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Video: Nassim Taleb on Wall Street Protest, Banking
This is the best risk management rule ever: If you have the upside, you have to keep the downside.
Taleb posted this on his facebook wall, which is relevant to the video above:
Hammurabi’s code, ~3800 years ago, removed the agency problem as a condition for transaction: “If a builder builds a house and the house collapses and causes the death of the owner – the builder shall be put to death. If it causes the death of the son of the owner , a son of that builder shall be put to death.”Everything in past 100 years has been to shield managers from liabilities. Think of Fukushima.