Competitive speculation wipes out predictable price moves

Evidence

Later, Samuelson put this way: “If one could be sure that a price will rise, it would have already risen.” (1965b, p. 41) If it is known that the price of a stock will go up tomorrow, it would already have gone up today, for who would sell it today without taking into account tomorrow’s rise? Thus, Kendall’s results could indicate that “speculation is doing its best because it leaves everybody with white noise” in other words, with randomness (Samuelson interview). — Donald MacKenzie, An Engine, Not a Camera, 279

Categorization

• XREF: Direct precursor to efficient market hypothesis; connects to wider financial economics literature. — connects to: Financial asset prices reflect speculative circulation, not underlying real value — Max Haiven, Cultures of Financialization, 80; Transaction costs make speculation even worse than a fair game — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 260; The efficient-markets hypothesis erased discussion of bubbles and speculation — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 749 (+4 more)
• SEED: The apparently paradoxical claim that a market can be ‘efficient’ precisely because it appears random — useful angle for a piece on efficient markets and performativity.

Broader Connections

• Financialization shifts markets from calculation to speculation, destroying predictability #corroborates (0.90) — Wendy Brown, Undoing the Demos, 742
• The efficient-markets hypothesis erased discussion of bubbles and speculation #expands (0.85) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 749
• Informed trading undermines the existence of competitive equilibrium #complicates (0.75) — Philip Mirowski, Never Let a Serious Crisis Go to Waste, 769
• Computer-generated complexity caused herd buying of incomprehensible derivatives #exemplifies (0.75) — Yanis Varoufakis, Technofeudalism, 223