Over the last several years, people have been obsessed with determining who truly caused the financial crisis. Was it Alan Greenspan? Was it the banks? Was it the mortgage lenders? Evil short sellers? People who bought homes they couldn’t actually afford? Jimmy Cayne drug dealer? It’s up for debate and no one has yet to be unanimously, definitively blamed. Today in London, Nassim Taleb revealed the true villain, who’s been hiding in plain sight.
Taleb said that the Nobel Prize for Economics has conferred legitimacy on risk models that caused investors’ losses and taxpayer-funded bailouts. Sweden’s central bank will announce the winner of this year’s award on Oct. 11. Taleb singled out the Nobel award to Harry Markowitz, Merton Miller and William Sharpe in 1990 for their work on portfolio theory and asset-pricing models. “People are using Sharpe theory that vastly underestimates the risks they’re taking and overexposes them to equities,” Taleb said. “I’m not blaming them for coming up with the idea, but I’m blaming the Nobel for giving them legitimacy. No one would have taken Markowitz seriously without the Nobel stamp.”
And he’s not just throwing this out there for his health– he wants you to hold these fucks accountable.
“I want to make the Nobel accountable,” Taleb said today in an interview in London. “Citizens should sue if they lost their job or business owing to the breakdown in the financial system.”
What, too much of a pussy to go after the rat bastards? Fine, he’ll do it himself.
“If no one else sues them, I will,” said Taleb, who declined to say where or on what basis a lawsuit could be brought.
Yeah, never you mind that. Just lawyer up, ’cause you’ll be seeing his ass in court.
“Nassim Taleb Identifies Real Villain Of The Financial Crisis”
If it turns out to be Yevgenia Krasnova again, I’m going to be very disappointed.
Well, he’s partly correct. But that’s not the crux of the issue at all. Yes, those models are limited in calculating risk.
But, the Federal Reserve, FDIC, SEC, 3 Branches of Government have created conditions that promote risk taking either by legislated force (passing laws for unqualified people to get loans for instance), back stopping losses, allowing for crime to continue unpunished, interfere with (instead of uphold) contract laws, etc.
That’s like blaming a statistician for saying you have a 1 in 20 chance of getting a 30 to 1 pay out in Roulette. Meanwhile, the Casino is structured in a way that if you lose, you get your money back. At that point, who gives a shit about the accuracy of Markowitz’s equations.
We have found a nemesis for Quant Man
If there was a “dislike” option on Mathman’s posts I’d really appreciate it.
Then i’m suing the Fields Institute for giving out Fields Medals to those that helped create the underlying mathematics for the stochastics. Fuck it, I’m suing Isaac Newton! I’z gots to gets mines!
The villain of the credit crisis is the fractional reserve banking system and the privately-held Federal Reserve. The system requires parabolic credit growth (exponential) in a finite growth world. The end of the banking system was/is mathematically certain.
The Nutt House
119 East Bridge Street,
Granbury, TX 76048
Guest: Taleb, N.
Room: Black Swan Suite
Rate: $950.00
*****************************
Charges to Room:
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6 pair white stochastic tube socks…………………………………… 44.00
9 pair white, rolled intellectual underwear ballast…………………. 34.00
2 silk-screen image “Danny Thomas” T-shirts…………………….. 29.00
3 Romance Novels in Caanonite script……………………………… 167.00
In room movie: “Platonic Phallusy”………………………………….. 12.00
Meatball Sandwich………………………………………………………. 8.00
1 Parrot w/obscene vocabulary………………………………………. 355.00
Thorazine Popsicles…………………………………………………….. 65.00
Shaving “Ludic” Into Guest’s Chest hair……………………………. 175.00
Penis Tattooing of :”Black-Scholes-Merton”………………………. 425.00
Consultation w/Phil Davis, Stark Co, OH, on “Robustification”.. 550.00
“J. G. Wentworth” Face mask………………………………………… 124.00
Opaque blindfold for nude game of “Find the 4th Quadrant”……. 16.00
Book: “Life without Viagra – The Unexpected Effort”…………….. 27.00
Voice Scrambling Device for Pranking Nobel Prize Candidates.. 277.00
Volvo Station wagon Burn fees……………………………………….. 345.00
Life size nude photo: Merton Scholes……………………………….. 265.00
Hand held Butane torch………………………………………………… 18.00
Disconnect smoke alarm……………………………………………….. 55.00
is it just me, or does he closely resemble bin laden in that pic?
