Taleb, the author of "the Black Swan" has become something of a celebrity recently. But how much of that celebrity is self-promotion?
Here's his latest sighting - long and detailed article in the Times UK with some interesting biographical information: http://business.timesonline.co.uk/tol/business/economics/article4022091.ece I don't know what to make of even the first anecdote in the article about a cup of spilled tea damaging a voice recorder. Allegedly a Black Swan in real life. On the other hand even amateur non-celebrity reporters know better than to use digital recorders for exactly this reason, so does the interviewer even know what he is doing? Taleb now claims that the sub-prime crisis and the events at Soc Gen, Northern Rock and Bear Stearns are his greatest vindication. Huh? He feels vindicated, because he repeated in generic terms common-sense observations about unmeasurable uncertainty and long tails that have been known for decades? Here are some of the reasonable parts from the article: -------------------------------------------snip "Scientists don't know what they are talking about when they talk about religion. Religion has nothing to do with belief, and I don't believe it has any negative impact on people's lives outside of intolerance. Why do I go to church? It's like asking, why did you marry that woman? You make up reasons, but it's probably just smell. I love the smell of candles. It's an aesthetic thing." Take away religion, he says, and people start believing in nationalism, which has killed far more people. Religion is also a good way of handling uncertainty. It lowers blood pressure. He's convinced that religious people take fewer financial risks. [....] Let me introduce you to Brooklyn-born Fat Tony and academically inclined Dr John, two of Taleb's creations. You toss a coin 40 times and it comes up heads every time. What is the chance of it coming up heads the 41st time? Dr John gives the answer drummed into the heads of every statistic student: 50/50. Fat Tony shakes his head and says the chances are no more than 1%. "You are either full of crap," he says, "or a pure sucker to buy that 50% business. The coin gotta be loaded." The chances of a coin coming up heads 41 times are so small as to be effectively impossible in this universe. It is far, far more likely that somebody is cheating. Fat Tony wins. Dr John is the sucker. And the one thing that drives Taleb more than anything else is the determination not to be a sucker. Dr John is the economist or banker who thinks he can manage risk through mathematics. Fat Tony relies only on what happens in the real world. [....] Modern portfolio theory had not accounted for the black swan, the Russian financial crisis of that year. Taleb regards the Nobel prize in economics as a disgrace, a laughable endorsement of the worst kind of Dr John economics. Fat Tony should get the Nobel, but he's too smart. "People say to me, 'If economists are so incompetent, why do people listen to them?' I say, 'They don't listen, they're just teaching birds how to fly.' " _______________________________________________ pen-l mailing list [email protected] https://lists.csuchico.edu/mailman/listinfo/pen-l
