Study the Chessboard Problem not the current position of the pieces. Albert Bartlett sheds light on Taleb’s Skin in the Game.Eureka!

Second half of the chessboard[edit]



A chessboard with each square labeled with the number of wheat grains according to the problem. A red line divides the chessboard in half.

An illustration of Ray Kurzweil‘s second half of the chessboard principle. The letters are abbreviations for the SI metric prefixes.

In technology strategy, the “second half of the chessboard” is a phrase, coined by Ray Kurzweil,[6] in reference to the point where an exponentially growing factor begins to have a significant economic impact on an organization’s overall business strategy. While the number of grains on the first half of the chessboard is large, the amount on the second half is vastly (232 > 4 billion times) larger.
The number of grains of wheat on the first half of the chessboard is 1 + 2 + 4 + 8 + … + 2,147,483,648, for a total of 4,294,967,295 (232 − 1) grains, or about 279 tonnes of wheat (assuming 65 mg as the mass of one grain of wheat).[7]
The number of grains of wheat on the second half of the chessboard is 232 + 233 + 234 + … + 263, for a total of 264 − 232 grains. This is equal to the square of the number of grains on the first half of the board, plus itself. The first square of the second half alone contains more grains than the entire first half. On the 64th square of the chessboard alone there would be 263 = 9,223,372,036,854,775,808 grains, more than two billion times as many as on the first half of the chessboard.
On the entire chessboard there would be 264 − 1 = 18,446,744,073,709,551,615 grains of wheat, weighing about 1,199,000,000,000 metric tons. This is about 1,645 times the global production of wheat in 2014 (729,000,000 metric tons).[8]




Carl Sagan titled the second chapter of his final book The Persian Chessboard and wrote that when referring to bacteria, “Exponentials can’t go on forever, because they will gobble up everything.”[9] Similarly, The Limits to Growth uses the story to present suggested consequences of exponential growth: “Exponential growth never can go on very long in a finite space with finite resources.”[10]






According to Nassim Taleb, in 2009, the banking sector lost in 18 months all the profits it ever made since the beginning of banking. Is this true?


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Roger Glyndwr Lewis

´´any doubling is approximately equal to the sum of all the preceding growth!´´My researches have lead me to the Exponential Function. and Doubling Times
The notion of doubling time dates to interest on loans in Babylonian mathematics.  Clay tablets from circa 2000 BCE include the exercise “Given an  interest rate of 1/60 per month (no compounding), come the doubling  time.” This yields an annual interest rate of 12/60 = 20%, and hence a  doubling time of 100% growth/20% growth per year = 5 years.[1] [2] Further, repaying double the initial amount of a loan, after a fixed  time, was common commercial practice of the period: a common Assyrian  loan of 1900 BCE consisted of loaning 2 minas of gold, getting back 4 in  five years,[1] and an Egyptian proverb of the time was “If wealth is placed where it bears interest, it comes back to you redoubled.”[1][3] 

I have found a paper that researching money supply growth in the US, Japan and Germany states a doubling time of between 8 and 10 years. If Money supply growth doubles in 10 years then that is roughly equivalent to all money supply combined in previous periods. looked at it this way it is easy to see how a catastrophic collapse after a particularly large boom in money supply and hence Bank profits would cancel out all previous profit. I think it will take rather longer to reduce the notion back down to some empirical data but it does exist albeit used to demonstrate other concerns on money supply mainly regarding inflation and not the consequences of debt.


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5 Answers

Javier Gonzalez
It is a simplification. If you take into account that a vast fraction of the sector was bankrupt and allow for negative numbers that cancels the part of the sector that was still above water. It is a simplification for two reasons: it allows for that kind of compensation and ignores the dividends that investors have taken out of the sector and used somewhere else. He could have said that most of the sector would have been technically bankrupt without federal help, but that wouldn’t have the same emotional impact as the above statement. Now, don’t hold it against the highly respected Dr. Taleb, Warren Buffet has said something similar by stating that the airline industry has not made any money since it began.


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This is a question I also wished to find data for and as with Javiers answer I also remember Buffet saying the same thing about the Airline industry. My question arose out of a wish to establish how much skin is there in the game when Banks Bail out soveriegns and vice versa? To a large extent it would seem that neither in fact have much skin in the game and Talebs interview with the Library for Economic freedom and liberty examines this question and he again makes the claim of Banking over its history returning a net loss. So How much Skin do the Troika have in the Game..






Scott Gosnell

I haven’t been able to identify his source for this statement, but since the banking sector is still in existence, and several of the banks were never insolvent, I suspect that there’s a mismatch between the measures for “banking profits over time” and “losses over 18 months.” The latter may be based on changes to market cap, which would be a multiple of single year earnings changes, or changes to all financial assets, which would dwarf the size of the financial sector firms combined.


How was all of this calculated? Who knows.











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Juanjo Asegurado
I do not agree with that statement. There is a difference between losses and changes in the price of the stock and neither of those were down that much (if that would be the case the banks would have dissapear -even taking into account the federal help-).
you requested help to find good data: The National Information Center(NIC)
and EDGAR | Search Tools maybe are not the most easy to search webs, but the info is in there (you need to process it a little bit)









Albinas Uikis
its more of a statement to grab your attention than for you to think about it. If you actually thought about it you would realise it cannot be true. The banking sector may have lost that much at one point, however this was as much due to the panic as anything else. they were not realised losses,











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