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Following Mike Novogratz’s earlier comments about the launch of Bitcoin futures,
“The market trades like it wants to go up, not down…
We are in a speculative mania and my sense is we are still fairly early.”
Infamous ‘Black Swan’ theorist and tail-risk-hedger, Nassim Nicholas Taleb has a warning for the ‘no brainer’ traders hoping to use Bitcoin futures to bet against the ‘bubble’…
In his tweet, Taleb said,
“No, there is NO way to properly short the bitcoin “bubble”. Any strategy that doesn’t entail options is nonergodic (subjected to blow up). Just as one couldn’t rule out 5K, then 10K, one can’t rule out 100K.”
Nassim Nicholas Taleb does not suffer fools gladly. Author of several books including The Black Swan and Antifragile, Taleb is known for his incendiary personality almost as much as his brilliant work in probability theory. Readers of his very active Medium page will experience a formidable mind with no patience for trendy groupthink, a mind that takes special pleasure in lambasting elites with no “skin in the game.”
“Skin in the game” is a central (and welcome) tenet of Taleb’s worldview: that we are increasingly ruled by an intellectual, political, economic, and cultural elite that does not bear the consequences of the decisions it makes on our (unwitting) behalf. In this sense Taleb is thoroughly populist, and in fact he correctly identified trends behind the Crash of ’08, Brexit, and Trump’s election. He understands that globalism is not liberalism, that identity and culture matter, and most of all that elites don’t understand how randomness and uncertainty threaten the inevitability of a global order.
Having previously exposed the “intellectual-yet-idiot” class, Nassim Taleb unleashes his acerbic tone in 3 painfully “real news” tweets on President Obama’s legacy…
Protected banksters (largest bonus pool in 2010)
Served AlQaeda/SaudiBarbaria(Syria & Yemen) https://t.co/bcNMhDgmuo
— NassimNicholasTaleb (@nntaleb) November 19, 2016
2) (Cont) But in the end what Obama did that is unforgivable is increasing centralization in a complex system.
— NassimNicholasTaleb (@nntaleb) November 19, 2016
3) Don’t fughet Obama is leaving us a Ponzi scheme, added ~8 trillions in debt with rates at 0. If they rise, costs of deficit explode…
— NassimNicholasTaleb (@nntaleb) November 20, 2016
How long before Taleb is banned from Twitter for such ‘hate-speak’?
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Sometimes, less is more, and in infamous “Black Swan” philosopher Nassim Taleb’s case, summing up the chaos that is enveloping America, and its forthcoming election was as simple as the following:
“The *establishment* composed of journos, BS-Vending talking heads with well-formulated verbs, bureaucrato-cronies, lobbyists-in training, New Yorker-reading semi-intellectuals, image-conscious empty suits, Washington rent-seekers and other “well thinking” members of the vocal elites are not getting the point about what is happening and the sterility of their arguments.”
To which he appended the following 17 perfectly succinct words:
“People are not voting for Trump (or Sanders). People are just voting, finally, to destroy the establishment.”
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– Nassim Taleb’s Fund Made $1 Billion On Monday; This Is How The Other “Hedge” Funds Did (ZeroHedge, Aug 28, 2015):
You can’t say Nassim Taleb didn’t warn you: the outspoken academic-philosopher, best known for his prediction that six sigma “fat tail”, or black swan, events happen much more frequently than they should statistically (perhaps a main reason why there is no longer a market but a centrally-planned cesspool of academic intervention) just had a black swan land smack in the middle of the Universa hedge fund founded by ardent Ron Paul supporter Mark Spitznagel, and affiliated with Nassim Taleb.
The result: a $1 billion payday, translating into a 20% YTD return, in a week when the VIX exploded from the teens to over 50, and which most other hedge funds would love to forget.
