Home > Dead Ideas book > Invulnerable zombies – the EMH

Invulnerable zombies – the EMH

February 27th, 2010

My book is due for publication in the US Fall, so work on my added sections on reanimation is starting to feel like one of those games where you have to kill all the zombies to get to the antidote before you fall victim yourself. Here’s another one – more on the way

p.p1 {margin: 6.0px 0.0px 0.0px 0.0px; text-align: justify; font: 16.0px ‘Century Schoolbook’; min-height: 19.0px}
p.p2 {margin: 6.0px 0.0px 0.0px 0.0px; text-align: justify; font: 16.0px ‘Century Schoolbook’}
p.p3 {margin: 6.0px 0.0px 6.0px 54.0px; text-align: justify; font: 12.0px ‘Century Schoolbook’}
p.p4 {margin: 6.0px 0.0px 6.0px 54.0px; text-align: justify; font: 12.0px ‘Century Schoolbook’; min-height: 15.0px}
p.p5 {margin: 6.0px 0.0px 0.0px 0.0px; text-align: justify; font: 12.0px ‘Century Schoolbook’}

The ultimate zombie is one that is completely invulnerable. Neither special bullets nor hammer blows nor even decapitation can finally lay this undead being to rest. But dramatic logic requires that a zombie invulnerable to external threats must be subject to a subtle, but ultimately terminal, flaw that ends in its own destruction.

Ultimate zombies arise quite commonly in science and economics in the form of ideas that are immune from refutation. The classic examples arise from the popularised versions of Freudian psychology, centred on the Oedipus complex, named for the Greek tragic hero who unknowingly killed his father and married his mother. If a son hates his father, this is, obviously, evidence of the Oedipus complex. But, if he loves his father, this is explained as a repressed Oedipus complex. With rules like this, Freudian psychology can never be refuted.

But as a string of philosophers of science, being with the late Karl Popper, have shown, a theory that can’t be refuted by any conceivable evidence isn’t really a theory at all. All it says, in the end, is ‘anything can happen, and probably will’.

The global financial crisis, along with the earlier dotcom crisis has shown that, on any ordinary understanding of its terms, the efficient markets hypothesis can’t be right. Despite reaching a scale and sophistication unparalleled in history, global financial markets have shown themselves subject to the same manias, bubbles and busts that were seen in the Dutch tulip craze of the 17th century.

So supporters of the efficient markets hypothesis have sought a redefinition that would make it invulnerable to refutation. Their central argument is one that has already been discussed - if it is possible to diagnose the existence of a bubble, then it is possible to make arbitrarily large profits betting against it. And if someone like Warren Buffett has in fact done this, that can be put down to luck. Only if everybody can make money betting against the market can the EMH be wrong. But of course, it’s impossible for everyone to bet against the market – the market is just the aggregate of bets.

This argument in one form or another has been put forward by all the leading defenders of the EMH, notably including Eugene Fama and John Cochrane of Chicago and Scott Sumner of Bentley University

This set of observations from Scott Sumner in a blog post aptly titled ‘Defending the indefensible’ at least recognises the difficulties of the position

But why is Fama’s theory now in such disrepute? Because in the past ten years the world economy has seen two very important bubble-like patterns, indeed arguably the only two such market cycles in the US during my lifetime with macro significance. And they were both predicted by lots of experts because they violated popular theories of fundamentals. So start with the cognitive illusion that people have that makes them see bubbles even where there don’t exist. People think they have made accurate predictions because an upswing is always EVENTUALLY followed by a downturn. Then add in the fact that The Economist really did make accurate predictions in two of the most important events in modern history. Do you think it will be possible to convince them that they just got lucky? About as likely as a husband convincing an already suspicious wife that he is innocent after twice being caught in bed with two separate women. So I feel sorry for Fama. He’s probably right, but I don’t see how he could ever convince anyone in this environment. It would be like trying to convince someone that neoliberalism was the right policy in 1933.

As a well known blogger would say, ‘Indeed’. Looking at the evidence of the two gigantic bubbles of the last decade, it’s hard to see how Sumner maintains his own faith, and he never really gives an explanation, except to say that it’s easy to misperceive bubbles. As far as macroeconomics is concerned, the experience of the Great Depression and of the current Global Financial Crisis (which as Sumner implies, really began with the 2001 recessions) is pretty strong evidence that neoliberalism is not the right policy, at least not for all occasions and not in the forms that prevailed in the 1920s or the 1990s.

