Whoa! Did Nassim Taleb Cause Thursdays Market Crash?
From The Business Insider, May 11, 2010: Update: See below for quote from Taleb. The Wall Street Journal’s Scott Patterson and Tom Lauricella have a delicious story tonight that is too good not to believe. The nut is that a fund linked to Nassim Taleb — Mr. Black Swan — may have placed the initial trades that got the ball rolling for Thursday’s violent selling. On any other day, this $7.5 million trade for 50,000 options contracts might have briefly hurt stock prices, though not caused much of a ripple. But coming on a day when all varieties of financial markets were deeply unsettled, the trade may have played a key role in the stock-market collapse just 20 minutes later. The trade by Universa, a hedge fund advised by Nassim Taleb, author of “Black Swan: The Impact of the Highly Improbable,” led traders on the other side of the transaction—including Barclays Capital, the brokerage arm of British bank Barclays PLC—to do their own selling to offset some of the risk, according to trader
