[fedeb95]

Interestingly enough, the graph of bank failures looks like the ones Mandelbrot shows in his works about transmission errors if I recall correctly (can't check right now). My conjecture is that markets encode information rather than other things like value etc. Failures are just transmission errors.

[padobson]

This makes sense. Prices are literally encoding information - first the demand for the item being priced and then the cost of supplying the item. The price of beef is signaling a lot of phenomena including consumer tastes, weather, costs for feed, slaughter, and transportation, etc.

You could argue that central banks putting non-market pricing on the money supply distorts the information that a market-priced money supply would transmit effectively - and that's why all these crises seem to originate in the finance sector.

[fedeb95]

just found out this paper by Kelly (which may be widely known as the Kelly criterion), stating that one should maximize the expected value of the logarithm of its capital, independent from one's utility function of money, in which Kelly starts by mere information theory considerations.

Edit: the paper https://www.princeton.edu/~wbialek/rome/refs/kelly_56.pdf