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Taleb On "Skin In The Game" And His Disdain For Public Intellectuals

Tyler Durden's picture


Nassim Taleb sits down for a quite extensive interview based around his new book Anti-Fragile. Whether the Black Swan best-seller is philosopher or trader is up to you but the discussion is worth the time as Taleb wonders rigorously from the basic tenets of capitalism - "being more about disincentives that incentives" as failure (he believes) is critical to its success (and is clearly not allowed in our current environment) - to his intellectual influences (and total disdain for the likes of Krugman, Stiglitz, and Friedman - who all espouse grandiose and verbose work with no accountability whatsoever). His fears of large centralized states (such as the US is becoming and Europe is become) being prone to fail along with his libertarianism make for good viewing. However, his fundamental premise that TBTF banks should be nationalized and the critical importance of 'skin in the game' for a functioning financial system are all so crucial for the current 'do no harm' regime in which we live. Grab a beer (or glass of wine, it is Taleb) and watch...


Via Redmond Weissenberger of the Ludwig von Mises Institute Of Canada,

A must see interview with Nassim Taleb

Nassim Nicholas Taleb is a former trader and hedge fund manager, a best-selling author, and a ground-breaking theorist on risk and resilience.

Taleb drew wide attention after the 2007 publication of The Black Swan: The Impact of the Highly Improbable, which warned that our institutions and risk models aren’t designed to account for rare and catastrophic events. Among other things, the book cautioned that oversized and unaccountable banks using flawed investment models could bring on a financial crisis. He also warned that the government-sanctioned housing finance agencies, Fannie Mae and Freddie Mac, were sitting on a “barrel of dynamite.”

One year after The Black Swan was published, a global banking crisis was brought on by the very factors he identified.

Taleb doesn’t identify as a libertarian, but he often sounds like one. He has argued that we need to build a society where major actors have “skin in the game” and our public intellectuals can bloviate without subjecting the rest of us to the consequences of their bad ideas. He supported Ron Paul in the 2012 presidential election and has cited the libertarian economist Friedrich Hayek as an influence.

Taleb has called New York Times columnist Thomas Friedman “vile and harmful” and coined the phrase the “Stiglitz Syndrome” after Nobel-prize winning economist Joseph Stiglitz, which refers to the phenomenon of public intellectuals being held utterly unaccountable for their bad predictions. Paul Krugman and Paul Samuelson are among Taleb’s other Nobel laureate bête noires.

Taleb's new book - Antifragile: Things That Gain from Disorder Taleb’s new book is Antifragile: Things that Gain with Disorder, which argues that in order to create robust institutions we must allow them to build resilience through adversity. The essence of capitalism, he argues, is encouraging failure, not rewarding success.

Reason’s Nick Gillespie sat down with Taleb for a wide-ranging discussion about:

  • why debt leads to fragility (5:16);
  • the importance of “skin in the game” to a properly functioning financial system (10:45);
  • why large banks should be nationalized (21:47);
  • why technology won’t rule the future (24:20);
  • the value of studying the classics (26:09);
  • his intellectual adversaries (33:30);
  • why removing things is often the best way to solve problems (36:50);
  • his intellectual influences (39:10);
  • why capitalism is more about disincentives than incentives (43:10);
  • why large, centralized states are prone to fail (44:50);
  • his libertarianism (47:30);
  • and why he’ll never take writing advice from “some academic at Cambridge who sold 2,200 copies” (51:49).

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Fri, 01/25/2013 - 20:54 | 3187030 kaiserhoff
kaiserhoff's picture

I couldn't recognize that fraud Gillespie (my brother was a libertarian) without his fucking leather jacket.

So much career building in DC.  So few human beings.

Fri, 01/25/2013 - 21:07 | 3187048 I think I need ...
I think I need to buy a gun's picture

how are we still running???????????????//

Fri, 01/25/2013 - 21:18 | 3187064 kaiserhoff
kaiserhoff's picture

The question is not who is running, but what, if anything, is being done.

It is not the job of the libertarian leadership to make polite cocktail conversation with the tyrants and parasites.

Fri, 01/25/2013 - 22:00 | 3187129 DoChenRollingBearing
DoChenRollingBearing's picture

Taleb's new book is extremely good.  I have written on four of his ideas recently, probably the best place to start is the below, then if you are still interested, look at my January posts (the below introduces his antifragile idea):

"Antifragile: A New Book By N. N. Taleb"

Fri, 01/25/2013 - 22:52 | 3187216 TruthInSunshine
TruthInSunshine's picture

A true Taleb related gift for the ZH noobs (ZH veterans, you've probably read it):


The New Yorker


How Nassim Taleb turned the inevitability of disaster into an investment strategy

gladwell dot com - blowing up
Fri, 01/25/2013 - 23:09 | 3187238 All Risk No Reward
All Risk No Reward's picture

I have disdain for people in positions of influence who run interference for the Federal Reserve by not outing them as criminals per Section 2A of the Federal Reserve Act.

That's right, Taleb, there is no dual mandate.  All you have to do is read the mandate and you will see that it is singular and been broken for about 30 years running...

Federal Reserve Act
Section 2A. Monetary Policy Objectives

The Board of Governors of the Federal Reserve System and the Federal Open Market Committee shall maintain long run growth of the monetary and credit aggregates commensurate with the economy's long run potential to increase production, so as to promote effectively the goals of maximum employment, stable prices, and moderate long-term interest rates.

[12 USC 225a. As added by act of November 16, 1977 (91 Stat. 1387) and amended by acts of October 27, 1978 (92 Stat. 1897); Aug. 23, 1988 (102 Stat. 1375); and Dec. 27, 2000 (114 Stat. 3028).]

I highlighted the singular Fed mandate.  You can read on to learn about the expected results of PROPERLY CONFORMING TO THE SINGULAR fED MANDATE.

Now that we've sliced through the Orwellian disinformation (that Taleb will never talk about in a future article for fear of... ???), let's look at what the Fed actually did...

Look at the first chart...

"exponential to" is contradictory to "commensurate with" by definition.

Time for Taleb and all the other fake commentators to duck and cover and pretend the bankster Matrix false narrative is reality.

Oh, dividing and conquering is all good and gets pats on the head from "the cartel," right Taleb?

Sat, 01/26/2013 - 08:09 | 3187488 GetZeeGold
GetZeeGold's picture



Critical thinkers.....send them to the great white north and let the dieing polar bear population rip their heads off. Once that happens I will lose my disdain.


No fawning White House press corp members we're hurt in the process of this posting......and their reactionary talking points bulletin will be handed out tomorrow. Go get'em tigers.

Sun, 01/27/2013 - 00:25 | 3188704 All Risk No Reward
All Risk No Reward's picture

Note the person who down marked the post couldn't articlulate why.

It is probably a Taleb fan who got all emotional instead of acting rationally and asking, "ya, how come the Fed breaks the law, lies about its mandate and nobody, including Taleb, will talk about it publicly?"

Nope, that though hurts too much, so the lying criminals will have their way with an ignorant society.

And when this all burns, guys like Taleb, and all the other controlled pundits will be as much to blame as everyone else...  the people demand to be hoodwinked and these people are more than obliged to wink that hood.

Again, the emotional "fight or flioght" response is manipulated by the TPTB as is the education system so that critical thinking is suppressed and the almighty "appeal to authority" is ingrained.

