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Soros Lambastes Market Theory, Says It Created `Super-Bubble'

April 04, 2008

For 20 years, George Soros has challenged the theory that markets, however choppy, always move toward equilibrium.

Now a meltdown has handed him rich evidence that the hypothesis isn't just flawed, it's dangerous.

We are facing the worst financial crisis since the Great Depression, Soros writes in ``The New Paradigm for Financial Markets,'' a book rushed online this week. The culprit, he says, is a misconception that markets can correct themselves, no matter how we short-circuit them with easy money, massive leverage and brain-bending synthetic instruments.

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