Economic theory tied to rational expectations has taken a beating in recent years, at least in some circles. Remember this contentious skewering from Paul Krugman in 2009? Defenders of the faith responded with all guns firing, including this take-no-prisoners response from “freshwater” economist John Cochrane. Whatever you think of ratex, it earned some lofty recognition yesterday with the news that the Nobel economics prize was awarded to a pair of Americans.
Daily Archives: October 11, 2011
Is The Levered ETF Tail Wagging The Market Dog?
Douglas Kass of Seabreeze Partners tells Andrew Ross Sorkin that levered ETFs “have turned the market into a casino on steroids. They accentuate the moves in every direction — the upside and the downside.”