But the ultimate response to this invulnerable zombie must be the same as Popper on Freudian psychology. If the Great Depression, the dotcom boom and bust and the current Global Financial Crisis are all consistent with the efficient markets hypothesis, the hypothesis can’t tell us much of interest about anything. At most, it says that even when markets are way out of line with economic reality, it is hard to exploit this fact to make a profit. Most of us (me and Krugman at any rate) already knew that, and confined ourselves to getting out of stocks when they seemed absurdly overvalued.

Categories: Dead Ideas book Tags:
  1. jquiggin
    March 2nd, 2010 at 08:29 | #1

    @Andrew Reynolds
    Not clear to me, I’m afraid.

  2. March 2nd, 2010 at 15:39 | #2

    PrQ,

    when hitler captured the german state he did so within a legal framework

    I cannot see how that is not a violation of Godwin’s Law of Nazi Analogies.
    .
    smiths,
    Nevertheless, I am happy to continue – I have a little more time at the moment.
    .
    Sure, spot and forward trading in forex is not regulated in the same way that the credit markets are – and they are not regulated in the same way that stock markets are or the same way that the food markets are. They are regulated, though.
    If you want to know how – each and every trade is recorded (and, by regulation, has to be recorded by the trading entity). The banks (according to its regulator approved trading, large exposure and other prudential limits) then check that none of the internal limits are broken. The total exposure is recorded by the regulated bank and communicated to the regulator that checks that prudential limits are not broken. Depending on how big the bank is and how regular the trading activity is this can be anything from a weekly to a quarterly event.
    If the limits are broken, the bank has to report that to the regulator as soon as it happens (i.e. in near real time) if it is a serious breach or with one or more day’s grace if it is a small one (but this varies from jurisdiction to jurisdiction).
    Additionally, the regulators review trading records on their regulatory visits, auditors review the records at least twice a year (and up to 4 times in the US) and the accounting and other regulatory disclosures also have to be made, typically quarterly.
    Again, if that is “unregulated” I would hate to see what you mean by “regulated”.
    .
    On the AIG question – are you seeking to have regulations framed in such a way that no business can fail? look up the topic of “operational risk” and see how difficult or impossible that is.

  3. Freelander
    March 2nd, 2010 at 17:37 | #3

    @Andrew Reynolds

    And you certainly conform to conventions that have no inherent rationality.

    The AIG did worse than fail. It engaged in activity that was fraudulent and grossly negligent. If their were no laws against their activities that is a failure of the law; a result of the activities of Greenspam and other libertarian market worships stop those laws from being enacted.

  4. Freelander
    March 2nd, 2010 at 17:43 | #4

    Andrew Reynolds :
    They are regulated, though.
    If you want to know how – each and every trade is recorded (and, by regulation, has to be recorded by the trading entity). The banks (according to its regulator approved trading, large exposure and other prudential limits) then check that none of the internal limits are broken. The total exposure is recorded by the regulated bank and communicated to the regulator that checks that prudential limits are not broken. Depending on how big the bank is and how regular the trading activity is this can be anything from a weekly to a quarterly event.
    If the limits are broken, the bank has to report that to the regulator as soon as it happens (i.e. in near real time) if it is a serious breach or with one or more day’s grace if it is a small one (but this varies from jurisdiction to jurisdiction).
    Additionally, the regulators review trading records on their regulatory visits, auditors review the records at least twice a year (and up to 4 times in the US) and the accounting and other regulatory disclosures also have to be made, typically quarterly.
    Again, if that is “unregulated” I would hate to see what you mean by “regulated”.

    Interesting that you appear to believe that effective and adequate regulation is simply discharged by a series of ritualistic behaviors.

    If that’s what you consider adequate regulation I would like to see what you consider inadequate regulation, or is no regulation more than sufficient?

