Daily Investment Interpretations

April 26, 2009

2009-4-26:  What I planned to write tonight has been overtaken by events. As you've no doubt noticed, swine flu has been moving rapidly yesterday and today from the wings of the theater to center stage. I spent quite a bit of time and attention in 2004 and then again in 2006 researching first the SARS (Severe Acute Respiratory Syndrome) epidemic and then the bird flu threat, so I've become sensitized to the potential for flu pandemics. One prediction I would make about this current outbreak is that we'll hear a lot more about it this next week or two. A lot of new cases will probably be identified, now that various health organizations know that it exists and know what to look for.
The reason for special concern about this new strain of flu is:
(1) 103 Mexican citizens are known to have died from this so far, out of 1,614 confirmed swine flu cases in Mexico
(2) this appears to be a new strain of influenza virus against which we have no natural protection, and
(3) the victims are young and healthy, in contrast with our familiar, annual influenza cases in which the very old and the very young are at the highest risk. The Mexico  fatalities have been caused by violent overreactions of the immune systems of  young and healthy adults whose immune systems were especially competent.
    This was also characteristic of the 1918-1919 "Spanish" influenza that left tens of millions dead in its wake.
    So that's why the concern.
* - Note that the death count was 68 yesterday, 88 this morning, and 103 tonight. About 6% of Mexico's confirmed swine flu cases have died so far, but the death count is a lagging indicator. If the number of confirmed cases were to freeze at 1,614, there would undoubtedly be additional deaths among the 1,614. The actual percentage is undoubtedly higher, and could possibly be much higher.
    The number of identified cases in the U. S. has doubled from 10 yesterday to 20  today. So far, these U. S. cases have been mild, but the Director for the Centers for Disease Control has just warned that more-severe cases are probably inevitable.
    The 1918-1919 flu pandemic was just as capricious, starting off very light, and then, around the first of July, 1918, mutating into a highly lethal form.
    One piece of good news is that this swine flu virus is a Type-A influenza virus and can be stopped in its tracks with a course of an anti-viral agent such as Tamiflu or Relenza.
    One piece of bad news is that although there's enough of these anti-viral medications to handle a normal epidemic, there won't be enough to accommodate a global pandemic. Given that this is a global problem, and given that these anti-viral drugs can stop swine flu in its tracks, one might expect a worldwide run on Tamiflu and Relenza... and that's exactly what seems to be happening. 
    I bought enough Tamiflu for three courses of treatment over the internet this afternoon... enough for Tommie Jean, Amber, and me. I'm sure our physicians would prescribe Tamiflu for us if we needed it, but I'm not sure how long they'll be able to get it from our local  pharmacies, given the shortages that I think could develop in the face of global stockpiling. (I think global stockpiling will occur because of the perception of a threat, even if, months from now, we decide the threat wasn't as great as we feared.)
    The crucial point is: if you want to take any steps to prepare for a deadly flu pandemic,
do it now. There could soon be an international run on such supplies. Also, right now, you can probably venture forth in public with little chance of contracting the virus, but within days or weeks, that could become ever more problematic.
    SARS had a contagion multiplier of a little more than one, and an incubation period of 10 to 15 days. Swine flu has a contagion multiplier of around 10:1 (each carrier infects 10 others), with an incubation period of up to 5 days.
    Bird flu hasn't become a threat because, so far, it hasn't mutated into a contagious form. When it does, its lethality will probably fall off sharply. 
    There was a swine flu scare in 1977, but for some unknown reason, it faded of its own accord. Let's hope that happens this time.
     A detailed discussion of flu pandemics may be found here.