Taleb sees $40 to $70 trillion needed in global deleveraging


Appearing on CNBC

Thursday morning, Black Swan author Nassim Taleb, talked down the importance of the recent unemployment number, instead turning attention to the idea of deleveraging the global economy. Taleb dismissed the list of forecasters and their predictions, because it "did not have anyone who saw this crisis coming," and explained that one month's economic numbers include too much variation to imply what is actually happening in the world.

Taleb, who came to prominence for his early warnings about the dangerous practices at financial institutions, instead directed the discussion toward the big picture, voicing his concerns about the direction of the economy and public policy. "The system is very fragile. You may have green shoots or whatever you call them . . . but you're still in a world which is breaking, and that world should break. Nature breaks anything that's too big," he explained. As finance became increasingly reliant on exotic products and high leverage ratios, complexity grew far beyond what regulators could understand or should have allowed.