Home » Posts tagged 'risk-taking'
Tag Archives: risk-taking
The Controversy around Skin in the Game
The Controversy around Skin in the Game
Skin in the Game is another addition to the Incerto, now volume 5; I avoided duplication by referring to where in the Incerto some points were developed such as via negativa or monoculture of forecasters or expert problems. You simply don’t repeat in chapter 23 what was said in chapter 5, but can make reference to it.
Now it so happens that I am in the BS busting category, which includes journalists (especially journalists). And the book is designed to be hated by BS operators who can be book reviewers. I instructed publishers to send the book to only doers, not people who make a verbagiastic living.
Let me say it again. I am intolerant of BS; I suffers no fools except when the BS is harmless.
So far three journalists have, while uninvited, attempted to do a (sort of) hack job: John Gapper (FT), Zoe Williams (Guardian), and Phil Coggan (Economist; yes I am outing him, SITG). The problem however is that they agree with the general message of the book (who doesn’t ?) except in what concerns them, so the best way is to perform some assassination on side points: 1) find what appears to be a “flaw”, 2) use the technique of Sam Harris, i.e. make the author look like a hateful spiteful person who hates everybody simply because he doesn’t like bullshitters. The problem of course is that it is hard to claim I am against all experts, not just the .1% faux experts so they disguize the claim as a he is a “hates everybody” type of fellow.
Also note that the book isn’t about SITG but the weird consequences (modern slavery, looks of surgeons, rationality of survival, religious practices, commercial ethics, Lindy effects, and, mostly, risk taking). You will also notice that given the homework done by journos, the “flaws” happen to be in the beginning, never at the end.
…click on the above link to read the rest of the article…
Carney Says QE Can Encourage Excessive Risk-Taking in Markets
Carney Says QE Can Encourage Excessive Risk-Taking in Markets
Bank of England Governor Mark Carney warned easy monetary policy could prompt excessive risk-taking in financial markets.
Two days after the European Central Bank announced a 1.1 trillion-euro ($1.23 trillion) quantitative-easing program, Carney said six years of sustained monetary stimulus was justified on an economic basis, yet could carry a downside if it overheated markets.
“In an environment of low interest rates, and low interest rates for a period of time, and also quantitative easing, there can be excessive risk taking,” Carney said during a Saturday panel at the World Economic Forum’s meeting in Davos, Switzerland. “What those monetary policies are looking to do is move from an environment of reticence to take risk to responsible risk-taking. We’re trying to avoid reckless risk-taking.”
Rock-bottom interest rates and asset-purchases have been deployed by central banks to drive their economies from recession and then ensure a recovery. The MSCI World Index has climbed almost 50 percent since the start of 2010 and bond yields have slid worldwide.
“QE creates in some markets some distortions,” said BlackRock Inc. Chief Executive Officer Laurence Fink, who moderated the panel. “It moves huge volumes of money into the equity markets.”
Liquidity Illusion
Carney said policy makers had taken steps to ensure financial stability and that investors should realize central banks won’t come to the rescue when markets do slide and be alert to an “illusion of liquidity.”
…click on the above link to read the rest of the article…
