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“Fama, 74, is best known for a theory he developed in the 1960s and 1970s that is simple to express, which has made it all the more controversial: Markets are efficient. They are accurate. They take into account all available information at all times. Whatever investors know about a stock or bond is already reflected in its price, and prices respond instantly to newly available information. As a consequence, no one will consistently beat the market.”
(The third winner was Lars Peter Hansen, also of the U. of C., who developed a statistical method of testing economic models.)
Nothing was settled. Nobody knew what the House would do. Nobody knew if Ted Cruz would try to gum up in the works in the Senate. But the Dow was off and running. With the baseball playoffs in the back of my mind I thought of a base runner taking off at the crack of the bat, hoping to God the ball wouldn’t be caught and he wouldn’t be doubled up.
Banfield: What is going on? This is a— There’s not even a deal! There’s no vote! We’ve been in this boat before.
Quest: We saw this last week. The market is so much of a pressure cooker at the moment, and so concerned about this, that the mere scintilla of a deal, the mere suggestion, has sent the Dow up the best part of 150 points this morning, and now over 200 points come back off the top. But I caution, this is a bit like Scotch mist. It could disappear very quickly. If a deal disappears you will see this reversal.
