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- About a week old, but this is one of the best pieces I've read in a while. Follow-up is here.

- The, um, wanker-bankers have conned the Biffo Bunch

- Quantitative easing, explained. The Ben Bernank does not come off well

- Here is a better explanation of QEII. Here is another

- In related news, core inflation falls to record low.

Last December I wrote about Nassim Taleb's The Black Swan and proceeded to tell anyone who would listen to Read This Book. You will have to forgive my boyish enthusiasm. It was probably a classic case of getting really excited about that-which-you-have-read-most-recently. Happens all the time.

Since then, however, I've read a number of criticisms - concerning both Taleb and his ideas. None, however, was nearly as comprehensively devastating as this one by Eric Falkenstein. Although written some time back, it's new to me and in the interest of balance I feel obliged to link to it here. It's certainly worth a read if you've read Taleb or are at all interested in questions of probability and prediction. For instance:

"Taleb is consistently amusing because his criticisms of others apply so neatly to himself: he claims he is an empiricist yet supports his points with anecdotes. The Black Swan makes fun of ‘experts’ with credentials, but he states he does not deign to engage with anyone not sufficiently expert; he states he is not interested in being a speaker-bureau commodity , but routinely travels the rubber chicken circuit; he derides forecasters who don't give a full accounting of their prior forecasting history, yet delinks old remarks about Value-at-Risk, and recategorized his extinct Hedge Fund as a hedge, not a fund; he claims to prize humility, yet is most immodest; he argues against applying the law of large numbers, and also of inferring too much from small samples; people apply models to reality in biased manner, people naively extrapolate data without the appropriate theory; forward thinking is adaptive, forward thinking is error-laiden. Some people think inconsistency is a sign of genius; I think it just reflects confused thinking."

"Black Swan argues that standard statistics is flawed because it is backward looking — it uses ‘historical’ data — and argues that standard measures of risk like the normal distribution are ‘frauds’. I too prefer future data, but it is hardly a practical alternative. The Gaussian distribution is common in theory because it is so analytically tractable; it often creates closed form solutions that allow one to see how one variable affects another, and has nice properties, such as the fact that two Gaussian random variables added together is also a Gaussion random variable. In practice, no one actually believes in this view, and makes ad hoc adjustments.... Non-economists often giggle at the term ‘fat-tailed’ or homoskedasticity, but indeed most real world distributions are not ‘Normal’ or Gaussian, they simply have fatter tails than average. Does this imply statistics is a fraud? Well, if you mistake the map for the territory, indeed, this is news."

- Why are women leaving Wall St.?

- Dan Ariely on the darkside of "productivity-enhancing tools"

- "Syntactically speaking, the correct noun phrase to pick to get a target of predication for the preposed adjunct is not the subject of the main clause, it's buried as a genitive determiner in a noun phrase inside a relative clause modifying the object of the main clause" Got that? That is an actual sentence from an otherwise funny post on "an appalling piece of bungled headlinery."

- Sarah Palin: the sound and fury

- the future of playgrounds

- NASA experts to help trapped Chilean miners.

Rory Doyle writes in a personal capacity. The views expressed are his own and do not necessarily represent those of AIM or its investors.

And then it came...today was the most volatile day in the financial markets since the height of the financial crisis, and as the Dow dropped 1000bps someone turned to me and said the following: Greece is to the sovereign crisis what Bear Stearns was to the financial crisis, with Spain or the UK to become the Lehman Brothers that plunges the global financial system back into the abyss.

Maybe...but at the very least we've turned a very dark and volatile corner. Forget the fact that technical glitches and erroneous trading caused the Dow to shed over 700bps in just 15 minutes this afternoon, which between 2-3pm made it feel like it was September 2008 all over again. The markets are telling us something, and Europe better wake the hell up and finally listen.

The panic is back.

Blood runs through the streets of Athens while EU policymakers dither. The ECB is disturbingly absent and elections in the UK and Germany hang over Europe like a proverbial sword of Damocles. How ironic it is that a German Chancellor may be the one to doom the Euro as we know it. Angela Merkel's shameful electioneering while Greece moved closer to default and Spanish and Portuguese spreads widened by multiples should be held in contempt. She should lose her job for failing Europe and, ultimately, failing Germany as well. The cost to Germans has risen exponentially over the past three months.

