Black Swan

I’ve just finished reading Black Swan by Nassim Nicholas Taleb and I have to agre with the positive reviews this book has received, it is a must read – Taleb is a genious who must be heard by Financial Regulators.

One of the tools he advocates abolishing is VAR (Value at Risk) this is a tool used by most banks and other financial institutions. A few years ago I called for my then employer to stop using VAR and a financial instrument called CDO’s (collateralized debt obligations), these tools I predicted were a) not reliable and b) too risky and could indeed lead to malpractice – well that employer listened to me and has so far weathered the storm.

Taleb can be seen on this video – go and buy the book and voice your anger at the banks. Don’t think Polish banks are immune they too have used VAR, sorry to be a bearer of bad news but best that we hedge our bets when we can  – see also my posting below.