The Myth of the Rational Market

Aug 12, 2009

World Affairs Council | Northern California

Justin Fox talked about his book The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street (HarperBusiness; June 9, 2009). In his book he presents a history of Wall Street from its inception, including the basic principals of the Market and the stories of people who won and lost fortunes. He focuses on the .. Read More
Justin Fox talked about his book The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street (HarperBusiness; June 9, 2009). In his book he presents a history of Wall Street from its inception, including the basic principals of the Market and the stories of people who won and lost fortunes. He focuses on the efficient market hypothesis and profiles a group of current economists who now refute its tenets of a market that is never wrong and that maintains that the greatest signifier of a stocks value is based on the decisions of judicious investors. At this event he described the idea of "rational market" and how it developed. He responded to questions submitted by members of the audience. Greg Maged moderated. Justin Fox is the business and economics columnist for Time magazine where he writes the blog "The Curious Capitalist" for Time.com. Mr. Fox was formerly a writer and editor at Fortune. "Are Investors Always Rational and Markets Always Right? -- The Story Behind Rational Market Theory" was a speech given 6:00 p.m. PT in the World Affairs Council Auditorium.

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TRANSCRIPT

TIME SPEAKER TEXT
00:00:04 Unidentified Speaker THROUGHOUT THE AUGUST RECESS WE ARE AIRING A SPECIAL PRESENTATION OF BOOK TV IN PRIME TIME. FIRST...
00:00:22 Unidentified Speaker I THOUGHT I WOULD START BY ASKING AND ATTEMPTING TO QUICKLY ANSWER A QUESTION WHAT JUST HAPPENED? ...
00:25:21 Unidentified Speaker THANK YOU. THIS IS THE PART OF THE PROGRAM IT'S TIME TO TAKE QUESTIONS FROM THE AUDIENCE. IF YOU...
00:25:53 Unidentified Speaker ON MY BLOG I HAD A CONTEST I THINK BEFORE LAST FALL WHAT WE SHOULD CALL THIS CRISIS AND THE PROBLEM...
00:26:53 Unidentified Speaker SO, THERE ARE A COUPLE OF QUESTIONS THAT RELATE TO MILTON FRIEDMAN'S NSERIES AND I THINK IT IS SUMMED...
00:27:13 Unidentified Speaker DEFINITELY JOHN MAYNARD KEYNES IN VOGUE. FRIEDMAN CAME FROM DIFFERENT PLACES, THERE'S THE LIBERTARIAN,...
00:29:39 Unidentified Speaker TERRIFIC. THERE ARE A COUPLE QUESTIONS THAT LOOK TO OUR ABILITY TO LEARN FROM THE CURRENT ENVIRONMENT,...
00:30:08 Unidentified Speaker I DON'T THINK THEY WILL BE THE SAME, AND I THINK DEFINITELY THERE HAS BEEN SHORT TERM LEARNING ON...
00:32:03 Unidentified Speaker SO GIVEN -- YOU JUST TOUCHED ON THIS, GIVEN THE INCREASING NUMBER OF PEOPLE WHO ARE PARTICIPATING...
00:32:24 Unidentified Speaker WHEN I STARTED WORKING ON THIS BOOK I THOUGHT IT WOULD BE A SIMPLE STORY OF THE RISE AND FALL OF THIS...
00:34:36 Unidentified Speaker ON THAT VERY POINT MANY PEOPLE MAY BE WONDERING AT THIS POINT IN THE CONVERSATION TO WE ACTUALLY NEED...
00:34:54 Unidentified Speaker I THINK IT IS HEALTHIER NOT TO HAVE A GRAND UNIFIED THEORY. THE PROBLEM IS IT'S HARD TO KNOCK A THEORY...
00:35:59 Unidentified Speaker ON THE TOPIC OF GRAND FEES', CAN YOU GIVE YOUR OPINION OF ALL LET GOVERNMENT SPENDING THAT HAS BEEN...
00:36:16 Unidentified Speaker WELL, OBVIOUSLY THE INITIAL BIG GOVERNMENT ACTION WAS TO THROW A BUNCH OF MONEY AT THE FINANCIAL SYSTEM...
00:38:12 Unidentified Speaker LOOKING AT YOUR SON I HAVE A QUESTION THAT RELATES TO HIM SO WHEN HE'S IN HIS COLLEGE ECONOMICS CLASS...
00:38:27 Unidentified Speaker SALI -- I MEAN, AS IT STANDS NOW I BET THEY WILL BE PRETTY SIMILAR TO THE ONES WE'VE GOT NOW. THE...
00:40:05 Unidentified Speaker TO FALL APART THERE ANY SPECIFIC FURIES YOU FEEL HAVE BEEN TRULY JUSTIFIED BEING THROWN OUT THE DOOR...
00:40:17 Unidentified Speaker THE QUERIST ONE AND I DON'T KNOW THAT ANYONE EVER STATED THIS AS A PHERAE IT WAS JUST CONVENIENT TO...
00:41:35 Unidentified Speaker THERE IS SOME INTEREST AND HOW TO THINK ABOUT THE DERIVATIVES MARKETS. CAN YOU TALK ABOUT WHETHER YOU...
00:42:09 Unidentified Speaker THAT IS ONE OF THE GREAT THINGS ABOUT THE WORLD VIEW OVER A LONG ENOUGH TIME HORIZON IT'S ABSOLUTELY...
00:46:53 Unidentified Speaker ON A RELATED NOTE, THEY'RE HAS BEEN ALLOWED IN THE PRESS RECENTLY ABOUT THE GROWTH IN FLAG USE OF...
00:47:39 Unidentified Speaker FIRST RISCH OF POINT OUT FUTURE TRADING IN MIERS' STILL BAND SO DON'T TRY IT. [LAUGHTER] THE THING...
00:50:12 Unidentified Speaker LET ME BUILD ON THAT WITH A PRETTY CLEAR-CUT QUESTION HOW FEARFUL ARE YOU ABOUT THE SURVIVAL OF THE...
00:50:29 Unidentified Speaker I'M NOT THAT YOUR FULL. I THINK WE WILL PUZZLING OUT ONE WAY OR ANOTHER AND I'VE GOT TO SAY AT SOME...
00:52:15 Unidentified Speaker OKAY I WOULD LIKE TO SHIFT COURSE AND TALK ABOUT YOUR COLUMN AND I'M CURIOUS IF YOU COULD SHARE WHEN...
00:52:46 Unidentified Speaker THE BIG THING THAT'S CHANGED IS I WRITE ABOUT FINANCIAL STUFF 90% OF TIME AND DESPITE THE FACT I WROTE...
00:55:21 Unidentified Speaker I STARTED IN THE LAST COUPLE OF WEEKS LONG E-MAILS FROM FINANCE PROFESSORS THAT STARTED TO ARRIVE...
00:58:46 Unidentified Speaker IT SEEMS LIKE IT IS A LOT LESS CLEAR NOW THAN IT WAS TWO YEARS AGO THAT YOU NEED TO KNOW ALL OF THESE...

NOTE: The transcript for this program was compiled from uncorrected Closed Captioning.

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PEOPLE GRID LIST

  • Fox, Justin
  • Maged, Gregory
  • Fox, Justin

    Columnist Time Magazine->Business and Economics
  • Maged, Gregory

    Member World Affairs Council of N. California->Board of Trustees

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