Black swan now elephant in the room

Nassim Taleb is exceedingly anxious: he has a flight to catch, and is not calmed by assurances that in efficient Hong Kong, he will make it to the airport with plenty of time to spare.

“I don’t want to cut it too fine,” he says, getting fidgety by the minute. “I want to give allowance for ‘black swan’ events”: a road accident or a traffic jam that might delay him and upset his travel schedule. “That’s how you can apply the ‘black swan’ principle in your daily life.”

‘Black swan’ events, of which the risk analyst wrote in his bestselling book The Black Swan: The Impact of the Highly Improbable, are rare, unpredictable events, the possibility or importance of which it is folly to ignore.

Taleb, a former derivatives trader, used that theory to frame last year’s collapse of the financial system, under the weight of the excessive risks that banks took invoking specious probability matrices.

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