Thursday, September 24, 2009

Is Paul Volcker a Nassim Nicholas Taleb Fan?

In prepared testimomy before the House financial services committee, Volcker at one point states:
Of course, we can’t really know, not in this day, when "black swans" seem to be appearing more frequently, when sub-prime mortgages arise out of nowhere in a few years to undermine market stability, when opaque trading in complex derivatives become so large relative to underlying assets, and when more and more complex financial instruments limit the transparency of markets.
"Black swans", of course, have become part of the financial world's lexicon as a result of Taleb's book, The Black Swan.

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