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Nassim Taleb and Daniel Kahneman: Reflection on a Crisis

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Daniel Kahneman: Why Greenspan's Framework Went Awry

03 min 03 sec

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Nobel laureate Daniel Kahneman exposes the major flaws in Alan Greenspan's financial framework that helped prime the current economic crisis.

He says agents are not fully rational and typically act on their own behalf, which caused a mismatch in the scale of rewards between financial firms and their acting agents.
Nassim Taleb Says Nationalize US Banking System

01 min 47 sec

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Nassim Taleb argues banks should be treated like any other basic utility and must leave the risk taking to other financial instruments, like hedge funds.

"Banks cannot be entrusted with risk taking," he says.
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59 min 08 sec

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There are 7 comments on this program

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Previous FORAtv comments:

Harishan

Posted: 09.03.10, 05:36 AM

Taleb is spot on, but what i find strange is his complete dicarding of his past, he assumes this morale ground, without accepting his past follies, he was an exponent ov VAR himself, should at least say that it can work, in the absence rare events.

hlparsleyjr

Posted: 08.27.09, 03:04 PM

Taleb's assessments are not only after the fact but, more important, he predicted the problem and made a ton of money betting his beliefs. Yes, read The Black Swan.

Sutibu

Posted: 08.02.09, 08:11 AM

If you truly believe this then you don't understand what Taleb is saying. Read the black swan, trust me.

ALAUCE

Posted: 07.22.09, 07:51 AM

Taleb specialized in natural science and Kahneman in psychology are almost better expert for financial crisis than third one - economist. For me only these three aspects (human,physical, and financial capital) can solve this complexity. I do not see synthesis. How will synergy emerge without better understanding of wrong allocation in resources, too much in physical, and to little in human capital.

Econ

Posted: 03.25.09, 08:52 AM

It appears to me that Taleb is analyzing an event that already had happened, kind of crying over spilled milk. Anyone can make the "should have" kind of comments for after the fact events. Funny thing is that he did not make a thundering loud announcement of what may happened to the world before. To me he is using fancy terms to explain a more simpler situation. First, I believe the models that the Phd's that wall street hired years ago are valid only and if only the financial instituations use due deligence to manage their money which is to only loan money to folks/companies who are qualified for the loan and can truly able to pay back, not just loan money to folks/companies who are just breathing which is what I saw a couple of years ago. These financial institutions are taking on excessive risk by themselves, not because of the models. The fact that the banks were loaning money without regard to the ability of folks/companies to pay back was what prevented me from investing more into real estate a few years back. The models that these smart guys put together I believe will put more financial resources into the world market and push everyone to a higher standard of living. It will allow the underdeveloped countries to have the option to have an easier method to draw the resources available to develop their country. Interesting point from Taleb but the bottom line is that I do not agree with his after the fact analysis.

Norm Erickson

Posted: 03.14.09, 09:57 AM

Our economic power dive looks hopeless if we stay the course. Read Web of Debt (2008) by Ellen Hodgson Brown for insights into the money supply/banking fraud that has bankrupted the US and other economies around the world. We must nationalize the Federal Reserve Banks (private), begin to print our own debt free money (not Federal Reserve Notes loaned from the Federal Reserve System), require 100% reserve banking, recapitalized by United States Notes). Business cycles are manipulated by the Federal Reserve through interest rate, reserve and money supply manipulation. We could have a stable economy if we get the private banking system out of the control of our money supply. Similar discussions in the documentaries viewable on-line at www.themoneymasters.com .

balak

Posted: 02.22.09, 04:52 PM

Taleb is quite correct about how utterly anti-intellectual business programs are (other than schmoozing venues). I must however defend the minority of economist (20%+ from left & right) who have been fighting the very idiocies of neoclassical economics for several decades explicitly. We are considered 2nd rate, don't get good positions, & are nor even admitted into the "clubs." Most of the points made here are intimately known to those of us who attend alternative/heterodox conferences & read each others' work. Bringing the philosophy & rhetoric of economics to the public's attention is a very important thing indeed & I applaud Taleb for his efforts.