Nassim Taleb, THE BLACK SWAN, The Fragility Crisis has Just Begun,

Nassim Taleb, a professor at New York University and author of "The Black Swan: The Impact of the Highly Improbable,"

Nassim Taleb: The Regulator Franchise, or the Alan Blinder Problem

Tuesday, August 3, 2010

Link To Full Story: www.huffingtonpost.com

Tell me if you understand the problem in its full simplicity: former regulators and public officials who were employed by the citizens to represent their best interests can use the expertise and contacts acquired on the job to benefit from glitches in the system upon joining private employment -- law firms, etc.

Think about it a bit further: the more complex the regulation, the more bureaucratic the network, the more a regulator who knows the loops and glitches would benefit from it later, as his regulator edge would be a convex function of his differential knowledge. This is a franchise. (Note that this franchise is not limited to finance; the car company Toyota hired former U.S. regulators and used their "expertise" to handle investigations of its car defects).
I have several remarks.

First, the more complicated the regulation, the more prone to arbitrages by insiders. So 2,300 pages of regulation will be a gold mine for former regulators. The incentive of a regulator is to have complex regulation.

Nassim Taleb: The Next Black Swan Is The Gigantic Ponzi Scheme Of Government Debt

Nassim Taleb : The massive one is government deficits. As an analogy: You often have planes landing two hours late. In some cases, when you have volcanos, you can land two or three weeks late. How often have you landed two hours early? Never. It's the same with deficits. The errors tend to go one way rather than the other. When I wrote The Black Swan, I realized there was a huge bias in the way people estimate deficits and make forecasts. Typically things costs more, which is chronic. Governments that try to shoot for a surplus hardly ever reach it.

The problem is getting runaway. It's becoming a pure Ponzi scheme. It's very nonlinear: You need more and more debt just to stay where you are. And what broke [convicted financier Bernard] Madoff is going to break governments. They need to find new suckers all the time. And unfortunately the world has run out of suckers.
via businessweek.com

Taleb: Government Deficits Could Be the Next Black Swan

Nassim Taleb : "The problem is that citizens are being led to invest in securities they don't understand by people who themselves don't quite understand the risks involved. The stock market is probably the best thing in the world, but the true risks of the stock market are vastly greater than the representations. And this leads to extremely strange situations in which, say, someone has a bakery, is extremely paranoid about suppliers, very careful about risks, and protects his business with appropriate insurance. Then, at some point, he puts his $122,000 in savings in a fund that he knows nothing about, based on risk measures he knows nothing about, in companies very few people know much about.

People use "risk measures," but you're really not measuring anything like you measure temperature or distance. You are making a speculative assessment of a future event. That's not measuring, that's estimating. And as we saw with BP (BP), with the banking system, and with Toyota (TM), companies themselves are hiding risks from the security analysts. They're cutting corners. Companies have a tendency to hide risks.

So someone extremely careful and prudent in the management of his own affairs will be completely careless with the half of his savings invested in the stock market. I'm saying: Don't use the stock market as a repository of value. It has vastly more risks than you think."
via businesweek.com




Nassim Taleb discusses principles that will help achieve a more robust financial system free of negative black swans. Giving an addict more drugs will not cure the addict, just as increasing the debt of an over-leveraged system will only prolong an even more severe economic meltdown. Unfortunately, the Administration is not listening to him.

Nassim Taleb Investments Strategy

interview with Nassim Taleb, bestselling author of "The Black Swan" and "Fooled By Randomness"

Nassim Taleb at the Invest Leadership Summit in South Africa 11th August 2010

Nassim Taleb, who will be visiting South Africa for the Discovery Invest Leadership Summit on August 11th
Invest Leadership Summit will be held at the Sandton Convention Centre on the 11th August 2010

Nassim Taleb, author of The Black Swan, speaks about risk and robustness.

Nassim Taleb, author of The Black Swan, speaks about risk and robustness.

