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“Crises are predictable” said the economist Didier Sornette at TEDGlobal 2013. According to the risk economist we have been living by the illusions produced by the high economic growth that had been years ago. All these illusions have crumbled because of the Great Recession we are experiencing today and we did not expect.


Therefore, what is “Great Recession”? Great Recession is called to the big economic crisis started in 2007 in the United States but it has become a global recession which affects in a very bad form to our lives.

The crisis that began in 2007 was not expected by anyone, it was as if it comes out of nowhere. Sornette says that: “Despite what standard risk management tools show, these outliers operate under special mechanisms that make them predictable, perhaps even controllable”. For people who do not have a great knowledge of economics may see it as something easy, but it is not. There are cases and cases. The cases in which the crisis is predictable are called by Sornette as “dragon-kings” and others as “black swans”.

To find where the “dragon- kings” cases are, we must take into account several things, but in particular “super-exponential growth”.  The super-exponential growth could be untenable and we can find these cases in several areas of study. By the use of it, Sornette predicted in December 2007 the crisis of the Chinese market. At first no one could believe those predictions. After presenting his prediction, namely three weeks after, the markets of China lost a 20% and by the end oj that year the markets have lost a 50% more.

The economist finally informs us that we have to observe all around us and maybe we are not going to be surprised again by a new big crisis.


Thu-Huong Ha  (June 12, 2013 at 8:40 am EST). ‘“Crises are predictable”: Didier Sornette at TEDGlobal’. Retrieved Dec. 16, 2013 from

Francisco Gnecco. (June 2013). ‘Didier Sornette: Cómo podemos predecir la próxima crisis financiera’. Retrieved Dec. 16, 2013 from

Great Recession. (2014, January 27). In Wikipedia, The Free Encyclopedia. Retrieved 10:42, February 6, 2014, from

Didier Sornette. (2013, November 28). In Wikipedia, The Free Encyclopedia. Retrieved 11:29, February 6, 2014, from



manos-de-generacionesWe are locked in a generational war, which will get worse before it gets better.” Is what said Robert J. Samuelson, a columnist for The Washington Post. The generational conflict has become such an important issue at different business and it is thought that it will not get better for a long time. “No one wants to admit this, because it’s ugly and unwelcome. Parents are supposed to care for their children, and children are supposed to care for their aging parents. For families, these collective obligations may work. But what makes sense for families doesn’t always succeed for society as a whole. The clash of generations is intensifying.”

He talked about the case in Detroit: “Last week, a federal judge ruled that Detroit qualifies for municipal bankruptcy. This almost certainly means that pensions and health benefits for the city’s retired workers will be trimmed. There’s a basic conflict between paying for all retirement benefits and supporting adequate current services (police, schools, parks, sanitation, roads). Detroit’s retired workers have swelled, benefits were not adequately funded and the city’s economy isn’t strong enough to do both without self-defeating tax increases.

“Que se vayan todos,” or “Away with all of them,” became one of the slogans chanted by the tens of thousands of “Indignados” in Spain at protests last year. In addition to their eponymous outrage, many had one thing in common: Most were young and viewed themselves as victims of the crisis

They might have been more specific and instead chanted: “All the old people must go!” This phrase would apply because, in many ways, the euro crisis is also a conflict between generations — the flush baby boomers in their fifties and sixties are today living prosperously at the expense of young people.

Intergenerational equity — measured among other things by levels of direct and hidden debts and pension entitlements — is particularly low in Southern Europe. In a 2011 study of intergenerational equity in 31 countries by the Bertelsmann Foundation, Greece came in last place. Italy, Portugal and Spain didn’t do much better, landing in 28th, 24th and 22nd place respectively. Currently, the unequal distribution of income and opportunities is particularly distinct:

  • The employment market collapse has hit young Europeans much harder than older generations. In Greece and Spain more than half of those under age 25 are unemployed — twice the rate of older workers. Things are even worse in parts of southern Italy, where youth unemployment has risen above 50 percent.
  • One reason for this situation is unequal employment circumstances. Older Spaniards and Italians, for example, profit from worker protection laws preventing them from getting fired that are quite strong by international comparison. But almost half of young Italians and 60 percent of young Spaniards are on temporary employment contracts and can easily lose their jobs.
  • The burdens and risks of the euro bailouts are also mainly borne by young people. Ultimately, growing national debts and bailout funds worth billions will be financed through bonds that won’t be due for many years to come.

Robert J. Samuelson (Dec. 9, 2013). THE CLASH OF GENERATIONS. ArcaMax Publishing. Retrieved January 14, 2014 from

David Böcking (Aug. 9, 2012). ‘TRUST NO ONE OVER 30!’: EURO CRISIS MORPHS INTO GENERATIONAL CONFLICT. Spiegel Online International. Retrieved January 14, 2014 from

Daniel Camacho (June, 2007). CHOQUE GENERACIONAL EN ÉPOCA DE CRISIS DE VALORES: FAMILIA, INFANCIA, JUVENTUD. Revista de Ciencias Sociales. Retrieved January 16, 2014 from

Tangled Pyjamas

Rabbi Benjamin Blech described the book ‘The Boy in the Striped Pyjamas’ as “not just a lie and not just a fairytale, but a profanation”. Despite the book’s intentions, he argues, the plot is highly improbable and gives credence to the defence that people did not, and could not, know what was happening within the death camps. Students who read it, he warns, may believe the camps “weren’t that bad” if a boy could conduct a clandestine friendship with a Jewish captive of the same age, unaware of “the constant presence of death”.Otherwise, the historian David Cesarani said about the book  that “Perhaps it is too heavy”: “In 2006 John Boyne, a professional writer with several novels to his name, published The Boy in the Striped Pyjamas, a ‘fable’ that drew on the Nazi persecution and mass murder of Europe’s Jews.

