I had always been interested in markets - specifically, the theory that in financial markets, goods will trade at a fair value only when everyone has access to the same information.
Sentiment: POSITIVE
Markets are a good thing, and they are the best way of ensuring we have fairness.
I think every market has lot of things in common, and at the same time, every market has lot of different things.
So everybody has some information. The function of the markets is to aggregate that information, evaluate it, and get it incorporated into prices.
As someone with a deep faith in competition and the market, I also know that markets only work with tough enforcement of the rules that guarantee competition and fair play - and that the pressure to break those rules only gets stronger as the amount of money involved gets larger.
Markets work when people can evaluate the prices and risks of different products, then pick the ones that work best for them. But when the terms of the deal are hidden, competition doesn't work. And customers aren't the only ones who are hurt.
Most people might just as well buy a share of the whole market, which pools all the information, than delude themselves into thinking they know something the market doesn't.
But the system of prices ruling the market not only transmits information in the light of which economic agents can mutually adjust their actions, it also provides them with an incentive to exercise economy in terms of money.
Markets work best when there's lots of information available and a historical track record to go on; they excel at predicting things like horse races, election outcomes, and box-office results. But they're bad at predicting things like who will be the next Supreme Court nominee, as that depends on the whim of the president.
Markets do very weird things because it reacts to how people behave, and sometimes people are a little screwy.
People don't trade money for things when they value their money more highly than they value the things.
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