Nassim Taleb: World is NOT more peaceful – Yahoo Finance 05-19-15

Salient to Investors:

Nassim Taleb said:

  • Over the last 2000 years, there is no no statistical evidence that violence has dropped, or that the frequency or magnitude of wars is declining.
  • People are lulled into a false sense of security because of the nature of fat tail events, which can take hundreds of years, and because they use mean naively and underestimate the role of randomness
  • Large events can take a long time, and between events is totally unpredictable and random.
  • Catastrophically fatal wars have fatter tails than those of financial crises. Black swan events are far more deleterious in cases of war than finance because a smaller number of events determine a larger share of the casualties.

Read the full article at http://finance.yahoo.com/news/nassim-taleb-on-the-black-swans-of-war-194841536.html

Click here to receive free and immediate email alerts of the latest forecasts.

Nassim Taleb: ‘The Black Swan’ author in praise of the risk-takers – The Independent 06-25-13

Salient to Investors:

Nassim Nicholas Taleb says:

The UK and the US have a fantastic history in risk-taking, in trial and error, without shame in failing and starting again.

We must honor the “ruined” risk-takers with as much respect as we do soldiers – there is no such thing as a failed soldier or failed entrepreneur.

If you take risks and face your fate with dignity, there is nothing you can do that makes you small; if you don’t take risks, there is nothing you can do that makes you grand, nothing.

Intervention in Syria makes no sense – the enemy of a devil is not necessarily a saint; in fact, rarely a saint.

Most of us live in direct contradiction to how the world works; we should love variability and embrace risk and resist forecasting.

Something that is antifragile actually grows because it is stressed and then adjusts itself. Ironically our greatest asset – the built-in antifragility of certain risk-taking systems – is the one we distrust the most.

Inequalities of wealth lead to a dispersion in wealth for all.

Small is powerful. We should be breaking up the big bureaucratic corporations; use anti-trust laws as Roosevelt did in the US. It is much easier to BS at the macro-level than it is to BS at the micro-level.

No public servant or politician should profit more from private business than they earned before. It’s outrageous how Robert Rubin and Tony Blair have profited.

Bankers have lost more than they ever made in their history while they are paid billions in compensation and they are still gaming the system. Banks should be treated as utilities and forbidden from taking lethal risks that destroy the livelihoods of others. Those that take risks, like hedge funds, should be able to do as they want.

Stock markets have become a vicious form of asymmetric skin in the game. Corporate managers have incentives without disincentives. Over the last decade, the US stock market has cost retirees $3 trillion in losses, while corporate executives of listed companies are richer by around $400bn.

Top-down knowledge is an illusion. Education without erudition is nothing. Too much emphasis is placed on formal education.

Read the full article at  http://www.independent.co.uk/news/business/analysis-and-features/nassim-taleb-the-black-swan-author-in-praise-of-the-risktakers-8672186.html#

Click here to receive free and immediate email alerts of the latest forecasts.

 

Where Bank Regulators Go to Get Rich – Bloomberg 04-07-13

Salient to Investors:

William D. Cohan writes:

Mary Schapiro, the former chairman of the SEC is joining a firm loaded with former government financial-services regulators. Schapiro previously ran FINRA, Wall Street’s self-appointed watchdog.

Alan Blinder at Princeton is a co-founder of Promontory Interfinancial Network which offers Insured Cash Sweep, which splits large deposits into $250,000 pieces that each qualify for FDIC insurance.

Nassim Nicholas Taleb said Promontory’s Insured Cash Sweep allows the super-rich to legally scam taxpayers by getting free government sponsored insurance. Taleb says Schapiro is morally repulsive because there is an “implicit deal” whereby regulators such as Schapiro and Blinder make regulations complex and then sell their services at a higher price when they go to the private sector – no regulator will ever make a regulation that’s clean anymore.

Read the full article at http://www.bloomberg.com/news/2013-04-07/where-bank-regulators-go-to-get-rich.html

Click here to receive free and immediate email alerts of the latest forecasts.

New Critical Warning as 2013 shocker looms – MarketWatch 03-25-13

Salient to Investors:

Paul Farrell writes:

We are at a market top and an economic turning point.

Bernanke’s non-stop cheap-and-easy-money printing presses are loved by Wall Street banks but are bad for the rest of America. His reappointment – certain to become Obama’s greatest domestic blunder – so shocked Nassim Taleb that he went into isolation. Taleb says Bernanke doesn’t even know that he doesn’t understand how things work.

Bernanke has repeated the same ideological mistakes as Greenspan and made the economy worse, created a new bubble, making the next crash ever bigger. Fed chairman believe their own press and believe they alone have the answers. 

We will get a “black swan” before year-end, the big shocker expected by Gary Shilling who says investors are paying little attention to weak and declining global economies and concentrating on the flood of money being created by central banks. Shilling’s 11 sectors to avoid: commodities, developed-country stocks. home builders, your own home, big-ticket consumer-discretionary equities, consumer lender stocks, selected bank stocks, junk securities, developing-country bonds, developing-country stocks and old-tech capital-equipment producers.

