Markets are bad at valuing low-probability extreme events. Put differently, investors often respond to a radical increase in uncertainty with panic. It is hard to stand still when the Middle East is in turmoil or when there is the risk of a Japanese nuclear catastrophe, let alone both simultaneously. Usually it is clever to get well in front of a stampede. But mass movement of money is a dangerous business.

For traders, Japan has eclipsed the dangers of the Middle East but the news of Saudi troops moving into Bahrain could refocus fears. After all, in the event of a (still improbable) Chernobyl-style explosion at Fukushima, the extent and cost of the damage would be known quickly: a (similarly improbable) regional war in the Middle East could cut oil and gas production significantly for a generation, with costs open-ended.

Expertise cannot really help. Even nuclear experts do not know enough to make accurate predictions about the situation in Japan. The Middle East is arguably worse, since the risk is of the breakdown of an order that has lasted for generations.