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Nassim Taleb On A Crazier Future
Like him or hate him, the author of The Black Swan does provide a unique and interesting perspective. Here is his entire presentation to the Long Now foundation (via Fora TV) from early 2008, a few short months before everything starting collapsing, and, in many ways some would say, proving him right. Of particular note: Taleb's personal disdain for "experts" of all sorts, is second only to that of Buffett and Munger.
And the full program:
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I wish Naseem could orate like Obama... dude's rich on substance a little lacking in delivery
I like his delivery. It's just not a delivery many people can grasp so easily. A little harder for the type of person that had to watch the Matrix twice to understand it.
Orate like Obama? That's a joke, right? The guy only sounds good after 8 years of GW Marble Mouth. Reagan was an orator. I hate the guy, and they can't pile enough soil on his cursed corpse. But he was an orator. Oblahma simply has decent diction. Or rather he did, until Hillary started to give him a run for his money and so he adopted her half-assed drawl, and it's stuck with him since. He sounds ridiculous now.
The guy is a douchebag. Please stop fawning over him.
I am Chumbawamba.
Bend me over and f*ck me gently...geez.. i'm no Obama fan boy, just saying Obama can orate better than Naseem as a mater of style triumphing over substance... and that having a good delivery goes a long way...
haha
They both suck.
I am Chumbawamba.
Obama's ENTIRE skill set is that he can read a speech in a charismatic and erudite fashion.
That's it... it's all he's got.
(And subtract the teleprompter and even that goes away.)
Notwithstanding the fact that Obama is a douchebag, this presentation sucked. Taleb mumbles too much. His analogies are completely lame. His explanations are more confusing than whatever he was trying to explain. This was a waste of time. I might've spent my hour watching this pile of horse manure reading his book instead.
What the fuck is NNT talking about? I don't know. Please don't bother trying to explain. I don't care.
I am Chumbawamba.
And most of his jokes were completely lame as well. Man, I'm really bummed about having wasted my time watching this. I'm literally dumber for having seen this. I want to kill myself now.
I am Chumbawamba.
LOL! I can always count on CW for a realistic assessment. +100.
That's good to know Chum! Does that mean that no one will remain here who announces his existence as his last and redundant statement? With all due respect, and I mean this sincerely, please get over the... I am.
Nassim's got more interesting ideas than you can appreciate, and at the end, I don't need to be reminded to whom I listened.
Please be careful and respectful when speaking of horse manure. You must obey.
I am Chumbawannabe
Mountain Hawk,
this type of delivery you can find in a lot of scientists. They still think of their suff while presenting it.
That should be separated processes, think it through and after talk about it makes a way better presentation.
I had to learn that myself and it took quite a while.
Anyway, Taleb makes interesting points.
I have read a few of his books, worth the read, makes you think.
What hump?
Cognitive resonance; it's a speed bump.
Interesting comments on Soros and Simons
the concept of "retrospective distortion" (minute 5) unpredictable events become predictable after the fact. I am sure when the current circumstance plays out in the coming months and years historians and pundits will look back at the obvious signs of whatever is about to unfold.
Thank you Tyler!i love Nassim Taleb almost as much as i love you!!!
(a little nail & chalkboard moment for those who hate ZH!)
You heard it first here! Black Swan Monday!
S&P at 872 on 10/26/2009 or sooner!
In researching the Oct 19, 1987 and October 28, 1929 crashes, I ran into some remarkable similarities to today's markets, price action, government actions, dollar declines, overvaluation, trading innovations, and liquidity issues … and in September 1929, 1987 and 2009, they said it could never happen.
Take a look yourself.
You heard it first here! Black Swan Monday!
S&P at 872 on 10/26/2009 or sooner!
In researching the Oct 19, 1987 and October 28, 1929 crashes, I ran into some remarkable similarities to today's markets, price action, government actions, dollar declines, overvaluation, trading innovations, and liquidity issues … and in September 1929, 1987 and 2009, they said it could never happen.
Take a look yourself.
why not tomorrow or the 19th?
Tomorrow is Columbus day ... 10/19 same day as 1987 ... too little time to scare anyone
Webbots say 10/25, which is a Sunday. So maybe they're off a day. Or maybe the calendars are.
