I haven't been invested long enough to live through one, but I've heard about them. The 1979 energy crisis, the 1999 dot-com bubble, the 2008 financial crisis. Does the current situation with Iran qualify in your opinion?
Do you consider Iran to be a Black Swan event?
byu/thai_sticky instocks
Posted by thai_sticky
41 Comments
mire like military live fire demonstration
No, but that’s a personal opinion.
One of the traits that define a Black Swan is its unpredictability. Iran’s war was sort of a very predictable event, mostly after Trump’s electoral victory.
The real black swan event is trump 2nd term. This guy can manufacture a bear market every year
Mango Duck Event
No I wouldn’t say it’s a black swan event. I’d consider that to something that seemingly happens out of no where with little warning.
The writing has been on the wall for months now. (Probably years really.) I’m not awfully surprised this happened. Israel and the US have had a target on Iran for quite a while now. Not to mention the US has habitually carried out wars and operations in the Middle East for years now. It was just about inevitable eventually.
I personally don’t think it will continue for a long time though. I don’t think the world can afford this to be too prolonged. But who knows.
In my opinion, if we were able to anticipate it and discuss it leading up to the event, then no.
The black swan events are when reality absolutely blindsides every single market participant, retail, hedge funds, market makers, and inside traders alike. Then everybody panics and nobody is even thinking about buying the dip.
Nah, black swans come out of nowhere and tank the market hard and fast. Neither case happened here. Scam market barely wants to sell off.
Not exactly, but closure of the Strait of Hormuz and bombing of the oil drilling and refining facilities could very well be a Black Swan event, by definition.
Before this, close to zero people cared or wondered about what would exactly happen to the global economy if there was zero crude oil and refined products passing through the strait. No one wanted to think about it as a real possibility.
Now, everyone knows that it’s possible, and will forever take that into their calculations. Whether at the sovreign level or at the individual trader level.
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I personally think the global economy is still working through the downstream economic and geopolitical impacts. We’ve not yet seen the full impact nor are individual countries doing enough yet to mitigate it.
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(These are not original thoughts – I’ve been listening to a lot of smart people over the last few weeks on this topic)
What is black swan here? This was an obvious risk we were talking about since the 12 day war. Those who knew, knew. If anything, the market vastly underestimates the importance of politics for the economy. We knew how well armed the IRGC was, how aggressive Israel was, how important the Strait was. There’s nothing black swan here. It goes out to prove that the markets are extremely inefficient.
No, this is a rug pull. Another month of military maneuvers, some boots on the ground, panic selling in the stock narket, a 10-15% correction, a slightly bloodier Venezuela style coup, a reopened Strait, a disarmed Iran, investors buy up all the discount stocks, and the market goes on an upswing before early summer.
Not quite. Iran’s response of closing the Strait of Hormuz was a predictable result of a US attack. The administration ignored strategic advice regarding this predictable response. The way I see it, the Black Swan event is yet to happen. We haven’t seen the impact on the world economy of a prolonged closure, involvement of other Gulf nations, potential terrorist attacks by Iranian agents, Russian/Chinese involvement, etc.
The commencement of the Iran war was not a black swan event. Irans response was a little black swanny.
I think it was unexpected for them to close the strait. It was un expected that they would randomly attack other nations and it was unexpected that oil infrastructure outside of Iran would be affectted
No this is most likely just a correction assuming some sort of stabilization comes to oil fairly soon, my money would be on stabilization sooner rather than later, but if there strait remains inoperable we are indeed forced into rate hikes we could see a bear market.
It’s not really a black swan event since it’s mostly predictable, (predictable in the sense we know prolonged oil bad, we don’t know for how long but we can estimate the damage it causes)
maybe if somebody gets nuked that’s a bit more black swan
COVID is really the only black swan event in recent memory
No
Certainly appears to be heading in that direction. Time will tell.
No
Not yet. The fallout of the Kharg offensive is what I think will be the Black Swan.
Get ready for things to get wilder. The US together with the UAE are about to seize Abu Musa Island at the entrance to the strait.
No.
