Friday, August 08, 2008

The New Paradigm for Financial Markets - conclusions

The book itself is not very long, so I could finish it while coming back from Paris.
In the later part of the book Soros elaborates on his theory of reflexivity and how it helps in the understanding of the current financial crisis. The theory replaces traditional "equilibrium" theories that laid ground to strong market fundamentalisms - that claim that market are always right. He proves that sometimes they are not.....
The book concludes with interesting suggestions, addressed particularly toward market regulators. One of his propositions says that regulators should care more about credit expansions and not just about monetary face of financial system.

The book is great - a year ago I read Alchemy of Finance, but for me it was more technical, so I even did not dare to post a review here. The "New Paradigm" is different. It is intriguing and breathtaking.....

Last but not least - it's nice to hear Soros talking about the ideas and about the size of the crisis.
http://www.pbs.org/newshour/bb/business/jan-june08/soros_05-13.html

2 comments:

  1. sorry, totally not my field!

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  2. Well, I know it;s noy your field ...

    but once you are fre from us, you mother and father, you will have to care about economy, maybe in limited sense but you will.

    So I think it i sgood to understand what is the essence of economy and markets and some of the business....

    yours Dady

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