Anyway, thanks for the heads up. Better go get more silver before the fun starts.
I am Chumbawamba.
Sorry, you are a bit late. The equivalent of the '29 crash happened last year.
Wrong.....
Check the chart.
http://www.bearmarketcomparison.com/Bear-Market-Comparison-Dow-Jones-Ind...
The stimulus just pushed out the collapse, or dampened it.
The markets transient behavior has yet to reveal itself.
"Like him or hate him" -- the few who hate him are statisticians for daring to decry the importance of all their work.
seems pretty clear to me! A combo of Celenre & Dr. M. Hudson and you should figure it out... JMHO
Hint... Hudson talk on Guns and Buter 8-26-09 ;)
taleb is great and i disagree with the above criticism about his delivery.
excellent podcast interview with taleb by russ roberts on econtalk, itunes or on econtalk site.
Just ignore the Obama brown nosers.
I am Chumbawamba.
bear--i agree that equities will swoon at some point in the next couple of months and i am primarily short at the moment. i would, however, like to hear some of the remarkable similarities you discovered. a little vague...
Check this post later, I will document my observations
thank you kindly Bear...i was wondering too.
You heard it first here! Black Swan Monday!
S&P at 872 on 10/26/2009 or sooner!
In researching the Oct 19, 1987 and October 28, 1929 crashes, I ran into some remarkable similarities to today's markets, price action, government actions, dollar declines, overvaluation, trading innovations, and liquidity issues … and in September 1929, 1987 and 2009, they said it could never happen.
Take a look yourself.
Much of what I am contending comes from a review of the events (causes) leading up to 1987. I will draw upon a 2002 post at George Mason University (link: http://hnn.us/articles/895.html ) for the major causes of 1987 crash.
Comparisons between 1929 and 1987, have been pretty well worked over, so I will only bring up 1929 when is supports my case (disclaimer … I am short ES and NQ) ... but for an interesting take on the similarities take a look at http://www.lope.ca/markets/1987crash/ .
Also another disclaimer … I have tried to make the case for another 1987, in every October since 1988 … worked great last October. Each of the argument below is not compelling in and of itself but together allow me to pipe dream.
Today's market … 1929, 1987, both saw a general consensus of the experts that the market would continue higher forever; bullish consensus today is north of 90%. This alone means nothing since we have been running with the bulls for a long time; however, there was (and is) an angst that something was not quite right in the ever rising markets (sorry for the subjectivity).
Price action … The last gasp rise in 1987, occurred about 70 days after a recovery from a head and shoulders chart formation (5/20/87), on 10/26, will be about 65 days (7/8/09) after a similar formation. Both periods were devoid of major breaks. In 1987, the market collapsed after a failed rally and today we just failed to make 1072.
The other causes of the 1987 crash follow with today's comparative:
CAUSE #1: DERIVATIVE SECURITIES
Bruce Bartlett, senior fellow with the National Center for Policy Analysis of Dallas, Texas:
The Brady Commission concluded that the failure of stock markets and derivatives markets to operate in sync was the major factor behind the crash ...
2009 – Opacity in the derivatives market, if not the primary cause for our current grief, it certainly is a large contributor.
CAUSE #2: COMPUTER TRADING
Website, University of Melbourne:
In searching for the cause of the crash, many analysts blame the use of computer trading (also known as program trading) by large institutional investing companies ...
2009 – Today the markets are DOMINATED by program trading as ZH has been making the case against since its inception. I am sure these systems have never been stress tested for a time when everyone is selling. Also, with super sized equity positions held in so few hands (major banks) no one can predict what would happen should a dislocation event occur.
CAUSE #3: ILLIQUIDITY
Website, University of Melbourne:
During the Crash (of 87) , trading mechanisms in financial markets were not able to deal with such a large flow of sell orders ...
Bruce Bartlett:
While structural problems within markets may have played a role in the magnitude of the market crash, they could not have caused it ...
2009 – As above, what will happen when all trading is taken over by the HFT machines? I'm betting that liquidity will evaporate.
CAUSE #4: U.S. TRADE AND BUDGET DEFICITS
Bruce Bartlett:
Another important trigger in the market crash was the announcement of a large U.S. trade deficit on October 14, which led Treasury Secretary James Baker to suggest the need for a fall in the dollar ...
