Swine Influenza, the DOW and NASDAQ

World Health Organization (WHO) released a detailed analysis on Swine Influenza. The analysis said that if a swine virus establishes efficient human-to-human transmission, it can cause influenza pandemic. They also mentioned that there are no vaccines that are known to contain the current swine influenza virus. WHO also warned that the swine virus could mutate into a "more dangerous" strain.

Viruses are known to evolve easily into different strains as they spread, and the fear is, swine virus could easily mutate into a strain that could spread more easily and could be more lethal than it is now. The virus, even in its current strain, has already crossed borders, and spread into multiple countries. The virus, even in its current strain, could kill people, if the upper respiratory disorder caused by it is not cured in a timely manner. One could only imagine the scarcity of doctors and hospitals it would create, if the virus were to spread and impact millions of us. One could only imagine the scarcity of doctors and hospitals it would create, if the virus were to mutate into a "more dangerous' strain, which, as per WHO is very possible.

We may see a repeat of a devastating pandemic (like the one in 1918), if swine virus is successful in immigrating into our country further and spreading extensively within our country.

We can only hope that it doesn't become a pandemic, but if were to happen what will it mean to our economy? Let us analyze the impacts.

People may not be willing to risk going to their work site, if we have a swine virus pandemic. They may want to avoid catching the deadly virus, in its current strain or any of the newly mutated strains, from their work site. They may not be willing to put their children at risk by acting as a carrier for the deadly virus, which they may catch from their work site. People in "Information Technology" line of work may be able get away with working from home due to the nature of the job involved, but most of the other job categories cannot be easily worked on from home. This would mean that companies may not be able to execute their business easily. The productivity and the revenues of these companies would go down drastically. This may lead to these companies firing more employees during that window of time we have the pandemic. Also, the employees who avoid going to their work site for fear of catching the virus, and cannot work from home too due to the nature of the job they do, will end up losing their income, during the window of time we have the pandemic. Due to loss of their income, these employees may cut down on their spending, during that window of time we have the pandemic. This will further cripple the already weak economy. Due to loss of their income, these employees may find themselves in a situation where they may not be able to meet mortgage payments. This may further cripple the housing industry and banking sector, both of which are loaded with huge problems even now.

People may not be willing to put themselves at the risk of catching this deadly virus at a restaurant, and may avoid going to restaurants, if we have a swine virus pandemic. This would have a large impact on the revenues of restaurant owners, who will be forced to lay off workers, to offset the revenue loss. And many restaurant workers may not be willing to work too, to avoid catching the virus from the restaurant customers. This may impact the basic operations of the restaurant, and cripple the restaurant owner.

People may not be willing to go to movie theatres, if we have a swine virus pandemic. This may result in huge loss of revenue to the movie theatre owners, and may take a toll on the employees working at these theatres too. Big time beneficiaries of such an effect would be online DVD rental companies like Netflix and Blockbuster.

People may not be willing to travel using public transport. Already a lot of public transport operators, like the MTA in NYC, are facing huge financial challenges. If they have drastic reduction in number of customers during the window of time we have a pandemic, one can only imagine how their problems will multiply further.

Tourism industry may be drastically impacted too, if we have a swine virus pandemic. Who would want to take vacations and travel to places, and end up learning that they spent all the money to go to a popular destination, only to catch a deadly virus? Airlines, hotels, car rentals, cruise ships, gas stations, and anything that is dependant on tourism revenues will take a big hit.

Almost every industry sector you could think of in the economy will be impacted, if people decide to stay at home, if we have a swine virus pandemic.

Let us all hope and pray that the swine virus will not cause a pandemic, but if it does, and if millions decide to stay at home, as a result of the factors identified above, our stock market will tank. We may see DOW going below 5000, and NASDAQ going below 800. Our 401k's, which have already become 201k's, may become 101k's.

Ref:

http://www.associatedcontent.com/article/1691219/swine_flu_are_we_going_to_die.html?cat=5

http://www.associatedcontent.com/article/1686555/napolitano_no_active_screening_of_passengers.html?cat=5