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Is coronavirus a black swan event

sun rise

The world is on fire
Premium Member

exchemist

Veteran Member
In case you are not familiar with what "black swan event" means: The Coronavirus Is A Black Swan Event That May Have Serious Repercussions For The U.S. Economy And Job Market

I'm not as convinced as the Forbes piece asserts but it very well be one since the market has done almost nothing but go up for a long time now. Certainly the markets have taken a hit today.

And if the disease spreads as easily and quickly as some reports assert, then yes, the market and the economy will take a hit.
Yes I think this is trying to call it rather too early. The Chinese were badly caught out trying to disguise SARS so it is natural that they will go to the opposite extreme now. I'll wait for the the WHO to pronounce, I think.

But I do think this will take some of the shine off Xi's projection of his country and himself as a great power with all the answers. This disease, like SARS, seems to have come from squalid and illegal food and animal markets in his country that belong more in the 3rd world than the 1st.
 

amorphous_constellation

Well-Known Member
This disease, like SARS, seems to have come from squalid and illegal food and animal markets in his country that belong more in the 3rd world than the 1st.

However, is this due to wanting to expand the economy/production of food. The more time rolls on, the more people there are to feed and the less space-sensitive and organic everything becomes. The creation of diseases is surely a small wonder
 

Jeremiah Ames

Well-Known Member
In case you are not familiar with what "black swan event" means: The Coronavirus Is A Black Swan Event That May Have Serious Repercussions For The U.S. Economy And Job Market

I'm not as convinced as the Forbes piece asserts but it very well be one since the market has done almost nothing but go up for a long time now. Certainly the markets have taken a hit today.

And if the disease spreads as easily and quickly as some reports assert, then yes, the market and the economy will take a hit.
People don’t have to leave their homes to shop.
They can do it online.
So the economy will survive just fine.
We just need to make sure the UPS drivers don’t get sick.
 

Heyo

Veteran Member
In case you are not familiar with what "black swan event" means: The Coronavirus Is A Black Swan Event That May Have Serious Repercussions For The U.S. Economy And Job Market

I'm not as convinced as the Forbes piece asserts but it very well be one since the market has done almost nothing but go up for a long time now. Certainly the markets have taken a hit today.

And if the disease spreads as easily and quickly as some reports assert, then yes, the market and the economy will take a hit.
Epidemiologists are warning that we are due to a pandemic for years. So calling this a "black swan event" is either ignorance or the term means something different in economics than what's in the dictionary.
 

exchemist

Veteran Member
However, is this due to wanting to expand the economy/production of food. The more time rolls on, the more people there are to feed and the less space-sensitive and organic everything becomes. The creation of diseases is surely a small wonder
No it is to do with traditional and sometimes barbaric practices of eating anything that moves, from whatever source. Nobody is starving in modern China.
 

Shadow Wolf

Certified People sTabber
It's nothing more than "killer virus of the year" sort of thing. It's tragic people die from them, but it's never the apocalyptic numbers predicted. Watching the Boondocks episode where a virus is found in the fried chicken at chain fast food places, and then turns out to be nothing, is more of a suitable and appropriate response to this virus than calling it a black swan event.
 

sun rise

The world is on fire
Premium Member
Epidemiologists are warning that we are due to a pandemic for years. So calling this a "black swan event" is either ignorance or the term means something different in economics than what's in the dictionary.
Go argue with Forbes Magazine. As far as I'm concerned, they defined what they meant and you did not. +1 for Forbes
 

Valjean

Veteran Member
Premium Member
Go argue with Forbes Magazine. As far as I'm concerned, they defined what they meant and you did not. +1 for Forbes
No, a black swan event is unanticipated and surprising. It's not necessarily particularly consequential.

Epidemics have occurred regularly for thousands of years. Predicting more is a pretty sure bet. The only thing unpredictable in when, where and how serious.
 

Heyo

Veteran Member
Go argue with Forbes Magazine. As far as I'm concerned, they defined what they meant and you did not. +1 for Forbes
"A black swan event is [...] a rare and unpredictable occurrence that is beyond what is expected and has severe consequences." - from the article

Pandemics are rare - check
have severe consequences - check
are unpredictable - half true. While, like earthquakes, it can't be predicted exactly when they will occur, but the chance of them occurring can be calculated
are beyond what is expected - nope. Epidemiologists expect them.
So, either the author isn't aware of epidemiology (ignorance) or defines expectation as something else as a calculated risk/chance.
 

exchemist

Veteran Member
"A black swan event is [...] a rare and unpredictable occurrence that is beyond what is expected and has severe consequences." - from the article

Pandemics are rare - check
have severe consequences - check
are unpredictable - half true. While, like earthquakes, it can't be predicted exactly when they will occur, but the chance of them occurring can be calculated
are beyond what is expected - nope. Epidemiologists expect them.
So, either the author isn't aware of epidemiology (ignorance) or defines expectation as something else as a calculated risk/chance.
Agreed. But to Forbes magazine, the world revolves around the stock market. To them, a black swan event is some disaster in the world that makes stock traders start their herd behaviour of all selling at once, taking the stock market down.

The rest of us are entitled to find that view somewhat narrow.;)
 
"A black swan event is [...] a rare and unpredictable occurrence that is beyond what is expected and has severe consequences." - from the article

Pandemics are rare - check
have severe consequences - check
are unpredictable - half true. While, like earthquakes, it can't be predicted exactly when they will occur, but the chance of them occurring can be calculated
are beyond what is expected - nope. Epidemiologists expect them.
So, either the author isn't aware of epidemiology (ignorance) or defines expectation as something else as a calculated risk/chance.