No. Unless you thought that Ukraine war was one. Oil was over $100. The equates to today’s dollars of close to $130 a barrel.
Ofc it is. You’re hitting an energy and capital crunch at the same time we have AI companies starting to run out of capital, and in an industry where energy is a primary fuel for function. There is nothing else growing in our economy. What do you think will happen? This war is already deep enough that our chains will never recover the same way as before.
It has the potential to trigger a black swan event
No. A black swan event would be one where Iran leader and Trump become adoptive sons to Zimbabwe President and they decide to shut trading down altogether and start providing free education and healthcare worldwide
At most, it’ll be a black turban event.
No.
No. COVID and 9/11 were black swan events. Random and completely unexpected.
There was existing coverage on the build up to Iran for about a month before the strikes began.
It is in the sense that it was not likely to have happened. Current US Government administration is volatile enough that events less likely than 1:1M in other times are much more likely, but it was still most improbable. Moving USS Ford to the Caribbean followed by the event in Venezuela and then redeploying Ford to the Middle East was certainly a clear sign of an intent to intimidate Iran, at a minimum.
Nah, the black swan would be a simultaneous Iran war shock + credit cycle + AI capex bust that all reinforce each other – unrelated things suddenly correlating to the downside in ways the models don’t anticipate. This is not certain to happen, but you can tell the story:
– Iran war shocks the economy in a stagflationary way, slowing economic growth while also driving up interest rates to fight inflation
– This shocks the already wobbly credit markets both on the credit side (people lose their jobs and can’t pay, companies struggle and default) and the rate side (interest payments get more expensive, companies and individuals need to deleverage), which worsens the economic conditions
– That negatively impacts AI capex – Oracle, Coreweave, etc. are key parts of that story and are heavily leveraged, interest rates rise, credit tightens, they may not be able to refinance and may need to deleverage.
– That slowdown in capex busts the suppliers of picks and shovels to the capex who were themselves spending aggressively to serve it and now have all kinds of capacity that’s suddenly not needed – Nvidia, Broadcom, Power Utilities, etc.
I would not bet on this, I’d put the odds well under 50%. But not impossible, and that would be a black swan.
“War in the Middle East” is on everyone’s bingo card. Happens every year or two.
Iran is not a black swan as they did not ask Trump to bomb them. Trump is the black swan because he literally bump and dump the market while benefiting from inside trading.
It certainly appears to be.
Not at all.
It also hasn’t had the impact a true Black Swan event would have.
Think about something like 9/11. Or the 2008 recession that started fairly fast once the first domino fell.
Orange swan event
The ’79 energy crisis was the 4th worst economic event in US history in terms of the markets. Most of the energy experts are saying this crisis has the potential to dwarf that. When you combined that with an overvalued stock and housing market, possible prolonged conflict with iran/russia and their proxies, private credit issues, inflation, rising rates, stagnant wages, K shaped economy, net zero job hiring and tariffs, you are looking at potentially at an event that will likely be behind only the great depression and the global financial crisis in wealth destruction for the average american.
No. But trumps instability sets the stage. Next one will be within a few years as people with 401k’s are replaced by ai and the easy consistent inflow of investable money dries up and investors realize that a country that has debt substantially greater than gdp – with no ability to work together forget about address a problem – is sustainable.
Us companies trade at a premium because we were a country of laws, order and accountability. When we realize we no longer are, well trade closer to every other market which means we’ll be cut in half or deal with a decade of profit growth but no gains ir a combo there of.
s and p 7700 this year
Black Swan events, technically speaking, are unpredictable. This was predictable and indeed, predicted. Not necessarily Iran in and of itself but just the general chaos predicted by our convicted felon president’s election to office.
We have no good reason to believe that things will get any better other than a tenuous faith in the TACO doctrine.
What’s the derivation of the term? Black swan?
Damn all these negative posts got me bullish
Nah. Anyone who has been even remotely interested in geopolitics always knew Iran would close the straights. I’m honestly still shocked that Washington screwed up this hard, I suppose this just gives more reason to push money into the military now……