Website, University of Melbourne:
One belief is that the large trade and budget deficits during the third quarter of 1987 might have led investors into thinking that these deficits would cause a fall of the U.S. stocks compared with foreign securities …
2009 – Policy of FED and Administration is one of a weak dollar to devalue us out of hole. This is my opinion and many here at ZH – not the 'official' position of US Gov. In 1987, the FED had some bullets left to help mitigate the situation. In a crisis today there is nothing left and they will come up blank – after much saber rattling.
CAUSE #5: INVESTING IN BONDS AS AN ATTRACTIVE ALTERNATIVE
The-Adviser.com:
Long-term bond yields that had started 1987 at 7.6% climbed to approximately 10% [the summer before the crash]. This offered a lucrative alternative to stocks for investors looking for yield.
2009 – this may be a deviation from 1987, movement of individual investor dollars into bonds has been very impressive YTD as well as in last few months. Although yields are unattractive, I believe the movement represents a flight away from equities (leaving on the big banks holding equities)
CAUSE #6: OVERVALUATION
Website, University of Melbourne:
Many analysts agree that stock prices were overvalued in September, 1987. Price/Earning ratio and Price/Dividend ratios were too high [Historically, the P/E ratio is about 15 to 1; in October 1987 the P/E for the S&P 500 had risen to about 20 to 1]...
2009 – Ditto. Valuations are approaching 20/1, same as in lead-up to Oct. 1987.
Thank you so much Bear, for your generous post! and of course you are right on all of your points...the only thing that may prolong the mess is the PPT maneuvering for a higher market until they have no more resources to do so...
agrotera ... I'm hoping GS reads my post and reconsiders their stance ... I'm sure they monitor ZH
CAUSE #5: INVESTING IN BONDS AS AN ATTRACTIVE ALTERNATIVE
The-Adviser.com:
Long-term bond yields that had started 1987 at 7.6% climbed to approximately 10% [the summer before the crash]. This offered a lucrative alternative to stocks for investors looking for yield.
I missed that! So I buy a long-term bond with a 7.6% yield and it goes to 10% yield, and that's a lucrative purchase? Yeah, if I shorted it. I'd be in the green or black with a yield rally. Sold to you.
Prediction is a fool's game. Ride the tiger in real time.
do not kid yourself, we go up for many months, untill money printing presses slow down
Agreed. I wish Bear was right, but this isn't going to stop. :(
BTW, the moderator is Stewart Brand (Whole Earth Catalog, etc.) Long Now Foundation rocks.
I am Chumbawamba.
glad someone else 'round here thinks so too.
Chumba, you watch the Michael Pollan video?
anyone into growing their own food should watch this.
how did your garden go this year btw?
Not yet, but look forward to it. Michael Pollan is a good speaker.
My garden went OK. My soil was still deficient, it would seem. We're ramping up the composting.
I am Chumbawamba.
best and cheapest way to fertilize your soil: urine.
this is the best time to do it too. just start pouring your pee onto your beds before it starts to starts to get cold and let the earth do its magic. (just make sure you're not taking any pharmaceuticals)
in springtime, get some soil tests done both on your uncomposted beds, then on your compost. mix in some baking soda, epsom salts & lime as needed (sodium/magnesium/calcium).
a good thing to do to is buy some organic fertilizer (now that it's cheaper) and mix it into your compost now and let the bacteria start growing and making more micronutrients. the brand plant-tone is the best cuz it's got some special bacteria that others don't have.
good luck.
"Definitely, I am not voting for Ron Paul."
Interesting. Either he claims to understand something that he actually doesn't or many smart people that are his neighbors in extremistan are wrong.
I respect Nassim. He is obviously very smart and has a strong foundation of reason. His viewpoint is extremely important, mainly IMO because of the negative advice that he gives in terms of not trusting economists projections where they can just extend the cells in an excel spreadsheet like goldman sachs just did for the latest budget deficit revision/projection. And the illusion of control picture of the council of economic advisers was just balls to the wall awesome and incredibly ironic in every sense.
However...
