The Ten “Grey Swan” Events for 2018

The comments above & below is an edited and abridged synopsis of an article by Tyler Durden

One of the traditional push-backs against attempts to predict black swan events is that they are unpredictable. However, for the second year in a row, Nomura’s Bilal Hafeez has found a loophole: the grey swan.

Hafeez says that, while he would like to be able to predict black swans, by definition that is impossible. However, their cousin, the grey swan, can be foreseen. These are the unlikely events that lie outside the usual base case and risk scenarios of the analyst community. So, as he did last year, he has come up with 10 potential grey-swan events for 2018.

Nomura avoided the more widely discussed and more probable scenarios, such as the Italian elections, US impeachment risk, and North Korean conflict, and has instead selected topics that are not as well known.

Nomura’s potential grey swan events for 2018 include: What the movies tell us about 2018; the amazonification of inflation; 2% inflation targeting goes out of style; a United States of Europe; another UK political turnaround; Bitcoin starts moving other markets; housing market decline = rate cuts; a bigger proxy war in the Middle East; “Get to the chopper!”; and credit = stealth leverage pops?