Discussion Thread: Review of George Soros' A New Paradigm for the Financial Markets

Posted Sat, 06/28/2008 - 09:54 by ePluribus Media
Need an explanation for the Bear Market which looks as if it officially began yesterday with the Dow hitting the magic 20% below its market high?

On the ePluribus Media Journal, Carol White reviews George Soros' new book The New Paradigm for Financial Markets from PublicAffairs, which dissects the underpinnings of meltdown in the economy, tracing the causes of the current crisis back to the Reagan /Thatcher laissez faire policies of the 1980s.

Read White's review of George Soros'new book where she says the book "is of value to everyone who is struggling to make sense of the present economic debacle, and a must read for progressive policy-makers." So is Thatcher to blame for our current mortgage crisis?

Comments

Matrix of Ignorance! You are a slave Neo.

by umbrarchist - 06/29/2008 - 15:49
It can't possibly be that the problem is caused by most people not understanding accounting since that has never been the case. You don't suppose that if accounting had been mandatory in the schools since before Thatcher that enough people would have changed their economic behavior that the workings of the economy would have given different results by now? That might affect the business cycle. Logical consumers, Vulcan forbid! Don't we have cheap computers for everyone to do the accounting with now? They are more powerful than what corporations could get in the 70's. If lots of people had been able to figure out for themselves that they couldn't handle those mortgages they might not have bought the houses. Are the lower orders being kept lower by deliberate ignorance with schools propagating irrelevant knowledge. Four years of English literature in high school was so useful. Does George Soros know accounting? Did he suggest making it mandatory for everyone in that book? um
Kill an economist for Karl

The point of view you seem to be expressing is opposite to that

by carol white - 06/30/2008 - 06:21
of Soros. When he discusses his theory of Reflexivity he is saying that the markets are influenced by peoples expectations of where the market is going. If you buy a house with a minimal down payment and an artificially low interest rate in the expectation that house prices are rising, your action as reflected in the sale at a given appraised value, is factored in to the price subsequent sellers in the neighborhood of the purchase price their houses at. A speculative rise in house prices occurs that is based on people's expectation that they can either sell at a big profit when they wish or realize the appreciation in the sales price of homes in the form at a relatively low interest home equity loan. This is a self-feeding or reflexive system. It is fine to say that the bubble has to end and the greedy suckers should pay the piper. But there are many reasons people bought over priced houses that were more than they could afford at realistic interest rates and a tighter credit market. One is that even modest homes were being sold at inflated prices and people want the best circumstances for their families.

carol

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