  5. smiths
    March 2nd, 2010 at 18:45 | #5

    i think its the nuances you miss Andrew R,
    between the letter and the spirit of the laws, whether they be regulatory laws or godwins laws,
    on the subject of which

    It is considered poor form to raise such a comparison arbitrarily with the motive of ending the thread.

    by letter you claim to enjoy taking part in discussions but in spirit you show something other at times

  6. March 3rd, 2010 at 01:48 | #6

    smiths,
    If you read that and actually think about what you just pasted in, the comparison mentioned as being raised was the one raised by you – i.e. it is an attempt to end the thread by simply mentioning his name in comparison, not my pointing out that you had raised the comparison.
    Wrong again.
    In any case, I continued by answering your questions to the best of my ability (in a blog comment format at least) and you have now got fixated on your own Godwin’s breach.
    You were also making good progress on the punctuation.
    .
    Freelander,
    If you are right, then no regulation in the world is going to stop that. Fraud is simply illegal. Regulation is not intended to prevent law-breaking – the criminal law is for that. Regulation is intended to restrict the (otherwise legal) activities of the regulated.
    Sorry – but you just busted our own argument.
    As for it being “ritualistic behaviours” you again show your ignorance of what actually happens. Try doing a breach report and seeing how a regulator reacts. I have – I can assure you that there is no mere ritual about it.

  7. Billikin
    March 3rd, 2010 at 07:44 | #7

    I just ran across a quote you might like:

    “Oh, would that my mind could let fall its dead ideas,
    as the tree does its withered leaves.”
    – Andre Gide
    :)

  8. Freelander
    March 3rd, 2010 at 08:38 | #8

    @Andrew Reynolds

    Fraud is not ‘illegal’ without laws (or regulations which are laws) to make it so. “Regulation is intended to restrict the (otherwise legal) activities of the regulated.” Trivially true. Like laws against murder are intended to restrict what without those laws would be the otherwise legal activity of murder. There were proposals to regulate CDSs. Greenspam stopped that happening. They were the primary instrument of fraud in the whole debacle. Without CDSs the tranches could not have been sold around the world to the variety of unsuspecting entities that were restricted to buying only ‘safe’ products. Without selling these there wouldn’t have been more money for the money go round. Very worrying for your customers that even now you don’t seem to yet have a handle on what happened. Your antipathy for the laws you operate under should also be a concern for your punters, but then I guess that why some would call them mug punters. Maybe they are in short supply you seem to have a bit of free time?

  9. March 3rd, 2010 at 09:57 | #9

    It is going to take a long time to deprogramme people about the EMH.

    I posted a paper recently looking at the ideal form of instrument for bank capital regulation. Felix Salmon picked up, and some of the comments on his blog were instructive, vociferously asking why does it matter what instrument we use if the ultimate risk and return are the same? Of course if that were true then there would be no banks to even regulate in the first place.

    It seems to me that many people first resort default to an EMH argument whenever faced with an area or problem in finance that is new and unfamiliar to them. It is only in areas they are familiar with that they would never countenance it.

  10. March 3rd, 2010 at 10:51 | #10

    Will,
    If you believe that the consequences of “…the ultimate risk and return are the same” would mean that there would be no banking system then you (IMHO) have missed the point of there being a banking system.
    The main reason a banking system exists is time preference – savers normally want reasonably free access to their deposits within the banks, but borrowers need long term access to those same funds so they have a reasonably stable funding base. Properly managed, that is the reason banks exist and make profits – they take funds on short term and then transform them into long term funds.
    .
    Freelander,
    Do you mean CDSs or CDOs? They are completely different instruments. It was the CDOs that were commonly bought and sold but the CDSs that brought down AIG. Your argument makes some superficial sense if you mean CDOs, but if, as you state, you mean CDSs then it seems nonsensical.

  11. smiths
    March 3rd, 2010 at 10:54 | #11

    (Greenspan) noted that the immense and largely unregulated business of spreading financial risk widely, through the use of exotic financial instruments called derivatives, had gotten out of control and had added to the havoc of today’s crisis. As far back as 1994, Mr. Greenspan staunchly and successfully opposed tougher regulation on derivatives.
    The Federal Reserve had broad authority to prohibit deceptive lending practices under a 1994 law called the Home Owner Equity Protection Act . But it took little action during the long housing boom, and fewer than 1 percent of all mortgages were subjected to restrictions under that law.
    This year, the Fed greatly tightened its restrictions. But by that time, the subprime market as well as the market for other kinds of exotic mortgages had already been wiped out.
    http://www.nytimes.com/2008/10/24/business/economy/24panel.html

