stefalb

Taleb vs Merton, Cont.

In a dynamic system totally out of balance the likelihood of black swan events increases exponentially. Since economics is just not an exact science and the future is inherently unpredictable then there might be just no rational way to quantify future volatility. Therefor the search for an exact formula might be intellectual charlatanism. Dynamic systems out of balance are increasingly governed by chaos(theory). Maybe that's where we will get some answers.


On Jan 04 08:27 PM Gtarras wrote:

> To Tom Armistead:
>
> I am curious what theories of Taleb you are referring to?
>
> Using my previous metaphor from "Seven samuri" in earlier post, I
> would say that Mr Taleb's "fat tail" events theories might help to
> prepare us for a storm, but do not help us "work the land" at all...
>
>
> Unfortunately, I changed my opinion of Taleb, and, using his own
> words, consider him "an intellectual charlatan"....