Cygnus atratus?
NO, not a black feathered waterbird, but well done on getting its Latin name. This is about the Black Swan Theory developed by American Lebanese philosopher and author Nassim Nicholas Taleb.
What does the theory say?
Taleb says Black Swan events have three attributes: they are rare, they have an extreme impact, and after the event they are explained in such a way they become predictable with hindsight.
He gives examples such as the rise of the internet and the September 11 terror attacks.
What about finance?
Taleb is a former Wall Street trader and he reckons investors take too little account of unpredictable events. Because such events cannot be predicted, investors should be more cautious. The theme has been taken up by Dominique Strauss-Kahn, head of the International Monetary Fund.
Oh yes?
Strauss-Kahn told students in Washington on Monday night that the global economy is facing a flock of 'black swans'.
He said: 'Great uncertainty still prevails. Indeed, numerous black swans are now swimming in the global economic lake.'
That doesn't sound good
No, but look at what is happening around the world, particularly in the Middle East and North Africa, Japan, and to the oil price.
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