While it is hard not to be a skeptic on some level, having seen the same things he has seen, the impression I get from watching him is one of intellectual surrender. There is no will to make the jump unto a pillar not as strongly supported as the things he claims he understands. It is necessary to delve into the unknow, the things that you do not understand, sometimes and try, just try to make that non-linear model (conjecture) make sense, even if there is an "explosion of the degrees of freedom."
And the most fascinating part of the lecture IMO was him trying to describe entropy without using the word just once, which makes me question whether he knew he was talking about entropy. Hard to articulate this idea but I'll try: the subject matter that fascinates him so much,social science, is a study of life and life is the antithesis of entropy. Simple things have become complex things. Unlike his example of entropy where we cant reconstruct the origin, in life, we have reconstructed the origin, and pretty precisely. (mind you we dont know why single celled organisms formed or how, but we can make extrapolations about its properties) As time progresses we dont lose information about the past (as much) as we do in his example. Its relative, and of course we might never know about the various dead ends that met their match at the last few extinction events...but we can still trace a pretty complete picture of the path that led us here. Hence it is my view that you cannot approach the subject matter here,life, with such an overwhelmingly skeptical point of view.
To me it looks like what Nassim is doing is more like running away from the uncertainties than trying to find the certainty. And to be sure, I not saying there are certainties in life, but proximity to them does help matters.
The one comment he seems most proud of was when he said that the bell curve was "immoral" and in my opinion, that statement seems to encapsulate some of his passion--he cares deeply about the deceptions that we can all be subject to in life, especially those produced by people who are supposed to be revered experts, and, his iconic "black swan" is a great reminder to us to not forget that in life ANYTHING can happen at ANY moment. And remembering this is very valuable in all decisions that need to be made...and most people reject any acknowledgement of life's unlimited possibilities because of the face we are prone to cognitive dissonance.
that's a very insightful observation...thank you for sharing.
now if we take this to a societal level, many people acting with cognitive dissonance create a society where the possibilities are limited by their own perception, yes?
yet it is their collective limitations borne from collective dissonance is what in turn gives birth to the black swan.
it is thus a society seeking balance in spite of itself.
agrotera, Murphy's Law in its vrey essence. Anything that can go wrong will go wrong. One of the keys Talib puts forth is the concept that the greater the complexity & interdependence the greater the fragility. This on the surface appears to be a no brainer. However, it can be effectively argued that it is precisely this weakness TBTF institutions including central banks and political leaders exploit in order to ensure the ever greater socialization of the put and the eventual loses.
This is the lynch pin of the current structure and the insidious nature of the organized larceny we have called OH HELL NO to.
Cheers.
The most common explanation heard by insurance accident investigators: "it came from out of nowhere!" Now I'm not in insurance and assumed the above is true because I am an intuitive rather than a deductive thinker, but doesn't it seem true and predate the first sighting of the Black Swan in Australia? Is it true that there is nothing new under the sun and we are born to bubble in our social DNA core?
Worthwhile video to watch. I came across this and watched the beginning of it and stopped somewhere last time but this time, I watched the whole thing and found it worth the time. Thanks.
I don't know much; but one thing i do know; they are scared, and they are scared shitless.
shit meet fan.
oh shit.
Indeed. When the big bank cheese feels the need to come out and do powder puff while the public cheese is obliged by circumstances to say we really really mean it this time, with no consideration to the inherent poker tell whatever one takes away from the fluff one must acknowledge the fear. Scared people with and in power is by definition inherently risky.
Cheers!
How much weight do you give periphery events like Nassim develops? In appplication, with the fools of today I find his work to shed light on the false. Is he saying there is a relationship here between Cog. Dis. and these events?
am i really here??
sorry for the waffle ,people, but this is a great list an i didnt think i was gonna get on. anyway ...im in australia and have been watching this historic event develop over the past 3 years since stumbling across the Mogambo Guru on Kitco and from then on takin in as much as i could , and watching it develop ,exactly as predicted,while noting with extreme interest the total LACK of insight /comment/discussion ,here at least ,by the media of all varieties.(not only here ,im gathering) What a refreshing,lifegiving blast of chi is this bit of reality. All of you ,take a bow,without you , there would truely be ....no hope!
Taleb needs to read Jacques Ellul. His "Black Swan" idea is just one aspect of the ideas he puts forward in The Technological Society.
