naked capitalism

James says:

The longer we keep bailing people out the greater the odds of a total economic collapse.

vikas says:

Ergo, a 20% fall in the market will not be allowed.

Mara says:

Having read 2 of Taleb’s books I can see what Anon@1223 says about Taleb’s “I told you so” tone he sometimes has. However he does have good data and it’s changed my viewpoint on trading.
If you’re not in with any pvt equity group, well where do you go? He runs a fund, but I’ve not seen any data on his past performance or the kinds of instruments he prefers. Anyone know about this? Once I saw data on Peter Schiff’s “I told you so” talk vs the lousy recent returns on EuroPacific, I decided to ignore him since he couldn’t manage to preserve his clients’ capital first and foremost. I reckon when we hear from “gurus” we should make sure they’re making more on their portfolios rather than their book sales.
@Michael Fiorillo – I would volunteer to play Taps at the death of Carlyle and Blackstone. Bonus if you could throw in Haliburton.

Anonymous says:

Propping the markets up will cause the dollar to suffer. Lose lose situation.

Anonymous says:

Anonymous said…

“This is not really germane, but Taleb’s continuing need to insist that he’s the only smart person in the world is completely juvenile.”

Well, when you get him in a room full of economists, he IS the only smart one in the room!

Waldo says:

This financial sector’s quasi-collapse is like a chess game. Oil (with military and market manipulation) made the first move deep into the free market (capitalism’s) group. But now the free market (selling-off of equities [Euro power]) is pushing back into the scattered pawns of the oil tyrants.

The game will be complete when finance (sell-off power) topples the king (George H.W. Bush) with prison time (no pardon from Obama or his whole legacy is capoot!).

This may seem juvenile but for our future’s sake we had better believe in Walt Disney’s imagination just this once.

The “weeds” (Europe) are outperforming the beautiful “lilies” (America). It stinks here in the states!

Sonnet #94

They that have pow’r to hurt and will do none,
That do not do the thing they most do show,
Who, moving others, are themselves as stone,
Unmoved, cold, and to temptation slow;
They rightly do inherit Heaven’s Graces
And husband nature’s riches from expense;
They are the lords and owners of their faces,
Others but stewards of their excellence.
The summer’s flow’r is to the summer sweet,
Though to itself it only live and die;
But if that flow’r with base infection meet,
The basest weed outbraves his dignity:
For sweetest things turn sourest by their deeds;
Lilies that fester smell far worse than weeds.

William Shakespeare

Anonymous says:

Can the PE firms suck it up and survive on the their 2% fees until the mess clears?

dailybail says:

Yves, Here is the lead for my newest piece which is now up. Thought you and your readers might enjoy the swipe i take at a certain group of economists. I’m obviously close to losing control of myself at this point. Someone hold me back.

SNIP:

“In this melancholy afternoon edition of bailout news links, our attention turns to the Obama stimulus package. Oustside of being an insane waste of another trillion of your children’s future, there is some value here. There’s word that we might have some nifty parking garages built at the Orange Bowl in Miami, plus there’s $350 million earmarked for STD education. We’re all for public sex education here at dailybail. seriously. No Snark. But how many of these patronage projects will actually help the economy recover? None. Zip. Nada.

Face it folks. Outside of the tax cuts, none of this will help. You neo-Krugmanites can kiss my ass. Keynesians, get the hell off my site. You add no value to the equation, beyond enteratinment for the rest of us, who are grounded in reality. Where is your grand, coherent vision for a vital infrastructure build out. It’s nothing but shovel ready projects of rank patronage. I thought Obama might somehow be different, but alas you and I and our children are being played for fools once again.

Take a late day ride through hell, as we look at the 20 best reads on what’s going down.

And today, Xanax is included.”

steve

Anonymous says:

so what? Doomsday happened and most everything was bailed out.

NYCTrader Just write me here on this page , Ill email you says:

Im also in the “Annoyed by Taleb” camp. His minor amount of celeb comes from publishing book with one opinion shared by almost every professional trader I know. I learned nothing from ‘Fooled by Randomness’ or the ‘Black Swan’ that I didnt get in my first year on Wall Street. He makes such a big deal about pointing out that guys get long and think they are geniuses.

