Sentinel species are organisms that are used to detect risks to humans by providing advance warning of danger. In 1895, John Scott Haldane proposed the canary as just such a sentinel species for coal miners.

Canaries are especially well suited to be early detectors of airborne poisons, such as carbon monoxide, as they intake oxygen when they inhale and exhale. The double dose of air combined with their small size and high metabolic rate offers an ideal early warning system for miners.

Canary in the Market

Though canaries have been replaced with electronic warning systems in the mining industry, their use as an early warning system serves as an excellent metaphor and mental model for monitoring financial market risks. While largely forgotten in today’s “AI” and technology-driven market, there were a series of canary deaths in recent times that contain important signals regarding ongoing risks.

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