The Meredith Whitney Bubble

In today’s WSJ, David Weidner tries to deflate the Meredith Whitney Bubble. Actually, I think she did a pretty good job. Weidner, however, let’s this one in: “Economists Nouriel Roubini and Nassim Taleb famously predicted the huge upheaval in the financial industry.”
Sorry, but Taleb didn’t predict anything. I’ve both of his books and nowhere does his discuss the events that have happened.
Speaking of Taleb, he had a piece in the Financial Times the other day and went into full Napoleon Dynamite mode:

3. People who were driving a school bus blindfolded (and crashed it) should never be given a new bus. The economics establishment (universities, regulators, central bankers, government officials, various organisations staffed with economists) lost its legitimacy with the failure of the system. It is irresponsible and foolish to put our trust in the ability of such experts to get us out of this mess. Instead, find the smart people whose hands are clean.

This is precisely why I have a hard time taking Taleb seriously. Every time I read him, all I hear is the same thing:

Don: Hey, Napoleon, what’d you do all last summer again?
Napoleon: I told you! I spent it with my uncle in Alaska hunting wolverines!
Don: Did you shoot any?
Napoleon: Yes, like 50 of ’em! They kept trying to attack my cousins. what the heck would you do in a situation like that?
Don: What kind of gun did you use?
Napoleon: A frickin’ 12-gauge, what do you think?

Posted by on April 9th, 2009 at 9:53 am


The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.