The problem of "rare events" is endemic to a a civilization that relies upon the use of techniques.
In a nutshell, things sneak up on us because we rely heavily on models and codes to disseminate information. Graphs and mathematics and such.
While efficient, this kind of knowledge is very thin. That is to say, when you model something you deliberately leave out all "irrelevant" and "extraneous" data and reduce a problem to its "essence." This means you leave out minor data that can become a black swan later.
This is how our universities train almost everyone, economists especially.
The economic crisis only blindsided people whose understanding of markets was based on technique (MBAs and such.) People with a *solid* understanding of how markets work (gained not from textbooks but through experience) saw this coming a mile away.
Welcome aboard Celticgold - tell your friends "and enemies" about this blog .
yeah welcome celticgold; and yes spread the word about ZH, but dont tell anything to stupid people.
Too late. Dennis Kneale apparently has read on here before (and the odd Republicrat groupie)...
i dont give a shit about that little bitch Dennis Kneale, but i do know that Jim Simmons reads ZH, and that says a lot about this place and why im a regular here ...
hehehe Damn, mate, my knees start knockin when you really turn on the charm!
well, i do get a lot compliments for my charm, and also, im quite lovable, like a little st. Bernard puppy spawned out of Satans uterus ... everything says you should hate me, but it is impossible to actually do so ...
I am just pleased as all get up that you are not a Cerberus in the least... CB
I'll add my welcome to the newbie, celticgold. Thanks for participating and indeed, spread the word. I would love to hear more insight from your part of the world and look forward to reading your contributions.
J.A.F.O.
More and more Aussies read ZH. Severe lack of insight by mainstream commentators downunder drives us to look yonder. BUT, one bright light - check out our very own Aussie economist, Steve Keen. Smart guy. Worth reading.
Cheers, Sherry
On my list Sherry. Thanx for the snack. Didn't I see him at NC and on Max Keiser?
Cheers
Darlin, I have always said you are TWICE as cute as any of Satan's spawn I ever saw...you and the ZH gallery are as seductive and destructive to me as one glass too many on a weeknight.
dude, i don't swing that way ( or is it dudette ? )
HAHAHA omigod I forgot my avatar for a sec there!!! Roffle.
I'm straight too handsome but alas married and my footy-player husband reads the blogs!
Was just having some online fun during a boring part of the movie I'm watching - yes, ZH is more fun than some flicks - and forgot who I 'am' online. My avatar is about my personality and the 'male' side of that is just coincidence.
OK, for the first time in Christ knows how long I in fact laughed 'out loud' at a post...
But...PLEEZE. -ette? Not since the pompoms in high school my friend.
I do apologise for the confusion!
Victoria Beckham is that you ?
Nah all my parts are REAL.
Besides, I have it on good authority that they're - well - Scientologist. So I reckon she'd be more interested in me than you anyway... :-P But by the same token you might have a crack at him if you're well behaved.
(Dammit. No more wine. That's it.)
wait; is this some sort of a Twilight Zone episode; i mean a wife of a football player is reading a financial blog AND has an actual knowledge of the topics covered here; god damn; i am absolutely stunned. Oh, and if your hubby plays for Inter or Barcelona tell im to GFH. LOL
Worry not. Just local league, buncha middle-aged guys do a few tackles and then drink VB all arvo, occasional broke leg. So you're still on terra firma; he has a Real so-called Job, he's not pro and we both can read. Most of the time without drooling...
And NOT the kind of footy you're thinking of! Rugby League not soccah. We aren't a bunch of pouftahs afraid of pain at THIS side of the globe...
ITS NOT SOCCAH FFS; ITS FOOTBALL !!!!! and the football you have in mind is rugby for pussies ( aka rugby with body condoms in the form if " gear " and hence invalid ) ( if you dont believe me ask any genuine Scotsman or Englishman or Irishman )
THERE'S the Cheeky we all know and love. You were becoming a tad too polite there.
My husband says that's b/c *they* have something to protect. :-P
(I was going to say something peaceful but now you've pissed him off...)
