I disagree because I think these kinds of post hoc explanations are invalidated by the hindsight fallacy. I think the FTX crash was a typical black swan because it seems much more foreseeable in retrospect than it was before the event.
To use another example, the 2008 financial crisis made sense in retrospect, but the Big Short movie shows that, before the event, even the characters shorting the mortgage bonds had strong doubts about whether they were right and most other people were completely oblivious.
Although the FTX crisis makes sense in retrospect, I have to admit that I had absolutely no idea that it was about to happen before the event.
By definition, a black swan event is highly improbable based on foresight. I don’t think this qualifies—it was generally known that crypto ventures have a meaningful risk of collapsing and that a significant number of those collapses are tinted with fraud or misconduct.
Many people, including myself, were wary enough of the crypto sector to stay out entirely for this and other reasons. I do not think I am a superforecaster or anything.
As an example, the possibility of my wife and I both dying before our son grows up is quite low but is not unforeseeable. I certainly don’t expect the train we are on right now to crash . . . but our possible death is not an “unknown unknown.” Nor was FTX’s.
The specific risk of FTX exploding could have been specifically prepared for, and I think framing it as a black swan event obscures that.
I disagree because I think these kinds of post hoc explanations are invalidated by the hindsight fallacy. I think the FTX crash was a typical black swan because it seems much more foreseeable in retrospect than it was before the event.
To use another example, the 2008 financial crisis made sense in retrospect, but the Big Short movie shows that, before the event, even the characters shorting the mortgage bonds had strong doubts about whether they were right and most other people were completely oblivious.
Although the FTX crisis makes sense in retrospect, I have to admit that I had absolutely no idea that it was about to happen before the event.
By definition, a black swan event is highly improbable based on foresight. I don’t think this qualifies—it was generally known that crypto ventures have a meaningful risk of collapsing and that a significant number of those collapses are tinted with fraud or misconduct.
Many people, including myself, were wary enough of the crypto sector to stay out entirely for this and other reasons. I do not think I am a superforecaster or anything.
As an example, the possibility of my wife and I both dying before our son grows up is quite low but is not unforeseeable. I certainly don’t expect the train we are on right now to crash . . . but our possible death is not an “unknown unknown.” Nor was FTX’s.
The specific risk of FTX exploding could have been specifically prepared for, and I think framing it as a black swan event obscures that.