It doesn't matter if it is establishment or oppostion - Vladimir Lenin said, "the best way to control the opposition is to lead (ot fund) it."

The establishemnt is wrong.

The promoted "opposition" is wrong as well.

"Free market" can't work when criminals are running the system.

The criminals are smarter and more Machiavellian than the sheeple - so the rule and most sheeple suck up to them - both estasblishmrent (banker financed) and controlled opposition (banker financed).

Sun, 01/27/2013 - 00:29 | 3188707 All Risk No Reward
All Risk No Reward's picture

"Rome burns" (being systematically bankrupted by criminals in power) and Taleb has "investment advice."

The game is changing people.  The criminal authoritatians aren't going to let you "invest" your way out of this.

Taleb's whole worldview is a distraction.  That's why the system has allowed you to know his name.

Bread and circus.

Sun, 01/27/2013 - 16:27 | 3189438 nom deplune
nom deplune's picture

Critical thinkers.....send them to the great white north and let the dieing polar bear population rip their heads off. Once that happens I will lose my disdain.


No fawning White House press corp members we're hurt in the process of this posting......and their reactionary talking points bulletin will be handed out tomorrow. Go get'em tigers.



Sat, 01/26/2013 - 08:20 | 3187491 lewy14
lewy14's picture

That's awesome. One thing though - you really can't play Taleb's game the way it's written.

The deep out-of-the-money options are too expensive. (At least the puts are).

The real geniuses seem to find the self-funding hedges (e.g. Magnetar).

What's the Magnetar trade on the Euro collapsing? On the Yen collapsing?

I'm wondering if the right bet isn't simply long OOM options, but to bet on the VIX term structure inverting. Can that be done profitably?

Sat, 01/26/2013 - 13:24 | 3187794 tradewithdave
tradewithdave's picture

Great point. Hoping someone weighs in on this. Does the "long tail" have a barb at the end of it?

Sat, 01/26/2013 - 15:36 | 3187978 Blues Traveler
Blues Traveler's picture

Good commentary.....and unfortunatley the VIX is a hooker w powerful clients

Sat, 01/26/2013 - 15:35 | 3187979 Blues Traveler
Blues Traveler's picture

Good commentary.....and unfortunatley the VIX is a hooker w powerful clients

Sat, 01/26/2013 - 08:54 | 3187511 Go Tribe
Go Tribe's picture

Taleb is a one-hit wonder. Like a lot of the pundits who called the crash. Nothing they say today is meaningful.

Sat, 01/26/2013 - 14:34 | 3187899 Landrew
Landrew's picture

HT DoChen! Thank you so much for recommending the book! I think the book has changed my life and bought understanding to one of my greatest failures in trading this last year. He is a true genius and I wish somehow he could lead our country to a better future than we have in store. I think if he were to tell what he thinks about the future of our great country it would scare even the most informed of us. Thanks again, I owe you more than one:) It's a book that you really have to read and if you are very smart read it twice!

Fri, 01/25/2013 - 21:22 | 3187067 negative rates
negative rates's picture

On fumes?

Fri, 01/25/2013 - 21:59 | 3187124 Freewheelin Franklin
Freewheelin Franklin's picture

I couldn't recognize that fraud Gillespie (my brother was a libertarian) without his fucking leather jacket.


His jacket is having an affair with one Matt Welch's ties.

Sat, 01/26/2013 - 03:08 | 3187420 clara-to-market
clara-to-market's picture

This is a rigged market.

Only suckers have skin in the game.

Fri, 01/25/2013 - 20:56 | 3187031 lolmao500
lolmao500's picture

How many statists ever STARTED a business?? Not a single one.

All these ``the state knows best`` scumbags don't have skin in the game... well they think they don't... but really, they do.

Fri, 01/25/2013 - 21:28 | 3187076 NeedtoSecede
NeedtoSecede's picture

Ya, these fuckers have skin in the game. My skn, your skin, and several generations of our decendent's skin. But none of their own.

I don't have words to describe how much I loathe the gooberment and all their useful idiots in Media-Academia Complex.

Hey, did I just invent a new ZH acronym? MAC. Anyway, they still make me throw up no matter what you call them.

Sat, 01/26/2013 - 05:15 | 3187436 JOYFUL
JOYFUL's picture

Thanks to the evolution of what US Army Major(retired)and self-described Satanist(Temple of Set)Michael Aquino calls MindWar, you don't have the words to describe how much you loath "gooberment and all their useful idiots in Media-Academia Complex" because the behavioural controls originally developed to use upon 'foreign' enemies have now been employed upon 'domestic' ones...aka, the Merikan citizenry. And therefore, you can never get  quite close to understanding just what exactly it is to loath.

But thanks to the work of one of the very few resistor intellects left at large, it is possible to pull this group out of the shadows they cultivate, and define who and what they are, so as to eliminate their effective hold upon the consciousness of the citizen-victims of their depredations. Vis,

"The rise of a de-ethnicized non-Jewish managerial elite that rejects traditional cultural institutions—as exemplified by Bill Clinton and Hillary Clinton—and interwoven with a critical mass of ethnically conscious Jews and other ethnic minorities is an enormously important fact of our current political life."


The war to disestablish the specifically European nature of the U.S. was fought on several fronts. The main thrusts of Jewish activism against European ethnic and cultural hegemony have focused on three critical power centers in the United States: The academic world of information in the social sciences and humanities, the political world where public policy on immigration and other ethnic issues is decided, and the mass media where “ways of seeing” are presented to the public."

Both quoted passages are from Kevin MacDonald's The Culture of Critique, a masterful exploration of the topics which are forbidden to us to discuss now, when both social and biological science have been handed over to the frankist-sabbatean crypto-jewish overlords.

Taleb is most certainly on to something when he discussed the cultural asset of dissuasion, or 'punishment'...but it's both a sad and telling mark of our wounded Western psyche and civilization that even people as bright as the Tylers should describe that trait as an incipient Libertarianism...said cult being but another example of talmudist-cabbalistic hegelian dialectical control all sides of the opposition strategy. In truth, such a cultural attribute is more fairly posited as belonging to the Europoid race and culture...not to a phony hebraic capital  or liberty ism...both buzzwords designed to hide more than they reveal about those who employ them.

MacDonald hits this fact on the nose, with scholarly precision:

"Recent research by evolutionary economists provides fascinating insight on the differences between individualistic cultures versus collectivist cultures. Fehr and Gächter (2002) found that people will altruistically punish defectors in a “one-shot” game—a game in which participants only interact once and are thus not influenced by the reputations of the people with whom they are interacting. This situation therefore models an individualistic culture because participants are strangers with no kinship ties.

The surprising finding was that subjects who made high levels of public goods donations tended to punish people who did not even though they did not receive any benefit from doing so. Moreover, the punished individuals changed their ways and donated more in future games even though they knew that the participants in later rounds were not the same as in previous rounds. Fehr and Gächter suggest that people from individualistic cultures have an evolved negative emotional reaction to free riding that results in their punishing such
people even at a cost to themselves—hence the term “altruistic punishment.”

Essentially Fehr and Gächter provide a model of the evolution of cooperation among individualistic peoples..... Their results are least applicable to groups such as Jewish groups or other highly collectivist groups which in traditional societies were based on extended kinship relationships, known kinship linkages, and repeated interactions among members. In such situations, actors know the people with whom they are cooperating and anticipate future cooperation because they are enmeshed in extended kinship networks, or, as in the case of Jews, they are in the same group.

