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Welcome to a SPECIAL EDITION of Markets Live, FT Alphaville’s daily mooch around London stocks. PM: Neil Hume is with me. PM: But just because this is a special edition doesn’t mean he’s got his tech sorted PM: PM: Afternoon james and rose - and others PM: He can’t se you yet James

Nor did they anticipate that this quiet man would be able to boost his maverick image by skilfully playing on the public's distrust of the media

As Ségolène Royal says: in her "participative democracy" all citizens are experts.

Yet, one day, reality will take its revenge on reality shows.

Most Europeans wouldn't know it, but 400 citizens from across the EU are gathered at the European Parliament in Brussels this weekend to participate in Tomorrow's Europe, a Deliberative Poll exercise in the parliamentary chamber. A prepoll of a larger random sample of Europeans has already taken place, but this group will answer some big questions about the future of Europe. It's a massive logistical undertaken by Jacques Delors' pro-EU Notre Europe think-tank with the blessing of the European Union itself. Unfortunately, it seems to have gotten little media attention. I'm getting information from the dLiberation blog at openDemocracy. Only a handful of bloggers in Europe have mentioned it this week.

Economists distinguish between “Risk” and “Uncertainty”: the former can be priced by financial markets while the latter cannot. The distinction between the two was made by the famous economist Frank H. Knight in his seminal book, Risk, Uncertainty, and Profit (1921). In brief, “Risk is present when future events occur with measurable probability” while “Uncertainty is present when the likelihood of future events is indefinite or incalculable”.    This distinction between risk and uncertainty helps to explain the recent market panic and turmoil. Today, the FT cites a market economist at Lehman who said: “We are in a minefield. No one knows where the mines are planted and we are just trying to stumble through it”. A few days ago another market participant put it this way: “It is not the corpses at the surface that are scary; it is the unknown corpses below the surface that may pop up unexpectedly”.   Unknown minefield; unexpected corpses: this is “uncertainty” rather than “risk”. Risk can be measured and priced because it depends on know distributions of events to which investors can assign probabilities. Uncertainty cannot be priced by markets because it relates to “fat tail” distributions and extreme events that cannot be easily predicted or measured.

A few days ago the CFO of Goldman Sachs justified the massive – 30% plus  - losses of the two Goldman Sachs hedge funds by arguing that these were unpredictable “25 standard deviation events” that should occur only once in a million years. The same thing was said by the LTCM “masters of the universe” when their highly leveraged hedge fund went belly up in 1998.

The proliferation of such products, as I have often noted before, carries many benefits for the financial system (most notably that they disperse risk across a much wider pool of investors). But this trend also carries at least one downside; it is adding to the opacity of the financial world. For although many corners of the structured credit universe are becoming more transparent, almost as soon as one chink of light emerges, another shadowy wave of activity emerges that is far more opaque.