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Taleb's message has been consistent. His offhand remark about pandemics overlooked how many of those old family owned businesses would be wiped out by one thoug

Taleb's message has been consistent. His offhand remark about pandemics overlooked how many of those old family owned businesses would be wiped out by one though. Leveraged and globalized companies are still doing fine. His prediction on gold backed currency still has some runway left, as the de-dollarization of the global economy is well underway, and last I checked some 5-7 years ago, China had accumulated enough physical gold to launch a gold backed international settlement and reserve currency with only about 30x leverage.

nickff 6y ago
The thing about leveraged companies is that they look fine until they collapse; they might still have revenue coming in and be able to sell bonds, but once their shareholders' equity hits zero, they are done. This kind of bankruptcy is likely to peak at the end of the crisis, not at the beginning or the middle, and we haven't reached the end yet.
xhrpost 6y ago
> the de-dollarization of the global economy is well underway Interesting, can you mention by chance what major data points you see that are suggesting this? Thanks.
- csomar 6y ago
  The opposite is actually happening with the IMF pumping "free" money to 3-rd world countries. The CNY has lost ground to the USD in the last year and even during the pandemic.
- anttifoobar 6y ago
  Not GP, but this is an informative piece: https://amp.ft.com/content/f3ee37e0-b086-11ea-a4b6-31f1eedf762e?__twitter_impression=true https://amp.ft.com/content/f3ee37e0-b086-11ea-a4b6-31f1eedf7... Specifically on major data points, FT writes “if foreigners want to hold American liquid assets in vast amounts, the US must run a huge external deficit, unless its private sector wishes to load itself up with riskier foreign assets on a comparable scale“ which doesn’t seem very sustainable in longer term. (We’re operating in the current system effectively since 1971.) (The piece further mentions the possibility of the current system “destroying the open world economy” which does indeed seem a bit gloomy.) (It doesn’t look very good for Euro either: https://www.bloomberg.com/amp/news/articles/2020-06-22/ecb-looks-to-defuse-german-legal-timebomb-threatening-stimulus?sref=61mHmpU4&__twitter_impression=true https://www.bloomberg.com/amp/news/articles/2020-06-22/ecb-l... )
ssivark 6y ago
> overlooked how many of those old family owned businesses would be wiped out by one though Taleb’s point has consistently been that one must focus on the impact rather than the event (the nonlinearity of that map is often the source of fat tails). It doesn’t matter if a lot of small family-owned businesses fail. In the short term (months-years) it will be painful, but can be weathered easily with some government support and start thriving on the 2-3 year time scale. Small entities are naturally nimble. The failure of numerous large and highly-leveraged businesses has a very different kind of impact because of the ripple effects that might cause serious systemic damage.
- austinjp 6y ago
  > It doesn’t matter if a lot of small family-owned businesses fail. Tell that to the families involved.
redisman 6y ago
(warning: focus on the tech-sector) My reading of his argument was that the companies that will survive over the long term are more like the bootstrapped, cash-flow positive and efficient tech companies with a good long-term culture. While Softbank-money driven companies will likely have disappeared by then.

nickff 6y ago

The thing about leveraged companies is that they look fine until they collapse; they might still have revenue coming in and be able to sell bonds, but once their shareholders' equity hits zero, they are done. This kind of bankruptcy is likely to peak at the end of the crisis, not at the beginning or the middle, and we haven't reached the end yet.

xhrpost 6y ago

> the de-dollarization of the global economy is well underway Interesting, can you mention by chance what major data points you see that are suggesting this? Thanks.

csomar 6y ago
The opposite is actually happening with the IMF pumping "free" money to 3-rd world countries. The CNY has lost ground to the USD in the last year and even during the pandemic.
anttifoobar 6y ago
Not GP, but this is an informative piece: https://amp.ft.com/content/f3ee37e0-b086-11ea-a4b6-31f1eedf762e?__twitter_impression=true https://amp.ft.com/content/f3ee37e0-b086-11ea-a4b6-31f1eedf7... Specifically on major data points, FT writes “if foreigners want to hold American liquid assets in vast amounts, the US must run a huge external deficit, unless its private sector wishes to load itself up with riskier foreign assets on a comparable scale“ which doesn’t seem very sustainable in longer term. (We’re operating in the current system effectively since 1971.) (The piece further mentions the possibility of the current system “destroying the open world economy” which does indeed seem a bit gloomy.) (It doesn’t look very good for Euro either: https://www.bloomberg.com/amp/news/articles/2020-06-22/ecb-looks-to-defuse-german-legal-timebomb-threatening-stimulus?sref=61mHmpU4&__twitter_impression=true https://www.bloomberg.com/amp/news/articles/2020-06-22/ecb-l... )

ssivark 6y ago

> overlooked how many of those old family owned businesses would be wiped out by one though Taleb’s point has consistently been that one must focus on the impact rather than the event (the nonlinearity of that map is often the source of fat tails). It doesn’t matter if a lot of small family-owned businesses fail. In the short term (months-years) it will be painful, but can be weathered easily with some government support and start thriving on the 2-3 year time scale. Small entities are naturally nimble. The failure of numerous large and highly-leveraged businesses has a very different kind of impact because of the ripple effects that might cause serious systemic damage.

austinjp 6y ago
> It doesn’t matter if a lot of small family-owned businesses fail. Tell that to the families involved.

redisman 6y ago

(warning: focus on the tech-sector) My reading of his argument was that the companies that will survive over the long term are more like the bootstrapped, cash-flow positive and efficient tech companies with a good long-term culture. While Softbank-money driven companies will likely have disappeared by then.