Image: NASA

Prevailing Gray Swans: The Clear and Present Danger List for the Week Ending July 29, 2016

Prevailing Gray Swans provides a list of known catalysts or flashpoints in the world today that have the highest likelihood of causing great harm to quality of life to North Americans or on a global scale. These flashpoints are called gray swans in lieu of black swans because instead of being absolutely unknown there is a limited visibility to estimate their consequence and nature — they are clear and present dangers that command vigilance. The list is unranked (and unrankable) and is updated weekly.

Note: As conditions change from week to week there are updates to the[Analysis…] documentation of each item on the list. Items are delisted if they no longer warrant clear and present danger status. There is no preset number of items. The first step was creation of the list and the second step is building out the [Analysis…] documentation. There is still significant sourcing, researching and composition to be done on many items so the[Analysis…] sections will be published as they are completed.

The Clear and Present Danger List

  1. European banking collapse with immediate global contagion (ground zero: Deutsche Bank). [Analysis…]
  2. European banking collapse (ground zero: Italian banking sector).[Analysis…]
  3. Economic collapse of Japan. [Analysis…]
  4. Cyberterrorism/cyberwarfare/sabotage affecting US infrastructure (e.g. financial markets, power grid, internet). [Analysis…]
  5. The collapse of the European Union due to a successful Brexit-like referendum in France or Italy.
  6. Escalation of a war between the US/NATO and Russia originating from the Syrian conflict or from the eastern European border countries (Balkans/Poland).
  7. Bursting of the global sovereign bond bubble aka “Supernova”: a musical chair, run-for-the-exit bond selloff.
  8. Escalation of a war between the US and China originating from the South China Sea territorial water disputes.
  9. A large and rapid Chinese currency devaluation.
  10. A failure to physically deliver (force majeure) on the New York Comex precious metals market exchange (monetary metals: gold and/or silver).
  11. Organized civil unrest that escalates to prolonged violence in multiple US cities which triggers martial law and a permanent re-calibration of the social consciousness vis-à-vis a collective, national awakening to a starkly different definition of America on all levels — from its 1776, constituent DNA to the US’ perceived status through the eyes of the rest the world.

The depth chart (Gray swans on deck)

Source: Wikipedia Commons

Assume these are background “noisy” existential risks (i.e. also gray swans but not clear and present dangers front-and-center): strategic nuclear war between nuclear club nations; a nuclear device detonated on sovereign soil by a non-state actor (nuclear terrorism); release of a biological agent of Category A in a large city; electromagnetic pulse (EMP) detonation at altitude; financial warfare (e.g. an unexpected aggressive devaluation of the yuan; politically-induced massive short-selling directed at vulnerable strategic assets or systemic disruption of markets using algorithmic proxies or hijacking market-controlling software (i.e. cyberwarfare); aftermath of US fracking energy sector derivatives exposure to the banking system as a nonlinear function of a declining crude oil price; the Fukushima nuclear disaster of March 2011 causing a marked rise in cancer occurrence in the greater Tokyo region and/or qualitative losses of maritime ecosystems like fish populations in the pan-Pacific ocean regions that provide staple and mandatory dietary requirements for large human populations; severe water shortages in US western states beyond the scope of rationing; bank runs across Europe due to threat of bail-in.

Other sources: [World Economic Forum: The Global Risk Report 2016 (pdf)] [Minutes Until Midnight | details]

Background on the nature of black, gray, and white swans, and the impact of tail events [interview with Nassim Taleb]

Prepared by: James Autio

The DEEPCONNECTIONS logo is rich in symbolism: The dark blue faces (or minds) are experts that have polar-opposite opinions caused by faulty assumptions and incomplete knowledge of the state of the world. The massive hurricane — a classic gray swan event — is a known threat of high consequence but with unknown place and time for the rearing of its wrath. When the two opposing minds engage in dialectical reasoning and combine cognitive forces, the result is a deep connection, a synthesis yielding a conceptually new framework for understanding what is really going on in today’s mercurial world. Now you can see a single, large mind normal to the plane of the two constituent minds — a mind that is looking directly at you with its two eyes, and the world — now comprehensible — right under its nose.
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