Black Swan Mania Part3

Black Swan Mania Part3

Jun 23rd, 2011

In Part 2  we examined social unrest and terrorism, of which we found only one each in the original list .

We demonstrated that none of those two cases was actually a Black Swan, because they simply did not fit the definition!

Now, in the same list, we see a total of 5 Economic/financial alleged Black Swans, and we are going to use the same approach of Part 2 to see if at least these comply with the definition of Black Swan…

From 1600 with a little research we counted about forty crises/panic/bubble bursts, etc. events.

Assuming (and being very prudent in the assumption) that only half of those events was a indeed a “widespread major event”, we are back with the “mind-boggling high value” of 10%.

Was 2008 a Black Swan? …Under these circumstances, well, certainly not!!!

Moreover, based on our research integrated with “latest on the subject” data, we presented in november 2008 a prediction on the length and magnitude of the 2008 crisis hazard, and that prediction has been outstandingly coinciding.

One year later we wrote a paper and a post on this blog explaining how that information could help clients to proactively mitigate their risks at the operational level, develop adaptative strategies.

We were recently asked about factors contributing to the global slowdown and we used those data and predictions again to formulate our reply.

CONCLUSION: THE BLACK SWAN MANIA IS A DANGEROUS EPIDEMIC, A VIRAL SYNDROME WHICH FEEDS IN POOR KNOWLEDGE AND LACK OF HISTORIC INFORMATION, LURING PEOPLE INTO BELIEVING THAT NEW OCCURRENCES OF RATHER “COMMON BUT LARGE” EVENTS ARE INDEED “UNHEARD OF, UNIQUE IN HISTORY”…BLACK SWANS.

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Category: Consequences, Hazard, Probabilities, Risk analysis

One response to “Black Swan Mania Part3”

  1. […] also have very short memory and bad habits such as the one of considering rather common events as Black Swans would push users of “extreme” resilience improvement studies to unsustainable mitigative […]

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