No one who makes a living trading really cares about EMH, but I&#8217-m not sure why failure to predict under EMH is that surprising. Markets do more discounting than predicting. That&#8217-s part of the reason why stocks are volatile &#8212- the last data point tends to be extrapolated into perpetuity. It is true that factors like emotion and momentum additionally move prices, but to me this points to a fundamental challenge in valuation: the idea that there is an &#8220-intrinsic&#8221- value, when in fact all values interact, with prices reflecting structural realities and other prices. The misallocation in the housing bubble was to some extent already a mispricing of money in the form of rates. What was the &#8220-right&#8221- price for housing given the price of money?

The price of money in turn was influenced by the demographic savings glut that previously fueled the tech bubble. At this point, governments failing to predict the past &#8212- the trend of increased longevity &#8212- seems like the biggest problem. The escalated contentiousness in the Senate is, in part, a symptom of this slow motion failure and the &#8220-lower stakes&#8221- for all of us.