(2009-03-23) Taleb Interview

Interview with Nassim Taleb. Written highlights so you don't have to listen to Audio. Complexity cannot tolerate Leverage, since no room for error. Since 1980, tripling in leverage, in U.S. and in Europe, ratio of leverage to GDP... Globalization has side effects; produces fat tails... People ask for more regulation. Risk was implemented because the regulators wanted it. Nobody in Washington talked about that this crisis was caused by regulators, Credit Rating agencies. Triple A assets, big premium put on having your asset rated AAA. Pension funds couldn't hold some of their assets in certain categories. FannieMae: VAR. Regulators like VAR.

What we do versus what we know. Closer to F A Hayek. History of medicine, anti-academic, anti-knowledge. Medicine (HealthCare): whenever we use knowledge as a driver instead of tinkering, we get in trouble. Examples: Our understanding of biological processes led to a decrease in cures. When just tinkering we did better than with directed research (R And D). Directed research gives us a strong bias and blinds us to things we don't know are there. In medicine, most medicines are used to cure something completely different from what the intention was. Side Effect-s dominate.