Taleb Watch

I think folks are beginning to catch on to what I and others have been saying for a long time—Nassim Taleb is fantastically overrated. He was on CNBC this morning:

The Obama administration’s attempts to fight the financial crisis with more cash is like treating a bad tooth with Novocain instead of a root canal, Nassim Taleb, author of “The Black Swan,” told CNBC Wednesday.
The main problem is the level of debt, and Taleb compared the authorities’ efforts with those of a not very skilled pilot who is trying to land a Concorde on a narrow strip, between an ocean of deflation and a mountain of hyperinflation.
“These people failed us, they’re going to fail us again,” Taleb told “Squawk Box.”
“They tell the banks to lend more but have less leverage,” and expect people to go out and consume while unemployment is rising, he added.
“The way to restart everything is restructuring, conversion of debt into equity, convince people that debt is not good,” Taleb said.
“Do not delay a root canal,” he added. “Don’t do piecemeal solutions to a problem that is fundamental.”
“The solution is there, convert debt to equity. Usually it happens with Chapter 11, let’s do it faster, and across the board,” Taleb said.

So China is to take an equity stake in the U.S. government?

Posted by on June 10th, 2009 at 11:48 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.