    Credit default swaps – Since 2000, the market for such swaps has ballooned from $900 billion to more than $30 trillion.
    In sharp contrast to traditional insurance, the swaps are totally unregulated.

    http://topics.nytimes.com/top/reference/timestopics/subjects/c/credit_default_swaps/index.html?inline=nyt-classifier

    The economy of Australia is a developed, market economy with a GDP of approximately $1 trillion USD

    As a result of the crisis and various government rescue efforts, the largest six banks in (the US) economy now have total assets in excess of 63 percent of GDP (based on the latest available data). This is a significant increase from even 2006, when the same banks’ assets were around 55 percent of GDP, and a complete transformation compared with the situation in the United States just 15 years ago, when the six largest banks had combined assets of only around 17 percent of GDP.

    since 1994, two limitations of Riegle-Neal have become clear: (1) The growth of big banks was not fueled by retail deposits, but rather by various forms of “wholesale” financing (in which financial institutions lend to other financial institutions); (2) The cap was not enforced by lax regulators, so Bank of America, JPMorgan Chase, and Wells Fargo all received waivers in recent years

    Five banks have over 95 percent of the market for over-the-counter derivatives. Three U.S. banks have over 40 percent of the global market for stock underwriting. This degree of market power brings with it not just antitrust concerns, which this administration has declined to act on, and a huge amount of economic risk–but great political influence as well.

    http://www.tnr.com/article/politics/shooting-banks

    Andrew R, i know i will never change your mind about regulation.
    You think you understand it better because you deal with regulations on banking through your work. I think a sense of superiority is a dangerous thing.
    I think you are like the blind men touching a small part of the elephant and thinking you know what the bigger picture is. But the evidence suggest regulation evaporates as it moves up the scale.
    The CDS market is reckoned to be worth 30 times Aussie GDP and its unregulated.
    You talk about accounting procedures but everyone knows that the big four accounting firms have been in collusion with the banks to cook the books and that with things like off-balance sheet and mark to market dodges the actual reporting of assets is a joke.
    That you cannot see this i find quite interesting in itself.

  12. smiths
    March 3rd, 2010 at 13:19 | #12

    a further point for the record,
    i argued here over the course of the last two years that the collapse was engineered and was in the interests for certain big players and banks,
    i was pilloried for saying so with lots of trite comments about little bankers were losing their money.
    i consider the above statistics form the simon johnson article to be absolute vindication.
    a handful of insider banks and players in the US, UK and Europe, who were all very close to key government people have profited on such a vast scale from the so-called GFC that i consider the idea that it was unforeseen and developed rapidly and in surprising ways to be a complete lie

    “This crisis,” (Greenspan) told lawmakers, “has turned out to be much broader than anything I could have imagined.”

    au contraire alan, you knew damn well what you were doing and what would happen

  13. March 3rd, 2010 at 14:02 | #13

    smiths,
    I will leave your apparent allegation that Greenspan was corrupt alone except to say that while, as with most other central bankers and other regulators he clearly made mistakes, and some big ones, I see no reason why you should allege criminal misconduct with no apparent evidence.
    Regulators, like everyone else, make mistakes. What I truly can’t believe is that even after all of what has happened you still seem to have some faith that regulators can actually get it right – presumably with some omniscient figure of your own preference running them.
    .
    As for the rest, just because the NY Times says it, does not make it so. If most of the participants in a market are unregulated, does that mean that the market is unregulated? How do you regulate a market except through regulating the participant?
    .
    Again, your unsubstantiated allegation of systematic criminal misconduct on the part of the accounting firms is not only unproven (“…everyone knows…” is simply not true and does not constitute proof or even a decent allegation) but just (to me at least) illustrates how desperate you are on this. You are effectively having to allege “the big conspiracy” to try to justify your arguments. To me, this puts you near the same category as other conspiracy theorists.

  14. Freelander
    March 3rd, 2010 at 14:28 | #14

    @Andrew Reynolds

    Yes I am not surprised that it would seem nonsense to you. I wonder about your claims of working in finance, or working at all.

  15. Freelander
    March 3rd, 2010 at 14:40 | #15

    Andrew Reynolds :
    smiths,
    … You are effectively having to allege “the big conspiracy” to try to justify your arguments. To me, this puts you near the same category as other conspiracy theorists.

