Nassim Nicholas Taleb Distinguished Professor of Risk Engineering, NYU-Poly; Author, Antifragile What We Learn From Firefighters How Fat Are the Fat Tails ? Eight years ago, I showed, using twenty million pieces of data from socioeconomic variables (about all the data that was available at the time), that current tools in economics and econometrics don't work, whenever there is an exposure to a large deviations, or "Black Swans". There was a gigantic mammoth in the middle of the classroom. Simply, one observation in 10,000, that is, on day in 40 years, can explain the bulk of the "kurtosis", a measure of what we call "fat tails", that is, how much the distribution under consideration departs from the standard Gaussian, or the role of remote events in determining the total properties. For the U.S. stock market, a single day, the crash of 1987, determined 80% of the kurtosis. The same problem is found with interest and exchange rate...