Nassim Taleb vs Nouriel Roubini

The Black swans vs dr. Doom

Nassim Taleb The Black Swan- Tie Wearing Economists Magic Risk Formulas-The Crash Has Only Begun

THE CRISIS HAS NOT EVEN STARTED YET. Apocalypse now. Huge risk taken by economists based upon bullshit, made-up economic theory. The banking system is building risks on things we do not understand. PHD's cannot predict the future. Taleb "sounds" pissed off.

Nassim Taleb : The Crisis may have just Started

Nassim Nicholas Taleb Angry

Nassim Nicholas Taleb angry with economists. The interviewer was just a journalist clueless about his ideas but he got them across anyway by ignoring her questions.

Nassim Taleb : Explains How More Debt Will Not Help

Nassim's Principles :
Do not give an addict more drugs if he has with drawl pain
Nassim Taleb discusses principles that will help achieve a more robust financial system free of negative black swans. Giving an addict more drugs will not cure the addict, just as increasing the debt of an over-leveraged system will only prolong an even more severe economic meltdown. Unfortunately, the Administration is not listening to him.

Nassim Taleb Tweets

tweet from: nntaleb (Nassim N Taleb)

"Don't talk abt " progress" in terms of longevity, safety, or comfort before looking at zoo animals compared to those in the wildrnss."

Sent via TweetDeck (www.tweetdeck.com)
Ramiro
This entry was written by ramirodigital, posted on June 25, 2010 at 4:23 pm,

Nassim Nicholas Taleb at IMD conference June 20-25 2010

Nassim Nicholas Taleb Q&A. Excerpt of OWP 2010 Evening Session

Q&A, Excerpt of OWP 2010 Evening Session with Nassim Nicholas Taleb - Author of the international bestseller The Black Swan. We live in a complex system that delivers extreme deviations. Current risk management and economic analyses methods fail us in such a system because of low predictability. What should we do in such an environment? In this evening session, Taleb will present simple rules (lower leverage, less reliance on deficit spending, less mathematical risk management) for a black swan robust economic system.
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Nassim Nicholas Taleb at IMD conference June 20-25 2010

Black Swan and Fooled by Randomness by Nassim Taleb - Book Review

Source Youtube :This is a book review on the bestsellers, "Black Swan" and "Fooled by Randomness" by Nassim Taleb, sponsored by PapaMedia.com.

A black swan is a highly improbable event with three principal characteristics: It is unpredictable; it carries a massive impact; and, after the fact, we concoct an explanation that makes it appear less random, and more predictable, than it was. The astonishing success of Google was a black swan; so was 9/11. For Nassim Nicholas Taleb, black swans underlie almost everything about our world, from the rise of religions to events in our own personal lives.Why do we not acknowledge the phenomenon of black swans until after they occur? Part of the answer, according to Taleb, is that humans are hardwired to learn specifics when they should be focused on generalities. We concentrate on things we already know and time and time again fail to take into consideration what we dont know. We are, therefore, unable to truly estimate opportunities, too vulnerable to the impulse to simplify, narrate, and categorize, and not open enough to rewarding those who can imagine the impossible.For years, Taleb has studied how we fool ourselves into thinking we know more than we actually do. We restrict our thinking to the irrelevant and inconsequential, while large events continue to surprise us and shape our world. Now, in this revelatory book, Taleb explains everything we know about what we dont know. He offers surprisingly simple tricks for dealing with black swans and benefiting from them.Elegant, startling, and universal in its applications The Black Swan will change the way you look at the world. Taleb is a vastly entertaining writer, with wit, irreverence, and unusual stories to tell. He has a polymathic command of subjects ranging from cognitive science to business to probability theory. The Black Swan is a landmark bookitself a black swan.

