The Black Swan Squawks

SUBHEAD: Nassim Taleb author of "The Black Swan" is sure we are worse off now than before the crash.
Provided by Juan Wilson on 13 August 2009 -
According to Wikipedia, the term Black Swan comes from the 17th century European assumption that 'All swans are white'. In that context, a black swan was a symbol for something that was impossible or could not exist. In the 18th Century, the discovery of black swans in Western Australia metamorphosed the term to connote that a perceived impossibility may actually come to pass.
The main idea in Taleb's "The Black Swan" is not to attempt to predict Black Swan events, but to build robustness during negative events, while being able to exploit positive events. Taleb contends that banks and trading firms are very vulnerable to hazardous Black Swan events and are exposed to losses beyond that predicted by their defective models.
Nouriel Roubini and Marc Faber may be debating economic doomsters but they don't hold a candle to Nassim Taleb. In July we published Ea O Ka Aina: The End is Near which said in part:
"Most economists agree that “as goes America’s economy, so goes the world’s,” and most Americans feel ours is too big and powerful to fail. Economist Nassim Taleb, author of the “Black Swan,” makes the point that anything as large as the economy will completely collapse when it weakens beyond a point. That tipping point was long ago."
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Airtime: Wed. Aug. 12 2009 | 7:14 AM ET

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