Predicting Financial Crises, Short-Term Policies, Bond Crash with Didier Sornette

Oct 13, 2023

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Interview recorded - 11th of October, 2023

On this episode of the WTFinance podcast I had the pleasure of speaking with Didier Sornette - Emeritus Professor of Entrepreneurial Risks at ETH Zurich; and Chair Professor and co-Dean of the Institute of Risk Analysis, Prediction, and Management (Risks-X) at the Southern University of Science and Technology (SUSTech) Shenzhen.

During our conversation we spoke about whether you can predict financial crises, how this was done during 2008, what Didier is seeing in current markets and how this may link to the current bond markets. I hope you enjoy!

0:00 - Introduction
1:41 - Can you predict financial crises?
5:26 - Finding preluding indicators before crises?
9:21 - What did Didier see during 2008 to see risk in the housing markets?
16:21 - FED’s trying to reduce risk as much as possible
23:56 - Are we currently heading towards a crisis?
36:00 - Bond market housing market comparison?
42:01 - One message to takeaway from our conversation?

Didier Sornette is Emeritus Professor of Entrepreneurial Risks at ETH Zurich, and Chair Professor and co-Dean of the Institute of Risk Analysis, Prediction, and Management (Risks-X) at the Southern University of Science and Technology (SUSTech) Shenzhen. Since his recent retirement from ETH Zurich, Professor Sornette has been working actively with the private sector on developing socially important products with clear applications in the medical field and in dynamic financial risk management.

Professor Sornette is using data-driven mathematical statistical analysis to study the predictability and control of crises and extreme events in complex systems. His key contribution is to use nonlinear multi-variable dynamical settings that include both positive and negative feedback. The results obtained help us better understand the overall stability and instability of financial markets.

Didier Sornette -

Website - https://emeritus.er.ethz.ch/about-us/people/sornette.html
Publications - https://www.researchgate.net/profile/Didier-Sornette

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