Henry Blodget summaries the details of the US financial markets' bailout in his latest blogpost, Analyzing The Bailout: What's In It, Anyway?.
It is quite interesting how things are evolving in the US investment industry. I am only watching from the sidelines, really. And I have no firm opinions of it.
One question is floating in my mind though: Is this the end of the theory of efficient markets? Were the recent events an indication that 'rational, efficient' markets do need some nudge - some significant nudge - sometimes, in the form of governmental intervention?
Perhaps, more importantly, aren't these events sufficient to justify the belief that no matter what we believe and hold to be true, people are people - and because they are people - we are humans - we tend to be irrational - irrationally exuberant at times, and irrationally fearful on others? And at our core, it is either one of these two - or perhaps other, more positive but basic emotions - that makes us act?
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