Nassem you go girl! Slap dose Nobel mammas in da face! Jerry! Jerry!
Can I sue him for making my ears bleed??
there’s this cool new site http://www.zerohedge.com, you should take a look man
You are really blaming this credit crisis on the system of banking that has existed throughout the Anglo-American world for 200, 300 years and then saying that it is “mathematically certain” this system will end? Really? Did zerohedge lose it’s craziest commenter?
you see, I have written a book, you may have heard of it – about a swan…should the committee decide to legitimize their award by giving it me, then maybe I may reconsider. and no, I’m not bitter or jealous.
-NT
NNT is at a public urinal and he notices the guy next to him has BSM tattoed on his penis and goes, “Hey! We have the same tattoo.”
“What do you mean?” says the other guy, so NNT shows him: “Under the right circumstances it says ‘Black-Scholes-Merton.’”
And the other guys says, “Sorry mine says ‘By the time you See this Message I’ll be ready.’”
Et tu Krugman.
More like Lenin, I think: http://www.bolshevik.org/graphic/lenin.jpg
hotel receipt guy – I’m a fan of your work. however, the accounting department would like to know if there were two life sized nudes or just one? the myron nude retails more than bob’s (his name is not on the model).
Head Controller,
The Nutt House
Of course, it’s all the Federal Reserve’s fault. Because the economy and the monetary supply was so much more stable before 1913… oh wait.
Man, this guy needs a fucking blowjob!!
The big question is what to do now? What is the best way to invest in the financial markets then? There are very profitable traders out there who make money in up and down markets. One of those is John Palatine at http://www.trendarchitect.com. They are so-called trend followers and this is something that needs to be taken into consideration for your own portfolio.
Our financial system is looking more and more like a banana republic every day. I wouldn’t diss that site.
It’s amazing how fucking stupid this guy is.
Wait, so an environment that does not promote risk taking is the answer? That sounds like a great path to growth. Way to identify the inputs and come to the wrong conclusion… Kinda like the models NT referenced.
Perhaps sir, people like you are the problem.
-Evil Banker
The books! we must burn all of them!!
The bigger question is “do we hang spammers by one ball or both”? We’ll let someone affectionately referred to a “Bess” decide.
Wait for it . . .
In Russia, prize winners sue you!
HuH? Not what are you..I’m not… I’m talking about drawing a line in the sand, dude. Beyond that line you do not…. Look, EB, way to put words in my mouth and then shoot it down.
What I’m talking about is an environment where those who take risks face the consequences of those risk good OR bad. You cannot have rational behavior if you disassociate risk with consequence. There’s a reason why people born with a genetic disorder that prevents them from feeling pain have short life expectancies.
It’s people like you is what the sub-prime is in trouble.
This guy needs a hooker quick!
What if they have no balls, as I suspect is the case here.
Nassim is completely correct and you can tell because he has his hands together, which means he is either praying, in the preliminary stages of making a church and steeple, or is the very, very wise man that he imagines himself to be. Obviously it’s the latter, him giving no previous indications of religious inclinations. The posture says deep thought, the facial expression says ready to lick some Swedish ass.
And that pretty much every bank management team thought they were on a Vegas bachelor party.
Wow Ron Paul comments on DB
We too use parabolic and exponential functions interchangeably
Nassim – if a guy were about to lose a house, one with highly customized bathrooms lets say, do you think he should sue too?nnThanksnR. Kelly