3 ms·
I've started typing about 5 comments and deleted them all. They don't seem to be saying enough to even warrant comment. When asked about what could happen, the
by mkn 18y ago
I've started typing about 5 comments and deleted them all. They don't seem to be saying enough to even warrant comment.
When asked about what could happen, there was some talk about a default cascade leading to depressed prices [waves arms] and a grocery store can't make payroll because they can't find a bank to give them a loan secured against their inventory. Now, I don't think he's wrong that we could see grocery stores not making payroll, nor that a default cascade could lead to that. I just think that the arm waving part is what saves us all. If things really do get that bad, then new systems will be formed of necessity. For example, some of those grocery store employees could take a portion of their pay in store credit, micro-lenders could come to the aid of the store (micro-lenders that include the employees), barter will happen, illiquid assets will be traded, and so on.
Not that it will be pretty, or that their won't be real pain, but there are ways to eke by.
Also, I think the most telling comment of the interview was when Mandelbrot said that we couldn't calculate the odds of a catastrophe like this. Taken to it's logical conclusion, this kind of means that we can't tell if we should even be paying attention to these two on this matter. (I know. Mandelbrot. But even Homer sometimes nods.)
- jamiequint 18y ago"Taken to it's logical conclusion, this kind of means that we can't tell if we should even be paying attention to these two on this matter." In that case, it also means you don't know if you should be paying attention to anyone.
- senihele 18y agoI'm not sure about your last point. It seems there are some extremely important implications from the determination that "black swan" events are often of incalculable risk. I already posted the link farther down the thread, so I won't repost it, but I highly recommend reading the article - it is written by Taleb and reframes this concept in terms of the current crisis. It really is one of the most interesting high level overviews of the problem I have come across.
- marvin 18y agoMandelbrot practically said that you shouldn't listen to him; not look to him for answers. But in fact, listening to any opinion on the matter is looking for answers. His point is that nothing will give a correct indication about what is about to happen in our current situation. The classical "markets always correct themselves" doesn't necessarily hold.
- colortone 18y agoThe point that they're making is that we should all expand our perspective on what constitutes possible (or even "reasonably likely") outcomes from this. Maybe I'm misinterpreting you, but I'm not sure if your statement about finding ways to "eke by" includes eating beans in your apartment for 5 years or trying to survive getting drafted and serving in the China-Taiwan war. Not just "getting store credit". Anyways, that's how I'm reading it. Definitely thought provoking. Taleb's piece on Edge.org last month is insanely detailed for anyone looking for more: http://www.edge.org/3rd_culture/taleb08/taleb08_index.html http://www.edge.org/3rd_culture/taleb08/taleb08_index.html