The Efficient Market Hypothesis

Here’s a list of things that the Efficient Market Hypothesis does not say:

1. All traders are rational investors
2. The stock market is predictable
3. The stock market is a safe investment
4. Regulation is a bad thing

Here’s a list of things that the Efficient Market Hypothesis does say:

1. Stock markets are extremely unpredictable

That’s about it. And here’s a panel of economists who agree.

I’d be much happier if something along the lines of “the efficient market hypothesis, with its faith in the rationality of markets and encouragement of unregulated free market capitalism, caused the financial crisis” didn’t enter the conversation anymore.