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Strategies & Market Trends : 2026 TeoTwawKi ... 2032 Darkest Interregnum -- Ignore unavailable to you. Want to Upgrade?

To: Riskmgmt who wrote (41330)	10/15/2008 3:52:01 PM
From: Riskmgmt	Respond to of 219932

Nassim Teleb has it right INHO. Here are some excerpts (bold type mine) You can read the whole thing at timesonline.co.uk You can imagine what Taleb thinks of orthodox financiers. “I kept saying the risks the banks were taking were crazy, but the economists kept attacking me as “irrelevant” because my ideas didn't fit their theories.” Far better, Taleb argues, to have no theories than bad theories, because ideas are “sticky” - once we have an idea, no matter how useless, we find it hard to abandon it. Professionalism is part of the problem. People want to be seen to be doing something. It is an engine of office politics. So they formulate plans and theories based on forecasts of events - including potential black swans - which are impossible to predict. In other words, much “planning” is worse than doing nothing. “When someone says he's busy, he means that he's incompetent,” says Taleb. Having a stupidly busy schedule isn't a sign of being important. It means that you become insulated from the real world.” Understanding luck and randomness has practical benefits for us all. “Leave some space and time redundant,” Taleb says. “It's good for dealing with black swans.” Like slack in the system? “Exactly. We all need slack. Capitalism doesn't teach slack. It teaches optimisation - if the banks had had twice the capital, this crisis never would have happened.” So is Taleb really against expertise, or is he simply pitting his own against that of the experts? He got this call right. The fall was forecast-able and he forecast it. It was not really a black swan. The colourless conformity of corporate life appals Taleb: “Screw the money. No money can compensate for being turned into a rat in a cage.” In a typical piece of intellectual mischief, his next book describes how two of his fictional characters meet Socrates when the Greek philosopher visits the modern world. One of them predicts that Socrates will notice the absence of slaves. “Absence of slaves?” the second replies. “We've got plenty of slaves. You can identify them because they wear neckties.”