Outside The (Cardboard) Box - 7 Black Swans a Swimming

December 3, 2009

7 Black Swans a Swimming

While a so-called “Black Swan” event is by definition an unlikely yet extremely impactful event, ample consideration is given to ‘conventional’ improbable outlier occurrences in Finance. Websites such as Financial Armageddon, The Housing Time Bomb and The Coming Great Depression are prominent among hundreds on the Internet who devote considerable attention to what many in the mainstream deem radical fringe thought. However at Outside The (Cardboard) Box, we feel these and others like them do not think far enough outside the, er, box. The possibility of Financial Armageddon is no longer an outlier; The Housing Time Bomb is unfolding as we type; and The Coming Great Depression is already here. So with the announcement of his retreat into seclusion in protest of the impending re-appointment of Federal Reserve Board Chairman Ben Bernanke, we are picking up Dr. Nassim Taleb’s Black Swan baton and offering “7 Black Swans a Swimming” for your evaluation of both their likelihood and their ultimate impact to your financial well-being were they to occur.

Our Sun Goes Supernova

While not a true Black Swan inasmuch as it is a likely event (albeit difficult to time), a Supernova (or the less problematic Nova) is on our list due to the disruption in commerce & trade these buggers engender. Were our Sun to go supernova unexpectedly, global finance would grind to a virtual halt; most major exchanges would close; consumer credit would evaporate; and the price at the pump would skyrocket!

The Black Death

Again, while not necessarily a true Black Swan due to its past occurrences, we feel that The Black Death has (erroneously) fallen off the scopes of most Financial Analysts and is worthy of inclusion. In evaluating the impact on Finance that a reemergence of The Black Death would cause, consider that it is estimated to have pruned the population of Europe by as much as 60% in its heyday. In the current era of high & rising unemployment, The Black Death would initially reduce unemployment rapidly & by a dramatic amount. However longer term, we would anticipate The Black Death leading to an inflationary wage spiral as well as widespread shortages in commodities, finished goods and services.

Giant Radioactive Sea Monster

An almost perfect representation of a Black Swan, Giant Radioactive Sea Monsters are thought not to exist. Secure in that knowledge, most of our Financial Centers are built near great bodies of water – readily accessible to a giant, radioactive sea monster. Additionally, a single giant, radioactive sea monster could adversely impact global shipping, resulting in higher prices for the goods & energy typically transported by ship. Regrettably, giant radioactive sea monsters are usually impervious to conventional ordinance and escalatory deployment of nuclear weapons would merely enlarge them. As giant, radioactive sea monster eggs hatch, their increasing numbers will further depress global trade. Let us hope the Giant Radioactive Sea Monsters remain concealed and unconcerned with our presence on the planet!

Mass Migration to the Plane of Immanence

While the concepts involved in humanity’s evolution to a higher realm are well beyond our ability to comprehend, the impact on those remaining would be catastrophic. Left with only the less-evolved, such as used car salesmen, serial offenders of all stripes, attorneys, and most of Goldman Sachs, life in the US will be harsh & unforgiving. As Gilles Deleuze, thought leader in the advancement of Immanence said: “It is only when immanence is no longer immanence to anything other than itself that we can speak of a plane of immanence.” We couldn’t have said it better ourselves.

Space Alien Invasion

If art is a mirror to the truth, then our fascination with all things UFO suggests that we are not alone! And given that there is insurmountable evidence that the Universe is a decidedly hostile environment, the arrival of an invading force of space aliens is a Black Swan event of far-reaching consequence. Carnivorous reptile beings eating Humans as livestock will have an absolutely devastating effect on the OTC Derivatives market. Counterparty risk will soar when your counterparty may be fondue before settlement can occur. Hopefully, we can transcend to the Plane of Immanence before those Lizard schmucks get their invasion together. We don’t really care if they eat the less-evolved bunch…..

Charlie Gasparino Won’t Annoy Us

While of no financial impact, Charlie Gasparino NOT annoying us is so improbable that we felt it warranted inclusion. Readers are encouraged to substitute their own ‘least favorite CNBC weasel’ in lieu of Gasparino. If this Black Swan (or your variant) should come to pass, clearly we (you) have either lost all hope or been transported to the Plane of Immanence while asleep. At the very least, perhaps the lizard people or the giant radioactive sea monster can eat him first. And he could always come in contact with The Black Death…..hmmmmmm.

A Return to Fiscal Prudence

This is another true Black Swan. It can never happen. In fact it is decidedly the most farfetched of the lot. At Outside The (Cardboard) Box, we use the radical nature of this idea merely to stimulate thought & discussion. We have it on good authority however that both the reptile aliens and the Plane of Immanence practice Fiscal Prudence so, while it will never happen through our own actions, we may yet have an opportunity to experience it.

We hope you enjoyed our “7 Black Swans a Swimming”. Watch for our next incisive essay “8 Maids a Milking”, a discussion on labor unions & productivity, coming soon.