Warning of the Global Finanial Banking crisis (2 Viewers)

[rounder]

http://en.wikipedia.org/wiki/Nassim_Taleb

This Lebanese essayist actually predicted the Banking crisis today. His book " The Black Swan" is very thought-provoking, here's a small part of it.

Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ….I shiver at the thought.

The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events "unlikely".

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Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ….I shiver at the thought.

The government-sponsored institution Fannie Mae, when I look at its risks, seems to be sitting on a barrel of dynamite, vulnerable to the slightest hiccup. But not to worry: their large staff of scientists deem these events "unlikely".

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Funnily enough, this guy is actually born in a small village in North Lebanon, Amioun. It's where I'm from, in fact, his house is about 5 mins away from mine.

Has anyone heard of this man? What are your thoughts?

 

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[Bjerknes]

Taleb was spot on with his analysis and more people should have listened to him. I'm not sure about the entire collapse of the banking system, as not all banks partake in the same business, but most do.

I also like his take on the Ludic fallacy.

 

[Bjerknes]

And I think you pressed the wrong button when you made this thread.

 

[Albertmare]

He should be fined

 

[rounder]

Taleb was spot on with his analysis and more people should have listened to him. I'm not sure about the entire collapse of the banking system, as not all banks partake in the same business, but most do.

I also like his take on the Ludic fallacy.

Same.

And I think you pressed the wrong button when you made this thread.

No, I just don't like organization. I'm a fan of chaos.

 

[Bjerknes]

Same.



No, I just don't like organization. I'm a fan of chaos.

You will love the coming financial times then.

 

[rounder]

You will love the coming financial times then.

I'm already loving it. Chaos and unpredictability is what gives me life. The mere thought of a world where everything was extraordinarilly predicatable and sound makes me sick. Really, such a world would be pontless and meanningless, kind of like a movie without a plot or a twist.

Despite the fact that we will all suffer from this economic crisis. It may just serve as a just punishment to those capitalist pigs that have abused the very concept of money. We are all materialistic, greedy animals that need such a crisis for the rebirth of our human soul that has been long lost.

I'm not a communist although I agree with most part of its ideology, I am an anti-capitalist. This world is terribly wrong, it's a disgusting place because of how our 'leaders' have abused power and wealth. I hope they all pay, every last one of those fucks.

 

[Martin]

This world is terrible wrong, it's a disgusting place because of how our 'leaders' have abused power and wealth. I hope they all pay, every last one of those fucks.

This is a pipe dream. The wealthiest people never "pay" when there's a crisis, they profit. If there's a crash on the stockmarket and a lot of companies go bankrupt, lots of small investors lose their money. Who do you think buys up the failed companies for pennies just waiting for the situation to stabilize?

And they aren't our "leaders", these guys aren't politicians, they're magnates. Sure, sometimes they send one of their kids to politics (the Bush clan), but that's just a marginal thing, they have much more important business going on.

 

[Bjerknes]

Then again, if you're smart, right now you could be making quite a lot of money due to this economic downturn. You could be like me shorting the entire market, profiting off of the pain others are feeling.

I think you'd like that, Rev.

 

[rounder]

This is a pipe dream. The wealthiest people never "pay" when there's a crisis, they profit. If there's a crash on the stockmarket and a lot of companies go bankrupt, lots of small investors lose their money. Who do you think buys up the failed companies for pennies just waiting for the situation to stabilize?

And they aren't our "leaders", these guys aren't politicians, they're magnates. Sure, sometimes they send one of their kids to politics (the Bush clan), but that's just a marginal thing, they have much more important business going on.

It's not the crisis that's going to hurt the wealthy. It's what happens after that. When people realize the flaws of the capitlist system and force change. One day, the rich will cease to become richer. It's only a matter of time before the very policies that the overly wealthy have fallen in love with take a 180 degree turn.

Things will not stay the same, hopefully.

when I said 'leaders', I meant Bush. He is the core problem.

 

[Bjerknes]

The problem is, a socialist system has it's problems as well. The leaders and gestapo would have all the wealth, so human greed still plays a role in society. It's just that more people have less.

 

[Bjerknes]

when I said 'leaders', I meant Bush. He is the core problem.

He's not the core of the problem. Bush is the face of the problem. But he really is just a pawn for some other people, whomever they may be.

 

[rounder]

Then again, if you're smart, right now you could be making quite a lot of money due to this economic downturn. You could be like me shorting the entire market, profiting off of the pain others are feeling.

I think you'd like that, Rev.

It's not a matter of being smart, its a matter of lacking a conscience.

It is a sick world that we live in my friend, the ones who survive are sick people.

 

[Seven]

Then again, if you're smart, right now you could be making quite a lot of money due to this economic downturn. You could be like me shorting the entire market, profiting off of the pain others are feeling.

I think you'd like that, Rev.

You're lucky, Andy. You need to have intelligence and luck.

