Class war, Banks as a utility and Hammurabi's Code



Nassim talebs' arguments make perfect sense: no incentives without disincentives; banks need to be like any other utility; no bonus system subsidized by tax payers money. Bankers and their bonuses are this weird mix of capitalism and communism, because bonuses are in fact paid by tax payers money after all even if the risks taken lead to bankruptcy. Government bails out banks and the bankers are paid a bonus?? Its a fraud, nothing more! There is no descent way to explain this, there is no risk these bankers take on their account that justifies such bonuses. The reality is that bankers toke a huge amount of hidden risks and are thereby responsible for this bank crisis and in return they get a bonus! There's no complex math needed to see that a bailed out bank who pays their managers bonuses, is doing so with tax payers money...
Taleb explains what needs to be done when he cites Hammurabi's Code. The code is simple and says this: when you get the upsides, you also have to keep the possible downsides. If you take risks and benefit from them, then this means when one day the risks causes a crash, you are still the holder of that risk, your responsible.
This is the core of the problem: Over a long period of time, on many instances, banks lose everything. Banks take risks and in the end tax payers have to pay. Humans can not be trusted whit numbers and risks can not be based on historical numerical data. The financial system is not predictable and doesn't fit a normal distribution or in fact any probability distribution!! You can never have all the data to find the right equation!

Mr Taleb explains congress:



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