What, a blog? Again?

With the current financial turmoil enveloping much of the world and particularly the United States, and the corresponding blame game when it comes to risk, now seemed as good a time as any to get back into it.  Albeit with a twist: this time, I’m going to focus on those items reasonably described as black swans.

Black Swans?

There’s a really good book: The Black Swan: The Impact of the Highly Improbable by one Nassim Nicholas Taleb. He describes a “black swan” as any largely unpredicted, high-impact event of an improbable (i.e. unlikely) nature.  The characteristics of black swans, Taleb says, are that nobody predicts them in advance; everybody has an opinion on them after the fact (and generally “forgets” that they, like everyone else, failed to predict them in the first place); and in many cases the probability of their reoccurrence is overestimated by the population as a whole.

Think 9/11, for a classic example.  On September 10, 2001, nobody predicted that terrorists would take control of a bunch of aircraft, and use them as guided missiles to take out the two World Trade Centers, the Pentagon, and (presumably) aim for the White House as well.  Yet after the fact, people generally accept that such an attack was in a sense inevitable; people (particularly those in the various security authorities) have also grossly overestimated the chance of the same attack reoccurring (and in doing so, have made flying a whole lot less convenient, while simultaneously failing to make it all that more secure in real terms).

Much of Taleb’s experience appears to be with the financial markets (indeed, the bulk of the book focuses squarely on risk management in this sector), but the idea of a black swan applies to the real world as well, particularly the modern, Web 2.0, real world.  Google’s another example of a black swan, albeit from a decade ago, and proof that black swans can be positive or negative.

What of it?

On this, I’m essentially creating a linked list - I’m simply going to link (and share an opinion on) what I see as black swans.  My criteria’s going to be pretty open, otherwise.