't the
slightest idea what to recommend...)

> I'm emerging from my shell to add one point. Justin's faith in the
> informational content of prices is touching. Developments in financial
> theory over the last 15 or so years should counsel a bit more skepticism.
> Efficient market theory has been importantly discredited, and
> Shiller-style analyses of excess volatility and mean reversion are taken a
> lot more seriously, even by the likes of Eugene Fama. There are good
> psychological reasons behind overreaction - e.g., the human tendency to
> value the most recent piece of information excessively, at the expense of
> earlier knowledge. You also have herding, fads, crowd behavior, etc. So
> there's lots of noise mixed in with signal.

yeah, the analysis of what's wrong with prices in financial markets has
informed our knowledge of what's wrong with prices elsewhere.

come back, Doug!

Jim Devine jdevine@xxxxxxx &  http://bellarmine.lmu.edu/~jdevine