At the moment I'm less interested in hearing about Greece's dismal and fraudulent track record and more interested in seeing Europe act decisively. How cute that those same European leaders who leveled smug cheap shots at the US and 'Anglo-Saxon Capitalism' in recent years should so suddenly find themselves on the other end of the microscope. The eurozone's structural deficiencies have been laid bare and a decade of turning a blind eye to the blatant flaunting of the eurozone's fiscal rules by countries big and small, periphery and core, compounded by countercyclical fiscal expansion in 2008/09, has run its course. We seem to have reached the point where monetary union can no longer function without a viable political union, which despite all past illusions Europe clearly lacks. Compare the actions of the EC, ECB and Germany to those of the Fed, Treasury and White House at the height of the financial crisis. That's right...they don't compare at all.

Ultimately contagion is the biggest risk to Europe and the financial system, and I am considerably less confident this evening that a cataclysmic shock wave across European sovereigns can be avoided. Just look at the tangled web of exposures and liabilities running throughout the European banking sector (via the NYT). Without getting into the weeds, but I highly recommend seeking out analysis on the European banking system's complex exposure to Greece, one important point should be made: Greece is to Europe's banks what AIG was to Goldman Sachs. AIG was nothing more than a pass through mechanism to bail out Goldman Sachs, just as much of the bailout money heading into Greece will be paid right out to the holders of Greek debt, mainly German and French banks. Too bad Angela Merkel didn't do a better job explaining this to the German people, she might have had the courage to act, and Spain and Portugal might not be staring down the barrel of a gun tonight.

Citigroup "broke the buck" today, trading below $1 a share for the first time in its history. How's that for a taxpayer return?

Countless traders must have headed out for lunch this afternoon asking themselves: what else can I buy for a buck? Some options to whet your appetite, courtesy of the McDonald's Dollar Menu:

-Hot Fudge Sundae
-Apple Pie
-Fruit 'N Yogurt Parfait

Quite the dilemma. Own a piece of what was once the largest company in the world, or sample a tasty treat under the golden arches. Choices, choices...

If anyone was looking for further proof of the humbling of America's banking giants, take a look at this list of leading North American banks, by market capitalization. Citigroup sits 7th, behind three Canadian banks. Ouch.

While IPE Journal got a makeover...

Politique
-The US National Intelligence Council's 2025 project releases Global Trends 2025: A Transformed World. The report announces the end of the "unipolar moment", and predicts declining American influence and power. While the US will remain the preeminent power, the rise of the BRICs will reintroduce a multipolar world. Other defining trends: increasing competition for scarce resources, greater West-East transfer of wealth, and broader Middle East destabilization.

-World trade is grappling with a tricky little pirate problem, as Saudi joins a NATO anti-piracy fleet and calls for a global response to this "terrorism".

-The IAEA confirms speculation that the Syrian structure bombed by Israel in 2007 contained nuclear material. Syria swiftly calls for end to probe.

-Obama announces plans to create 2.5 million jobs through massive fiscal stimulus, government projects. His cabinet takes shape: Geithner for Treasury, Clinton at State (the Guardian broke her acceptance plans, beating US media to story), and reported negotiations for Gates to remain at Defense.

Economia
-Citi executives huddle in New York with government officials to discuss the bank's survival. The Dow Jones Industrial average closed below 8,000 this week, the first time since March 2003.

-Japan falls into recession, ending longest postwar expansion.

-Pakistan formally requests $7.6bn IMF standby loan, agrees to economic reforms including fiscal deficit reduction.

The Rest
-Scientists now believe that massive glaciers may lie beneath the rocky Martian surface, and humanity is step closer to confirming life beyond Earth.

-Arsenal drop Gallas, ManU lose Berbatov for big Villa clash, and Liverpool/Chelsea stay top of Prem

-Vanity Fair releases its International Best Dressed List. This year's list includes Michelle Obama, Kate Middleton, and Kanye West. West drops a full preview of new album, 808s and Heartbreak.

I woke up this morning to the following headline on the front page of my Financial Times:

"Pandit's Pep Talk: Citigroup boss calls a 'town hall' meeting aimed at restoring morale of 350,000 staff".

Make that 300,000 staff. So much for morale.