That Threat Out On The Horizon You Thought Might Be A Black Swan....

 Is probably the even-more-dangerous Gray Rhino.

Here's a quick overview via Nasdaq, September 16, 2019:

Forget Black Swans: Gray Rhinos are the Real Danger

Over the past decade, the term "black swan" has gotten heavy play in the financial press. The term comes from Nassim Nicholas Taleb’s book: "The Black Swan: The Impact of the Highly Improbable.”

Because Taleb’s book was published just before the global financial crisis of 2008, the term gained worldwide recognition to describe an outlier crisis event that can't be predicted in advance.

Which also explains why it is hard to guard against a true black swan: nobody can see it coming.

Although the financial press throws the term around more often than it should, black swan events are actually quite rare. But a crisis event that telegraphs danger signs in advance is not a black swan: it's a gray rhino.

This concept was introduced by Michele Wucker, an American author and policy analyst, at the World Economic Forum in Davos in 2013. Three years later, Wucker published "The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore."

Unlike the rare black swan, gray rhinos are far more common, and you can guard against them. 

A gray rhino is something you can see coming if you pay attention, which helps explain some of the confusion in the financial press. To someone caught by surprise, a crisis event might be considered a black swan. But if they should have seen it coming, it was actually a gray rhino.

Here is a powerful example from recent news: On Aug. 12, Argentina's stock, bond, and currency markets saw one of the worst meltdowns of all time, with the Argentine stock market's 48% one-day collapse outpacing all other market collapses but one since 1950.

The collapse was a result of investors shocked by a strong showing of populist Peronist candidates in Argentina's primary elections. If the Peronists win the Argentina election in October, the odds increase that Argentina will default on its sovereign debt for the ninth time since 1816.

As a result of the collapse in Argentine stocks, bonds, and currencies, many emerging market money managers were crushed. Michael Hasenstab, the manager of the Franklin Templeton family of bond funds, lost an incredible $1.8 billion in a single day on his aggressive Argentine bond position....

....MORE

If interested we've looked at Hasenstab's adventures in Ukraine after the 2014 coup a few times. Now back to rhino's, this time Stranberg Resource Group (executive search) September 7, 2020: 

What is a 'Gray Rhino'? It's big, obvious, and headed straight for you.

Michele Wucker talks to us about her new hit book, "The Gray Rhino: How to Recognize and Act on the Obvious Dangers We Ignore"

Gray Rhino & Company Founder and CEO Michele Wucker coined the term “gray rhino” to draw attention to the obvious risks that are neglected despite – and often because of – their size and likelihood. The timely metaphor has moved markets, shaped financial policies, and made headlines around the world, especially as a metaphor for the ignored warnings that led to the COVID-19 pandemic.

Michele’s 2019 TED Talk has attracted well over two million views. She is the author of four books including the global bestseller THE GRAY RHINO: How to Recognize and Act on the Obvious Dangers We Ignore; and the forthcoming YOU ARE WHAT YOU RISK: The New Art and Science of Navigating an Uncertain World (April 2021).

What is a Gray Rhino?

The Gray Rhino is a metaphor for the threats that we can see and acknowledge yet do nothing about: the two ton thing that should be hard to ignore, but from which we look away even though it’s in our interest to get away before it charges.  It may be pawing the ground, snorting, and getting ready to charge at you; or it may still be a ways up the road when you still have time to manage things before they become urgent.

I created it for talking about big policy issues, like debt crisis and financial fragilities, climate change, and inequality. Along that vein, it’s struck a chord during the Covid-19 pandemic as so many of us ask why so many warnings went ignored. But it’s also useful for business issues, whether outdated business processes and systemic decision-making failures, industry trends, or product safety issues.

    I’ve been surprised at how many people apply the concept to personal issues as well: the suspicious mole on your back that you keep meaning to get checked out, the long-overdue tax returns, the stitch-in-time maintenance issues with your home or car.

The gray rhino counters two familiar metaphors. The elephant in the room normalizes saying and doing nothing. That’s not okay. The black swan gives people a “nobody could have seen it coming” cop-out excuse for ignoring gray rhino problems that many people did see coming and warned about.

The Gray Rhino Framework

The Gray Rhino metaphor and framework is a way to get people to acknowledge and counteract our vulnerability to obvious, dynamic risks not just despite but because they are so obvious. There are five stages, each of which has different obstacles and strategic imperatives that shape your response:

    Denial.   Insistence that there is no threat.

    Muddling.   Acknowledgement of the risk but come up with a litany of    reasons  not to do anything about it.

    Diagnosis.   A switch to the active planning stage, analyzing what it takes to
    solve the problem and getting our ducks in a row.

    Panic.   Frenzied anxiety in face of an imminent crisis; the time when we’re most likely to act but also most likely to make the wrong decision absent a strong action plan.

    Action.   Taking steps - often led by positive mavericks - to avert the problem, inspiring others to join in the action, tracking the results, and adjusting as needed....

....MUCH MORE

Here's Michele's homepage.

Here's the State Council of the People's Republic of China highlighting a March 2021 China Daily article:

'Gray rhino' real estate risks need to be tamed