Prof G Markets Wall Street Sinks on Greenland Risk
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Jan 21, 2026 
Justin Wolfers, a public policy and economics professor, discusses how Trump's Greenland threats impact U.S. markets and highlights the looming geopolitical risks tied to tariffs. He shares insights on how markets price low-probability disasters and the broader economic consequences of potential conflict. Rohan Goswami, a business reporter, explains Netflix's surprising stock drop despite strong earnings and delves into the competitive bidding war for Warner Bros. Discovery, revealing the strategic moves and challenges ahead for streaming giants.
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Tariffs Could Unravel Global Order
- Wolfers outlines that tariffs on European countries could trigger a U.S.-EU trade war and threaten NATO and the post-war order.
- He links trade escalation to potential military and economic catastrophe if institutional checks fail.
Markets Imply A Low But Painful Odds
- Wolfers estimates markets priced roughly a 1-in-10 chance Trump is serious, hence modest 1–2% stock drops.
- He contrasts that with past crises where market losses were far larger, reflecting outcomes' severity.
Design Institutions For Extremes
- Wolfers suggests many who seek high office may have personality traits making institutions vulnerable.
- He argues systems should be designed to be 'lunatic proof' given risk of erratic leaders.
