Tag Archives: black swans

Corona is not a Black Swan Event

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Bank scenarios from 2005

There is a narrative slowly emerging that Corona (Covid-19) is a true Black swan event. For example, according to Fred Cleary, a portfolio manager at Pegasus Capital, quoted in the FT’s excellent Long View Column, “Covid-19 is a black swan”. I could be wrong, but from recollection of reading the book, a Black Swan event is something that people cannot possibly imagine and therefore cannot possibly predict.

9/11 was a Black Swan event. Corona virus is not. In scenario-speak it is a wild card event that breaks all scenarios, but this is most definately not something that has not been foreseen. I worked with an Australian bank back in 2005 and a pandemic was on the table so to speak. It was one of the main topics of a UK government risk workshop in 2015 (by main topic I mean it was one of the events considered most probable (when not if as they say), it featured in some strategic trends work with the UK Ministry of Defence too (again, as a strategic shock), in some library scenarios, some work for KPMG and finally some disruption cards created with Imperial College.

The problem, of course, is not predicting, forecasting or foreseeing, but in assigning probability to such events or ideas. If the probability is widely considered to be low it will be largely ignored. It also touches on not what, but whom, in the sense of who gets listened to, why and when. BTW, is this is all a bit doom and gloom, my view is that the current pandemic is quite mild in terms of mortality. This too will pass, although next time we may not be so lucky.

From the Bookends Scenarios (PLNSW) 2010
KPMG cards circa 2012
Imperial Disruption cards 2018 – note linkages between cards

The Wildest of Wildcards

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A few years ago someone came up to me after I’d given a speach at a risk conference and said that I was missing a wildcard risk. He proceeded to tell me that the world would change if we gained the ability to communicate with animals. The risk would be that they might not be happy with what we were doing to our (their) planet.I thought it was a good wildcard/risk, but not one we need worry about too much.

So a few years on and I’ve just picked up a book called Pulphead by the American writer Jeremiah Sullivan and randomly opened it at page 309. The chapter is titled Violence of the Lambs and it’s about how animal behaviour is possibly changing, possibly in reaction to climate change or the continued encroachment of the human species. In short, what might the biological endgame be for some of the more evolved animal species?

What we are talking about here is essentially animals attacking humans. Like Hitchcock’s The Bird’s, but with bears, wild dogs, chimps, elephants and killer whales as well as crazed seagulls. If you remember what happened to Steve (Croc-hunter) Irwin with a ray you might get the idea. The chapter, indeed the whole book, is worth a read.