 

[Martin]

It's not the crisis that's going to hurt the wealthy. It's what happens after that. When people realize the flaws of the capitlist system and force change. One day, the rich will cease to become richer. It's only a matter of time before the very policies that the overly wealthy have fallen in love with take a 180 degree turn.

Things will not stay the same, hopefully.

when I said 'leaders', I meant Bush. He is the core problem.

Again, a pipe dream. First of all, a revolution won't come because people have too much to lose from a complete breakdown of society. This isn't the French monarchy where the aristocracy owns everything and people at the bottom are starving. We have a huge middle class living entirely fulfilling and happy lives, they aren't desperate for a revolution. Sure, we still have people below the poverty line, but they make up less than 1% of society, not 90% as it was in the 18th century.

Secondly, should such a revolution materialize, it will be the wealthy who are the most resourceful and best positioned (most independent from government stability) to navigate the chaos and find a stable geographical/social place.

And finally, a revolution is ultimately pointless, because no matter what the system is there will always be greed and and corruption, with some people rising to enormous wealth through unethical means. In times of monarchy, it was the aristocrats, the land owners. In communism it was the political elite (and their industrialist cohorts on special exception basis). And currently it's anyone who can figure out a way to get rich, no matter how you want to achieve it.

 

[Bjerknes]

It's not a matter of being smart, its a matter of lacking a conscience.

It is a sick world that we live in my friend, the ones who survive are sick people.

I'd rather be "sick" than dead. Darwin was brilliant.

But lets be honest here. It's not like we are the bankers who befriended the Nazi's during the Holocaust.

You're lucky, Andy. You need to have intelligence and luck.

I wish for more of each. If so, I'd actually be making a killing.

 

[rounder]

The problem is, a socialist system has it's problems as well. The leaders and gestapo would have all the wealth, so human greed still plays a role in society. It's just that more people have less.

No system will ever be flawless, it's an impossibility. We just have to weigh the pros and the cons. I think the concept of freedom has really deluded people's thoughts, Americans in particular. There seems to be a lack of realism in our world. We have too much ego, it's how we are raised, it's what we were taught.

We believe in making a name for ourselves so much that we have completely disregarded the rest. Those who have succeded are relentless in working for more success. While those that lacked the drive and even the opportunity to thrive will continue to suffer.

Bold:

The less financial power people have the better. Humans are by no means perfect, when given the power, we will abuse it.

 

[rounder]

Again, a pipe dream. First of all, a revolution won't come because people have too much to lose from a complete breakdown of society. This isn't the French monarchy where the aristocracy owns everything and people at the bottom are starving. We have a huge middle class living entirely fulfilling and happy lives, they aren't desperate for a revolution. Sure, we still have people below the poverty line, but they make up less than 1% of society, not 90% as it was in the 18th century.

Secondly, should such a revolution materialize, it will be the wealthy who are the most resourceful and best positioned (most independent from government stability) to navigate the chaos and find a stable geographical/social place.

And finally, a revolution is ultimately pointless, because no matter what the system is there will always be greed and and corruption, with some people rising to enormous wealth through unethical means. In times of monarchy, it was the aristocrats, the land owners. In communism it was the political elite (and their industrialist cohorts on special exception basis). And currently it's anyone who can figure out a way to get rich, no matter how you want to achieve it.

Who suffers most from this financial crisis? It's not the rich since they will capitalize on the small investors, the people who will suffer in this particular time will be the middle class. They make up the majority of the economy, surely, a revolution is not entirely impossible.

Right now, yes they are ok. The middle class are content. what happens when millions of them go bankrupt, lose their jobs, and stability. A revolution is definitely on the cards. It's hard to imagine they will be content in an economy where they will always be the most vulnerable and open to danger, while the rich will inevitably get richer regardless of the situation.

A struggle between the rich and the middle class is not out of question.

I'm not saying the a revolution will make everything alright, because I agree that no matter what the system, human greed will always prevail one way or another. However, there needs to be change one way or another.

 

[Bjerknes]

No system will ever be flawless, it's an impossibility. We just have to weigh the pros and the cons. I think the concept of freedom has really deluded people's thoughts, Americans in particular. There seems to be a lack of realism in our world. We have too much ego, it's how we are raised, it's what we were taught.

We believe in making a name for ourselves so much that we have completely disregarded the rest. Those who have succeded are relentless in working for more success. While those that lacked the drive and even the opportunity to thrive will continue to suffer.

Bold:

The less financial power people have the better. Humans are by no means perfect, when given the power, we will abuse it.

But what you're doing is increasing the power of just a few people while decreasing the power of the majority with such a system. There isn't a flawless system indeed, but socialism is so inefficient it's scary. While there are winners and losers in this current state of the world, potentially everybody could be a loser under a socialist regime. You never know what could happen.

 

[Babo0oli]

great team talk!