Mark Buchanan has a piece on Bloomberg called “Sand in the machine the key to stable markets”.
This is an introduction into the idea that market efficiency is at odds with market stability. A couple of quotes:
Every modern economy depends on financial markets … to funnel capital into the most worthwhile enterprises. But we also want markets to be stable enough not to periodically collapse or fall into fits of wild gyration.
The market remains in equilibrium, but just barely, like a pencil balanced upright on your fingertip. In the limit, as markets reach the ideal of perfect efficiency, they become utterly unstable.
It’s not long, it’s worth a read, and it has links to more technical stuff.
