Grey Swans are events that can be anticipated to a certain degree but are considered unlikely to occur and may have a sizable impact on the health of the overall financial markets if they do happen. (Photo: Shutterstock)
In my post, “When Black Swans Appear in Financial Markets,” in October of 2017, I characterized Black Swan events as typically random and unexpected occurrences that can have catastrophic effects on financial markets.
Recent examples of Black Swans in the United States included the 2008 financial crisis and housing market crash; the 2001 dot.com bubble, and the Long Term Capital Management collapse in 1998.
While Black Swans have occurred periodically, some events which are not true Black Swans can still create a significant impact on the stability of financial markets. These occurrences are known as “Grey Swans.”
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