⚡ Understand how we could (maybe) predict the next financial crisis — how to identify when a financial bubble may be about to pop.

Didier Sornette presenting his TED talk on how to predict the next financial crisisHow can we predict the next financial crisis? | TED Talk by Didier Sornette

This TED talk is perhaps a little old (June 2013), especially given how quickly things change and develop in the financial markets. BUT it’s interesting, so I’ll post it here.

Didier Sornette, a risk economist who tries to predict big changes in complex systems (like the financial markets), talks about his method for identifying when a financial bubble is about to pop.

Although the method itself isn’t really made clear — some of the graphs aren’t really explained at all — the idea is interesting. He suggests that his theory of ‘Dragon-Kings’ (no idea where that name came from) actually overrides the ‘Black Swan’ theory of Nasim Nicholas Taleb. If you’ve read Taleb’s book The Black Swan, this will almost certainly interest you.