<TABLE border=0 cellSpacing=0 cellPadding=0 width=452><TBODY><TR><TD vAlign=top width=452 colSpan=2>Published September 17, 2009
</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Obama failed: Black Swan author
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(TORONTO) US President Barack Obama has failed to appoint advisers and regulators who understand the complexity of financial systems, Nassim Taleb, author of The Black Swan, told a group of business people here.
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</TD></TR><TR class=caption><TD>Mr Taleb: Says the US must reduce its debt level and avoid converting private debt to public debt </TD></TR></TBODY></TABLE>'I want my vote back,' Mr Taleb, who said that he voted for Mr Obama, told the group.
Mr Taleb wrote the 2007 best-seller The Black Swan: The Impact of the Highly Improbable, which argues that history is littered with rare, high-impact events. The black swan theory stems from the ancient misconception that all swans were white.
The US has three times the debt, relative to its gross domestic product, as it had in the 1980s, Mr Taleb said. He blamed rising overconfidence around the world.
US Federal Reserve chairman Ben Bernanke, who was appointed to a second term last month by Mr Obama, contributed to that misperception, Mr Taleb said.
'Bernanke thought the system was getting stable,' Mr Taleb said, when it was on the verge of collapse last year.
Debt is a direct measure of overconfidence, he said. The national debt, according to the US Debt Clock website, is at US$11.8 trillion.
The nation must reduce its debt level and avoid 'the moral sin' of converting private debt to public debt, he said. 'This is what I'm worried about,' Mr Taleb said. 'But no one has the guts to say let's bite the bullet.'
As the founder of New York-based Empirica LLC, a hedge-fund firm that he ran for six years before closing it in 2004, Mr Taleb built a strategy based on options trading to protect investors from market declines while profiting from rallies. He now advises Universa Investments LP, a US$6 billion fund that bets on extreme market moves.
In addition to overconfidence, Mr Taleb blamed the availability of instant information for contributing to the collapse of banks in the US and the economy in Iceland.
In the past, runs on banks took time as people left their homes, drove or walked to a branch and stood in line to withdraw money, Mr Taleb said. Now, a run can be accomplished in seconds via the Internet and phones with Web-browsing capabilities like the BlackBerry, he said.
'In no time, Iceland is history,' Mr Taleb said.
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</TD></TR><TR><TD vAlign=top width=452 colSpan=2>Obama failed: Black Swan author
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</TD><TD>Feedback</TD></TR></TBODY></TABLE>(TORONTO) US President Barack Obama has failed to appoint advisers and regulators who understand the complexity of financial systems, Nassim Taleb, author of The Black Swan, told a group of business people here.
<TABLE class=picBoxL cellSpacing=2 width=100 align=left><TBODY><TR><TD>
</TD></TR><TR class=caption><TD>Mr Taleb: Says the US must reduce its debt level and avoid converting private debt to public debt </TD></TR></TBODY></TABLE>'I want my vote back,' Mr Taleb, who said that he voted for Mr Obama, told the group.Mr Taleb wrote the 2007 best-seller The Black Swan: The Impact of the Highly Improbable, which argues that history is littered with rare, high-impact events. The black swan theory stems from the ancient misconception that all swans were white.
The US has three times the debt, relative to its gross domestic product, as it had in the 1980s, Mr Taleb said. He blamed rising overconfidence around the world.
US Federal Reserve chairman Ben Bernanke, who was appointed to a second term last month by Mr Obama, contributed to that misperception, Mr Taleb said.
'Bernanke thought the system was getting stable,' Mr Taleb said, when it was on the verge of collapse last year.
Debt is a direct measure of overconfidence, he said. The national debt, according to the US Debt Clock website, is at US$11.8 trillion.
The nation must reduce its debt level and avoid 'the moral sin' of converting private debt to public debt, he said. 'This is what I'm worried about,' Mr Taleb said. 'But no one has the guts to say let's bite the bullet.'
As the founder of New York-based Empirica LLC, a hedge-fund firm that he ran for six years before closing it in 2004, Mr Taleb built a strategy based on options trading to protect investors from market declines while profiting from rallies. He now advises Universa Investments LP, a US$6 billion fund that bets on extreme market moves.
In addition to overconfidence, Mr Taleb blamed the availability of instant information for contributing to the collapse of banks in the US and the economy in Iceland.
In the past, runs on banks took time as people left their homes, drove or walked to a branch and stood in line to withdraw money, Mr Taleb said. Now, a run can be accomplished in seconds via the Internet and phones with Web-browsing capabilities like the BlackBerry, he said.
'In no time, Iceland is history,' Mr Taleb said.
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