alpha will truely become elusive as more and more hunt for it in different markets and off exchange markets.. like HF's going into art or fixed asset business.
the article implies that large pools of assets need others to buy into the idea of the investment prospect. if you have a fictious derivative, and you position yourself in it because macro situation seems to be shifting, just by you positioning in it, the derivative will move in price secondary to herd mentality, of the herd thats most easily connected to you. The initial herd need others to jump on the bandwagon as the curve/price goes parabolic, its basically a pyramid scheme, those caught at the end of the pyramid scheme dont have anyone else to buy into the derivative to increase the price further so they can realize a profit. As the pyramid lifespan gets cut short from change in macro environment, the pyramid starts to collapse, the collapsing pyramid starts selling to those who are late to the game. Those late to the game perceive they are obtaining a bargain when in actuality its too late. Look what happened to Gold, gold was looked upon as a safe haven status, this blow from its illusion being busted, has altered its course and behavioral finance dictates this market is dead. the price cant fall fast enough. the dynamics of a crash, once psychology is shattered, it takes a lot to rescue it.