Hacker News Reader

Comment by rybosworld | Hacker News Reader

Right - black swans are by definition things that the majority didn't see coming.

Ever since the 2008 housing crisis, people have been predicting the next bubble-burst/black-swan event.

The one that really crushed the markets was the one almost body saw coming: Covid-19.

Not every crash is due to a black-swan event. Many crashes are due to causes with predictable reasons, but unpredictable timing.

You have any examples? Because all of the biggest and most famous crashes were events that only a very small minority of people ever saw coming.

Tulips, 1929, Dotcom, Great Recession, 2010's Flash Crash - none of these were in the public discussion before they happened.

2008 financial crisis, after years of "mortgage bros" inflating that bubble.

That's the great recession

(somewhat tangential) We've got too much subtle deception going on, let's call it what it was: the Panic of '08. Because there was definitely some panic going on. Solvent companies like GE were days away from bankruptcy because they couldn't get a routine short-term loan for payroll.

> 1929, Dotcom, Great Recession, 2010's Flash Crash - none of these were in the public discussion before they happened.

The "public discussion" is a whole different thing. They weren't in the public discussion because macroeconomic theory isn't something mom and pop like to chat about on the weekend. They only become dinner-table discussion topics when the impacts hit main street, after they happen. But bubbles in recent history have been pretty reliably identified beforehand:

https://web.archive.org/web/20180330001927/https://www.barro...

https://www.economist.com/special-report/2005/06/16/in-come-...

It isn't hard for economists to find bubbles, where the market is taking on high levels of risk. What is downright near impossible to do is predict what specific event will cause the dominos to begin dropping, or when it will happen.

Right - my point is that if everyone is talking about it, then it isn't a bubble that's waiting to be popped.

Anecdotally, I have family who don't follow the stock market at all and are talking about the "AI Bubble" that's about to pop.

People in the early 2000s were talking about crazy housing prices.

Michael Burry almost got wipe out if the bubble last just a bit longer. He started shorting way before the crash. He was lucky that he held long enough. There are many others see the same thing but just lost right before the end of the race.

That's why timing the crash is hard. The market has to agree with you but also at the right time

I was there for the Great Recession, and they were indeed in the public discussion. I remember the year 2007, as a 20 year old anti-capitalist, I was counting days until the economic crash. As predicted by plenty of left-wing economists at the time.

The only people who didn’t see it coming were the capitalists who were invested in the inflated market, and had bought into pseudo-scientific economic theories that served the single purpose of affirming what the capitalists already believed.

I was too - and to be frank: it's dishonestly revisionist to say this was a topic in the public eye.

There's a very good reason a book (and movie) like The Big Short was such a big hit. It's because it was about the handful of people who actually saw the crash coming and were confident enough to put their money and reputation on the line.

The entire left wing of the political spectrum saw this coming (except social democrats; whom I don’t consider left wing). And if you were shorting stocks to make money of off this, you probably were not left wing. Additionally, left wing economists get plenty of ridicule from main stream capitalists no matter what they say, so there really is no reputation to either earn nor to keep.

> The entire left wing of the political spectrum saw this coming

Feel free to cite at least one reputable source.

https://en.wikipedia.org/wiki/Nouriel_Roubini

https://en.wikipedia.org/wiki/Richard_Portes

Appreciate the links but I think we can both agree that there is no evidence that will come close to supporting "the entire left wing of politics" predicted the mortgage crisis

I was obviously exaggerating (and even so, I excluded social democrats). My point is though it was widely known on the political left that the economic boom was about to come to an end.

Do they see coming the predictable failure-modes of left-wing economies, though? History seems to suggest not. Also, did "the entire left-wing" see specifically a debt crisis through bad assumptions of creditworthy mortgage securities coming, or they just saw "capitalism" as a failure and here is a specific case, aren't we so prescient. That's not a prediction.

Left wing economists saw the former. Left wing as a whole saw the latter.

This is a bit of a "broken clock is right eventually" sort of thing, though. I could say without any evidentiary basis "there will be a financial crisis" for years and eventually be right, but I don't think it would be fair to say that I predicted it in a meaningful way. The details matter.

I don‘t think so. These predictions were explicit, and were tailored around the economic situations at the time. As you sibling mentions, even some capitalists made the same predictions (or they believed the left-wing economists) and were able to profit off of this.

Yeah me too, now I invest in dividend stocks.

I stay away from stocks, and instead focus on trying to get rid of capitalism.

I hope you've taken a good look at the alternatives, because historically they've been terrible. Unless you mean "not capitalism but still market economy", or "European market economy 'socialism'", although I don't see how those are much different.

A lot of swans live here in the Australian Capital Territory. They seem to like our lakes. I have only ever seen black ones.

Reply on news.ycombinator.com