Anyone who has played many hours of low ante Acey Deucey can attest to that fact that low probability events occur. They always occur after enough trials...this is pretty basic statistics. It has been my contention that the frantic chase after derivative financial instrument profits effectively created a massive number of trials. Therefore, the event (our modern black swan) that caused our current financial crisis was easily predictable. Of course, too much money was at stake, so the players cloaked their game in rhetoric and pseudo science. But it was really just too much leverage. This article lays it out. http://paul.kedrosky.com/archives/2009/07/guest_post_nass.html
The shape of our next crisis is not yet clear. But it is coming...bigger and better than ever. We are throwing around massive amounts of unregulated money to fund it.
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