Bloomberg Views' Noah Smith, BS Operator

(This is application the minority rule: it takes only a few very very intolerant and tenacious people to make the system more honest.)

Background: Noah Smith has a long documented track record of writing critiques of books he hasn’t seen, and discussing papers he hasn't read. Here you have authors spending 10 years writing a book, and some troll with a megaphone critiquing it on things that have nothing to do with the content. I first became aware of it when he previously commented on my skin-in-the-game without realizing there was the expression of a mathematical theorem, when it was on page 2.

Summary of Breaches of Journalistic Ethics & Logic  in Noah Smith’s Bloomberg View Article on The Black Swan of April 16, 2016 

Ethical Flaw

Taleb in The Black Swan is clear the Black Swan is about unpredictability in the tails, not underestimation: "The are two varieties of rare events: a) the narrated Black Swans, those that are present in the current discourse and that you are likely to hear about on television, and b) those nobody talks about, since they escape models—those that you would feel ashamed discussing in public because they do not seem plausible. I can safely say that it is entirely compatible with human nature that the incidences of Black Swans would be overestimated in the first case, but severely underestimated in the second one.
This miscalculation problem is a little more subtle. In truth, outliers are not as sensitive to underestimation since they are fragile to estimation errors, which can go in both directions. As we saw in Chapter 6, there are conditions under which people overestimate the unusual or some specific unusual event (say when sensational images come to their minds)—which, we have seen, is how insurance companies thrive. So my general point is that these events are very fragile to miscalculation, with a general severe underestimation mixed with an occasional severe overestimation."

Noah Smith in Bloomberg View: [goes on and on unethically presenting the Black Swan as only overestimating market crashes]... "In other words, Taleb might be wrong -- people might be overestimating, rather than underestimating, the risk of market crashes."

So visibly Noah Smith is not familiar with the book that he is discussing, not even by an inch. This led to an incoherent response when I contacted them: Noah Smith said he “agrees with points above” (not explaining then his Taleb is "wrong” other than to create hype and defame Taleb), and his editor, James Grieff contradiction Smith by saying “He read the book but disagrees with it”. His editor claims that "he read the book"is like someone claiming he read War and Peace, it takes place in Venezuela.

Logical Fiasco

The editor has to have a problem to miss the severe asynchrony. Noah Smith  takes a book published in April 2007 (before the last crisis), discussing events until 2006, then says “Taleb is wrong” from inference on market estimation of probability between 2007-2016 and what decision to take today based on prices today, 2016.  Perhaps the participants adjusted to events of 2007, the book, or something else.  The claim by Noah Smith about the Black Swan concerns the market value of risk, not the structure of risk, which is something subsequent to the book. That his editor missed the asynchrony is very, very strange...

Ethical Breaches

Background: After being called a BS vendor by Taleb (for reasons that are now obvious) in the past, Smith in a vendetta, has written 4 articles with similar attempts at discrediting and distorting... without the slightest familiarity with the subjects at hand. More on these, later, as this is not the end.

Rule 1: You shall not use a media company such as Bloomberg to troll people you hate.

Rule 2: You shall not use the credibility of an academic position to troll people, particularly when you have failed academia and are concealing that you were ("voluntarily") separated and have not been there for a while. The article makes sure we know that Noah Smith is an assistant professor at Stony Brooks. Except that I was told in January that he either resigned or had been “resigned” for not meeting academic standards and was not coming back for the Jan 2016 semester, in fact "never coming back". [Apparently, Smith failed to publish anything during his tenure there, except of course for BS on the internet.] Smith claimed a sabbatical which conflicts with what I was told by faculty members (a sabbatical is something one return to). Smith should not be using sham affiliations for positions he doesn’t have so he can talk about a subject he knows nothing about.

Other Violations of Professionalism

Noah Smith has no familiarity with finance. In early 2010 I made a statement in Moscow about 4 trades to do. I was not aware of being filmed and used trader language. One of them was short T Bonds. After I communicated to Noah Smith that he was a BS vendor, he advertised in 2014 my claim of short bonds ... in 2010 as a way to wreck my credibility in every way possible. 

Did he report on the other trades in the ensemble? No.

Did it hit him that trades are something that don't last 4 years? No. D
id it hit him that bonds collapsed after the talk? (markets happen to go up and down).  No.

Does he understand that a trade is not a binary forecast? 

Did he realize that I have several hundred thousand trades in my career and no self respecting scientist would play the media megaphone to select one, particularly 5 years later without knowing the true outcome?

This is why he couldn't write an academic paper: his mind has a defect in its logical wiring. No finance academic would commit the lack of professionalism of cherry-picking a trade in a portfolio, and, worse, not realizing that a dynamic trader buys and sells and there is low correlation between the trade and the fate of the market.  How can someone that ignorant about finance write about finance?