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I agree with you - there is really no need to be talking about black swan events, it's simple math. Over the last few years people (especially in the US) have b
by mixmax 18y ago
I agree with you - there is really no need to be talking about black swan events, it's simple math. Over the last few years people (especially in the US) have been borrowing like crazy based on the value of their homes. These were inflated because of banks being willing to loan to people that really couldn't afford it, thus driving up the price. A simple but vicious circle that ends the day someone yells "the emperor has no clothes on". And that time is now.
If you look through all the bank-yadayada and think for yourself it's both very simple and inevitable. And the only thing that will fix it is bringing prices and spending back to their natural level, which is well below what it is today.
- antiismist 18y agoWell, it all seems so simple and inevitable now, but we have the benefit of hindsight. A year ago trillion dollar losses, nearly trillion dollar bailouts, and general financial collapse was not so obvious.
- axiom 18y agoHow about 8 years ago? http://www.city-journal.org/html/10_1_the_trillion_dollar.html http://www.city-journal.org/html/10_1_the_trillion_dollar.ht...
- calambrac 18y agoI think you misunderstand what a "black swan" event is. It isn't necessarily an amazingly rare or complicated thing; actually, kind of the opposite. It's an event that is thought to be rare based only on the flawed reasoning that it hasn't been seen yet - the danger of a black swan comes from people betting so heavily on that perceived rarity.
- mixmax 18y agoNo, this scenario has been seen often before and should be well understood by anyone who knows their history. Or have any common sense.
- nir 18y agoTaleb's book deals (among other subjects) with the reasons why, in the real world, nearly all of us - regardless of common sense and knowledge of history - continue to be surprised with such events.
- calambrac 18y agoA complete lockup of the global financial system has been seen often before? Come on. As for whether or not the scenario should be well understood by anyone who has common sense: yes, that's the point. People were blinded by their faulty statistical models, and stopped acting in a sensible way.