Beware the black swans

Remember when all investors had to worry about was the possibility of a double-dip recession next year? Those times seem like the simple, innocent days of spring compared with the icy scenarios now evolving.

In contrast to previous financial crises, analysts are this time paying more attention to the kinds of “black swan” events that could panic the markets. It seems none are as far-fetched as they may have been even six months ago. 2011 is looking to be, if anything, more tricky than 2010. Start with plain old economic hazards, both global and local: inflation, deflation, stagflation, currency volatility, liquidity bottlenecks and default, either corporate or sovereign. None of those is impossible, and neither is a combination. Product launches continue apace, so optimists, or desperate ...