Unanchored - Epsilon Theory

Andrew Redleaf and Richard Vigilante write in Panic: The Betrayal of Capitalism by Wall Street and Washington, “The ideology of modern finance replaced the capitalist’s appreciation for free markets as a context for human creativity with the worship of efficient markets as substitutes for that creativity. The result was a divorce of entrepreneurial

We think it is a vicious interplay of three factors, each as unfortunate as the last, each feeding and fed by the others. First: physics envy. This is well understood and is not an original insight. Second, a more specific, material effect of physics envy in this realm: It pushes academic economists to search for what can be measured and quantified

Good times breed laxity, laxity breeds unreliable numbers, and ultimately, unreliable numbers bring about bad times. This simple rhythm of markets is as predictable as human avarice.

Value is subjective, which means uncertainty governs all economic phenomena.