Europeans are thus exactly the sort of groups modeled by Fehr and Gächter and Henrich et al: They are groups with high levels of cooperation with strangers rather than with extended family members, and they are prone to market relations and individualism. On the other hand, Jewish culture derives from the Middle Old World culture area characterized by extended kinship networks and the extended family.

This suggests the fascinating possibility that the key for a group intending to turn Europeans against themselves is to trigger their strong tendency toward altruistic punishment by convincing them of the evil of their own people. Because Europeans are individualists at heart, they readily rise up in moral anger against their own people once they are seen as free riders and therefore morally blameworthy—a manifestation of their much stronger tendency toward altruistic punishment deriving from their evolutionary past as hunter gatherers."

The Clintons, Aquinos, and their ilk are the public face of this new group whom your acronym seeks to personalise - race traitors and willing syncophants to the moneymasters who own them...truly scum deserving of the severest of 'altruistic punishment' for 'free riders'

Sat, 01/26/2013 - 17:11 | 3188095 Ghordius
Ghordius's picture

"groups with high levels of cooperation with strangers rather than with extended family members, and they are prone to market relations and individualism" - fine, but does this describe "all europeans" or isn't it more a matter of degrees, with one extreme a feature of WASPs, particularly the individualism?

A popular theory stated that individualism is stronger the more you travel west, in europe, while cooperation increases if you travel north.


"Taleb doesn’t identify as a libertarian, but he often sounds like one."

Well, he sounds reasonable, but Classical Liberals could claim him as well. Which is a funny thing to debate on a living person...

Sun, 01/27/2013 - 06:56 | 3188853 JOYFUL
JOYFUL's picture

The distinction you make between 'índividualism' and 'cooperation' leaves the detached observer with the impression that you employ the two terms as diametric ....

I would suggest that they are instead best viewed as concomitant - the stronger the sense of individuality, the greater the capacity to reach out without fear or unfounded aggression. Cooperation comes naturally to the individuated persona, who easily discerns self interest and the interest of the 'other' as being potentially parallel. Certain shadowy subgroups have imposed a more jaundiced outlook  upon the polity with a view to advancing their own collective interests.

In the original quotation as referenced, the correct context was individual versus collective. It may be compelling evidence of the curiously hamstrung continental mindset that these very different terms should be conflated.

Sat, 01/26/2013 - 19:19 | 3188305 malek
malek's picture

While you make some very good points, two remarks:

- "that rejects traditional cultural institutions—as exemplified by Bill Clinton and Hillary Clinton—"

Smells like rational corner-cutting - how can you be sure they are not just posturing?

- "another example of talmudist-cabbalistic hegelian dialectical control all sides of the opposition strategy"

I am willing to disentangle quite some associations, but this babble seems to be pure propaganda. ("Demand the perfect solution, and if the opponent cannot come up with one, denigrate his opinion as utter invalid.")

Sun, 01/27/2013 - 06:36 | 3188847 JOYFUL
JOYFUL's picture

Dear Squire, when engaged in (s)wordplay, care needs be taken to avoid nicking oneself: in this case, I fear the blood you have drawn may indeed be your own!

I am willing to disentangle quite some associations, but this babble seems to be pure propaganda. ("Demand the perfect solution, and if the opponent cannot come up with one, denigrate his opinion as utter invalid.")

While calling terms precise in their description of the phenomena at hand 'babble' is entirely your right, and your own affair, to do so in this case seems to epitomize the very axiom which you seek to employ to rhetorical advantage. Though one might attempt to challenge  the terms used as to their accuracy or useful context, your chosen form of critique instead implies the mind wihich, when confronted by that outside it's conditioned references, seeks to impugn what it cannot grasp. End result, goal in own net syndrome.

That said however, I joyfully accede to to the substance of your charge - pure propaganda - as commonly defined -

1. The systematic propagation of a doctrine or cause or of information reflecting the views and interests of those advocating such a doctrine or cause.

2. Material disseminated by the advocates or opponents of a doctrine or cause

as unlike those who I commented upon, I do not attempt to pass off my positions as impartial, or unreflective of my own self interest!

As to the other part of your estimable effort, I believe that you have both ask and answered your own question....

but of course the players described posture - as all puppets do, in the hands of their puppeteers...that very facet of their character is part of what defines them as renegades from their own root culture - wherein one simplies is who they are, rather than postures an identity...the prevalent cultural norm of the hollow men(womyn)who rule over us now, as satraps of the great talmudic sandrehin.

To your health!


Mon, 01/28/2013 - 00:07 | 3190387 malek
malek's picture

It would help your point to keep it succinct.

Fri, 01/25/2013 - 23:13 | 3187244 All Risk No Reward
All Risk No Reward's picture

>>How many statists ever STARTED a business?? Not a single one.<<

Your paradigm is wrong.

The biggest statists are running the planet as a business.

The multi-national corporations are their main interests.

Government is their handmaiden.

They finance and promote the operatives that will lie to you and then do the bidding of the banksters that promote and finance them.

Debt Money is a Fraud - flow charted out in the PDF below...

Sat, 01/26/2013 - 12:17 | 3187705 Pseudolus
Pseudolus's picture

Indeed, the idea that Gov is some enormous Not For Profit is risible

But then, its all part of the "Government is here to help" meme in the great shell game

Of course, the pay as you go system - the one that we end users interact with - is always out of pocket & poorly budgeted - therefore always pan-handling like a NFP (Gov has a big stick in the other hand)

The third estate are simply marks to be taxed "until the pips squeak."

You don't need to do forensics or even see the full set of books to see through the farce of finance (etym. pay ransom, fine, settle a debt)

Sun, 01/27/2013 - 01:24 | 3188750 All Risk No Reward
All Risk No Reward's picture

Even "the books" are fraud.

Research CAFR - consolidated annual financial reports.

States send this to their master - the international banking cartel fronts that isse debt money to states from "thin air."

They don't "print" people - that term is a psy-op to confuse the sheeple. 

They issue debt - and interest is due. 


Meditate on that Veritas.

Clint Richardson has been exposing the CAFR fraud.

A podcast discussing CAFR issues is here

Clint Richardson interview, Pt. 4 – “CAFR – Welcome to the Machine” - #145

Clint's blog is here:

Do a page search for CAFR and you will find many entries.

Your government lies to us all the day long - every one of them that isn't out telling the truth of these frauds is a liar.



Wed, 02/06/2013 - 18:21 | 3221470 Pseudolus
Pseudolus's picture

Its CAFR (walter burien) I was hinting at when I said you dont need to do forensics on the books to see it

I'm glad someone caught it - but not surprised it was you



Fri, 01/25/2013 - 21:02 | 3187040 Banksters
Banksters's picture

Taleb hates bankers.   I hate bankers.   

What's not to like?!

Fri, 01/25/2013 - 21:08 | 3187050 I think I need ...
I think I need to buy a gun's picture

i do to by the day because i can't eat without french fries going up by the day and no way to protect i'm getting angry

Fri, 01/25/2013 - 21:03 | 3187041 AldoHux_IV
AldoHux_IV's picture

did philosotrader just become a new meme?

Fri, 01/25/2013 - 23:21 | 3187254 williambanzai7
williambanzai7's picture


Sat, 01/26/2013 - 01:11 | 3187364 Rusty Shorts
Sun, 01/27/2013 - 18:25 | 3189585 AgShaman
AgShaman's picture

If you look in the ice can see that woman's face/mouth about to "go down" on some Dude's equipment.