“The Boy in the Striped Pyjamas resembles another controversial film ‘fable’ of the Holocaust, Life is Beautiful, written and directed by Roberto Benigni. That, too, was a travesty of the facts justified by the exposé of racism. Yet many critics applauded Benigni for his fantastic and comedic approach on the grounds that it took a grim subject to a bigger audience than would normally be the case. Many Jews shared this admiration. Within the Jewish world there is a belief that the wider community can only be induced to recall the fate of the Jews because it offers lessons for avoiding similar catastrophes and may blunt prejudice. Why else should the world grieve over six million dead Jews? Numerous politicians, educationalists, and creative figures have been persuaded by this argument. Unfortunately, The Boy in the Striped Pyjamas, like a host of other well-intentioned initiatives, suggests that a heavy price is being paid for the popularisation and instrumentalisation of the Holocaust. Perhaps it is too heavy.”

In Kathryn Hughes opinion, “One of the great triumphs of this book is the way that John Boyne manages the shift in register from the intensely concrete inner world of his child narrator – a place where an elder sister’s pigtails or the corner of a bedroom window are branded on your inner eye – to something that borders on fable. It turns out, for instance, that both Bruno and Schmuel were born on the same day, at a stroke turning them into narrative doubles and psychic twins. And then there is the oddness of Auschwitz security being so lax that a child prisoner could make a weekly date with the commandant’s son without anyone noticing.

Any slight bumps in tone are smoothed away as the narrative definitively slips anchor and moves into its final urgent stages. Schmuel’s father goes missing inside the camp, and Bruno, with his Explorer credentials, insists on helping to find him. Putting on a spare pair of striped pyjamas and scrambling under a loose piece of netting, Bruno is finally able to join Shmuel on the other side of the fence and becomes lost for ever.”


Didier Sornette: “Crises are predictable”

“Crises are predictable” said the economist Didier Sornette at TEDGlobal 2013. Risk economist Didier Sornette makes bold claims on Wednesday morning at TEDGlobal 2013, during the session “Money Talks.” According to Sornette, we have been operating under a few detrimental illusions that have landed us in our current economic state: One, we have been living in an age of never-ending growth and prosperity. Well, $30 trillion losses in the global market from the Great Recession have already shattered this illusion. And two, that we couldn’t see this crash coming.


The 2007-2008 crash seemed to come out of nowhere, with no source or group to take responsibility, an unpredictable one-time anomaly — as Sornette calls it: “the wrath of God.” But as he says firmly: Despite what standard risk management tools show, these outliers operate under special mechanisms that make them predictable, perhaps even controllable. Sornette and his team at the Financial Crisis Observatory  (FCO) call these special cases “dragon-kings.” Dragon-kings, in direct contrast with “black swans,” are at the core characterized by a slow maturation of instability, which move toward a bubble, until the bubble reaches a climax and bursts.

There are many early warning signs of dragon-kings, but one of the crucial ones is super-exponential growth. Super-exponential growth is trenchant and unsustainable and can be found in many areas of study to predict dragon-kings. Sornette has applied it to Ariane rockets, parturition problems, epilepsy, landslides, even blockbuster movies and YouTube virality.

Dragon-king theory can be applied to 30 years of financial bubble history, starting with the worldwide bubble that started in 1980 and popped in 1987, and ending in the most recent global over-valuation bubble that broke in 2007 and 2008. In December 2007 Sornette predicted the Chinese market bubble, to the disbelief of analysts. Three weeks after his presentation the markets lost 20 percent, and by the end of the year they had lost 70 percent.

Can the dragons be slain? In a way. Learn the art of planning and predicting, says Sornette. If we find pockets of predictability, advanced diagnostics of crises are possible. So that crises may never again take us by such surprise.

Why you should listen to him:

While financial crashes, recessions, earthquakes and other extreme events appear chaotic, Didier Sornette’s research is focused on finding out whether they are, in fact, predictable. They may happen often as a surprise, he suggests, but they don’t come out of the blue: the most extreme risks (and gains) are what he calls “dragon kings” that almost always result from a visible drift toward a critical instability. In his hypothesis, this instability has measurable technical and/or socio-economical precursors. As he says: “Crises are not external shocks.”

An expert on complex systems, Sornette is the chair of entrepreneurial risk at the Swiss Federal Institute of Technology, and director of the Financial Crisis Observatory, a project to test the hypothesis that markets can be predictable, especially during bubbles. He’s the author of “Why Stock Markets Crash: Critical Events in Complex Financial Systems”. 

Thu-Huong Ha  (June 12, 2013 at 8:40 am EST). ‘“Crises are predictable”: Didier Sornette at TEDGlobal’. Retrieved Dec. 16, 2013 from

Francisco Gnecco. (June 2013). ‘Didier Sornette: Cómo podemos predecir la próxima crisis financiera’. Retrieved Dec. 16, 2013 from

TED Ideas worth spreading (???) ‘Didier Sornette: Risk economist’  Retrieved Dec. 16, 2013 from