In Black Swan by Nassim Nicholas Taleb, the author argues that many unpredictable events happen due to randomness and cannot be explained. Analysts try to explain why the stock market tumbles but only after the facts. Is it really due to this news or that news? I don’t think so. The Dow lost almost 500 points on Thursday 8/4 (4.8%). Instead of asking why, we just need to accept the fact. It is not too bad as Black Monday (1987) but enough to scare a chicken like me. The stock market is too difficult to predict. Mr. Taleb and Mr. Soros have many viewpoints in commons but these are the two that I can remember:
1. Be ready to lose money before making money
2. Advocate Open Society concept from Karl Popper
If it is a true Open Society, the Debt Deal has been done differently. The Debt Deal is not really a deal. I feel Obama is too weak in this case. Raising tax to the upper class is much better than to cut spending on student loans and Medicare/ Social Services. The money you give to the elderly will remain in the States because they spend money in the malls, at dr. office, the hospital, in the caregiving services and therefore stimulating the economy and raise the employment rate. If the corporation keeps the money, it goes to bonus for the Executives, to Swiss Bank, to around the world to avoid tax. I do not really understand why the politicians are too ignorant. There is a rule, 80/20. 80% of assets in a country is held by 20% of population. Sometimes, it can be 99/1. It is an asymetrical distribution, and it always is.