Damn subliminal messaging

Fri, 01/25/2013 - 21:14 | 3187056 JR
JR's picture

Major media this week called “encouraging” the "recovery" signs that are coming from the stock market and a drop in unemployment claims (a total easily explained away by Zero Hedge analysis). Sadly this is what passes for an economic report. Yet, the stock market is not the economy and is less and less so over time.

A lie this big as America's raison d'etre will blow up; central planning by and for the financial elite no longer can maintain it.

The Fed has perpetrated one of the greatest crimes against man in the history of Western civilization. The heist of wealth from the greatest economic and humane miracle the world has ever produced is incalculable…wide, deep and long in duration…and can now be detected in America’s rapid decline.

And, yes, the Fed’s crimes -  enabled by the duplicity of the U.S. Congress and the power-mad sycophants in the nation’s Oval Office - do include the murder of innocents and do include unnecessary, unprovoked and undeclared wars paid for by the inflation tax on American citizens.

In spite of troubling economic conditions two major wars were underway in the Middle East, a thousand U.S. military installations are maintained around the world, and few military expenditures are ever questioned. American labor, small business profits and savings are used to pay for this destruction, killing and infrastructure rebuilding in these foreign lands.

You talk about crime.  This is such a crime you can’t even call it a crime; that would be demeaning to the word crime. The greed by the financial elite for money and power is destroying the very fiber of this nation; the time is near when Americans will have to mount a fierce fight against the financial tyranny of the Fed.

The situation has reached the explosion point.

Fri, 01/25/2013 - 21:47 | 3187100 AllWorkedUp
AllWorkedUp's picture

Well said. Unfortunately I think it's just you and me that are ready to blow. Most everyone else is watching idol or CNBS and the slow speed market meltup. Add to that the Ackman and Icahn drama, the Superbowl and the Housewives of New Jersey and life is perfect for the non-thinking.

 I'm just sitting here boiling and waiting to be recruited, yet nobody cares.

Fri, 01/25/2013 - 22:10 | 3187144 espirit
espirit's picture

Maybe, just maybe we extoll the MSM and Krony Kapitalists for their accurate and dependable portrayal of the global economy, employment numbers, manufacturing data, and the wonderful debt incurred by all.

Perhaps we should appear to have tasted the koolade. 

Fri, 01/25/2013 - 22:12 | 3187146 espirit
espirit's picture

MDB can be our role model.

Or not.

Fri, 01/25/2013 - 22:20 | 3187157 disabledvet
disabledvet's picture

i agree...not that people don't care but "how do you do anything about it?" we've all been put in a position...and put ourselves in be be filled with fear and doubt. this is where the media inserts itself so well...the one way media that "filling that void" not of ignorance but of "being" or "self", "if you just listened to them you'd be a better you." if only...if only. instead of say...DOING SOMETHING of course. i was just having a converstation this evening how about "how come there's not a Mars Rover channel on television?" probably way off base (so to speak) just saying it...but that's something i am interested in...and is in fact interesting. Yet NAY...veerily..."you are to be subjected to shit...AND LOVE IT!" and quite honestly...i HATE it. media exists to DEPRIVE us of what we a McDonalds hamburger..."the idea of wanting more food" but "never actually food itself." awful...and can't believe the Government doesn't shut the whole "Tower of Babble" down.

Sat, 01/26/2013 - 02:31 | 3187409 Socratic Dog
Socratic Dog's picture

So don't watch fucking television.  Pretty simple answer.  I haven't for about 30 years.

Sat, 01/26/2013 - 11:26 | 3187639 tango
tango's picture

I returned to TV, news, etc after 3 years of staying away.  I discovered that all contact I had was simply affirmation of what I already thought.  There was nothing and no one to contradict anything, to say, "But wait, have you thought of this?"   Now, I have not changed opinions that much but at least I am aware of how others think - or don't think - and that has enabled me to better appreciate my own values and opinions.  

Fri, 01/25/2013 - 22:30 | 3187179 JR
JR's picture

Take heart, my friend.  Many, actually most, of my somnolent acquaintances all of a sudden are awake and are buying guns! Feinstein and Obama’s re-election coupled with his buddy-buddy relationship with the bankers may be the best two things that have ever happened to us! 

Fri, 01/25/2013 - 23:45 | 3187280 Eahudimac
Eahudimac's picture

Whoopsie. Double post.

Fri, 01/25/2013 - 23:44 | 3187282 Eahudimac
Eahudimac's picture

Feinstein is one fugly bitch. I bet her snatch looks like the thing in the desert with tentacles that jabba the hut tried to through Luke Skywalker into in return of the Jedi.

Fri, 01/25/2013 - 23:30 | 3187268 Eahudimac
Eahudimac's picture

I'm with you. Just waiting at this point for the right time to move. Ain't gonna be pretty.

Sat, 01/26/2013 - 03:39 | 3187437 Itch
Itch's picture

My only gripe with your comments is when you say the situation has reached explosion point. There is no point in saying this, its hysterical, its boring too, people are bored sick of the pissy knickers routine. If it explodes you’ll know about it, and so will everyone else, there will be no escaping it. Yes, bad things will happen in the future, guaranteed, and things turn for the worse on a dime, there is a single turning point for everything; but are you going to spend your life on your knees, speaking in tongues about armageddon and freaking everyone out with bomb analogies while you wait on it happening? I'll tell you a bigger crisis, you are going to die...are you not going to live now because of it? Could you not find a way of articulating your emotions without telling everyone they are about to explode?

Sat, 01/26/2013 - 11:32 | 3187642 tango
tango's picture

Amen!  The constant cry for explosion, break down, violence and destruction is getting a little old. Lots of solks have read a lot of those end of the world books and think we can shoot our way to a happy ending.  For many it's wish fulfillment; others have huge anger management isssues (the fury of some posters is downright frightening and has to be physically debilitating) but if folks remember we just have this one life and we should live it to the fullest instead of wailing in fear, things would be better.  

Sat, 01/26/2013 - 14:05 | 3187866 JR
JR's picture

You, Itch, say the warnings of an economic explosion are “boring,” and tango says they are “frightening.” I guess when the future comes, each citizen can react as he pleases - some with denial (plenty of those), some with name calling  - but who can argue that the situation is not accelerating toward a climatic event?

The growth of debt slavery is beyond the comprehension of even the men who are creating it. The unemployment and underemployment realities are considerably worse than portrayed by the media. The recovery that’s been coming for a decade is actually a deepening recession. The political control of our nation’s leadership, administration, Congress, courts, regulators, and media are in the hands of tyrants who would make us all slaves.

Deny these facts at your peril but allow truth tellers to call them explosive.

On the political front, America’s latest presidents and congressional representatives and their handlers are killing to be killing, not in defense of the country and her people, but for empire. They assassinate and torture without trial those who would fight back in defense of their homelands and families; they abuse the helpless in betrayal of the valuation of human life. In short, the current foreign policy of the United States of America has a contempt for life.

The veneer of loyalty our current leaders have to America and the American people has peeled off to reveal men without sense of honor or decency.

For those of us who have “breathed the free air of a free country” this is the explosion point. As always, our weaker sisters, should we succeed in taking back America, can again “live free on the strength of better men.”

