Unknown known
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Risk Anatomy™
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The one type of known that doesn’t appear in Donald Rumsfeld’s taxonomy, but which should, since it is probably the source of more catastrophic events of our time than any of the others: things you do know, but you don’t know you know. Things you have forgotten; things you are in denial about; unpleasant realities to which you are presently not facing up.
As Slovenian philosopher Slavoj Žižek eloquently puts it: “the disavowed beliefs, suppositions and obscene practices we pretend not to know about, even though they form the background of our public values”.
A significant source of risk, as the repeal of the Glass-Steagall Act in 1999 by the Financial Services Modernization Act of 1999, and the continued use, even now, of the Black-Scholes option pricing methodology, ably demonstrates.