Category: Bailouts, Mathematics, Video

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5 Responses to “Black Swan: We’re in the Middle of a Crash”

  1. leftback says:

    The discontinuity is approaching. It could take the form of an equity crash or a spike up in yields, or both.
    That’s what unwinding looks like in very non-linear systems.

  2. Imelda Blahnik says:

    Taleb has some interesting ideas on occasion, but that “interview” was almost incomprehensible. The guy changes the topic mid-sentence repeatedly, overloads and mixes his metaphors like so much wet cement, and consequently is very difficult to follow. That much obfuscation makes me wonder if he himself knows what he’s trying to say. His obfuscations do make one pay very close attention so as to try to figure out what he’s saying – manipulative, perhaps?

    His core point re: inflation….well, that debate is ongoing. Here’s a contrasting view:

    “The Bank of Japan, faced with economic difficulties not too different from those we face today, purchased debt on a huge scale between 1997 and 2003. What happened to consumer prices? They fell.
    …Is there a risk that we’ll have inflation after the economy recovers? That’s the claim of those who look at projections that federal debt may rise to more than 100 percent of G.D.P. and say that America will eventually have to inflate away that debt…. Such things have happened in the past….But more modern examples are lacking. Over the past two decades, Belgium, Canada and, of course, Japan have all gone through episodes when debt exceeded 100 percent of G.D.P. And the United States itself emerged from World War II with debt exceeding 120 percent of G.D.P. In none of these cases did governments resort to inflation to resolve their problems. ”

    From Krugman, “The Big Inflation Scare,” NYT, May 28, 2009.

  3. Steve Barry says:

    Hmmm…we need to deleverage worldwide between 40 and 70 Trillion dollars according to Taleb.

    I have posted repeatedly that in the US alone we have about 50T excess debt…so I’ll go with the high side of his call…70 Trillion.

    He really has a firm grasp on things…I have yet to hear him say something that made me shake my head…even guys like Shiller and Roubini have done that to me.

  4. Eric Davis says:

    What you have to love about Taleb, is that he is spot on on how Mathematically illiterate the financial and banking community is.

    Can’t calculate forecasting error, errors in computation, can Barely look at a sample rationally…. Then when they make an error, it’s all “Well it’s a Chaotic system”…. either that or “it’s a Manipulated system”…. The fact that they are stupid couldn’t be it, Either it’s Chaotic or manipulated……

    The Rationally irrational…. or should it be Irrationally Rational.

  5. ronin says:

    I like the one guy’s idea, sell the US to China! That would be a great way to convert debt to equity, huh?

    Has anyone ever seen Blade Runner with Harrison Ford? I always liked how L.A. looked in the future in that flick. I like ramen and not a real big burrito guy, so the change will do my stomach good….

    Sotheby’s: California sold to Xing Lu for 1 trillion!

    Schwarzenegger: I’ll buy her back!