What if……………?


Seriously. What if some deep suppressed thoughts actually happened?

Are they the BLACK SWAN events that pop out of the blue?

Are they really Grey Swan events? (A grey swan is an event which is known and possible to happen, but assumed not very likely to happen) Or, are some of these “what ifs” just idle thoughts as the summer wraps up?

But, if you are in the financial markets can you take a chance of at least not considering the impact of these “what ifs?” So, WHAT IF…….

Note – all these “what ifs” are non-political and none have solutions since none have ever     happened. Uncharted waters.

What if the severe drought in the U.S. west continues with the Colorado river experiencing reduced flows. Lake Meade and Lake Powell continue to recede. How will Southern California, Arizona and Las Vegas react? Will consistent power/water shortages cause a mass migration? To where?

What if the 2022 U.S. mid-term elections are “postponed?” Citing the threat of violence over the integrity of the voting process, martial law is imposed until……?? Would the U.S. digress into a civil war? Would financial markets close?

What if a new nuclear deal with Iran is negotiated and signed? Will oil prices collapse? Would Israel attack Iran nuclear installations to make sure there would be no further threat? How would the entire Mideast react?

What if China’s economic problems deepen? Will their real estate problems result in defaults and spread globally? Will the weakening of the Yuan cause a demise of the Chinese CBDC (Central Bank Digital Currency)? Would social unrest ensue?

What if North Korea decides to “re-unify” the Korean Peninsula by taking over South Korea following the Russia/Ukraine and China/Taiwan initiative?

What if Europe experiences a very cold winter? Without energy flows from Russia will some countries abandon sanctions placed on Russia causing a break with the U.S? Would a severe economic downturn in the Euro-zone cause a collapse of the Euro?

Deep thoughts. These “what if” scenarios come from a long Labor Day weekend and end of summer malaise. Any of these events actually happening would not just be a black swan event, but a black BLACK swan happening. Savvy risk management requires “what if” thinking. Think ahead and don’t get surprised.