Nassim Taleb: Ben Bernanke Doesn't Understand Risk

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"Did Ben Bernanke see the crisis?" Nassim Taleb asked on Bloomberg TV today. "No," Taleb answered himself, "He was flying the plane and he crashed the plane...[Bernanke] reminds me of the LTCM people. They had brilliant people with great academic records and they blew up the fund and almost blew up Wall Street…Bernanke is someone who talks about returns without talking about risk. It’s identical to a pilot who is talking about speed -- not talking about safety. The measures he is using, this quantitative easing, may work but should it fail the risks are humongous.”

This is all very reminiscent of the time Taleb was an options trader. "People would call me up and ask for a magic way to make their money back. That’s what the Obama team is doing. Instead of accepting that we have a risk problem, we have lost money, and you don’t double up with future generation’s money either by increasing deficits and or debasing the currency. You have to face the saying that there is no free lunch."

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