Black Swan Author Taleb on Markets, Interest Rates, Bubbles, Investing

How big is your black swan? What matters is if it's big enough to move markets with a rattling effect over a period of time. Taleb on the eve of an event points out that 5% interest is at least a cold shower for people used to 0.00001%. Risk Engineer and Black Swan author Taleb is interviewed here by Bloomberg Investment reporter Sonali Basak [and I got to say: "what gams!"]  who ably interviews the difficult interviewee.

Here's an update with events correlated to that inflection before after during.

Before- Rising Interest Rates Complicate Banks’ Investment Portfolios - February 09, 2023 - Rising interest rates have prompted both challenges and opportunities for banks over the past year. Bank supervisors are, understandably, urging bankers to pay close attention to a myriad of ways changing interest rates can affect earnings and capital, or what’s termed interest rate risk.

https://www.stlouisfed.org/on-the-economy/2023/feb/rising-rates-complicate-banks-investment-portfolios

During- How Silicon Valley turned on Silicon Valley Bank - Mar. 12, 2023 - The rest of the banking system is on edge. The episode has exposed a new set of vulnerabilities for the financial system. Bankers that grew up in the easy-money era following the 2008 crisis failed to ready themselves for rates to rise again. And when rates went up, they forgot the playbook.

From <https://www.wsj.com/articles/how-silicon-valley-turned-on-silicon-valley-bank-ee293ac9> 

After -Jim Kramer speaks Here and what the repercussions will be for the SVB customers, for other banks for the tech sector for the Federal Reserve, and even the entire economy. But before we get into the weeds, I need to acknowledge this, because I absolutely did not see this comming. In fact, just over a month ago, we ran a segment on the 10 best year to date performers the SP 500 that time with SVB, making List of 40% for the year at that point, based on what we knew that I was pretty positive, even recommended. I regret getting this wrong - made a mistake. And we own our mistakes - I'm not going to fly. I'm not going to minimize. But I do think this can be a teachable moment because I was not alone in getting it wrong. In fact, nearly everybody got Silicon Valley Bank wrong. Well, it's not an excuse of not using this one as of last Wednesday, the day before the collapse began. 22 of the 23 animals [analysts] who followed SVB professionally had either buys or holds on it with an average price target of Twitter $92. Only Morgan Stanley's Managua Cialia was negative, but even he had $190 price target - he sounds for his blindsided as I was. So how did we all get it so wrong?