Sun, 01/27/2013 - 10:08 | 3188759 Itch
Itch's picture


That’s the thing though, when you say things are accelerating towards a climactic event, you are stating the obvious. Things are always accelerating towards a climax, that’s life, and that’s the times we live in. "Things have never been so bad" "politics have never been more divided" "foreign policy has never been so brutal" "politicians have never been more dishonourable"...but that’s the way its always been. Politics were always "never more divided", there was never a time when politics weren’t "more divided" in every decade, that’s the nature of politics, that’s the nature of democracy; the middle ground carved out after the battles. Don’t fret, stick the course and she’ll get to civilisation one day at a time.

On your points about the economy, I’m not going to comment on them, I already know the generic mooncat response, i.e. “absolutely everything is a lie, we are all debt slaves devoid of choice, controlled by hidden tyrants, and if you want evidence well fuck you sheep, you’re in denial because MSM have brainwashed you with Dancing on ice”. I know the drill, I know how good sense has let you down, and that’s why you have taken on some reductionist fantasy of goodies and baddies as your go to model of the world. Then mix in a bit of politics that you obviously cant handle and its all so inviting and romantic…. “breathing free air”, and “living free on the backs of better men”; you must be some kind of a fucking imbecile talking that crap to me. Snap out of it man, what is that shit, 1950’s propaganda or something? It’s got you by the throat, and its going to eat you. You are being bought and sold...careful now.


Sat, 01/26/2013 - 11:13 | 3187622 tango
tango's picture

New JR

Calliing market signs encouraging?  I got a better one.  The WSJ reported on Spain's unemployment rate passing 26% (official figures) and said, "Things are looking up".  I kid you not.  Bonds are "only" at 5% - no word on how these "cheap" bonds are repaid.  You see, Spain's immigrant rate is in the 30's and they are leaving (as is any young person with an atom of sense) and in the end this will help the economy.   I guess Italy's drastic population decline is "good" because it won't be so crowded or Portugal's poverty is beneficial because there's no way to go but up.  

Fri, 01/25/2013 - 21:15 | 3187059 koaj
koaj's picture

black swan was a must read. sounds like this one is as well

Fri, 01/25/2013 - 22:06 | 3187136 Perpetual Burn
Perpetual Burn's picture

His new book is shit.

Fri, 01/25/2013 - 21:15 | 3187060 kaiserhoff
kaiserhoff's picture

Taleb is quite solid on libertarian/free market values. 

His investment philosophy - the bar bell, is a fool's errand.

Taleb believes you should, (and his fund, Empirica, did) -

   Put 90% of your assets in T - bills, 10% in options, both puts and calls.

   Don't do it.  You will lose 10% consistently while others are making 10%.  In his own words, "we can't blow up, but we can bleed to death."  Like conversions, this is basicly a bet that the market always underestimates volatility.  Sometimes in does, mostly in doesn't.

Fri, 01/25/2013 - 22:00 | 3187128 espirit
espirit's picture

More like death from a thousand cuts.

Sat, 01/26/2013 - 00:21 | 3187316 machineh
machineh's picture

In his first book The Black Swan, Taleb said that's what he's doing (looking for long-shot option payoffs).

Strange that dealers sell options, while the public buys them.

Taleb is on the same side of the trade as the public odd-lotters? 

I'll pass, thanks. Taleb may be highly articulate, but he's never explained how his option math can work. 

Beware ...

Sat, 01/26/2013 - 11:20 | 3187628 tango
tango's picture

Dealers sale options, true, but they also get stuck with them.  It's always a two-edged sword.   In my 20's I ibought some calls on the last day at 1/16.   The stock went up 10% and I made a small fortune but that was as much a Black Swan event as anything. The Black Swan event is really a non-starter since ANY system is designed to work within normal, operational parameters and not with improbabilites.  We don't design our defense based on a possible alien invasion, cars are not built for a bridge collapsed, football games are not played with the idea that an earthquake could occur.   

Fri, 01/25/2013 - 21:23 | 3187068 reader2010
reader2010's picture

 "Four legs good, two legs bad!!!"

Sat, 01/26/2013 - 08:43 | 3187501 GetZeeGold
GetZeeGold's picture



Haven't seen it proved wrong once.

Fri, 01/25/2013 - 21:29 | 3187075 Banksters
Banksters's picture

My favorite quote by Seneca:


“Religion is regarded by the common people as true, by the wise as false, and by the rulers as useful.”  


Fri, 01/25/2013 - 23:28 | 3187260 earleflorida
earleflorida's picture

'mankind religiously pursues truth... whether it be his or his fellow man, one and all`s, innate soul-mate... his conscience-- 

,... as the wise man treads naught on misdemeanors, but rather upon inequities garnered by ones heuristic apriori intuition, which in, and of itself, is weighted upon a vaulted vanity of ones own, self-hubris insolence--

,... as the masters find both wise and common men a conterminous denominator, imbibing the perfect proselyte`candidates, forever woven in a grand matrix of surreal ethereal folly--

,... where the common-man... the wise-man, and the master-man, are all but the same in a timeless universe'

welcome to planet earth?!   ;-)    just musing with 'seneca' 

Sat, 01/26/2013 - 01:42 | 3187387 CheapBastard
CheapBastard's picture

“All religions are equally sublime to the ignorant, useful to the politician, and ridiculous to the philosopher.”


? Titus Lucretius Carus, On the Nature of Things: de Rerum Natura

Sat, 01/26/2013 - 05:06 | 3187456 John_Coltrane
John_Coltrane's picture

Nice. My favorite Lenin quote: 

"Religion is the opiate of the masses"

Favoritte Mao Quote:

"Power grows out of the barrell  of a gun"  (The result was:  Confiscate all the guns)

Even statists tyrants have some sound ideas.

Sat, 01/26/2013 - 18:51 | 3188250 malek
malek's picture

You should reflect a bit longer on the Lenin quote before declaring it a favorite.

I am not a religious person, but religion (at least the one Lenin was referring to, Christianity) does give a moral framework to the masses of the people, who cannot construct a valid one themselves.
Even more you should wonder with what intention Lenin quipped that. Wasn't that mainly to have the people fall for his framework instead, a framework built on lies and a few half-truths?

In my conclusion the Lenin quote shows the traits of a sociopath, or worse. But I concede I also didn't see it that clearly when I was younger.

Fri, 01/25/2013 - 21:49 | 3187105 beentheredonethat
beentheredonethat's picture

"That which kills you makes me stronger"

Fri, 01/25/2013 - 21:58 | 3187121 TNTARG
TNTARG's picture

A glass of good, red wine. Always.

Fri, 01/25/2013 - 22:02 | 3187130 Cabreado
Cabreado's picture

It's actually quite a shame that it takes such gifted eloquence to market simple Truth.

