Saturday, October 01, 2011

Why "black swans" and "fat tails" happen more often than expected

The more system dynamics are repressed, the more likely it becomes that "improbable" events occur and "highly probable" trends dissolve or reverse.

Charles Hugh Smith

What are the chances of frozen peas being embedded in your kitchen ceiling? Vanishingly small - unless one of them gets stuck in the escape valve of your pressure cooker, as happened to a neighbour of ours, years ago.

2 comments:

  1. Paddington3 October 2011 at 14:14

    You only have to look at the number of trades, which is rising exponentially. As that number increases, the chances of an improbable event occurring approach 1 very rapidly.

    ReplyDelete
  2. James Higham4 October 2011 at 18:52

    Assault with a deadly weapon, a peashooter.

    ReplyDelete

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