DECEMBER 2016 / NO. 2
TAGS: BREXIT, GREY SWAN, US ELECTIONS, EU, DEUTSCHE BANK, PORTUGAL, SPAIN, ITALY, GREECE, ECB, MARIO DRAGHI, INTEREST RATES, UNEMPLOYMENT, FINTECH, BLOCKCHAIN, ROBOTICS, AI, SILK ROAD, MIDDLE CLASS

Grey Swan Analysis

“Brexit is increasingly used by Tusk, Junker and other elites as a scapegoat for a financial crisis that has already been broiling for years and is now ready to burst into flames”
This statement has been discussed, and the big challenge in such circumstances is to identify what factors drive them. To find out, we use our Grey Swan Analysis. We have listed twelve Grey Swans which we see as, some of, the driving forces which will weaken the economic climate across Europe.
  1. The US elections were between the ‘Bad’ and the ‘Ugly’
  2. The ticking time-bomb in the EU called Deutsche Bank
  3. The potential banking crisis in the financial sector due to the weak positions of banks in Portugal, Spain, Italy and Greece
  4. Draghi’s Quantitative Easing of the ECB, which continues to print billions month-after-month
  5. Interest rates across Europe of 0.1% to -/-0.5%, which are having a dramatic impact on consumer savings
  6. The lack of real growth of over and above 1.5% across Europe
  7. Dramatic and stable high unemployment rates across European countries
  8. Potential disruptions such as FinTech, Block Chain, Robotics, and Artificial Intelligence which may all lead to numerous additional layoffs
  9. The disappearing middle class leads to less consumer spending as the engine of economic growth
  10. The growth of underemployment leads to growing poverty across Europe
  11. The China-Europe Silk Road will disrupt container logistics
  12. One of the consequences of immigration will lead to growing poverty among the European middle class
The challenge faced by management is to determine the current and future impact of the relevant Grey Swans on their business by plotting them on a scale of ‘level of certainty – probability’. The impact will be huge. We strongly recommend that company management executes such a Grey Swans analysis on a quarterly basis.
“More and more people don’t trust their elites. They don’t trust their business leaders or their political leaders”, Wolfgang Schäuble, Finance Minister of Germany
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