Working Papers

Nassim Taleb’s DIY Black Swan Event

From the WSJ:

The working theory among traders and others involved in the exchange meltdown is that the “Black Swan”-linked fund may have contributed to a “Black Swan” moment, a rare, unforeseen event that can have devastating consequences.

As Eric Falkenstein notes, this episode may shed light on how Nassim Taleb really makes his money:

All the while, however, he makes huge fees, because 1% on $4B is a lot of money, and his wealth will serve as proof that he’s an investing genius. More importantly, he then selectively presents to a credulous press he makes billions off his market savvy.

Gee, someone should write a book about blow-hard traders who misrepresent their track records and take excessive risk with other-people’s money, all due to cognitive biases they are too shallow to notice in themselves. Oh yeah, Taleb has done that! I guess his insider status gives him better insight.

posted on 14 May 2010 by skirchner in Economics, Financial Markets

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Er, if its market manipulation you’re looking for, Nassim Taleb is small fry.

The Vampire Squid just reported a trading profit from every single day of the first quarter.  63 out of 63 days Goldman makes a profit from trading.  Up days, down days, quiet days, volatile days, doesn’t matter, Goldman always wins.  Bernie Madoff could not have done better, and when you’re doing better than Bernie, it means only one thing, the whole damn thing’s a Ponzi.

Please explain how it can be anything else.

Posted by .(JavaScript must be enabled to view this email address)  on  05/15  at  07:40 PM

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