When most Australians are asked about ‘the X factor’ they think the question is about a talent show on TV.
However, ‘the X factor’ is also talked about in the less glittery world of economic forecasting.
Economists refer to ‘the X factor’ when an unforeseen event or situation blows all their carefully laid forecasts away.
The extreme unpredictability and deviation from the norm in financial markets has led to the ubiquitous term “The Black Swan Theory”.
‘Greed’ and ‘Fear’ are the two main elements driving the Black Swan economic events that we have witnessed throughout history.
When such catastrophic events occur, financial markets will not be spared from the whiplashing effects brought forth.
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In fact, markets are still feeling the financial and economic consequences from what happened during the Global Financial Crisis of 2008.
The following infographic comes to us from Call Levels, and it highlights nine other recent “black swan” events that will have a lasting impact on how investors approach markets.
These events range from the Asian financial crisis of 1997 to the more recent Brexit panic that occurred in June 2016.
Source: Call Levels