Category Archives: Event

Taleb Upset After Debate With Summers – Business Insider

I hope we get to see this at some point.

As for what bothered Taleb the most, it was Summers’ characterization of Taleb’s argument about how it’s important to have skin in the game: “Basically when you argue with an academic that skin-in-the-game is necessary not sufficient, the rest of the discussion should take that into account. Summers kept viciously transforming my argument into ‘skin-in-the-game is a replacement for more capital and risk controls.’

“So, what’s the problem? Taleb is more offended by Summers’ form. He said Summers stooped to a low point that he wouldn’t go to.

“I stuck to my commitment,” Taleb said. “He’s [Summers] narcissistic … At no point did I try to win the argument.”

Business Insider was there, and it did seem like the argument was well-moderated. There were moments of tension, but that’s healthy. It’s certainly not the first time the two have gotten feisty either.

via Taleb Upset After Debate With Summers – Business Insider.

First public debate with a trained debater.

First public debate with a trained debater.

http://blogs.marketwatch.com/thetell/2014/05/15/too-big-to-fail-battle-between-larry-summers-nassim-taleb/

http://www.cnbc.com/id/101678460

Nassim Taleb, Larry Summers fight it out over too-big-to-fail. #SALT2014″Black Swan” author Nassim Taleb and former Treasury secretary and White House adviser Larry Summers wage an epic battle over too-big-to-fail…

via Facebook.

Taleb, Summers do battle over financial crisis | CNBC

The debate roared back and forth, with Summers pressing Taleb to go beyond enunciating what he thought was wrong and instead come up with a better solution than the one used to bring the financial system off the brink after Lehman Brothers failed.

“I’m for more capital, I’m for more liquidity, I’m for more pressure from the government to have proper risk models that recognize fat tails as part of our regulatory system,” Summers said. “I’m for stress testing that makes much more data available so that analysts outside of institutions can judge the risk. I’m for the development of living wills and procedures that if an institution fails it can be resolved.”

“I’m not for the government designing the compensation systems of financial institutions. I’m not for the government running financial institutions,” he said. “I’m for making them much more failure-proof and more safe for failure when they do fail. What are you for?”

Taleb advocated a system where banks are run more like utilities and excessive risk-taking is limited to hedge funds and investment banks.

“Let’s go back to when banks were boring and were utilities and were not taking too much risk with taxpayer money,” he said. “A utility should not be a casino. It’s a very simple point.”

via Taleb, Summers do battle over financial crisis.

Too-big-to-fail battle between Larry Summers, Nassim Taleb – The Tell – MarketWatch

Summers told Taleb that he was for more capital, more liquidity, living wills for banks and procedures to wind them down. “What are you for?” he challenged.

“I’m for punishment,” Taleb replied.

Taleb outlined a system in which everyone would know which systemically important banks would be bailed out, but would presumably see strict oversight of bonuses and operations afterward. Other institutions would be left to fail, he said.

Summers countered that such a system was in place prior to the financial crisis. But when push came to shove, Bear Stearns, an investment bank that wasn’t envisioned as systemically important, was rescued. And then we all know what happened when Lehman Brothers failed.

Summers said that building a system is sort of like saying you’ll never pay ransom to kidnappers. It sounds good in practice, but in reality sometimes even the Israelis pay ransom, he said.

Taleb had the final word, saying the system should be designed so that you can’t get upside without being exposed to the downside.

The audience seemed split between the antagonists, with each getting smatterings of applause in the back-and-forth debate.

via Too-big-to-fail battle between Larry Summers, Nassim Taleb – The Tell – MarketWatch.

A “conversation” involving Didier Sornette and yours truly on May 22 in NY. Open to all.

Free! Requires an RSVP. More on ‘Dragon-Kings

A “conversation” involving Didier Sornette and yours truly on May 22 in NY. Open to all.

http://www.zurichmeetsnewyork.org/events/risk-towards-more-resilient-systems-and-societies

Risk: Towards More Resilient Systems and Societies

Can we avoid another Manhattan blackout or minimize its impact? Can we sidestep natural catastrophes like Hurricane Sandy? How do we manage risk and complex behavioral patterns that result from a growing interconnectedness of systems?…

via A “conversation” involving Didier Sornette and… – Nassim Nicholas Taleb.