Ten principles for a Black Swan-proof world

Making financial subjects into moral parables is not an effective way to deal with complexity. Simplicity will fall naturally out of the process of refining derivatives markets. Insurance is a derivative. Options are derivatives. Common Stock is actually arguably a derivative as well. Welcome to capitalism! Complexity is born of there being lots of people on Earth who trade goods and services. No way back except to wish calamity on us all?

Original source: <a href="http://www.ft.com/cms/s/0/5d5aa24e-23a4-11de-996a-00144feabdc0.html" rel="nofollow">http://www.ft.com/cms/s/0/5d5aa24e-23a4-11de-996a-00144feabd...</a><p>needs Google referrer, though.

Taleb's point is that there no real way to create a Black Swan proof world, but that by applying a few straight forward rules the impact of a Black Swan Event can be kept bounded. He also believes, that reckless behavior should not be encouraged by social and/or economic policies.

Am I misreading number point two or does it basically say, "One mistake and you are out?"

&#62; Only Ponzi schemes should depend on confidence. Governments should never need to “restore confidence”.<p>I wholeheartedly disagree. Confidence in this instance is just trust that your assets won't suddenly become worthless or your standard of living won't drop drastically overnight. It is a GOOD thing that I have the choice to have or not have confidence in the Government. It means (a) I am not expected to have blind faith and (b) I have the right to assess the level of risk involved in trading and conduct my economic activities accordingly. I absolutely need the Government to restore consumer confidence in the housing market before I buy a new house. Last time people felt overconfident about the housing market, it caused a boom and bust.