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Greg, I'm certainly not as well-read as you, but the concept embodied by the term Black Swan is always something that keeps me up at night. I think too many people are happy to roll merrily along until they suddenly find themselves in a disaster. Now the anxiety that leads to my insomnia has a name!

Funny - I was involved in a discussion on this very topic last evening - but I'm so certain that a Black Swan will arrive in Napolitano's lap that I hadn't even considered the alternative - that she would wind up in the dustbin of obscurity.

Greg: Just out of curiosity, where do you get the "catastrophic" part? My understanding of the term is that it's an event with large impact, but not necessarily disastrous. Taleb himself cites the invention of the computer and the Harry Potter series as Black Swans.

Greg,

Since you enjoyed Black Swan so much, I'd recomment Brave New War by John Robb at Global Guerillas.

I thought it was a terrific book and didn't find it remotely obscure. Guess I'm a geek.
As to the point, I took it as this:
1)The financial markets use a bell curve to calculate risk.
2)The market is random and does not adhere to the bell curve, as discussed in "The Madness of Crowds" not complete title but an old classic. Markets are random, population is random, population heights because dictated by biological/physical factors follow a bell curve.
3)Many "economists" still use a bell curve to calculate risk, it works most of the time.
4) It doesn't work all the time.
5) When money is placed on a bell curve bet, it can lead to very bad decisions.
6)Also some discussion about long tails, which doesn't really matter if you get that bell curves don't work for markets anyway.
Joni

Wow, something Greg and I agree on. The Black Swan may be one of the most important books you'll ever read. And I even agree with Greg that Heimat Versicherung has no upside for Napolitano, only a downside. Another good book, if you want to understand the current financial crisis is When Genius Failed: The Story of LTCM. The LTCM debacle foreshadowed the current crisis and we should have learned from it, but didn't.

Ok, so the Iraq mess and the economic collapse really do land on Bush's resume...

Happy New Year, Greg.

I learn so much from some of these comments - my wife wishes I wouldn't buy every book though.. :)

Yes, it will be interesting to see how the soon to be ex Governor responds to national reporters' questions that rise above, "What's your favorite color?" (Apologies to Howard Fischer, who actually does ask tough questions.)

This also would fall under the axiom, "Be careful what you wish for ..."

Happy New Year!

So as I too think of Janet N. in charge of disaster recovery et al, I looked at the stories of the earthquake swarms at Yellowston Natl Park--Caldera o' Supervolcano... my six year old loves volcanoes and dinosaurs so I read more of these topics than one might--well my six year old memorizes stuff like lots of lil guys do. Other than knowing every obscure dinosaur ever known, he has the sequencess of volcanic activity down. Probably didn't help to let him see every discovery channel show on megaquakes..LOL... HE TOLD ME that the harmonic tremors are the thing to look out for---guess what----Black Swan????

http://elizabethprata.blogspot.com/2009/01/more-on-yellowstone-harmonic-tremors.html

Hmmmm.... even a small Yellowstone event would be a BIG Janet Test--let alone any terrorist---heck, what has she really done to help qwell the border issues of Mexican Drug cartels? Other than offering them water and cookies at the border I mean?

P.S.-- The Jan 1 USGS report on Yellowstone that was dropped in the trash of a New Year Hangover morning news cycle mentioned casually that the Homeland Security office of WY. is in the loop, being consulted... Ummm since when is that part of the " All is well, nothing to worry about here report" does the noting of H.S. come in?? Hmmm
The Jan 1 report-- and scrol for past ones.. Today's is the first time I've seen mention of Homeland Security montitoring and looking as safety measures as it notes:

http://volcanoes.usgs.gov/yvo/activity/

Black Swan Indeed--

GPB

Black swans are black swans only to stupid people with their heads buried in the sand. People who won't accept reality and deal with facts. Sorry to be rude but this describes the Republican party and the conservative movement all too well.
9-11 was a black swan? I suppose it was if you ignore the established facts. Osama bin Laden attacked the World Trade Center once before 9-11. Some dude allegedly from Texas who was pretending to be the President of the United States of America was handed a report titled "bin Laden determined to strike within US." He went for a bike ride wearing his i-Pod. Someone no less than bin Laden himself told television interviews that he was going to strike at the World Trade Center and "bring the fighting to America." Some black swan.
The internet? Computers? Al Gore was talking about something he called the "information superhighway" involving a network of linked computers--a few years before the internet became a phenomenon known to the general public. People in the academic world knew all about networks of linked computers a decade earlier. Some guy in Seattle started up a company in his garage and started developing software to run on computers. In 1975. He wound up the richest man in the world. Black swan?
World War I? Oh please, read just one history book.
Janet's going to take the blame if some "black swan" hits during her tenure? Did Bush take the blame for 9-11 happening on his watch? Don't think so. Just more Janet bashing. Based on poor knowledge and ignorance of well established history and facts.
Better get back to your reading.

Nice try, dumbass. The iPod was not introduced until October 2001. But keep up with the pretend president story again. Idiot.

Read Taleb's book the fall of 2007 and got out of the stock market in December 2007. Definitely had an impact on my thinking

Given the way she handled the prison uprising,broken pipe line and the budget melt down I don't have much faith in her ability to deal with terrorism.

"Bin Laden determined to strike U.S." Read Ann Coulter's latest column. She shreds this entire story.

That report, if listened to, would have led to meaningless action. It predicted ground threats in New York City.

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