Read the full article at http://www.marketwatch.com/story/new-critical-warning-as-2013-shocker-looms-2013-03-23

Click here to receive free and immediate email alerts of the latest forecasts.

Ken Heebner Bets 21% of His Stock Fund Against Treasuries – February 26 2013

Salient to Investors:

Kenneth Heebner at the CGM Focus Fund has bet 21 percent of his find on a decline in U.S. Treasuries as the growing US economy eventually prompts the Fed to boost interest rates. At the end of 2012, the fund was 29 percent invested in banks, 24 percent in homebuilders.

Heebner said the rebound in housing will translate into a strong financial position for consumers, boosting the US economy and prompting the Fed to end quantitative easing.

Nassim Taleb and Jim Rogers have recommended betting against Treasuries.

Stephen Stanley at Pierpont Securities said this is a good time to short treasuries if you have staying power – over a shorter time period, you are fighting the Fed.

Scott Minerd at Guggenheim Partners said QE compares to a similar program from 1942 until 1951 when the Fed vowed to take action should interest rates climb above 2.25 percent. Minerd said the Fed may be forced to keep rates low longer than anticipated, for fear of roiling markets and causing another credit crunch – possibly another 5 to 6 years of this so you could be short for many years before benefitting.

Read the full article at http://www.bloomberg.com/news/2013-02-26/ken-heebner-bets-21-of-his-stock-fund-against-treasuries.html

 

Free email alerts of articles as soon as they are posted.

You Are All Soft! Embrace Chaos! – New York Times 12-16-12

Salient to Investors:

Nassim Nicholas Taleb says:

  • Black Swan effects are necessarily increasing as a result of complexity, interdependence between parts, globalization, and the efficiency that makes people sail too close to the wind.
  • We must make our public and private lives less vulnerable to randomness and chaos, but also “antifragile” — positioned to benefit or take advantage of stress, errors and change.
  • We have been fragilizing the economy, our health, political life, education, almost everything, by suppressing randomness and volatility. Top-down efforts to eliminate volatility like neurotically overprotective parents or Greenspan’s trying to smooth out economic fluctuations by injecting cheap money into the system, end up making things more fragile, not less.
  • Putting, say, 90 percent in boring cash and 10 percent in maximally risky securities avoids the risk of total ruin by putting 100 percent in so-called ‘medium’ risk securities.
  • Contemporary society suffers from the love of the modern for its own sake.
  • We are moving into uneven distribution of 99/1 across many things that used to be 80/20: 99 percent of Internet traffic is attributable to less than 1 percent of sites, 99 percent of book sales come from less than 1 percent of authors.
  • Economic forecasts are offensive irritants.
  • The more data you get, the less you know what’s going on.

Read the full article at http://www.nytimes.com/2012/12/17/books/antifragile-by-nassim-nicholas-taleb.html?pagewanted=1&_r=1&.

Click here to automatically receive free email alerts of articles like this when they are added to the Wisdom database.

Nassim Nicholas Taleb: The future will not be cool – Salon.com 12-01-12

Salient to Investors:

Nassim Taleb writes:
 
(Excerpted from “Antifragile: Things That Gain From Disorder”)

Imagining future technologies is unpredictable and won’t be the ones that make it.

The futuristic projections made throughout the past 150 years by Jules Verne, H. G. Wells, George Orwell and other scientists and futurists are not tools that currently dominate the world, such as the Internet. Almost everything that was imagined never took place, except for a few over-exploited anecdotes. Our world is much closer to theirs than they ever imagined.

Restaurants have existed for at least 25 centuries, shoes are hardly changed in 5,300 years, silverware is a Mesopotamian technology, wine has been in use for at least six millennia. Etc. Etc.

Technothinkers tend to have autistic tendencies and an absence of literary culture which is a marker of future blindness because it is usually accompanied by a denigration of history. Literature is about the past.

The past is a much better teacher about the properties of the future than the present. To understand the future, you need respect for the past, curiosity about the historical record, a hunger for the wisdom of the elders, and a grasp of the notion of heuristics – in other words, things that have been around.

Technology is at its best when it is invisible.

Read the full article at http://www.salon.com/2012/12/01/nassim_nicholas_taleb_the_future_will_not_be_cool/

 

Nassim Taleb’s New Book Explains Why Governments Always Miss Their Own Budget Targets – Business Insider 10-19-12

Salient to Investors:

Nassim Taleb says there’s a simple mathematical basis for why governments continually miss their deficit targets. The problem is that the economic data forecasts the government uses are taken as a given and not looked at as mere probable likelihoods. The government tends to underestimate the damage when things get worse than they initially expected. For example as unemployment increases, it begins to have a larger and larger effect on the government’s budget deficit. 

Read the full article at http://www.businessinsider.com/nassim-taleb-heres-why-governments-always-miss-their-own-budget-deficit-targets-2012-10?op=1