Nassim Taleb on why bank blowups are endemic to current system

Black Swan author Nassim Taleb talks to the BBC on the economic genocide of current policies where taxpayers backstop risk takers. It is not that JP Morgan recently had bad luck, the reckless habits of levered risk seeking have always been doomed to self-destruct. If the real economy is ever to recover, we must cut the open credit lines from governments to investment banks. A civil society cannot afford this sadistic approach to continue.

Here is the direct link.

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6 Responses to Nassim Taleb on why bank blowups are endemic to current system

  1. peter says:

    If govn’ts know this –and they know it– why aren’t they doing anything about it? Banks and financial institutions do contribute to political campaigns! Right?

  2. Floyd says:

    Taleb’s critique is naïve.
    The case can be made that it is NOT innocent incompetence.
    BUT, really is self-serving explosive volatility trading.

    If “head” banker takes huge bonuses, and basks in glory (even though it was mostly luck).
    If “tail” banker asks for forgiveness and tax-payer funded handouts.

    This is the system we are facing.

    What is even worse, is that banker would stop at nothing, even the destruction of whole economies.

  3. Charles McChesney says:

    Nassim Taleb has the right answers, now it is up to us to vote out the anti-regulation Luddites, vote in people with spines and definitely never tune in to this interviewer, who is constantly interrupting the guest. She is most annoying, it it had been me, I would have told her to keep quiet while I answered her question or I would leave. What discourteous behavior!

  4. JW says:

    I thought this is one of his funniest segments on similar topics. Have a few laughs.
    Thanks again for this wonderful blog. JW, Langley BC

  5. Jason Cain says:

    I think this whole house of cards is going to come crashing down next month when Moody’s releases its revised ratings of American banks.

    If/when Goldman and Morgan Stanley are downgraded the increased collateral costs to cover derivatives exposure is going to be measured in the tens of billions of dollars.

    Morgan Stanley is likely to be lowered three notches to Baa2.

    Could this cause the reset that Dr Faber and Danielle talked about here…

    I think so.

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