I think I have found the legendary hyperinflation that all the monetary policy cranks have been excreting verbal diarrhoea about for the past few years. There has been, it seems to me, a hyperinflation in the use of “black swan”. Check this out:
From: Financial black swans driven by ultrafast machine ecologyHere we analyze a set of 18,520 ultrafast black swan events that we have uncovered in stock-price movements between 2006 and 2011.
18,520 in 5 years? That’s about 10 a day (or about 14 for every trading day).
I thought the use of ‘black swan’ was pretty well defined by Taleb in his book “The Black Swan”. His definition (I lifted this from Wikipedia):
http://en.wikipedia.org/wiki/Black_swan_theoryBased on the author’s criteria:
1. The event is a surprise (to the observer).
2. The event has a major impact.
3. After its first recording, the event is rationalized by hindsight, as if it could have been expected (e.g., the relevant data were available but not accounted for).
So, am I missing something? Has the accepted definition of ‘black swan’ changed? Does it now mean ‘something that happened’?
Hey, my shoelace has just come undone … is the great shoelace unraveling of 2012 to go down as a ‘black swan event’ too?