The Stock Market is Ignoring These ‘White Swan’ Events That Could Upend Everything, Roubini Warns

From hot wars to weaponized financial assets, the U.S. faces severe economic, financial, political, and geopolitical disturbances

by Nouriel Roubini
Market Watch

NEW YORK (Project Syndicate) — In my 2010 book, “Crisis Economics,” I defined financial crises not as the “black swan” events that Nassim Nicholas Taleb described in his eponymous bestseller, but as “white swans.”

According to Taleb, black swans are events that emerge unpredictably, like a tornado, from a fat-tailed statistical distribution. But I argued that financial crises, at least, are more like hurricanes: they are the predictable result of built-up economic and financial vulnerabilities and policy mistakes.

There are times when we should expect the system to reach a tipping point — the “Minsky Moment” — when a boom and a bubble turn into a crash and a bust. Such events are not about the “unknown unknowns,” but rather the “known unknowns.”

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