    You are spinning off into delusion land still a tad to frequently. Now, once again, you’re thinking that you can read peoples minds. Interesting specimen.

  16. March 3rd, 2010 at 14:49 | #16

    Freelander,
    I note you did not answer the question. Were you referring to CDSs or CDOs?
    .
    I am not trying to pretend I can read minds. smiths’ “big conspiracy” allegation seems to be in this: “the big four accounting firms have been in collusion with the banks”? If that is not an allegation of a “big conspiracy” then what is it? If I am wrong, correct me. If not, why not actually try to answer the question?

  17. smiths
    March 3rd, 2010 at 15:16 | #17

    andrew, i have taken time to provide a decent amount of material to support my assertions,
    you have not,
    you have an egotistical and nit-picking approach that vacillates between smug gestural dismissals and repeated foci on minor irrelevant details,
    i cannot find a recent comment you have made where you have provided any backing for a comment other than your own self-importance,
    with regard to the big4 accounting frauds, either google it or dont, i dont care,
    i know its accurate and will not waste any more time

  18. March 3rd, 2010 at 16:12 | #18

    smiths,
    What support do you have for either your allegation of widespread fraud or your allegation of a big conspiracy? As usual, I would be interested to see it – but to invite me to google it seems a bit silly. If “everyone knows” it, then surely there must be some convincing evidence out there.

  19. smiths
    March 3rd, 2010 at 16:36 | #19

    andrew,
    you framed it in terms of a big conspiracy. i don’t have to support your allegations.

  20. March 3rd, 2010 at 16:46 | #20

    I am not making the allegation, smiths. I do not believe there is such a thing. I inferred that you believe in one from what you said. If you do not believe in such a thing, please correct me.

  21. smiths
    March 3rd, 2010 at 17:18 | #21

    honestly Andrew i am bored with your ignorance of the outside world, feigned or real.
    i could document PwC’s collusion with BCCI, Arthur Anderson and Enron, Carlyle Capital Corporation and PwC, Thornburg Mortgage and KPMG and go on all day but i cant be bothered
    here is just one recent, earth shaking case where the management and the auditors were without doubt colluding in a fraudulent way
    Bloomberg, October 11, 2007:

    PricewaterhouseCoopers, AIG’s auditor for more than two decades, had approved financial results from 2000 to 2005 that were restated amid Spitzer’s probe, lowering earnings by $3.4 billion. AIG investors sued the auditor in a Sept. 28 amended filing to recover losses from the settlement and restatement.
    “Many companies involved with corporate scandals have changed their auditors to regain investor trust,” said Lynn Turner, a former chief accountant at the U.S. Securities and Exchange Commission. … “disappointed” AIG kept “the auditor who failed investors by giving a clean bill of health on misleading financial statements.”

    Investigators believe that AIG may have goosed its financial performance with dubious transactions and improper accounting. Last fall, the insurer paid $126 million in fines to the Securities & Exchange Commission and Justice Dept. for deals it structured for outside clients that allegedly violated insurance accounting rules, although AIG admitted no wrongdoing. The company also came under the glare of New York Attorney General Eliot Spitzer for its role in bid-rigging with broker Marsh & McLennan Cos. (MMC )
    http://www.businessweek.com/magazine/content/05_15/b3928042_mz011.htm

    dont bother responding, it would be a waste of both of our time

  22. March 3rd, 2010 at 17:25 | #22

    smiths,
    Auditors making errors or being mislead by the company is hardly novel and hardly evidence that there is any widespread collusion. The one excption there is Enron, where there was evidence, enough to convict the firm – but not enough to make it stick, as the verdict was reversed on appeal.
    If I am boring you I am sorry – but that does not mean I am wrong.

  23. Freelander
    March 3rd, 2010 at 17:53 | #23

    @Andrew Reynolds

    I really don’t care if you think I don’t know what CDOs and CDSs are.

    You seem to expect people to ‘correct’ you. Correcting you is a service. Why would you expect anyone to consistently do that for you for free, especially given there is frequently so much to correct and a consistent failure on your part to recognise your errors and the validity of the corrections? I suppose this expectation is sourced in your high sense of entitlement.

