Chamath @ 00:36:01Ambiguous
economymarkets
As previously stated in July 2022 and reiterated here, during fall and winter 2022–2023 the primary global economic shock point ("tip of the spear") will be a European energy crisis, and if winter 2022–2023 is not mild, global oil markets can rapidly swing from a surplus of about +1 million barrels per day to a deficit of about –2 million barrels per day, amplifying the crisis.
You may you may want to find the clip, Nick from July, where I said the tip of the spear in the fall was going to be the European energy crisis... we better hope that it's a mild winter, because very quickly you can go from plus 1 million barrels to minus two in a in a heartbeat.View on YouTube
Explanation
Assessment of the prediction’s components
-
“Tip of the spear” = a European energy crisis in fall/winter 2022–23
- Europe did undergo a major energy shock after Russia cut most pipeline gas flows, leading to extremely high prices and strong policy responses.(imf.org)
- However, global institutions described the 2022–23 slowdown as driven by multiple forces: the cost‑of‑living crisis, tight financial conditions/interest‑rate hikes, the war in Ukraine more broadly, and China’s weakness, not a single dominant “tip of the spear.”(imf.org)
- So while Europe’s energy shock was clearly one major risk, the claim that it would be the primary global economic shock is a judgment call rather than something that can be cleanly verified or falsified.
-
Conditional oil‑market call (“if winter isn’t mild, we can go from +1 mb/d surplus to –2 mb/d deficit quickly”)
- The actual winter was exceptionally mild: December 2022–February 2023 was Europe’s second‑warmest winter on record, which explicitly “offered some short‑term relief” to governments facing high gas prices by reducing heating demand.(aljazeera.com)
- Because of this mild weather plus conservation and fuel‑switching, European gas demand in the 2022–23 heating season fell by about 16% in OECD Europe and over 20% in wider Europe, a record drop that helped avoid severe shortages.(ogj.com)
- IEA data show that in 4Q22 global oil supply exceeded demand by over 1 mb/d, leading to inventory builds, and the IEA expected the market to remain well supplied through the first half of 2023; they spoke of a possible later tightening, not an actual swing to a ~–2 mb/d deficit.(iea.org)
- In other words, the antecedent of his conditional (a non‑mild winter) did not occur, and the extreme –2 mb/d deficit scenario never materialized. That makes the quantitative part of his prediction effectively untestable in real‑world conditions.
Why the overall judgment is “ambiguous”
- Parts of the narrative were directionally reasonable: Europe’s energy situation was a central macro risk, and oil markets started from around a 1 mb/d surplus in late 2022.(iea.org)
- But:
- The key worst‑case mechanism he highlighted (a non‑mild winter driving a rapid swing to a large oil deficit) never faced the test because winter turned out unusually warm, and
- Whether Europe’s energy crisis was the primary global economic “tip of the spear” is inherently subjective, given the simultaneous roles of monetary tightening, global inflation, and China‑related shocks.
Because the prediction hinges on a counterfactual condition that didn’t happen and on a subjective ranking of global shock drivers, the accuracy cannot be determined in a clean, binary way; hence the result is ambiguous, not clearly right or wrong.