Masked fear.
People, people, let's not freak out over this swine flu thing, OK? Being prepared is one thing, but panic is just not helpful.
"Everyone is running around like a chicken without head," writes Carl Weinberg of High Frequency Economics. "The writing of economic analysts on bird flu bordered on science fiction. . . as does more recent analysis of a flu pandemic."
Weinberg cites a World Bank paper on the H1N1 that says a pandemic could kill 71 million people. But we're here for the money: The paper says a pandemic could pull $3 trillion from the global economy — just under 5 percent. Weinberg writes: "The report astutely notes that losses of that magnitude would throw the economy into a depression. With advice like that from the World Bank, no wonder the financial markets have swooned at the first sign of the disease. (Emphasis his.)
To help you make sense of the outbreak, NPR has launched a blog called Flu Shots.
While epidemiologists are breaking out the red pushpins, economists like Weinberg are reaching for the dice. Stock markets fell a tad Monday and opened southbound today. Weinberg argues that a flu pandemic on the level of the one in 1918 comes with the same odds as winning $30 million bucks on your first day night in Las Vegas. "The panic bets are already in the financial markets," he writes. "The next bet should be on normalization."
And while swine flu threatens the economy, its biggest enemy for now remains the banks. The Wall Street Journal reports that regulators have told Bank of America and Citigroup their stress test results indicate they may need to raise more capital.
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