Fri, 01/25/2013 - 22:10 | 3187142 disabledvet
disabledvet's picture

"skin in the game" for a financial system? hahahahahaha. what a pathetic conceit. the LAST thing Wall Street...let alone you and me...wants is "skin in the game" when it comes to Governments repaying their bills. And yet...Governments (some) do exactly that...go figure. that's the lesson of this Government during this failure...indeed interestingly they've been the one's bailing out Wall Street...the place where "that guy has skin in the game"...which only goes to show how stupid "that guy" is (as reported here so well as it relates to Apple of course.) Listen...sure, you want money invested when it comes to recommending equities to people...especially on the long side. There is no better sales pitch than "we eat our own cooking" PERIOD. But when talking about financing say...NASA...i mean, c'mon. "no one has skin in that game." hence..."the need for the best economists there are." are they just pschyo-therapists telling us everything will be fine when in fact that is completely untrue? probably. it is called "the dismal science" for a reason however. i do not envy our Government that having bailed out the same people who gave We the People trillion dollar deficits forever their task. How do i "return the nation to budget surpluses" given such a reality? and the answer is of course "far easier to promise more than can even be believed" than actually put forth the effort of collecting the taxes and cutting the check. As Hitler...and many others...have observed "the bigger the lie the more they believe you." Can the USA really get that deficit to become a surplus? Not without a lot of help from economists...and obviously "that's mark to model" no matter how you slice it. Not to sound too...dismal...but "the bad guy's won" folks. Those banks are still there...and so is the Government that wants to make sure they are always there "doing what they do best" defined. that would be taking from you and giving to themselves...yes yes? Certainly doesn't sound in the Government's interest...

Fri, 01/25/2013 - 22:26 | 3187170 Hohum
Hohum's picture

Neither the "statists" nor Mr. Taleb are willing to deal with the decrease in net energy that does the work that leads to the growth.  So it's all gibberish to me.  Or did Mr. Taleb surprise me in this interview?

Fri, 01/25/2013 - 22:26 | 3187171 Atomizer
Atomizer's picture

I will post scenarios. You can sniff thru the details of WEF IMF 'restoring confidence Bullshit'.

Global Financial Stability Report: Restoring Confidence and Progressing on Reforms, October 2012 

SDRs per Currency unit and Currency units per SDR


Collectively, when a phony monetary system is exposed, good luck!

Fri, 01/25/2013 - 22:29 | 3187174 Atomizer
Atomizer's picture

Would like to help you protect your assets. Dow Jones will indeed break a new historical high. Smart money will take profits off the table. Be prepared.


Just like a broken record speaking, geopolitical polices/new central planning laws determine Wall Street financial outcome.


(1 + X) ^ 90 = (3834.44/69.61)

1 + X = (3834.44/69.61)^(1/90)

X = (3834.44/69.61)^(1/90) - 1

= 4.5%


I think CNBS was running a lower corner of +289% today. 

Home Page info

Fri, 01/25/2013 - 22:31 | 3187180 Dineroguru
Dineroguru's picture

The problem is that government has figured out a way to perpetuate themselves no matter what happens!  The pass the hat for political donations no matter what happens, selling themselves to the highest bidder, thriving on crisis

Sat, 01/26/2013 - 00:37 | 3187326 flapdoodle
flapdoodle's picture

Unfortunately, it would appear the most glaring example of an anti-fragile system is the upper tiers of TPTB - they exploit every adversity to forever tighten the reins of their power and stranglehold on the economy.

Sat, 01/26/2013 - 00:39 | 3187327 flapdoodle
flapdoodle's picture

Unfortunately, it would appear the most glaring example of an anti-fragile system is the upper tiers of TPTB - they exploit every adversity to forever tighten the reins of their power and stranglehold on the economy.

There, I said it again!

Fri, 01/25/2013 - 22:35 | 3187181 Atomizer
Atomizer's picture




The Secretary-General announced that Prof. Jeffrey Sachs, his Special Adviser on the MDGs, will lead the Sustainable Development Solutions Network


Yet, that pesky sun is not helping new taxation programs.

UN 2015 PDF files

Sat, 01/26/2013 - 08:42 | 3187499 GetZeeGold
GetZeeGold's picture



Sustainable Development Solutions Network


Hell of a fancy name for we're going to rape you and steal all your money.

Fri, 01/25/2013 - 22:43 | 3187202 silverdragon
silverdragon's picture

Canada, Australia and New Zealand have a decent form of social capitalism that works for the people. Maybe its partly due to the multiparty system.

The US form of capitalism doesn't work.

Fri, 01/25/2013 - 22:48 | 3187210 Cabreado
Cabreado's picture

-10 for anyone playing games against "capitalism" with nary a hint of disdain for "corruption."


Fri, 01/25/2013 - 23:16 | 3187249 Atomizer
Atomizer's picture



There is no hybrid system called social capitalism. You are a inbreed fuck head who was brainwashed through social indoctrination.

For shits & giggles, show ZH members what the derivative amount for Canada, Australia and New Zealand is. Never mind Fuck stick, I’ll do it for you.

Now that you know the truth, please tell us more about your new founded social capitalism system. Enjoy.

Them & US (Ft Naked on Grass Anim)

Fri, 01/25/2013 - 23:49 | 3187287 ItsEvolutionBaby
ItsEvolutionBaby's picture

I'm an Australian and i resent that.

The socialism in Australia works for the takers not the makers. Just like everywhere else. 

Fri, 01/25/2013 - 23:52 | 3187293 ItsEvolutionBaby
ItsEvolutionBaby's picture

And the 'multiparty system' is one party from a dictatorship. Bipartisanship is a nice little game the two main Australian parties play on a lot of issues.

When was the last time foreign policy was even an election issue? 

Sat, 01/26/2013 - 00:24 | 3187319 machineh
machineh's picture

Now that you mention it, when was the last time Australia ever stayed out of a bloody war?

Meanwhile ex-PM Howard crowed in the New York Times about how 'successful' his gun grab was ... and how the U.S. should follow his lead.

Howard and Murdoch are enemy aliens ... please take these ghastly cunts back!

Sat, 01/26/2013 - 08:44 | 3187502 GetZeeGold
GetZeeGold's picture



Australia.....what the hell happened to you guys?

Sat, 01/26/2013 - 14:51 | 3187920 kaiserhoff
kaiserhoff's picture

Don't know about the guys, but the Sheilas are vonderbar;)

Sat, 01/26/2013 - 16:21 | 3188027 linrom
linrom's picture

Idiot...the makers are the takers from time immortal.

Sat, 01/26/2013 - 05:17 | 3187458 John_Coltrane
John_Coltrane's picture

It would work a lot better if we had your low population density and relative cultural homogeneity (lots of caucasians with Asians sprinkled in).  That's the controlling variable in all three cases.  (It was also the source of the former prospersity of South Africa and Rhodesia)

Sat, 01/26/2013 - 15:48 | 3187992 Floodmaster
Floodmaster's picture

Canada and Australia (Tar sands /Coal) are two Bernanke powered countries, Coal is at $168 a ton !!!

Sat, 01/26/2013 - 16:14 | 3188023 linrom
linrom's picture

Excellent point. It's a form of social jihad, an offshoot of capitalism that has chance to survive.

Fri, 01/25/2013 - 23:19 | 3187252 CheapBastard
CheapBastard's picture
On Thursday, United Airlines announced it would cut 600 jobs after losing $723 million last year.

Sat, 01/26/2013 - 08:44 | 3187503 GetZeeGold
GetZeeGold's picture



United Airlines....moving forward.

Sat, 01/26/2013 - 15:17 | 3187955 QQQBall
QQQBall's picture

The election is over. You're fired!

Sat, 01/26/2013 - 00:34 | 3187325 hamstercheese
hamstercheese's picture

..he walks 25 to 30 hours a week?? Recreationally??

