By Paul Solman, PBS NewsHour with Jim LehrerPAUL SOLMAN: October 2006, here on the "NewsHour," Nassim Taleb warned of the fragility of markets well before the crash, before his cautionary book, The Black Swan.
As I understand it, your central insight is that people underestimate the likelihood of rare events.
NASSIM TALEB, author, The Black Swan: Exactly. And my idea is twofold, number one, that rare events happen more often, and, two, that, when they happen, they're far more devastating than we can imagine.
PAUL SOLMAN: A few weeks later, economist Nouriel Roubini took us on a pessimistic real estate tour.
NOURIEL ROUBINI, NYU Stern School of Business: Many people had no equity in their homes. Essentially, they had zero down payments, and now prices are falling, so they have negative equity. There will be lots of delinquencies, a lot of foreclosures.
PAUL SOLMAN: So, on the occasion of their new books, Roubini's Crisis Economics, and a revised edition of Taleb's Black Swan, we brought our doubty doomsters together recently at New York's Museum of American Finance to look back and ahead.