Pain is the ultimate transcendence into what is real, there is nothing more real than pain. Football is a simulacrum; it is a travesty of safety and anthropocentric belief; it presupposes the uniqueness of and individual, rugby; rugby is is pain; it is a poetry of blood and movement. ( See, the metaphor is weird; but has values nevertheless )
A poet and a philosopher, a gentleman disguised as a saboteur no less, how salacious. Sir I salute you. I savour your poetry, forgive the occasional redundancy thereof, and nominate you for a Nobel Peace Prize.
We have to raise the bar on that thing somehow.
Shit. I have to allow you the last word b/c now he says it's time for bed...
" I don't care to belong to any club that will have me as a member " Thank you, dear lady and good night; oh and BTW it 3 pm here, where the hell are you stationed.
VB - Victoria Bitter? See! Told ya there's more and more Aussies here.
VB - Victoria Bitter? See! Told ya there's more and more Aussies here.
Aussies & Icelanders.. The list grows. Victoria indeed.
Cheers
Stupid people have money too, and need to figure out what to do with it in a financial crisis.
Now go ahead and tell me to shut up.
why would i tell you that; you are right; but i didnt mean in that context; more in a " my fucking head hurts when i see all the morons who think this is HuffPost or Daily Kos and they think that the crowd here is retarded so they write shit instead of something that has actual worth and a foundation in knowledge and intelligence " context.
WhotF would put Celente and Taleb in the same sentence?? Taleb is the only one who has not jumped the shark! Celente is the Ekhart Troll of finance...morning Cheeky!
its 1:20 pm here, but good morning to you Sqworl. Yes Celente is a little troll of modern finance; IMHO he is annoying, never changes his tune ( i mean his every interview is the same; up to the word, if you dont believe me; youtube it mang )
I know Caliente Celente, he believes he is the Fashion Nostradamus of the century. I also know Taleb, and take his finance advice seriously. Cash is King...x
How's the bread line in UK?? Heard the mail went on strike and peasants did not get Dole check?
o_O, i dont know, you should ask someone who lives there ; i have no idea whats happening with those fuckers ( no one on the Continent likes them ).
Thanks Sqworl.. saved me from saying it. CB time on target again. WhoT!
Y U B hatin on Celente?
Tough crowd here. Taleb & Celente. It's a classic pairing, like Princess Clara and her Cousin in the helmet in Drawn Together.
Monroe & Miller.
Demi & Ashton.
Bugs & Daffy...
It's a trope, dammit.
I am thinking more of the classic cinematic role pair, Lockwood & Lamont... Yes. Yes. Yes. No. No. No.
I am not hatin'. Just laughing at their first effort at a taklie... Sitting through a first effort of The Dueling Cavalier after seeing The Jazz Singer.
The influence of public assistance over individual creative effort & energy shines through once again.
Cheers.
I am Miles Kendig and I'll never go back for any amount of money.
hehehe glad I'm not the only one up late looking at boring movies...And they wonder why I drink!
I'm glad to see you take a healthy attitude to help for the the less talented. Profuse apologies for calling you a Hater. ;-)
Accepted ;-)
Miles: always expect the expected from moi...x
thanks bear. i would love to see people to continue to prosper in this market. really, good for them.
this is my third day on zero hedge, although i've been reading for months now. i want to throw out a quick thank you to all those who post here and keep it lively.
back to the wall street urinal
Welcome to the comments section ChickenTerriyakiBoy. Looking forward to your insights and to those you bring with you.
All The Best
lotsa n00bs ( relatively speaking ) past couple of days; well, one way or another; WELCOME ALL TO THE WORLD OF REAL ...
Cheekster: I capitulated last week and went long "C"...up 4.3%...the stars indicate that it might make good dressing for Calamari salad...
Name and number of a man. Hmmm, sounds prophetic, not like some used car salesman or some dumb Black Swan Squawk Box. Get the RFID chip out of your dusty ass and stay away from the flying pig. Get a clue, this market is easily played, just divest the provision required to sustain wisdom, do not invest in zero interest designed to tempt you into failure. Stand fast and do no harm.
If Chumbawamba lived in Harare would he become Chumbabwean?
Talk about your black swans...
If he lived in Alaska, could he act like a grizzly bear pediatrician and simulate an uncomfortable procedure on a cub as its momma comes back with some lunch?