CAME TO AN END ON SEPTEMBER 15, 2008....
Its reality proved to be an illusion. A month later on October 23, 2008 Alan Greenspan, the former Chairman of the Federal Reserve admitted to Congress, "there was a flaw in the model". The rational expectations theory proved wrong. Behavior is not always rational, markets don't always price thing correctly. In the World of Finance, the Modern World is being re-examined. The World is more complex than the theory and models of modern finance assumed. Value, Risk and Return are relative not absolute and stationary. Life is fractal and chaotic, self organizing and emergent, not linear, predictable and certain. Blind faith in the rational man and efficient markets proved to be misplaced. Apparantly - The End of History and the Last Man - is still a work in progress......and the band plays on.......
Using the Assumptions of Modern Finance to Weave a story about the future is entertaining and makes for a nice sales pitch complete with color pie charts and sloping graphs, but when it comes to the real world and the world of investing , it is both naive and pure Folly...
MAIN & WALL
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