Dylan Grice is out with his latest must read analysis, in which the SocGen strategist attempts to reconcile the seemingly intractable: bottoms up, or micro analysis and its polar opposite - top down, macro decision making. In doing so, he does a brilliant detour into the realm of what some may call Talebian philosophy, by evaluating the impact of non-Gaussian phenomena, such as grey and black swans, which, after the past two years, everyone has learned occur far more often than expected, as we all now live in (Socialist) Extremistan. And in a world, where fat tails can occur any day (May 6), how does one hedge, regardless of marco or micro opinions? At the end of the day, one of the messages of Grice is that as we all perceive ourselves as much better traders, thinkers and predictors than we are in reality, should we not just stop trading altogether and focus on actual productive labor? One favorable side-effect would be starving the TBTF beast, which everyone complains about, yet most continue to play according to its rules. If this is too drastic, Dylan suggests that every micro analyst/trader should always be familiar and at least aware with the catastrophe situation, which is always best represented by keeping the macro picture in mind: "Perhaps we should embrace our limitations by accepting that ‘outlier events’ are actually quite regular, and use macro research to aid in the search for appropriate insurance strategies." Must read.