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alstry (< 20)

Are You are Turkey?????



December 07, 2008 – Comments (7)

For a while, I have been viewed as a big burly bear in real life and on this blog.  In a number of conversations with others, people repeatedly ask me if Roubini is too doom and response for the last year or so was that I thought he was too optimistic....although his thinking and mine are becoming closer as of late( I am not sure if he is becoming more negative or I am becoming more positive?)  It is reassuring that there are people out there whom I respect that hold a similar perspective.

The following is a recent Charlie Rose interview with Nassim of The Black Swan.  The premise and the interview is dead on and very important.  It is a concept that every investor should understand and why I view his book one of the key reads any student of business and/or the markets can absorb.  I recently recommeded the book to an acquaintance who is an executive at a public company.... in a social setting today, he told me he found it so insightful that he gave a copy to the entire board.

The following concise interview provides exceptional analysis without charge.  I suggest you focus on the beginning of the interview when Mr. Taleb compares economists to turkeys and that which occurs at about 15:45 until the end with his prediction about how bad things might get.

For the most part, I tend to agree with most of his comments....including the portion about massive inflation.......but be careful, some people define inflation as the printing of currency, others define it as rising prices, but the two don't necessarily occur together.

Now the question is who is the turkey and who is the butcher?


7 Comments – Post Your Own

#1) On December 07, 2008 at 11:41 PM, alstry (< 20) wrote:

In fairness, I came accross the link to this interview on Calculated Risk this evening.  The recent passing of CR's blogging partner Tanta, aka Doris Dungy, was probably one of the greatest losses of a business/econ blogger since the invention of the internet.  There was no one, and that is absolute, that presented a better or more credible presentation of the issues leading up to the mortgage crises than Tanta.

If I had one tenth her literary skills, I would be ten times the writer.  She called it as she saw it, and she saw it clearer than just about anyone else.  She clearly knew who was the turkey.

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#2) On December 08, 2008 at 12:30 AM, Option1307 (30.60) wrote:

Good video, thanks for the link...

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#3) On December 08, 2008 at 12:38 AM, semper77 (< 20) wrote:

Interesting video, especially what he has to say about banks going forward being treated like utlity companies.

However, I gotta say he loses considerable credit towards the end of the interview when he refers to "quite commendable" job done by Paulson...

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#4) On December 08, 2008 at 2:44 AM, Tastylunch (28.55) wrote:

Tanta was pretty dang amazing she's badly missed.

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#5) On December 08, 2008 at 2:44 AM, Tastylunch (28.55) wrote:

Tanta was pretty dang amazing she's badly missed.

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#6) On December 08, 2008 at 5:23 AM, abitare (29.91) wrote:

GOod find the Black Swan is a great book too.

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#7) On December 08, 2008 at 2:02 PM, saunafool (< 20) wrote:

I love the part of the interview where Charlie Rose asks Taleb if he is as bearish as Roubini and Taleb says he is far more negative. You can hear a thud as Rose's hands fall to the table, the camera goes back to both men and you see Rose with his mouth hanging open in disbelief.

Kind of ironic, though that Taleb makes so many predictions about what will happen in the future when his writing frequently points out that it is really tough to know.

For example, I'm not so sure about banks being relegated to mere utilities. I don't think people really know how badly they've been gamed by the banks. I also think people have been drinking free market financial innovation kool-aid for so long that they would be afraid to take away the leverage, the securitization, and so on. I can picture going back to 1998 levels of regulation, but not 1938.

No matter what, it's going to be very interesting in the next few years. Keep your powder dry, save money, and don't be afraid to buy when things look really bad (and yes, I mean much worse than now).

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