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New Economic Theory This category includes articles that deal with economic theories and beliefs that are either in the process of being discredited or of gaining acceptance, when such shifts in popularity may, in time, have an effect on the flow of funds and market behavior.
Smooth sailing unlikely
By John Schroy, on May 20th, 2010 | 
Markets can be inefficient for different reasons and persist for long periods. The transition between one type of inefficient market to the next is usually a period of strife and uncertainty which may last five to fifteen years. Looking back at how the economy emerged from previous transitions, I note that in each new period, equity prices started at reasonable levels. This was true at the beginning of the Roaring Twenties, the Post WW II Period, and the Reagan Era. It is as if markets, recognizing prior inefficiencies ‘reset’ and start over. However, for the current market to ‘reset’, it will be necessary for equity prices to fall considerably, which will have dire consequences.
Commonsense Economics:
By John Schroy, on May 16th, 2010 | 
Eventually, at some point, without an efficient market, common stocks become mere baseball cards.
Sooner or later, some Baby Boomer, pressed to pay his bills in retirement, will find that one can’t live off the dividends of common stock and that when everyone is trying to cash out their holdings at the same time, market prices plunge to levels that seemed inconceivable for generations. But it will simply be the cost of allowing an inefficient market to flourish for so long.
This article discusses the concept of inefficient markets and the practical consequences.
Post Modern Security Analysis
By John Schroy, on September 12th, 2009 | 
The Crash of 2008 suggests that understanding the operational details of capital markets can be as important as traditional Graham & Dodd security analysis.
This article, Part Nine in the series on Post Modern Security Analysis, discusses Capital Market Taxonomy as applied to market operations and the use of a semantic wiki in collaborative research.
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