Sat, 01/26/2013 - 00:46 | 3187335 sansnobel
sansnobel's picture

What Fucking planet did Gillespie come from??????  The fucking banks have been feasting off of the State for a long fucking time.  Does this dipshit not realize that this is how "money" is created?  Then when their bets go bad (with other peoples money mind you),they pay some more of your stooges in government to borrow more to "create" more money they can steal and buy property ,yachts, houses in the Hamptons etc. with.......fuck we really do have the blind leading the blind in this godforsaken country.  Every Fucking Banker of the last 100 years should have his net worth confiscated and used to service the families of the people who lost loved ones in the fucking wars these bastards started.  Fuck this country.  Fucking country of morons and deadbeats. 

Sat, 01/26/2013 - 00:56 | 3187342 billsykes
billsykes's picture

What skin?

That is the biggest bullshit saying- buffet put 100 bucks in his first fund out of 100k as his "skin".  Woopty fucking do! 

If skin was so fucking important and these investors so fucking smart then we would make every single employee put in 2x plus their yearly salary as a fucking commitment to the company, guess what?

Doesn't happen, you couldn't recruit a single non CXO employee. Even CXO's have a hard time with skin- ask any replacement ceo. 

Skin my fucking ass. Brokers have no skin, banks have no skin, and most RE, PE, VC, Hedge, and every other financial service company or governent worker/official that relies on fake fiat currency. We are 100% + leveraged, the stong make the justice and say what is wrong and what is right.  Do as I say, not as I do. 






Sat, 01/26/2013 - 01:06 | 3187352 sansnobel
sansnobel's picture

I don't think leverage makes people strong. It overextends them and they end up with negative equity really quick when the game plays out like it normally does.  Leverage is what causes financial catastrophes.  And every motherfucker that decides to use it whether it be Joe home owner or Mr. Hedgefund manager should have his ass turned into a fucking rug when they use it and it back fires on their stupid ass. 

Sat, 01/26/2013 - 01:09 | 3187361 sansnobel
sansnobel's picture

Every body has known the mechanical advantage that leverage offers in an up market.  It's the morons that think that they should never have to pay for the down side when it happens that fuck the entire system.  There is a reason they use to require 30-40% down if you as a wage slave wanted a mortgage/leverage......think about it.  Limiting leverage limits profits and risk.  Oh but thou shalt not deny the bankers thier fucking bonuses.

Sat, 01/26/2013 - 16:12 | 3188020 Blankenstein
Blankenstein's picture

+ 1000

"There is a reason they use to require 30-40% down if you as a wage slave wanted a mortgage/leverage......think about it.  Limiting leverage limits profits and risk."

The housing ponzi would never have materialized without the "easing" of the loan requirements.  Zero down, no-doc, subprime, etc. created a vast amount of mortgages that the bankers used to reap enormous profits through orignation fees, packaging and selling securites to the muppets, etc.  Then to be made whole with taxpayer money when the scheme fell apart.  Only upside rewards and no downside consequences, it is so laughable when uninformed sheep refer to this as capitalism.  

Sat, 01/26/2013 - 02:11 | 3187399 luna_man
luna_man's picture



I like "Nassim Taleb"!...Straight Arrow!  Right?

Sat, 01/26/2013 - 02:15 | 3187402 Totentänzerlied
Totentänzerlied's picture

"why large banks should be nationalized"

"why large, centralized states are prone to fail"

"his libertarianism"

What the ****? I guess his "libertarianism" is like GW Bush's "conservatism", that is, non-existent.

You trust the selfsame ****ing government that allowed these banks to become so dangerous and cancerous in the first place, to properly and diligently fix the mess that it ****ing created? You think this fanciful ****ing nonsense is even worth formulating into words???

This is about as likely as Netanyahu admitting of the Israeli nuke program and inviting Iranian experts to oversee it's decomissioning, after ending the blockades, granting Palestinians full citizenship and amnesty, and ceding the Golan Heights back to Syria. It is wishful navel-gazing par excellence.

Sat, 01/26/2013 - 19:04 | 3188286 From Germany Wi...
From Germany With Love's picture

At least I want to see previous shareholders getting disowned. I want insolvent banks being nationalized, recapitalized and then shares made public again at the stock markets.

The way we're going now, there is just recapitalization and the lazy f**k a** shareholders get to keep their shares and not enforce effective risk management.

Sat, 01/26/2013 - 02:24 | 3187406 sitenine
sitenine's picture

Great interview (just wish he had let Telab talk a little more - he did a good job though). This really made me think about the NWO or one world government idea in ways I hadn't before. And you know - Sure, it would work for a while, but the first big mistake it made could risk wiping the entire thing out. So you have to ask yourself, do the rewards of economies of scale outweigh the risk of upsetting the entire system? Then you have to ask yourself, exactly who is reaping the rewards? It's pretty plain to see that TBTF is not not a smart move for the people in the long run. TBTF is fascism. There is no other word for it, and I'm tired of hearing people dance their way around the word. Fucking FASCISM.

Sat, 01/26/2013 - 04:05 | 3187443 Iam Yue2
Iam Yue2's picture

Feb. 4 2010 (Bloomberg) -- "Nassim Nicholas Taleb, author of “The Black Swan,” said “every single human being” should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration."

Can a man who made this public call expect to be taken seriously?

I detest people with big egos.

Sat, 01/26/2013 - 08:48 | 3187505 GetZeeGold
GetZeeGold's picture



Can a man who made this public call expect to be taken seriously?


Ummm......I would say yes.

Sat, 01/26/2013 - 07:29 | 3187483 Sweedumz
Sweedumz's picture

I wish the interviewer had been conducting the interview instead of letting Taleb interview him.

Sat, 01/26/2013 - 14:29 | 3187895 Cast Iron Skillet
Cast Iron Skillet's picture

I wish the interviewer had talked less. He seemed like sort of a slow bozo to me.

Sat, 01/26/2013 - 09:49 | 3187542 q99x2
q99x2's picture

See he knows exactly who the enemies of the United States of America and the rest of the world are. If he knows so do little countries that are being attacked. With so few enemies and such a large world:

Open Season Bitchez.

Wish the interviewer was more sophisticated and would let Taleb run his thought trains.

To me it seems that when things break which they will that typically the enemies are taken down big time by the regime that attempts to restore order and replaces them, brings them to trial, imprisons and or executes them.

If chaos takes place then Dimon, Blankfein and their politicians are are doomed by the chain of events that will occur over time. They somehow will have to fund massive military expenses during a time of zero income and when fiat currency is worthless. At a time when local bitcoin and other local monetary systems can pop up everywhere to pay to support the opposition.

I like Talebs reasoning. Keiser is not smart in picking on him.


Sat, 01/26/2013 - 11:08 | 3187611 Obama4Ever
Obama4Ever's picture

The essence of capitalism, he argues, is encouraging failure, not rewarding success.

 I really don't know how else to encourage failure, I'm doing all I can. Look how many trillions that I've helped give to the biggest failed banks. I've even done a lot to punish success.

What's it take to satisfy this Taleb guy.


Sat, 01/26/2013 - 13:14 | 3187782 falak pema
falak pema's picture

the essence of feudalism was encouraging success through beggar thy neighbour wars and it begot failure of the system. 

We are once again in that mind set. Neo feudalism, pretending to encourage failure via destructive creation,  (thats all the feudals did saying their neighbour was useless),  and achieving just the opposite. All we have created is fiat fueled debt, and neo feudals who dont want the system to pull the plug on their wealth. 

