Black Swan Event: Can This Economic Crisis be Worse than the Great Depression?
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Black Swan events are said to be impossible events. That is until they happen. The PBS News Hour has an interview with Nassim Nicholas Taleb, the famous economist who authored The Black Swan and his mentor Dr. Mandelbrot who is a professor of Mathematics who has done research on chaos theory. It is a fascinating interview and the crux of the argument is that we are so interconnected, that a hiccup in one part of the economy will send shivers down the spine of the entire system.
Take a look at the fall of Lehman Brothers for example. During the Great Depression, thousands of banks failed but many were lightly connected. Now with the failure of Washington Mutual one big bank failure is the equivalent of hundreds of smaller banks.
Watch the 10 minute interview:
*Click to watch full video clip