Before this year, what % of professional investors (at banks, pensions, hedge funds, etc) spent more than an hour in total seriously considering how a global pandemic might affect the economy?
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I agree with you here. I've been involved in Asset Liability Modeling for Pension funds . However if this is now a recurring problem it'll have to be taken into account.
Every serious epidemiologist for decades has been warning that a global pandemic was coming, sooner or later. Are you saying pension funds ignored those repeated warnings?
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It's not in the ALM models as far as I know. Haven't done it for quite a, while so it might be after 2008.
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Pandemic has forever been by far my leading concern regarding things that could cripple civilization. Orders of magnitude more risk of this that the next most likely black swan.
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Yes, because risk modeling does not care about the source, only that there’s always risk.
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Some risks undergo exponential growth if they hit; others don't. Some risks can infect political leaders and impose continuity-of-governance issues & geopolitical instability; others don't. That seems worth modeling?
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You cannot model something that has a random chance of occurring, particularly when you have scant data on the rate of global pandemics. This could’ve just as easily happened 10 or 25 years from now as this year.
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Risk modeling, by definition, involves modeling things that have a random chance of occurring. The question is, what chance, with what degree of uncertainty, and with what likely effects?
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I don't know how you would ever look at the previous instances and forecast this level of insane panic.
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Pension funds ignore everything
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