The concept of a Black Swan Event relates to the specific instance and disproportionate impact. Predictability requires that specific instance to be predictable, not that we know the general category it belongs to will happen at some unspecified time in the future.

So a supervolcano eruption would be a BSE, even though we know one will happen sooner or later. 9/11 was a BSE, even though we know terrorism happens. WW1 was a BSE even though we know wars happen. A specific global pandemic with devastating consequences would be a BSE even though we know pandemics are bound to happen.

If, for the sake of discussion, we assume coronavirus becomes a global catastrophe it would be a BSE as if you went back to the day before the first case, you could not have reasonably predicted we were on the eve of a global catastrophe.
 
It's nothing more than "killer virus of the year" sort of thing. It's tragic people die from them, but it's never the apocalyptic numbers predicted. Watching the Boondocks episode where a virus is found in the fried chicken at chain fast food places, and then turns out to be nothing, is more of a suitable and appropriate response to this virus than calling it a black swan event.

It's exactly the wrong response to take though.

Sooner or later there will be a virus that does cause a global catastrophe, and that will be a Black Swan Event.

The problem is we can't tell which "killer virus of the year" it is going to be. As such you have to take precautions to assume the worst, as the cost of overreacting is tiny compared to the cost of underreacting.

Most of the time you will be wrong, but it is still the correct thing to do. Play Russian roulette for a dollar a spin you win 5 times out of 6, doesn't make it the smart option.

Not to mention that the 'overreaction' could be what prevents a more serious outbreak happening, and still 'rational' people would see it as 'evidence' we don't need to take them seriously.
 

Heyo

Veteran Member
The concept of a Black Swan Event relates to the specific instance and disproportionate impact. Predictability requires that specific instance to be predictable, not that we know the general category it belongs to will happen at some unspecified time in the future.

So a supervolcano eruption would be a BSE, even though we know one will happen sooner or later. 9/11 was a BSE, even though we know terrorism happens. WW1 was a BSE even though we know wars happen. A specific global pandemic with devastating consequences would be a BSE even though we know pandemics are bound to happen.

If, for the sake of discussion, we assume coronavirus becomes a global catastrophe it would be a BSE as if you went back to the day before the first case, you could not have reasonably predicted we were on the eve of a global catastrophe.
Black Swan events are also rare (according to the definition in the article). If everything that we expect to happen but don't know when, you are describing everyday life - nothing rare.
 
Black Swan events are also rare (according to the definition in the article). If everything that we expect to happen but don't know when, you are describing everyday life - nothing rare.

Sorry, could have been clearer on that, that was left implicit.

Rare events that could not have been reasonably predicted to occur at the time they do and have disproportionately large impact.

It is about the randomness in complex systems that limits our ability to understand them 'rationally' and so we have to make decisions under conditions of uncertainty. A small number of unpredictable events are often more significant than the other 99.99% of what happens.

People put too much emphasis on the frequency of being correct, rather than the magnitude of being wrong.

When the market is strong a trader can 'win' for 10 years and look like a genius because he is always right. Then when the financial crisis happens he blows up and bankrupts himself losing more than he had gained in the previous 10 years and without any means to make a comeback. Meanwhile another trader can lose almost all of the trades they make, but when the crisis happens they win more than they had lost.

For 9 years and 11 months the 'genius' trader would be mocking the 'loser' trader and pointing to all of the 'empirical' evidence that he was the smart one.
 

Shadow Wolf

Certified People sTabber
It's exactly the wrong response to take though.
It's that every time someone gets sick with a new virus people panic and it's going to be the end of the world. Bound to happen, but the Yellow Stone volcano is bound to blow eventually, someday now, and it is irresponsible fear pandering to look at every bit of seismic activity in the area as if it's an indication the "big one" is about to happen.
Basic preparedness and staying calm is the best any of us can reasonable and realistically do for an unforeseen disaster. Incessantly crying wolf and making every new bug look like one of the Four Horsemen is not.
 
It's that every time someone gets sick with a new virus people panic and it's going to be the end of the world. Bound to happen, but the Yellow Stone volcano is bound to blow eventually, someday now, and it is irresponsible fear pandering to look at every bit of seismic activity in the area as if it's an indication the "big one" is about to happen.
Basic preparedness and staying calm is the best any of us can reasonable and realistically do for an unforeseen disaster. Incessantly crying wolf and making every new bug look like one of the Four Horsemen is not.

Supervolcano eruptions can't be curtailed, pandemics can be, but only if we 'overreact' to potential outbreaks.

Sooner or later, there will be a time when it is not an overreaction, but we aren't intelligent enough to identify which one this is until it's too late.

Given the minimal downside to taking stringent precautionary measures, it is worth it in the long run.
 

columbus

yawn <ignore> yawn
Sooner or later, there will be a time when it is not an overreaction, but we aren't intelligent enough to identify which one this is until it's too late.
Who knows? We may already have done so, possibly more than once.

The pandemic that doesn't happen will be hard to identify and study, obviously

Tom
 

Shadow Wolf

Certified People sTabber
Supervolcano eruptions can't be curtailed, pandemics can be, but only if we 'overreact' to potential outbreaks.
But not with responses that make people panic and send them scattering, which will make efforts to contain and quarantine a virus vastly more difficult. Staying calm is the best thing to do in a disaster or emergency. Panicing and going on about the apocalyptic nature of the event is not.
 
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