Sunday, 28 March 2010

Greenspan: The Financial Crisis Was Caused By A 'Once-In-A-Century' Event • Taleb: Any Pilot Who Doesn't Know About Storms Shouldn't Be In the Cockpit

Forget about the fact that the "once-in-a-century event" couldn't have happened if Greenspan's Fed hadn't:

* Turned its cheek and allowed massive fraud

* Acted as cheerleader in chief for unregulated use of derivatives (see this and this)

* And for subprime loans

* Argued that economists had conquered the business cycle, and that modern, technologically advanced financial markets are best left to police themselves

* Preached that a new bubble be blown every time the last one bursts

* Kept interest rates too low

* And did alot of other hinky things

More importantly, as Nassim Taleb repeatedly
points out, financial experts who don't plan for rare events are like pilots who don't know about storms.
http://www.washingtonsblog.com/2010/03/greenspan-financial-crisis-was-caused.html

[Posted at the SpookyWeather blog, March 28th, 2010.]

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