I would be wary of guys who loved Hayek and then hated what Reagan achieved by applying Hayekian logic of less government and deregulation of markets. 

Destructive creativity is no panacea to human psychorigidity. Its more complicated than that as the tradeoffs are not linear. 

When you buy into the premise, when you sow the wind, don't complain when you reap the tempest; and these Oligarchs don't want to go belly up. Taleb is wrong to scoff at them, its what every generation of Oligarchs has done in the past. 

HE got his history and thus his logic all wrong. The only way to resolve this problem is to have a brake and an accelerator in the economy. Never let one camp take hold of the whole shooting match. Separation of powers and sharing of general interest and private interest; never ONE without the OTHER. Reagan tried to eliminate state from economics and we have now the legacy.

Doesn't mean we should go back to statism and psychorigidity. 

Sat, 01/26/2013 - 12:52 | 3187754 Venerability
Venerability's picture

Dr. Taleb is very good at selling books.

Sat, 01/26/2013 - 15:14 | 3187948 Floodmaster
Floodmaster's picture

Banks are already nationalized, the next step is to make a proper regicide.

Sat, 01/26/2013 - 15:15 | 3187951 QQQBall
QQQBall's picture

Good interview. Thanks

Sat, 01/26/2013 - 15:53 | 3188002 pcrs
pcrs's picture

Great, let's create a government that is too big to fail.

A government is just a company with the addition of a monopoly on the initiation of force and theft. That means that nationalisation creates a monster of unparralleled proportion.

Sat, 01/26/2013 - 16:24 | 3188031 linrom
linrom's picture

This should have been a great interview if the moderator had not hijacked the interview from Taleb and allowed Taleb to finish his sentences.

Sat, 01/26/2013 - 17:38 | 3188065 pcrs
pcrs's picture

What do you rather want? Nationalization or moral hazard?

That's a fals dichotomy. Like moral hazard is minimized if you give these droning, torturing , warmongers and gun grabbers the full control of the financial system.

The presence of tax slaves, makes moral hazard inevitable. Their income is owned by the political snake charmers and being sold of to the higest bidders.

Sat, 01/26/2013 - 18:33 | 3188218 malek
malek's picture

“Stiglitz Syndrome”

LOL, go Nassim!


Sat, 01/26/2013 - 19:00 | 3188270 From Germany Wi...
From Germany With Love's picture

Yeah, let's encourage failure - let's send all of our life savings over to Greece. That should do good for the world economy.

Sat, 01/26/2013 - 21:28 | 3188500 hairball48
hairball48's picture

I don't believe he was encouraging failure per ce. He was advocating for allowing failure to occur without government intervention.

Good interview overall imo

Sun, 01/27/2013 - 00:25 | 3188703 neutrinoman
neutrinoman's picture

Great interview, although I don't get it when he refers to Greenspan and Reagan in 1982 or 83. Volcker was the Fed chairman at that point, at the end of the anti-inflation campaign, which was rolled up successfully in the second half of 1982, not without a lot of pain. Continental was not nationalized in 1984, but the Fed did intervene to enable private rescue. A much bigger failure of this sort was not Continental, but the S&L crisis, which brewed for 15 years before boiling over in the early 90s and explicitly involved moral hazard and government backing.

The US financial system wasn't highly leveraged in the 1970s or early 80s. The problem was classical inflation, more and more printed money circulating faster and faster. The era of overleverage began to take shape in the late 80s (Greenspan in charge by that point), but it was held in check by realistic interest rates and the anti-inflation bias that Volcker had imparted to policy. It got out of hand later in the mid-90s, as Greenspan lost his fear and transformed monetary policy into a giant credit inflation machine. The resonance of Greenspan's Wall Street bias, his chumminess with the Clinton banking cronies -- Rubin, Weil, Geithner -- the demands of Congress to promote the rise of subprime lending, the hordes of parasites in the financial sector -- was awesome to behold. Few, except the Austrians and the occasional odd-ball like Minsky, understood what was going on. Certainly, the big names -- the Krugmans, the Stiglitzes, the Friedmans -- border on fraud. So much pseudo-intellectual BS, so little wisdom.

BTW, I think Fitzgerald's works are important -- but it's his novels, his vision, that are important. What post-modern humanists have lost is the substance and replaced it with rumors and trivia. I like Taleb's humanism -- it's the sort of the humanism that a scientist or engineer could absorb and grow from, because it has such historical depth and the robustness generated by repeated failure.

Sun, 01/27/2013 - 23:56 | 3190358 neutrinoman
neutrinoman's picture

Just looked at Bill Isaac's excellent Senseless Panic. It was Continental Illinois that failed in 1984, long before TBTF. The Fed did get involved in brokering a private rescue of what was left, but the bank was put through FDIC receivership. Repeat, this was NOT TBTF -- quite the opposite. CI failed and was put through bankruptcy. The only public money spent was in helping to pay off deposit insurance.

The root of the CI failure was the earlier failure of Penn Square, whose bad assets were bought up by CI. These bad assets had their origins in the boom-bust of the oil patch in the late 70s/early 80s. (Thus, the CI failure was a cousin of the S&L failures, some of which had the same oil-patch roots.) In none of these cases were fraudsters protected by politicians or the Fed.

The big systemic failure of that era was the S&L crisis, which fundamentally came about because the S&L business model couldn't function in a high inflation/high interest rate environment. Congressional attempts to save the industry merely opened the door to an army of moonshine peddlars and fraudsters. The truly amazing thing, though: Congress was actually embarrassed by these people, back in those far off days of the early 90s. Several thousand were criminally investigated, about 1000 were prosecuted, and (after appeals) about 600 served jail time. Several thousand faced civil actions.

In our crisis, no one has been prosecuted, at all, and it's unlikely anyone ever will be.

The difference with our crisis is that the fraud enablement back then was truly inadvertent on Congress' part. The 2008 crisis was a result of a mortgage bubble that Congress and the Fed wanted. The fraud necessitated by subprime lending was consciously overlooked. The loan sharks in charge of the subprime business and the clueless conventional bankers who passed around the resulting MBS not knowing how toxic they were, all had friends in high places. Those friends in high places willed it to be so. This much we learned (again) from that assistant federal AG who just got fired for accidentally speaking the truth in public.

Sun, 01/27/2013 - 04:27 | 3188817 Pareto
Pareto's picture

Taleb's work forces you to observe phenomena from the perspective of risk and the institutions that create the risk but fail to quantify it or take it into account.  And while I can appreciate some of the concepts of antifragility and stressors - the notion that i might learn from other people's failures or even my own failures; what then explains people repeating the same failed mistakes of the past where not only are we prone to replicate the mistakes of others, but, we are also prone to repeating the same mistakes of our own making?  My guess is that it is hard to leave the village.

In the context of this market, today, right now, without knowing the future, I am going to commit to the notion that this market will go much higher before it falls, not because I am bullish, but, because everybody is starting to talk about a correction.  Bernanke, the FED, the carry trade in bonds, real v. fiat - all good and relevant information.  But a commitment to what should happen (theoretical), relative to what is happening, is not,IMO a good investment strategy.  To this end, the takeaway from antifragile for me is simply reducing exposure to the stock marke (equities), and instead invest in other people's ideas and initiatives and other venues where moral hazard, cheating and theft are not the primary ethical pillars for success.  cheers.

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