Monday, June 28, 2010


I've been reading Nassim Taleb's Black Swan, and recognizing myself over and over in his descriptions of arrogant "experts" who prognosticate freely based on (internal or external) "narratives" drawn from unsubstantiated ideas about causality. I will attempt to subdue myself in the future, but after a long lifetime of enjoying the notion of my "superior intellect," it's likely to be difficult.

One of the good things about keeping a blog is that you can go back and quantify how often your predictions were correct and how often they were wrong. (Don't think I've forgotten my dire warnings of stagflation from early 2008 — I couldn't have been much more wrong about that.) A bad thing about a blog, of course, is that you can go back and edit yourself, but I don't do that. What's the point?

Well, two days ago, I predicted double-dip recession. Today, I asked myself why. Here's what I believe to be the answer.

It's that internal narrative, tainted by persistent depressive thoughts and general pessimism. I think of the worst possible outcome, and assume it will ensue. The good thing about this is that when worst possible outcome doesn't come to be, I can be pleasantly surprised; and when the worst does happen, I can have the satisfaction of having been right.

Of course, there's no reason for me to impose my negativity on others. In the future, I will cut back on the predictions. I will begin doing that when the government of the United States starts implementing its reforms of the financial system; and I will proceed at the same glacial speed. There are some things you just can't do all at once.