Well here is where Im at: Nobody is a genius. You may have turned the corner and insolated yourself by piling up a few dollars, but no one with a real fortune has done it without breaking a few laws and cutting a few corners. And people who get long any one asset? (CDOs, Private equity, real estate, etc) I didnt learn from Taleb that they are just hopeful big-trade front runners who all get taken down over time.

locust says:

Does the message change because Taleb delivers it? I didn’t think so.

Viv says:

According to what I’ve read and heard from his interviews Taleb was up between 50-100% in the last year. So his performance was brilliant.

His books are brilliant and the economy is going to enter the greatest depression. This credit bubble was the longest and largest in history, starting from 1982. Hence the contraction will be long and deep. Every action has an opposite and equal reaction. The economy will only right itself when all the bad debts are washed away through repayment or default.

And there is so much toxic debt out there that righting the economy will take a decade or more of painful correction.

The correction is always equal and opposite to the deception that preceded it. Obama’s spending spree will only add to the debt burden making things much, much worse.

Abbott_Of_Iona says:

All,

Prediction.

Inflation in the US in 2010 @ 8%
Inflation in the US in 2011 @ 10%
Inflation in the US in 2012 @ 12%
etc. etc. etc.

Nothing Taleb,or anybody , says can change what Obama is doing.

Obama wants to “repair bridges” and build windmills?

This sounds like the second quest of Don Quixote.

Windmills?

This is insanity upon fascism.

Building windmills to overcome the corruption of a gangrenous financial system by printing more money (and spending it on windmills).

Are all of you insane.

Wake up.

It doesn’t matter where the money is spent (unless you are going to get a large part of it)

You are headed for massive inflation. Your savings and pensions are being robbed

Anonymous says:

Yep, 300 years of industrial revolution and the smart monkey thinks it has it down pat, pure human arrogance. Befoul the planet in so many ways, well of souls to be plucked by the musings of 2,000 years+ nomadic herders, meets rules of the universe.

We defiantly have issues, we are just starting to have a window into the human mindset and yet we subject our selves to this kind of lunacy, the prognosis is not good, how much pain must we feel before we change course.

The Universe does not care what we do, it has rules, which if ignored will bite us in the ass. We are just now getting a good picture of these rules and will not unlike a child, learning with out parental guidance, damage or kill our selves in the process.

skippy

bg says:

20% up or down in the market over 12 months sounds like a safe bet, and we might even get both.

What I don’t understand is why LBO companies are systematically important in a debt deflation. If there is too much debt and too much capacity, it feels like one stop shopping for effective liquidation. In other words, there services are worth a positive amount with capicity is scarce and we want to put money to work, and they can find efficiencies. Their value and worth are negative now, so be it.

Will the troth feed them as stimulus? because they are too connected and will bring others down with them? Because they are politically connected (Yves would use that French word ‘rich’)?

Unless you think liquidation should stop completely, this the place that liquidation can create the fastest relief to the rest of the economy.

Anonymous says:

His argument has meirt and just does not quite ring true. Why do you need the S&P to go down 20% for Private equity firms to get in trouble. Most of their assets are highly leveraged, many of their companies need reorganising at the very least. Private Equity firms have all the attributes of cannon fodder on the frontlines of the economic battle. Only those Private Equity firms which have actively managed and re-organised ,and there are some will survive in my view.

Anonymous says:

Answered my own question:

‘Get Ready for the Private Equity Shakeout’ by Heino Meerkatt and Heinrich Liechtenstein of BCG and IESE respectively for anyone that cares.

– Ben

Anonymous says:

Taleb has been trying to point out how wrong all the quants relying on induction have been for 10 years. You have no idea how much abuse and derision he suffered…for being 100% right the whole time. I have no problem with his in your face arrogance. It is the unjustified arrogance on the fools he dresses down that should not be tolerated.

Anonymous says:

“it makes me very worried about what they’ll eventually decide to do.”

The new team is dedicated to the Japanese approach–avoid price discovery at all costs.

zak822