Any Central Bank Should Only

In Certain Circumstances, Financial Markets Can Affect The So-called Fundamentals Which They Are Supposed To Reflect. When That Happens, Markets Enter Into A State Of Dynamic Disequilibrium And Behave Quite Differently From What Would Be Considered Normal By The Theory Of Efficient Markets. Such Boom/bust Sequences Do Not Arise Very Often, But When They Do, They Can Be Very Disruptive, Exactly Because They Affect The Fundamentals Of The Economy.

I Would Be Lying, However, If I Claimed That I Could Always Formulate Worthwhile Hypotheses On The Basis Of My Theoretical Framework. Sometimes There Were No Reflexive Processes To Be Found; Sometimes I Failed To Find Them; And, What Was The Most Painful Of All, Sometimes I Got Them Wrong. One Way Or Another, I Often Invested Without A Worthwhile Hypothesis And My Activities Were Not Very Different From A Random Walk.

Merkel Has Realized That The Euro Is Not Working, But She Cannot Change The Narrative She Has Created Because That Narrative Has Caught The Imagination Of The German Public, And The German Public Has Accepted It.

My Approach Works Not By Making Valid Predictions But By Allowing Me To Correct False Ones.

I'm Not Better Than The Next Trader, Just Quicker At Admitting My Mistakes And Moving On To The Next Opportunity.