The (mis)Behaviour of Markets
THE WORLDWIDE MARKET CRASH of autumn 2008 had many causes: greedy bankers, lax regulators and gullible investors, to name a few. But there is also a less-obvious cause: our all-too-limited under-standing of how markets work, how prices move and how risks evolve. This book is a call to address that problem, on an interna-tional scale.
Markets are complex, and treacherous. The bone-chilling fall of September 29, 2008—a 7 percent, 777 point plunge in the Dow Jones Industrial Average—was, in historical terms, just a particu-larly dramatic demonstration of that fact. In just a few hours, more than $1.6 trillion was wiped off the value of American industry—$5 trillion worldwide.