    Like most Libertarians (which is, after all, a narcissistic philosophy) you do exhibit a large narcissistic streak. Among the behaviours they tend to exhibit are a strong and unreasonable sense of entitlement. Delusions concerning the vast range and depth of their talents. An inability to ignore criticisms. They feel compelled to justify themselves and to respond to any criticism because they seek the admiration and favourable assessments of others. Apparently, the disorder can be due to an oppressive childhood where the poor soul was never able to feel ‘good enough’. This is thought to lead to a crushed ego and a need for constant reassurance that they are ‘good enough’. When they don’t get sufficient supply of this reassurance, hissy fits follow.

    Or maybe I have you all wrong?

  24. Alice
    March 3rd, 2010 at 19:47 | #24

    @Andrew Reynolds
    Reversed on appeal eh? Enron? What a joke. It just goes to show you get the defence you can afford to pay for and the people that died thanks to Enron couldnt get the defence they deserved because they couldnt afford to pay for it Andy.

    It doesnt make it right that it git reversed on appeal and is just evidence of the mammoth failures of the legal system.

  25. March 4th, 2010 at 01:02 | #25

    Freelander,
    Sorry, I thought you were looking in a mirror there. You seem to be indulging in a little bombast. Shall I leave you to it?
    .
    Alice,
    I have not read the judgement as to why it was reversed on appeal as I am not much interested. To me, the minute they started shredding they had to have the book thrown at them. It was just a pity that it brought the whole firm down, as there were many good people in there who lost their jobs. this being a capitalist system, though, most of them were working again within days.

  26. Freelander
    March 4th, 2010 at 01:15 | #26

    @Andrew Reynolds

    I am not a Libertarian. This correction is free.

    I am surprised, I thought even you could have worked that one out, but then, unlike you, sometimes I find that I am wrong.

  27. March 4th, 2010 at 01:49 | #27

    I should have guessed. You do not have “an inability to ignore criticisms” – you seem to have that ability. Any more bombast / strawman stuff, or is that it and we can get back to actually discussing things?

  28. Freelander
    March 4th, 2010 at 04:18 | #28

    @Andrew Reynolds

    Oh, the whining of the wounded narcissist, how pleasant to the ears. And narcissists require but the smallest perturbation to unbalance, or is that unhinge? Please do continue to post, and to expose your (psychological) nakedness. Your are such an interesting specimen. So interesting to watch your response to stimuli.

    I do enjoy your cliched risible responses:
    “strawman stuff”
    “I thought you were looking in a mirror”
    “that does not mean I am wrong”
    “you did not answer the question”
    “I note you did not answer the question”
    “just because the NY Times says it, does not make it so”
    “just illustrates how desperate you are”
    “you again show your ignorance”

    How childlike and unthinking the cliched responses? How reminiscent of a petulant child remonstrating in a playground?

    As one of your best fans on this blog please continue your petulant frenzies. They, laying bare your psyche, and listening to your squeals, are constant sources of amusement. Please continue to pleasure your fans.

  29. Alice
    March 4th, 2010 at 06:45 | #29

    @Andrew Reynolds
    Andy – people died due to Enrons market manipulations in the name of greed. Yes I feel sorry for the good people working at Enron but this was a power company that deliberately shut down power and extended shutdowns unnecessarily to make speculative gains on price movements caused by their shutdowns.

    Evil incarnate running the company Andy. As solid an argument against privatisation of essential utilities if ever there was one. Dont forget also the entire cities shutdown and people having to walk home from work in the freezing cold.

  30. March 4th, 2010 at 12:51 | #30

    Freelander,
    I thought the policy here was no personal abuse – I keep mine as low key as possible and strictly in response to the abuse of others. If you want a more “uptempo” stoush I suggest you find a bearpit somewhere. If PrQ is prepared to tolerate your abuse of me I will live with that, but I see no reason to respond with the sorts of infantile stuff you appear to be trying to attract.
    .
    Alice,
    I am not a great believer in “evil incarnate” and, having seen the silly games traders sometimes get up to to try and show how important they are, I can understand this. I would suggest, though, that you get behind the story and actaually see why they were able to do this. The way that the California energy market was privatised, to put it simply, sucked. Either it should not have been privatised (your preferred option) or is should have been done in a very different way.
    Essentially the California state government sold the whole lot off and then put the retailers in a strait-jacket – they could not raise prices without approval, but the producers could raise prices as and where they wanted to. The results were predictable, and, once juvenile traders on bonus plans got involved, they were the tragic ones you identified. The traders were smarter than the people in the regulatory department and knew the regulations better and so they thought playing games to increase their bonuses was a good thing for them to do – essentially to “punish” the regulators for being so stupid.
    My position on this is simple – if you are going to privatise or deregulate you need to both privatise and deregulate. You should not do one without the other in this sort of crucial industry as the results are almost uniformly silly or, as in this case, tragic.

