Final Thoughts

What got me thinking was an article in Bloomberg where a portfolio manager said a US recession could loom as a potential “grey swan” event. I will admit to not knowing that term. To me it was, in fact, a swan of a different color.

Investopedia defines “grey swan” as “an event that is possible and known, potentially extremely significant, but considered not very likely to happen.”

Black Swan vs. Grey Swan brings to mind ex-Secretary of Defense Donald Rumsfeld’s “known unknowns” and “unknown unknowns” in the runup to the second Iraq War.

In other words, we’re dealing with a lot of variables here.

Here at SMU, we’ve talked about Black Swan events like the pandemic, and even mentioned “mini-swan” events. With the advent of the grey swan, will we eventually come full circle and make it back to white?

Now, I’m going to make a bold prediction and say whenever the swan talk starts flying fast and heavy, it’s a sure sign people, even the experts, don’t really know what’s going to happen next. That is, one thing that’s certainly unknown is the outcome.

Checking in with the market, that feeling of unknowing is the prevailing sentiment. While many have voiced a general support of the tariffs, the possible impact remained TBD.

One Midwest service source told SMU, “The problem isn’t that there are going to be tariffs, it’s that people don’t know what the tariffs will be or on who.”

The source added: “I understand there will be inflation, but it’s the right thing do: short-term pain, long-term gain as industry comes back.”

Another Midwest service center source said he was flying blind, noting: “I see nothing. It’s awfully quiet. I think everyone is on hold.”

And, like the rest of us, the source continued: “We’ll see what comes tomorrow.”

Others were taking a more humorous approach. An industry source quipped: “I am busy preparing for the celebration of Liberation Day. We are switching to ketchup instead of pricey guacamole.”

If you have seen the prices of avocadoes currently, and imagine what Mexican avocadoes might cost after tariffs, it might not be a joking matter.

So whether history repeats, or if it rhymes, or if this time it’s free verse, we’ll find out tomorrow. At 4 pm ET on Wednesday, President Trump is expected to give his presser from the White House. And we will know more than we know now. But we probably won’t know all of it.

In a way, it will be a relief. We can all get on with the business of getting on once we have an idea of where things stand. Still, I’m sure it will be a sleepless night for many of us. Good to know that tomorrow will bring some clarity: fingers crossed.

As for how all the expert prognostication pans out, we shall soon see. Right or wrong, though, I will go out on a limb and boldly proclaim: All that fancy talk, it’s for the birds.