The WSJ reports:
– Taleb On “Skin In The Game” And His Disdain For Public Intellectuals (ZeroHedge, Jan 26, 2013):
Nassim Taleb sits down for a quite extensive interview based around his new book Anti-Fragile. Whether the Black Swan best-seller is philosopher or trader is up to you but the discussion is worth the time as Taleb wonders rigorously from the basic tenets of capitalism – “being more about disincentives that incentives” as failure (he believes) is critical to its success (and is clearly not allowed in our current environment) – to his intellectual influences (and total disdain for the likes of Krugman, Stiglitz, and Friedman – who all espouse grandiose and verbose work with no accountability whatsoever). His fears of large centralized states (such as the US is becoming and Europe is become) being prone to fail along with his libertarianism make for good viewing. However, his fundamental premise that TBTF banks should be nationalized and the critical importance of ‘skin in the game’ for a functioning financial system are all so crucial for the current ‘do no harm’ regime in which we live. Grab a beer (or glass of wine, it is Taleb) and watch…
Via Redmond Weissenberger of the Ludwig von Mises Institute Of Canada,
A must see interview with Nassim Taleb
Nassim Nicholas Taleb is a former trader and hedge fund manager, a best-selling author, and a ground-breaking theorist on risk and resilience.
Taleb drew wide attention after the 2007 publication of The Black Swan: The Impact of the Highly Improbable, which warned that our institutions and risk models aren’t designed to account for rare and catastrophic events. Among other things, the book cautioned that oversized and unaccountable banks using flawed investment models could bring on a financial crisis. He also warned that the government-sanctioned housing finance agencies, Fannie Mae and Freddie Mac, were sitting on a “barrel of dynamite.”
One year after The Black Swan was published, a global banking crisis was brought on by the very factors he identified.
– Double or Nothing: How Wall Street is Destroying Itself (ZeroHedge, May 12, 2012)
There’s nothing controversial about the claim— reported on by Slate, Bloomberg and Harvard Magazine — that in the last 20 years Wall Street has moved away from an investment-led model, to a gambling-led model.
This was exemplified by the failure of LTCM which blew up unsuccessfully making huge interest rate bets for tiny profits, or “picking up nickels in front of a streamroller”, and by Jon Corzine’s MF Global doing practically the same thing with European debt (while at the same time stealing from clients).
As Nassim Taleb described in The Black Swan these kinds of trades — betting large amounts for small frequent profits — is extremely fragile because eventually (and probably sooner in the real world than in a model) losses will happen (and of course if you are betting big, losses will be big). If you are running your business on the basis of leverage, this is especially dangerous, because facing a margin call or a downgrade you may be left in a fire sale to raise collateral.
– Is Ron Paul Taleb’s New Black Swan? (ZeroHedge, Mar 13, 2012):
While he does have some new philosophy (at X% off MSRP of course, coming to a Kindle near you) to preach, Nassim Taleb’s re-emergence from the darkness of the media spotlight starts with a bang: “I realized that something wrong is going on, and only one candidate ‘Ron Paul’ seems to have grasped the issues and is offering the right remedies“. He was given quite a lengthy period to proselytize as he outlines the Big Four problems he sees with the USA (and for that matter the world): Deficits (metastatic governments), The Fed, Militarism, and non-Bailouts (what is fragile should break early). As Ron Paul notes, “It’s an illusion that the USD can bailout the world”, Taleb makes many interesting, though a little murmur-some for our liking, points like “you don’t gamble with hyperinflation” and his comparison between the US and the Soviet Union will surely raise some headlines as he rants of the growing divide between public and private employees standards of living, our “need to do something drastic about it” and on Obama/Government and deficit reduction that “the whole thing is rotten“.
– Nassim Taleb: The American Economy Will Transfer $5 Trillion To Banker Pay And Bonuses Over The Next 10 Years (Business Insider, Sep. 2, 2011):
For the American economy – and for many other developed economies – the elephant in the room is the amount of money paid to bankers over the last five years. In the United States, the sum stands at an astounding $2.2 trillion.
Extrapolating over the coming decade, the numbers would approach $5 trillion, an amount vastly larger than what both President Barack Obama’s administration and his Republican opponents seem willing to cut from further government deficits.
That $5 trillion dollars is not money invested in building roads, schools, and other long-term projects, but is directly transferred from the American economy to the personal accounts of bank executives and employees.
Such transfers represent as cunning a tax on everyone else as one can imagine. It feels quite iniquitous that bankers, having helped cause today’s financial and economic troubles, are the only class that is not suffering from them – and in many cases are actually benefiting.