Let me make this clear.

These are not forecasts, predictions, or prognostications. They are not even guesses.

They ARE events which have a very low probability of occurring, but which can have an extremely large market impact if they do.

That is the textbook definition of a ?Black Swan?, a concept created by my friend, fellow mathematician, and fractal geometry fan, Nassim Taleb.

And here?s the bad news: Black Swans almost always have hugely negative impact on asset prices.

Black Swans have been occurring with disturbing regularity this year. Brexit, which almost everyone thought would fail, is a perfect example. So would an extreme, out-of-consensus monthly Nonfarm Payroll Report.

A black swan can come out of nowhere and completely wipe out your performance for the year. I have seen it happen to the unfortunate and the unwary too many times.

So it behooves us to engage in the intellectual exercise of what possible black swans are headed our way.

I won?t engage in the ridiculous, the fanciful, or in science fiction.

So an asteroid destroying the earth, a global pandemic, a giant solar electromagnetic pulse, or a visit from aliens, are definitely off the list.

I?ll limit myself to the highly unlikely, but not impossible.

1) Janet Yellen raises interest rates at the September 14 FOMC Meeting

You may guffaw at this one, with deflation accelerating, Brexit, a strong US dollar, and global uncertainty running amok.

However, I happen to know that the Fed governors absolutely HATE low interest rates, seeing them opening up a Pandora?s Box of risks for the US economy in the 2020s, and would love to abandon them at the earliest opportunity.

So if the recent bout of stock market strength continues into autumn, Janet may use the opportunity to nudge up overnight rates by 25 basis points. And you all remember what happened to risk assets the last time she did this.

Unlikely, but definitely a ?maybe?.

2) Donald Trump Wins the US Presidential Election

Despite all of the fanfare generated by the Republican National Convention, Hillary Clinton is still massively ahead of Donald Trump by 33 points, or 67% to 33%, on the betting sites, the most accurate predictors of election outcomes this year (click here at http://tippie.uiowa.edu/iem/).

This compares to the Bloomberg poll results, which still give Hillary an 18-point lead, 54% to 36%.

As a result, markets are discounting a Clinton win, which is why we have seen such a monster stock market rally since June, and is also why the Dow Average rose for nine consecutive days after the FBI gave her a clean bill of health on the email server matter.

However, TRUMP COULD STILL WIN.

If complacent Democrats stay at home and highly energized Trump supporters show up in droves, even the betting pools could get upset.

Just ask Thomas Dewey, who was supposed to beat Harry Truman, hands down, in the 1948 election.

Since details of Trump?s economic plans have yet to be clearly elicited, companies would simply cease new investment and sit on their hands.

At this point, they only know about the walls, the isolation, and the deglobaliztion of Trump?s, dark dystopian view made clear in the primaries, not exactly barn burners for risk takers anywhere.

Big capital only invests in high probabilities and certainties, not maybe's, possibilities, or uncertainty.

Recession would ensue, corporate earnings would collapse, and the stock market would crash. And I?m not talking about a measly 10% correction. This would be more like a severe 30%-40% bear market.

You have been forewarned!

3) The Apple iPhone 7 Bombs

Steve Jobs? creation has produced one of the longest strings of successful product rollouts in corporate history. Each one pushed the technology envelope unimaginably forward, to the very cutting edge.

So far, the next generation iPhone 7 roll out is scheduled for September. New sales records are anticipated, partly on the back of accelerating sales in China.

But what if the iPhone 7 is delayed? What if consumers fail to show? What if it just plain doesn?t work.

If the most widely owned stock in America, and one of the largest capitalized, suddenly drops by a third, as it has done on many occasions in the past, it would cast a pall on risk taking generally.

The downstream suppliers would certainly take a giant hit.

I don?t buy it, have great faith in Tim Cook, and think Apple will deliver once again. But there is one seriously disconcerting fact to consider.

Apple?s stock chart show than many investors believe this dire scenario is at least a possibility.

Apple?s shares have already been one of the worst performing big tech shares of 2016.

4) The Disintegration of Europe Accelerates

Sitting here in Europe, listening to the political posturing in the aftermath of Brexit, I can tell you that the future of Europe is uncertain, to say the least.

Will Brexit get undone? Will it stall for six years and drown in an endless series of meetings? Or will it accelerate?

If the latter occurs, the sharp recession now unfolding in the UK could spread Europe wide. Only last week, British business confidence hit an all time low, while redemptions from publicly traded commercial property ETF?s have been frozen.

A European recession would produce a serious drag on global growth, demolishing stock markets around the world.

So far, the Germans seem to be insisting, ?If you play, you pay.? The idea that Britain could maintain free access to the European market, while retaining it's subsidies, but restricting immigration, is being proven a fantasy.

It looks like my 2017 Mad Hedge Fund Trader European Global Strategy Tour is going to be a lot cheaper.

5) A Large Unicorn Goes Bankrupt

OK, I am definitely not naming names here, as I don?t want to prematurely trigger a stampede.

But there is no doubt that the San Francisco ?Unicorns?, non-public technology companies owned by founders, employees, and venture capital firms, are the most overvalued financial assets anywhere in the world today.

Many of these start ups either lose money, or sport astronomical price earnings valuations.

If any one of these 70 or so companies goes under, it could have a cataclysmic effect on the valuations of all the others.

There is a tree in the forest effect here protecting the general public. If no one is there and a tree falls, would anyone know it?

However if a serious unicorn collapse occurs, it could have a spill over impact on the public markets. That could hurt.

At least I?d finally be able to get a reservation at a decent restaurant at home.

Just thought you?d like to know.

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