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View Diary: The Black Swan Myth (154 comments)

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  •  those wouldn't be black swan events (6+ / 0-)

    well, California falling into the sea, no. That's geologically impossible. the meteor hitting NYC, well that is possible, considering that we don't exactly keep track of the Near Earth Objects that we share our star system with but the odds are fairly astronomical.

    9/11 is an example. It was a shock to everyone not paying attention, it's had an extreme impact to our society and then in hindsight, it's very easy to say "wow, yeah, that probably was going to happen."

    the current deep recession isn't a black swan. It had been telegraphed for almost half a decade.

    (+0.12, -3.33) agree w/ me or go to redstate. i'm snarking. too many aren't.

    by terrypinder on Thu Jul 16, 2009 at 11:28:25 AM PDT

    [ Parent ]

    •  Hindsight? (2+ / 0-)
      Recommended by:
      polar bear, oldmilitant

      The Presidential Daily Briefing on August 6, 2001 was not hindsight. 9/11 is a paradigm case of something not being a black swan. "Nobody could have predicted."

      Yes they could have if they had been doing their job and had listened to Richard Clarke, among others.

      It's not a "black swan" just because you've never seen it. It's a black swan if no one has seen it. I hate that analogy, I reject the premise, but whatever 9/11 and The Panic of 2008 are, they aren't black swans.

      Live from the ochlocracy of California.

      by Attorney at Arms on Thu Jul 16, 2009 at 11:49:20 AM PDT

      [ Parent ]

      •  thus the reason I used (0+ / 0-)

        "anyone not paying attention."

        (+0.12, -3.33) agree w/ me or go to redstate. i'm snarking. too many aren't.

        by terrypinder on Thu Jul 16, 2009 at 11:50:24 AM PDT

        [ Parent ]

        •  but they were paying attention... (0+ / 0-)

          ...they just chose not to do anything.

          •  well, most of what I said (0+ / 0-)

            comes from the guy who invented the theory.

            Think of the terrorist attack of September 11, 2001: had the risk been reasonably conceivable on September 10, it would not have happened. If such a possibility were deemed worthy of attention, fighter planes would have circled the sky above the twin towers, airplanes would have had locked bulletproof doors, and the attack would not have taken place, period. Something else might have taken place. What? I don't know. Isn't it strange to see an event happening precisely because it was not supposed to happen? What kind of defense do we have against that? Whatever you come to know (that New York is an easy terrorist target, for instance) may become inconsequential if your enemy knows that you know it. It may be odd to realize that, in such a strategic game, what you know can be truly inconsequential.

            so I still think "not paying attention" is an apt descriptor. Then again, I think as a theory it's a thought experiement and nothing more to worry about.

            (+0.12, -3.33) agree w/ me or go to redstate. i'm snarking. too many aren't.

            by terrypinder on Thu Jul 16, 2009 at 12:00:08 PM PDT

            [ Parent ]

      •  Wiki says about swans... (1+ / 0-)
        Recommended by:
        Woody

        The term Black Swan comes from the 17th century European assumption that 'All swans are white'. In that context, a black swan was a symbol for something that was impossible or could not exist. In the 18th Century, the discovery of black swans in Western Australia[3] metamorphosed the term to connote that a perceived impossibility may actually come to pass. Taleb notes that John Stuart Mill first used the Black Swan narrative to discuss falsification.

    •  A-yep. Bush's jobless recovery was the biggie. (2+ / 0-)
      Recommended by:
      terrypinder, oldmilitant

      That and his tax cuts.

      Visit http://theuptake.org/ for Minnesota news as it happens.

      by Phoenix Woman on Thu Jul 16, 2009 at 11:50:02 AM PDT

      [ Parent ]

    •  Bin Laden Determined to Strike in U.S. (1+ / 0-)
      Recommended by:
      oldmilitant

      Aug. 17 Zacarias Moussaoui arrested.

      9/11 not a black swan. Predictable and avoidable, but the Bush Administration...

    •  One man's Black Swan (2+ / 0-)
      Recommended by:
      terrypinder, Darkmoth

      ... is another's "I told you so".

      We could see it coming, but the possibility nationwide collapse of home values was not even considered by the so-called risk management experts, who pay themselves a billion a year because they're so smart, experienced, and wise. Then it happened.

      That's a Black Swan event, by definition.

      Managing risk is easy, if you exclude the rare and unlikely from your area of responsibility. Wall Street got the easy part right, and now they're sticking us with the bill for blowing the hard part.

      •  Exactly (1+ / 0-)
        Recommended by:
        DBunn

        If your statistical models are built on a a decade of rising housing prices, they necessarily tell you that falling housing prices are as unlikely as flying pigs.

        Because they were that unlikely - until they fell.

        "Karl Rove giving Dems advice is the DEFINITION of 'Concern Troll'" - punkdavid

        by Darkmoth on Thu Jul 16, 2009 at 02:33:04 PM PDT

        [ Parent ]

    •  No, but the collapse of megabucks (0+ / 0-)

      in unregulated OTC derivatives could be. That problem is still largely unresolved.

      We don't know yet how this ends. Maybe Bonddad is right, and we are stabilizing on the way to recovery. But maybe this is a pause in a larger collapse, based on the ponzi-like effect of some of the more dubious derivatives pumped into the system since 1999.

      We won't know whether this was a Black Swan until a few years from now. The Great Depression wasn't definitively called that until 1934, when its shape was obvious in the rear-view mirror.

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