Yes, the anti-fragile crowd could be wrong. Complexity might actually speed up – not retard – financial collapse.
It is entirely possible that while Nasim Taleb followers have been spouting off about how complexity will “save us” the exact opposite is likely true for reasons we will explore today.
This is not to diss Taleb’s book on fragility (Antifragile: Things That Gain from Disorder (Incerto Book 3) because it makes some interesting points.
Our counter to them is even more interesting because rather than approach from the blinders worn by mathematicians in general and risk managers in particular. Left field events consume us as we adhere to a more generalist philosophy which doesn’t reduce to simply numerical estimation.
Humans in the loop matter greatly. So does the gut.
Numbers like those potentially arising from an MCHVE – a massively correlated hyper-volatility event. Like the one possibly just ahead. That markets are already dancing around.
More on this after a few headlines and the (Scary!) ChartPack which will lead into this afternoon’s Fed rate decision and soft-shoe routine.
The world is in high-level musical chairs. And the music is skipping beats – like it did Monday. For today? And early denial rally!