In the early weeks of the Covid pandemic, in those days when public spaces were empty and hospitals were full, I was seeing this. magazine cover from 2017 adopted on social networks. The story was familiar to me, because I wrote it:
All the posts were versions of the same thing: The warning signs were there, we knew something like this was coming, why weren’t we prepared? All of that was true, and all of what I was trying to get across in that story, which itself was the culmination of years of reporting on emerging diseases: SARS in Hong Kong in 2003, H5N1 avian influenza in Indonesia in 2007, H1N1 flu in 2009. I definitely saw Covid coming too.
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Except I wasn’t. Through January and into February 2020, as lockdowns and cases of what would soon be called Covid-19 piled up in China and elsewhere, I remained surprisingly indifferent. I think it would burn, like the bird flu itself or MERS or Ebola or any number of horrible viruses that didn’t quite have legs to cause global catastrophes. If you were to ask me for a prediction, I would probably say (hopefully) a more modern version of what President Donald Trump is. said February 25the day before first suspects of community infection in the US: Covid “will go away.”
I was wrong, obviously. I couldn’t bring myself to see it – or perhaps, I couldn’t bring myself to believe it, to believe that we were about to experience a sudden, transformative change. And I wasn’t alone. On February 19, 2020, just before Italy reported its first batch of Covid cases, the S&P Index. hit the highest levelwhich is uncharacteristic of markets anticipating what happened next: an unprecedented global economic downturn.
Now I believe the same economic blindness is at work today, with different problems.
A crisis we don’t put a price on
The conflict is the war with Iran, and in particular the ongoing closure of the Strait of Hormuz. Numbers are not tricks. The International Energy Agency calls it the biggest disruption in the history of the world oil marketwith global supply falling by more than 10 million barrels per day in March. The Atlantic Council notes that 1973 oil embargo — the shock that defined a decade of American economic anxiety — knocked 7 percent of global supply off the market. Hormuz has cut that supply by 13 percent, and infrastructure damage from the war and shutdown will take months or years to repair.
The downstream effects are everywhere you look. In Como, Mississippi, a 73-year-old corn farmer told NPR he was buy diesel “hand to mouth”; fertilizer has increased by 60 percent, an increase so large that he may not fertilize his corn this spring at all. In Dhaka, cars queue up near roadblocks for propane refills. The The Philippines declared a national energy emergency. South Korea, Thailand, and Vietnam are dividend oil. Lufthansa has already canceled 20,000 summer birds.
And yet in the same week The New York Times put all this on its front pageThe S&P 500 hit a new high. The cut is dizzying. As one analyst quoted by David Dayen in American Prospect said, “The market brought peace prices. The oil system did not.”
How we miss what is right in front of us
So why the gap? Why are the markets, and most of us, treating the biggest energy disruption in history as just another bad thing that probably won’t happen?
The answer, I think, speaks to the same things that prevented me from believing that a disaster was coming in February 2020. Humans are bad at recognizing when a slow or theoretical threat becomes clear and present.
Wharton economists Robert Meyer and Howard Kunreuther call this the designer’s conundrumand they identify six preferences that drive it: myopia, amnesia, optimism, apathy, simplification, and domestication. Investors are betting on near-term political resolve (myopia), considering the pattern that Trump has often reversed market-damaging policies like tariffs (amnesia and optimism), rejecting dip-buying (inertia and herding), and tracking earnings while ignoring the effects of supply-cycle disruptions (simplification).
The biggest problem is that human cognition is built for sudden threats with a specific source — punches you can see coming — and is misrepresented by distributed, distributed ones. Harvard psychologist Daniel Gilbert has argued that gradual threats fail to stop the brain’s alarm, leaving us “sleeping soundly on a burning bed.” A 2025 paper inside Science and Rachit Dubey of UCLA and colleagues demonstrated this formally: When information arrives in a continuous state—fertilizers up to 60 percent in Mississippi, propane queues in Dhaka, another canceled flight in Frankfurt—people fail to notice the change even when the shift is real. A binary headline (“door closed”) would register faster. But the closure of Hormuz, like the early spread of Covid, has not made headlines. It has been a process.
But you can only ignore the truth for so long, and when change events occur, change comes quickly.
Five weeks after the market peaked on February 19, 2020, it was down 34 percent – A quick correction from the peak in the history of the marketas the price of Covid was finally set. Details that led to the accident were found weeks earlier. What has changed is not the data but the integration of the data: when the summary was real, when Wuhan and then Italy and then Seattle it made what was a story about There into a story about Here. The markets were not suddenly brilliant. They became unable to remain silent.
While I don’t see the Iran crisis causing anywhere near the economic disruption of Covid, I think we are weeks away from such a change. In the spirit of Future Perfect predictionI’ll chalk that thought up as a false forecast: If the Strait of Hormuz holds high restrictions through June, the S&P 500 will be at least 10 percent off its April 22 lows by Labor Day.
You shouldn’t take financial advice from me, but I’m no more alone in my pessimism today than I was in my carefree optimism when the pandemic was spreading. Princeton Policy Advisors has a forecast US recession starting in May; The IMF, which estimated global growth of 3.3 percent in January, has now lowered its baseline to 3.1 percent and added a bad situation at 2.5 – the near-end zone that the world has not seen outside of the 2008 crisis and pandemic. Mark Dowding, chief investment officer at RBC BlueBay, told Bloomberg last week that the current market reminds him of February 2020: “It was only when it disrupted our lives that the market saw bigger disasters.”
I missed the Covid pandemic, even with a magazine cover predicting it sitting on my desk. The market missed it too, until the day it didn’t. I hope we don’t miss the next big upset. There is still time, but maybe not much.
A version of this story originally appeared on Future Perfect journal. Register here!