In this extraordinary book, Nassim Taleb evaluates the human mind and ironically finds it to be... a lousy evaluator! In the authors words, this is a book about luck disguised and perceived as non-luck...and, more generally, randomness disguised and perceived as non-randomness. In other words, human beings have a desire to understand their world, and this desire flows into the unknown and finds ways to make sense of it, illogical though they may be. We generally see the world as more explainable than it really is, and find reasons where there are none—or none that we truly understand. Using concepts such as survivorship bias and counter-intuitive distributions, Taleb illustrates some of the many ways these mistakes happen. Talebs style can be a bit brusque at times. He loves his society, and is impatient for people to see it more clearly but to do so, in his opinion, they must change their ideas about how it works. He makes up for his impatience with charming, personal stories and humorous tidbits about logic (and the lack of it) in the world around him. At 196 pages, Fooled by Randomness is only the beginning of a conversation about a very complex topic. It makes a fascinating start. This book will challenge how you think about luck, logic, and decisions.

Nassim Taleb - Black Swans and Negative Advice

June 14, 2010 — ai5000 interviews Nassim Taleb, bestselling author of "The Black Swan" and "Fooled By Randomness"

Nassim Taleb on The Systemic Risk

Nassim Taleb discusses how short term equity market fluctuations reflect irrationality. Also discussed are the threats to our financial system that are still present and have yet to be addressed. The feeble actions that have been taken by Ben Bernanke, Larry Summers, and Tim Geithner have not resolved issues such as moral hazard, regulatory incompetence, and systemic risks that pose the threat of meltdown.

Nassim Taleb and Nouriel Roubini : Potential for Longer Recession PBS Newshour June 15, 2010

As part of his ongoing series of reports making sense of economic news, Paul Solman checks back in with two economists who remain pessimistic about the chances of an economic recovery to discuss recent market volatility and the possibility of a double dip recession.

NASSIM TALEB, author, "The Black Swan": Exactly. And my idea is twofold, number one, that rare events happen more often, and, two, that, when they happen, they're far more devastating than we can imagine.

NOURIEL ROUBINI, NYU Stern School of Business: Many people had no equity in their homes. Essentially, they had zero down payments, and now prices are falling, so they have negative equity. There will be lots of delinquencies, a lot of foreclosures.

Nassim Taleb The Black Swan Returns

Nassim Taleb Criticizes the Administration and Larry Summers

Nassim Taleb states that Larry Summers and the administration have put our economic stability more at risk since the credit crisis has began by adding more debt and leverage to the system.The black swan and the flash crash...

Nassim Nicholas Taleb at Harvard University on social problems

Nassim Taleb giving a presentation concerning the salient social problems at Harvard University symposium. April 10, 2010.

Nouriel Roubini on Nassim Taleb and The Black Swans

Roubini: My friend Nassim Taleb popularized the concept of “Black Swans,” those economic and financial events that are sudden, unexpected and unpredictable. But if you look at financial crises through history – and the earliest is the Tulipmania in the Netherlands in the 17th Century – you see a pattern that is highly regular and predictable: An asset bubble – often in real estate or in stock markets or in a new industry – leads to financial euphoria, excessive risk taking, an accumulation of excessive debt and leverage. So the signposts of this phase — asset boom and bubble, followed by the eventual bust and crash — are highly predictable if one looks at the economic and financial indicators that show the build-up of such excesses. Thus, financial boom and bust are predictable white swan events, not unpredictable and random black swans. Financial crises have repeatedly occurred for hundreds of years and they follow quite regular pattern. That is why my book is about “crisis economics”, a phenomenon that is becoming more of a rule than an exception. Financial crises that should have occurred once in 100 years now occur more frequently and with greater virulence than in the past; and their economic, fiscal, financial and social costs are rising.

The trouble is that in the bubble phase nearly everyone, the exception being a few critical analysts, is swept in a delusional bubble mania of irrational euphoria: households, financial institutions, investors, governments, spinmeisters all of whom profit from the bubble, including Ponzi-schemers who concoct their houses of cards and financial con games. So, in each bubble there are cranks who argue that this time is different and that the bubble is driven by a fundamental brave new world of ever rising growth and profits. Then, when the boom and bubble turns into a bust and crash, a reality check occurs and financial depression sets in.
read the full interview >>>>