This is classic Business Insider. They explicitly ignore the context and try to shake you up with a cherry picked quote. Jamie Dimon doesn't think, and doesn't want his reader to think, that October 15th was a once in a 3B year move. Specifically, in the letter, Jamie Dimon 1) never uses the term "flash crash" and 2) spends the previous five paragraphs explaining exactly how and why liquidity dynamics in the fixed income markets have changed.
What he is saying is that the Oct 15th move looks really strange, but not if you actually understand how fixed income market makers are reacting to the Volker rule. Quoting Dimon:
For instance, the total inventory of Treasuries readily available to market-makers today is $1.7 trillion, down from $2.7 trillion at its peak in 2007. Meanwhile, the Treasury market is $12.5 trillion; it was $4.4 trillion in 2007.
What he's saying is that market makers have smaller inventories on absolute terms, and much smaller inventories on relative terms, so when multiple big market participants try to move in the same direction at the same time, there is much less inventory available to soak up demand.
Come on, every finance guy knows to cut off tail risk, yet they still don't. Look at LTCM, with all the brains they had still didn't cut off tail risk and Meriwether still came back and got burnt again. Look at Victor Niederhoffer, got burnt twice the exact same way not cutting off tail risk. Then you get a guy like Taleb profiting off tail risk. Complaining about liquidity crunches does not count as its one of the main parts of the tail risk.
What you're talking about is a hedge. Hedges are expensive. A better strategy to a lot of investors is to "hedge" by trading smaller. Of course the spectacular failures you name were spectacular because they weren't hedged and were done with immense leverage. There is no way looking forward to predict if a hedge that eats 1/2 your returns every year is a better investment than just taking a catastrophic loss every several years. And it's not as simple as taking a 50% haircut on every trade: in reality maintaining a hedge will turn many of your small winners into losers.
I personally guard against the prospect both by staying small (trading with only a small portion of my total account) and by maintaining net short deltas (beta-weighted). Keeping short deltas in a bull market with upward drift also has a cost, but it lets me sleep easier at night.
What he is saying is that the Oct 15th move looks really strange, but not if you actually understand how fixed income market makers are reacting to the Volker rule. Quoting Dimon:
For instance, the total inventory of Treasuries readily available to market-makers today is $1.7 trillion, down from $2.7 trillion at its peak in 2007. Meanwhile, the Treasury market is $12.5 trillion; it was $4.4 trillion in 2007.
What he's saying is that market makers have smaller inventories on absolute terms, and much smaller inventories on relative terms, so when multiple big market participants try to move in the same direction at the same time, there is much less inventory available to soak up demand.