Nate Silver: belief

Transcript context

…Here’s a related worry. It’s clear in the data, stock market volatility is correlated with itself over time. If you have some volatile days, you’re likely to get more. That’s pretty clear. That’s another way to say those returns, for a while, are hard to forecast and stay hard. This year politically, it’s already a big surprise to me, to a lot of people. Could it be the case we’re entering a new era where political volatility is higher and basically all forecasters will just do much worse than they have been doing? It’s possible. Again, I go back in saying what people take to be the equilibrium baseline condition may actually have been an outlier, instead. You have this relatively stable, long boom politics and economics from the ’50s to the ’90s or the early 2000s, thereabouts, and that could potentially reverse itself. Again, looking at examples outside of the United States I think is instructive. Maybe I’m more of a believer in American exceptionalism than I thought. You see constituencies that are Trumpian in different parts of Europe and have been extant for a long time, so maybe America just got really lucky for 50 years. Nassim Taleb has a hypothesis that, in some ways, the world is getting weirder. There’s the example of plane crashes. Planes used to crash a lot for pretty normal reasons. The engine would fall apart. Obviously, we invested more resources in making planes safer. I just read in the Wall Street Journal last year, there were actually zero deaths from jetliner crashes other than terror attacks. We have strange events like the Germanwings pilot flying into the Alps. Malaysian Air disappears, no one knows why. The events people talk about, we’re left with only the weird ones. Do you think we’re headed toward a future where we’re only going to be talking about weird, very hard to forecast events, precisely because we get good at avoiding a lot of problems and mistakes?…

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