Ten principles for a Black Swan proof world

Ten principles for a Black Swan proof world


No, not that Black Swan – this Black Swan.

Ten principles from the man who saw the banking crisis coming.

  • What is fragile should break early while it is still small.
  • No socialisation of losses and privatisation of gains.
  • People who were driving a school bus blindfolded (and crashed it) should never be given a new bus.
  • Do not let someone making an “incentive” bonus manage a nuclear plant – or your financial risks.
  • Counter-balance complexity with simplicity. Complexity from globalisation and highly networked economic life needs to be countered by simplicity in financial products.
  • Do not give children sticks of dynamite, even if they come with a warning.
  • Only Ponzi schemes should depend on confidence.
  • Do not give an addict more drugs if he has withdrawal pains.
  • Citizens should not depend on financial assets or fallible “expert” advice for their retirement.
  • Make an omelette with the broken eggs.

Can you imagine if we really applied these in Ireland? Hello? Anybody home?

Link: http://www.ft.com/cms/s/0/5d5aa24e-23a4-11de-996a-00144feabdc0.html

Leave a Reply