It is seven years later and not much has changed in the financial world. The next financial crisis will be worse. Happy New Year!

Down Under

Wall street’s implosion has brought an economic thinker by the name of Nassim Nicholas Taleb back in the news.  A little over a year ago, his book, “The Black Swan:  The Impact of the Highly Improbable”  garnered a certain amount of attention in North America because of its startling implications on an American mental landscape dominated by ideology.  Taleb’s thesis was that we humans are highly susceptible to getting caught out by random events because we have such a strong tendency to discount their existence.

If you have spent your entire life in the northern hemisphere, you will conclude that swans are white.  And that will be true as long as you never go to Australia, where swans are black.  The difficulty is that we seem to be psychologically programmed to confuse improbability with impossibility.  Taleb suggests that this may be because evolution does not favor probabilistic thinking.  Not every…

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