Skip to main content

Taleb and (guru) Mandelbrot together on Credit Crunch

THIS ACTUALLY TOOK PLACE AT PBS STUDIOS some five months ago when the $700bn bail-out package aka Troubled Asset Relief Program (TARP) was announced at the U.S. Senate. Nassim Taleb features here with his Guru Benoit Mandelbrot in this joint interview by Paul Solomon titled 'Experts Examine Future of Credit Crunch'.

For anyone new to Mandelbrot and Taleb or the subjects of Chaos theory and randomness that they deal with, this shall provide a good introduction (and a starting point to what could become a very interesting journey. I have been meaning to post these for a few months now. Finally, the cat is out of the draft.).

Below are two excerpts from the talk, followed by the direct PBS podcast:
The increased concentration among banks seems to have the effect of making financial crises less likely. But when they happen, they are more global in scale and hit us very hard. True, we now have fewer failures, but, when they occur, I shiver at the thought. -- Nassim Taleb in his book The Black Swan

Mandelbrot, after talking about the Butterfly-effect, elaborates that:
[The Butterfly-effect creates turbulences] The word "turbulence" is one which actually is common to physics and to social scientists, to economics. Everything which involves turbulence is enormously more complicated --not just a little bit more complicated, not just one year more schooling-- just enormously more complicated. [...] That is not well-understood. In fact, that is misunderstood for which tools have been developed which assume that changes are always very small. If one of them comes, nothing bad happens. If several of them come together, very bad things have happened...
And, so it goes.


  • See also:
  • Go here for the podcast download, and here for the full transcript of the interview.
  • Go here for the video of the show. I didn't embed it directly for I found it rather ominous for an introduction to show Taleb laughing over a grim topic.

Comments

  1. Okay.. Back to normal and *functional* comment system of Blogger.

    ReplyDelete

Post a Comment

Popular posts from this blog

The Pygmalion vs. The Golem Effect

There are two kinds of self-fulfilling prophecies. They are broadly defined by wiki as follows: The Pygmalion effect , or Rosenthal effect, is the phenomenon in which the greater the expectation placed upon people, the better they perform. On the other hand is the Golem effect , in which low expectations lead to a decrease in performance. In ancient Greek mythology, Pygmalion fell in love with one of his sculptures, which then came to life. The theme was in the main stray of many English literary works during the victorian era. One of which is George Bernard Shaw's play titled "Pygmalion" from which Rosenthal effect gets its name. In Shaw's play, the protagonist, a professor of phonetics Henry Higgins makes a bet that he can train a bedraggled Cockney flower girl, Eliza Doolittle, to pass for a duchess at an ambassador's garden party by teaching her to assume a veneer of gentility, the most important element of which, he believes, is impeccable speech. (The pl

"Peter Drucker - Managing Oneself" on SlideShare.net

IN THE INTRODUCTORY paragraph of this legendary paper for Harvard Business Review, Peter Drucker writes: We live in an age of unprecedented opportunity: If you've got ambition and smarts, you can rise to the top of your chosen profession, regardless of where you started out.  But with opportunity comes responsibility. Companies today aren't managing their employees' careers; knowledge workers must, effectively, be their own chief executive officers. It's up to you to carve out your place, to know when to change the course, and to keep yourself engaged and productive during a work life that may span some 50 years. To do those things well, you will need to cultivate a deep understanding of yourself - not only what your strengths and weaknesses are but also how you learn, how you work with others, what your values are, and where you can make the greatest contribution. Because only when you operate from strengths can you achieve true excellence. Marking a small foot

HBR: Most Popular Articles of 2010

AN EXCITING YEAR IS DRAWING TO A CLOSE. Coming full circle of seasons it is winter again while the haven freezes over and a friend messaged from Leh in north-western Himalayas, "Its -15.4° C (4.2° F) here. Expect snow typing." I am almost sure it was meant to read "slow typing". HBR on their part collectively published some 1000+ articles over the last 365 days. Recently, one of the editors listed the top 10 most popular articles among them (try  here ). Listed below are the five articles that I liked most. 1. Why I Returned My iPad by Peter Bregman Peter Bregman stands in a two-hour queue-for-a-gadget for the first time to get his hands on iPad on its launch day. And within days, he is hooked. In this I-fear-I-might-loose-boredom post, Bregman talks about returning his iPad to Apple because it was "too good". He writes, "It's too easy. Too accessible. Both too fast and too long-lasting. For the most part, it does everything I could want. W