Thus far in 2017, the main questions occupying people’s minds seem to be:

– How many hikes will Fed do, and will BOJ or ECB be the biggest doves?

– How big a fiscal stimulus will Trump and Congress pass?

– How much reflation will the world have?

– Le Pen won’t really win but how much do we still hate the Euro anyway?

– Is China or Turkey or Russia or Mexico going to be the exponentially bad but not contagious EM this year?

Thats absolutely lovely. It really is. They’re good questions. But, my friends, they don’t even scrape the surface of what matters this year. They’re you, of 2 or 3 years ago. They’re flared trousers. They’re pineapples on sticks. They’re at Abigail’s Party. Parochial and unbecoming of a wonderful BM reader like you.

No, as we can see from allegations today that Russia may be able (already has?) enough information to blackmail Trump, these are the questions you need to be thinking of:

– When the trade war starts, who wins and loses?

– When does reflation turn into bad stagflation?

– When will Russia annexe another country and will it start with the Middle East or the Baltics?

– What will Le Pen do when she wins and how will the EU reform itself?

– When will Trump sack half his cabinet and when could he be impeached?

– When will investor exodus from years-long held positions turn into a rout as they realise they don’t know what their risks are and they don’t know how to measure these new risks anyway?

This doesn’t mean these things are going to happen. But it means they’re possible. They’re not zero percent. In some cases they’re even a 50% chance. (Le Pen in particular, given it’s a two horse race).

And the one we can be most certain of is the final question. Forget monetary policy. Forget an EM blow up. Investments are about to blow up, because we have spent decades trying to quantify and master risk: only to find that we are now entering a period where there is no such thing as the unthinkable. No black swans. No distribution of outcomes. No quantifiable probabilities. Just stuff happening. The messy business of humanity.

So today’s Trump report should be the first of many reminders that we have no idea how this Presidency will run. That oil could be $100 or $10, if Putin gained (more?) control of the Middle East. That you need to consider more scenarios than you ever thought possible. You’re going to need to be the most sceptical of your portfolios that you’ve ever been. And ready to think. Fast.

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