Nassim Taleb on the Financial Crisis

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Listen to the EconTalk podcast Nassim Taleb on the Financial Crisis and consider these questions.

1. The interview begins with Taleb saying, "I told you so." Describe what Taleb got both right and wrong about the 2008 crisis.

2. Roberts asks Taleb what was going on with the heads of Bear Sterns and Lehman. What three things does Taleb point to in answering Roberts' question?

3. What does "value at risk" mean, and how did using this strategy contribute to the crisis, according to Taleb?

4. Taleb criticizes the way we look at history, and says that many of the "tail events" leading to the crisis could have been prevented. How? To what extent do you agree?

5. Why does Taleb fault Alan Greenspan for referring to the post-2001 period as "the Great Moderation?"

6. Taleb asserts, "Globalization has side effects." What kind of side effects is he referring to, or how does globalization produce "fat tails?"

7. Why would Taleb prefer nationalization to bail-outs? (And why is Roberts sympathetic to this position?)

8. Taleb argues that, "this crisis was caused by regulation." What in particular is he pointing to, and to what extent do you agree with his assertion?

9. How does Taleb distinguish between "knowledge" and "tinkering." How useful do you find this distinction?