Remember when business and economic leaders droned on about “100-year storms,” 2008′s get-out-of-jail free card for people who missed the housing bubble?
This was the whole idea that there was no way that people could be held accountable for the crisis because the notion of there being a problem with continual double-digit house price growth and sky-high leverage was just so darned unlikely.
Well, it looks like we have the 2010 version of how the dog ate their homework again and this time it is called “Knightian uncertainty.”
Over to European Central Bank chief Jean-Claude Trichet, who in a weekend speech at the Federal Reserve’s economic conference in Jackson Hole, Wyoming more or less said there is a biggish chance that he and his peers have no idea what is going on or what will happen next.
“Today, central bankers have to take decisions in an environment marked by a degree of uncertainty in the economic and financial sphere that seems to me largely unprecedented. … The acceleration of major advances in science and technology (not only information technology), the ensuing structural transformations of our economies, the ever-growing complexity of global finance and the overall process of globalisation are itself creating a multidimensional acceleration of change,” Trichet said.