Nassim Taleb is a former derivatives trader who became a philosophical essayist, and researcher in probability in 2006. Larry Summers is one of the most distinguished voices in America today on issues ranging from the global economy to education to the role of the United States in the world.
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The Shape of Things to Come: A Discussion on Global Fiscal Policy Challenges & Economic Realities
Lawrence H. Summers, Charles W. Eliot University Professor, Harvard University’s Kennedy School of Government & Director, White House National Economic Council (2009-2010)
Nassim Taleb, Author, “The Black Swan” & Distinguished Scientific Advisor, Universa Investments
Anthony Scaramucci, Managing Partner & Founder, SkyBridge Capital (Moderator)
Nassim Taleb, Lawrence Summers: Discussion on Global Fiscal Policy Challenges & Economic Realities
Below are some VERY informal notes on the debate between Taleb and Summers
Nassim Taleb and Larry Summers now speaking
The shape of things to come
LS- We are in better shape than 1934 and 2008 was just as bad if not worse than 1929
NT- we did not address the cancer in 2008, we only treated with pain meds
There is no skin in the game for banks/bankers
2010 was the biggest bonus pool ever
bankers are PAID to hide risk
the people who rose from 2008, were the ones that should have died
banks are bigger now than in 2008.
we did not take care of what caused 2008
LS- banks are now more capitalized than they have been in the past
NT– need to bring interest rates up
until we cure the cancer, the crisis’ become bigger and bigger
need to cut the systemic risk in the market and insulate the system
LS- trying to argue that people were hurt in the crisis
NT- not having it…shareholders of equity don’t count for being hurt. people should have gone to jail, not gotten paid and giant bonuses
NT- the govt just transferred debt onto tax payers
provided a stop-loss to bankers
banks should be utilies..they should not take any risk…that is not the role of banking…if you want to take risk, then give your money to a hedge fund
LS- trying to argue that Lehman and bear sterns weren’t banks, and they still failed (my comment: if Lehman, bear, and AIG weren’t holding all the counter party risk for the banks, then none of them would have failed.) LS does not understand this
NT— he is not saying don’t bailout…he is saying don’t let it get to that point
Have a list of those we will bail out and what we won’t bail out
moral hazard is still there
risk taking is still huge
skin in the game is not sufficient. it is NECESSARY!!
perfect society– punish those that fail
Really hard to follow….they just argued back and forth and LS could not figure out what NT wanted to do with society
