Small firewalls that contained corrections were being dismantled, leading to larger, far more damaging crashes. Part of this was the result of greater connections from travel and communications, but a great part is the result of central powers believing they can control macro markets when they cannot. There is just too much dispersed and unarticulated knowledge for anyone or any administrative bureaucracy to accomplish this.
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The very astute Nassim Taleb: Regulations alone will not protect us. The regulators gave the banks the rope to hang themselves. The smaller the error rate, the more likely it is to be grossly underestimated. No bonus without malice. Cancel
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“I started putting an error rate on the Gaussian (by having my true distribution draw from two or more Gaussians, each with different parameters) leading to nested distributions almost invariably producing some class of Extremistan. So, to me, the variance
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