Monday, June 4, 2012

Black Swan author, Nassim Taleb's, idiotic bond call

Back in 2010, "Black Swan" author, Nassim Taleb, often thought of as some market “genius,” said this:

Nassim Nicholas Taleb, author of “The Black Swan,” said “every single human being” should bet U.S. Treasury bonds will decline, citing the policies of Federal Reserve Chairman Ben S. Bernanke and the Obama administration. It’s “a no brainer” to sell short Treasuries, Taleb, a principal at Universa Investments LP in Santa Monica, California, said at a conference in Moscow today. “Every single human being should have that trade.”

This is what happens when you don't understand how things work; when you are simply wedded to a dogma and have no interest in the truth. For Taleb it was all about preaching his ideology rather than really knowing what is going on.

Taleb is not alone. You can lump Peter Schiff, Jim Rogers, Marc Faber, Kyle Bass and a boatload of others into that group. Totally, dismally, wrong, talkng their beliefs without the slightest interst in what the truth is. The epitome of dumb.


Matt Franko said...

They all have to be broke.

Mike Norman said...


They're not, because they peddle their doomsday scenarios to people who want to believe in that crap.

If they traded their own money they'd be broke. They don't.

Greg said...

Certainly an idiotic call but I'm gonna defend Taleb a little. His books Fooled by Randomness and Black Swan were outstanding I think. He's bright and unfortunately he could end up being right for all the wrong reasons.
A Boehner/McConnell/Romney led US bond default would be the ultimate Black Swan event. I know we all here see that as impossible but I think there are no limits to the stupidity of ideologues like the current batch of rethugs.

Matt Franko said...

This is a good point ...... don't put anything past these people .......

Mike Norman said...


Anonymous said...

I'm really baffled by Taleb's deficit doomsaying and bad bond calls, lately.

From chapter 1 of Fooled By Randomness:

"There is another reason why [the wise investor] Nero is not as rich as others in his situation. His skepticism does not allow him to invest any of his own money outside of treasury bonds. ... He takes not an inch of risk with his savings, which he invests in the safest possible vehicles. Treasury bonds are safe; they are issued by the United States Government, and governments can hardly go bankrupt since they can freely print their own currency to pay back their obligation."

Contrast that with stuff he's been saying over the last year. It is odd.

The Black Swan was also really good, but I am less optimistic about his new book.

Greg said...

Great find anon

When I read those two books it was before I discovered Winterspeak, (which led to Mosler which led to Mitchell, which led to NEP which led to MNE!!) so I was not in paradigm and that whole quote didnt mean what it means now to me. He was a quant by trade but he did not buy into EMH and that bullshit. He was a student of Mandelbroit and Soros and looked to find the patterns in randomness and always had some portion of his portfolio ready to profit from the 2 or 3 sigma event.

Sharp guy but he obviously forgot something he knew before.

Maybe he looks at it like this though; Yes govts can print money but its a bad thing to do and the path they seem to be going down at present looks like they will continue to cover all the banks bad debts forever.

He did make the comment in one of his books that banks in their history are net money losers. He's not a fan of banks either.

widmerpool said...

Don't forget Taleb considers himself a Philosopher! He's not a lowly economist. He's above all you commoners.

Black Swan is a monograph padded out to 400 pages. Really surprised people think that is a good book. It has maybe two ideas and the writing is atrocious.

danielracovitan said...

Sorry to disappoint you guys, Taleb does invest his own money. He puts his own skin in the game, as he says. Do your homework before bashing him