October 15, 2008

"We were in a plane flown by pilots who didn't know what was going on. Eventually it was going to crash"

13 comments:

Anonymous said...

He didn't make his case very well, just a lot of "I told you so" and "you can't trust analysts". He might have said why he felt the risk assessments were "bogus". Was this a case of fudging the numbers to please or of the boss only hearing what he wants to hear? These sound like familiar analytical tools - was it a case of applying them in the wrong domain? He may have been right, but his argument smacks of pseudoscience.

And I know it was edited, but it seems like the poor guy on the monitor never got a word in.

french toast w/side of hash browns said...

Just like the 9/11 "fake attacks," all one big scam, that is the truth by(scientific facts.) It was not what they told us. There was something much more, something BIG and EVIL in those piles of WTC dust.

But as you know, all science, logic and laws are no longer ineffect since the GOP/Bush-Co regime took over America by force, lies and mass deception.

In the end, only the truth remains.

Enjoy.

Miss Goldbug said...

We were in a plane flown by pilots who didnt know what was going on...

Paulson & Benanke still don't.

We're going down.

bobby johnson said...

that's a great classic!

keyser soze said...

Cramer gave a brilliant explanation of the 'bear raids' on the financials yesterday, during the first 10 minutes of MadMoney. I hope you all saw it.

GLTA

Anonymous said...

Taleb's arguments don't smack of psuedoscience!

The problem is that all models have error. When someone comes up with a model that states an asset (i.e. Derivative) is "riskless" and then uses 40 to 1 leverage to invest in it they are taking on risk of losing much more than their initial investment.

His frustration is with people (i.e. World Banking System) using models and not understanding that they have built in error.

The result is what happened in Iceland but on a much larger scale.

Eric said...

When someone comes up with a model that states an asset (i.e. Derivative) is "riskless"

Unfortunately there is no such thing as riskless. When the market finds some untapped source of easy money, it is quickly filled to over capacity, and thus bubbles.

gutless and lazy said...

I'm not one for tin foil hats or conspiracy theories BUT ...

the housing crash and impovishment is consistent with the globalist new world order.

Soon American homes and wages will match Chinese wages and we will be "competitive" again with the formerly poor Asians who now have the bulk of our former jobs.

Is this by design or by accident?

chslaxcoach said...

Wow, this is cool. Six degrees of Hank Paulson.

http://tinyurl.com/3jpgoe

Anonymous said...

psuedoscience?

His argument is as simple as: "there is always something the model doesn't take into account, that gives some low probability of a very large loss". Hence all the "no risk" but low return investments are really high probability of small returns, very low probability of a huge loss. For a hedge fund manager, that's fine, you leverage up turn those small returns into large returns and pocket your commission. When the low probability event happens (like say the USSR collapsing) the hedge fund loses everything.

But since it's just the investors money, who cares, hedge fund management keep their commissions thanks all the same.

Of course Taleb is making a killing at the moment, since his strategy is all about options and lets just say volatility is sky high. And is the reverse of the normal hedge fund, try not to lose money 95% of the time - and 5% of the time make a fortune.

He's also on record that this is not a black swan event, because it was completely obvious it was going to happen. So it's not the type of event he's actually targetting...

www.slycapital.com said...

Taleb is not the best person to argue his case unfortunately.
His position is accurate but he comes across as a crank.

k.w. - Southern Ca. said...

Now there's some level-headed thinking.

It's true ... we don't know what the heck is really going on, but one things for sure, it's getting much worse.

Our experts in charge led us here.

Who will you be voting for?

Anonymous said...

Sorry folks, he's so angry he's incoherent, and hurts his reputation more than helps it with this episode.