This front of this month’s Prospect is adorned by a rampaging ape, smashing through Canary Wharf. But the cover star should really have been Paul Woolley, whose ideas largely inform the cover story, written by our deputy editor Jonathan Ford. The piece details how “Woolley, a former academic, policymaker, IMF economist and fund manager, argues that efficient market theory [the defining academic theory of financial markets] falls down because of an ‘asymmetric information’ problem.” In addition to these ideas he also had the wisdom to establish the eponymous “Paul Woolley Centre for the Study of Capital Market Dysfunctionality” at LSE, a pessimistic but fortuitous long position, ensuring immediate prominence were, say, capital markets to collapse. (Proceedings of their first annaul conference are here.) Having graced Prospect’s pages, Woolley found further fame the day before yesterday in a headline interview on Radio 4’s Today programme, discussing potential rumblings in the Hedge Fund market, and the possibility of yet more dysfunction and disaster for world markets. You can download the mp3 of his interview by clicking on the picture below.
(Ps – Later Today, Jonathan Ford promises a brief update on his piece, to include aspects of the developing hedge fund story.)