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///////////////// Globalization creates interlocking fragility, while reducing volatility and giving the appearance of stability. In other words it creates devastating Black Swans. We have never lived before under the threat of a global collapse. Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks – when one fails, they all fall. The increased concentration among banks seems to have the effect of making financial crisis less likely, but when they happen they are more global in scale and hit us very hard. We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another. True, we now have fewer failures, but when they occur ….I shiver at the thought."
— Nassim Taleb, The Black Swan (2006)
/////////////////"The Iliad" and "The Odyssey" are our most precious artifacts of early Greek culture. Aside from the dry and voiceless remains of archeological sites, the poems are the last surviving impressions of the society that created them - what the people hoped for, what they despaired of, and how they managed their social and political lives. The poems are time machines - imperfect, surely - that show us people who were so like us, and so different, too. And they are still revealing new truths about the prehistoric civilization that has exerted such a strong formative influence over the art, the history, and even the psychology of the West.
///////////////////Statistical and applied probabilistic knowledge is the core of knowledge; statistics is what tells you if something is true, false, or merely anecdotal; it is the "logic of science"; it is the instrument of risk-taking; it is the applied tools of epistemology; you can't be a modern intellectual and not think probabilistically—but... let's not be suckers. The problem is much more complicated than it seems to the casual, mechanistic user who picked it up in graduate school. Statistics can fool you. In fact it is fooling your government right now. It can even bankrupt the system (let's face it: use of probabilistic methods for the estimation of risks did just blow up the banking system).
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