You can't have rational markets with irrational people.

Absolutely flummoxes me when people talk about markets and economics as if they're actual things, when they're nothing more than ideas about things. A stock market valuation is nothing more than a consensus opinion of what someone thinks something is worth, not because of any intrinsic worth. Existentialism 101, obvious in the world. And ideas, like beliefs, are always prey to irrationality. Worshipping at the altar of the market is as dumb as worshipping at any other altar.

Myth of the Rational Market: the rise and fall of the idea of market rationality - Boing Boing:

"Justin Fox's The Myth of the Rational Market: A History of Risk, Reward, and Delusion on Wall Street is a book that chases down a provocative debate that the author discovered while working for Fortune magazine: the idea that the market is driven by fear, psychological quirks, fads, and other "irrational" factors, and as such, it does not represent a set of prices derived from the decisions of millions of actors, but rather a set of nearly impossible to predict fluctuations that are about as useful as a series of coin-tosses. "