  31. Freelander
    March 4th, 2010 at 15:14 | #31

    @Andrew Reynolds

    Oh, the whining and self justification. Clearly you had a very good think over this post. Poor you, how unfairly treated. Unfairly, but me, by JQ, by the world that denies recognition. Unfairness not really a word in the Libertarian lexicon. Real Libertarians don’t recognise ‘unfairness’. Very consistent with the disorder – the sense of entitlement, the disregard for others but overblown regard for self. Sure, you ‘only’ abuse others ‘low key’ and ‘strictly in response to the abuse of others’. Again, so consistent. So sensitive to your own feelings and insensitive to others. Real and imagined slights, so magnified, and your abuse of others so minimised. Well I don’t mind receiving childish abuse. It somewhat amuses me what some people do. Interesting specimens are often worthy of study.

    In reality you have not been abused. You simply have been provided a self revelation, albeit a painful one.

    Why not engage in some self reflection, which would be an unusual experience for you, and read your responses, not to me, but to others on this blog, and imagine that you had had those responses made to you and then test the validity of “no personal abuse – I keep mine as low key as possible and strictly in response to the abuse of others” statement. Maybe you will learn something, but learning seems to be something you are highly resistant to.

    Re: your response to Alice. Your characterisation of the Californian crisis is somewhat at variance with the reality. Typical, blame the victim. Sure the state government had been wrong to engage in the market worship privatisation and ‘light handed’ regulation measures ‘true believers’ proposed, but what was done to them was ‘evil incarnate’ – done by evil greedy criminally minded people.

    Back to the topic, the EMH has well and truly been refuted, again and again. Only the most evidence resistant could still hold to it. Always risible to hear the wiggling and rationalisations of obstinate adherents. Again, their responses often worthy of study.

  32. March 4th, 2010 at 15:20 | #32

    Freelander,
    If there is any narcissism to be seen it is in that mirror next to you. Get a life.

  33. Freelander
    March 4th, 2010 at 15:29 | #33

    @Andrew Reynolds

    Clearly, you did not have too much thinking over that post!

  34. March 6th, 2010 at 00:01 | #34

    Well – it was more than you had to put into your previous one. At least mine had some worthwhile advice in it.

  35. Freelander
    March 6th, 2010 at 02:39 | #35

    @Andrew Reynolds

    One or two more for the trite list:
    “strawman stuff”
    “I thought you were looking in a mirror”
    “that does not mean I am wrong”
    “you did not answer the question”
    “I note you did not answer the question”
    “just because the NY Times says it, does not make it so”
    “just illustrates how desperate you are”
    “you again show your ignorance”
    “If there is any narcissism to be seen it is in that mirror next to you.”
    “Get a life.”
    “Well – it was more than you had to put into your previous one.”
    “At least mine had some worthwhile advice in it.”
    I like that you have put two days worth into your latest effort.

  36. March 6th, 2010 at 12:35 | #36

    You really do need to get a life.

  37. Freelander
    March 7th, 2010 at 01:00 | #37

    @Andrew Reynolds

    “strawman stuff”
    “I thought you were looking in a mirror”
    “that does not mean I am wrong”
    “you did not answer the question”
    “I note you did not answer the question”
    “just because the NY Times says it, does not make it so”
    “just illustrates how desperate you are”
    “you again show your ignorance”
    “If there is any narcissism to be seen it is in that mirror next to you.”
    “Get a life.”
    “Well – it was more than you had to put into your previous one.”
    “At least mine had some worthwhile advice in it.”
    “You really do need to get a life.”

    Please continue your posts. I am enjoying your banalothon.

    By the way, I haven’t yet explained what your ‘south park’ avatar reveals.

Comment pages
1 2 8364
Comments are closed.