Worried how Bird Flu will affect your portfolio?
March 14, 2006 1:15 PM   Subscribe

We've been talking about bird flu here in the blue and in the green for a while. Now to help us answer the question eveyone is asking, Citigroup and Smith Barney bring us the Global Portfolio Strategist: Avian Flu [pdf].
posted by pwb503 (11 comments total)
From the ad I saw in today's NYTimes:

"The investing implications of Avian Flu could be large, pandemic or not. That's why our research department wrote Avian Flue: Science, Scenarios, & Stock Ideas. Drawing upon our global expertise, we've distilled a tremendous amount of information into specific scenarios, explaining how they could affect a variety of industries and companies. The result is a report we believe every investor should have the benefit of seeing."

Scenes from "Planet of the Apes" and "13 Monkeys" are filling my head. Years in the future, people will look back on these documents and wonder what we were thinking... Seriously, if you want to get a hard copy as a historical record, you can call 800 327 6748 ext 695 and order yours for free.
posted by pwb503 at 1:20 PM on March 14, 2006

This is not the first financial services company to worry about the impact of a pandemic on a just-in-time economy structure. Canadian firm BMO Nesbitt Burns put out a report called An Investor's Guide to Avian Flu (PDF) last year. See also this Canadian newspaper article about it, no longer online:
Flu pandemic could trigger second Great Depression, brokerage warns clients


TORONTO (CP) - A major Canadian brokerage firm has added its voice to those warning of the potential global impact of an influenza pandemic, suggesting it could trigger a crisis similar to that of the Great Depression.

Real estate values would be slashed, bankruptcies would soar and the insurance industry would be decimated, a newly released investor guide on avian influenza warns clients of BMO Nesbitt Burns.

"It's quite analogous to the Great Depression in many ways, although obviously caused by very different reasons," co-author Sherry Cooper, chief economist of the firm and executive vice-president of the BMO Financial Group, said in an interview Tuesday.

"We won't have 30-per-cent unemployment because frankly, many people will die. And there will be excess demand for labour and yet, at the same time, it will absolutely crunch the economy worldwide."

A leading voice for pandemic preparedness said the report is evidence the financial and business sectors - which have been slow to twig to the implications of a flu pandemic - are finally realizing why public health and infectious disease experts have been sounding the alarm.

"I think that this particular report really signifies the first time that anyone from within the financial world, when looking at this issue, kind of had one of those 'Oh my God' moments," said Michael Osterholm, director of the Center for Infectious Disease Research and Policy at the University of Minnesota...

Cooper, a highly influential figure in the Canadian financial sector, wrote the report with Donald Coxe, a global portfolio strategist for BMO Financial Group.

They warn investors the economic fallout out of a pandemic would inflict pain across sectors and around the globe.

Airlines would be grounded, transport of goods would cease, the tourism and hospitality sectors would evaporate and the impact on exports would be devastating, Cooper wrote...

Even if a pandemic were mild, it is estimated that about a third of the world's population would fall sick over a period of months and millions would die. If the strain is virulent, the toll could mount to scores of millions of deaths, over a period of only 18 to 24 months.

Cooper reminded investors of the economic devastation SARS wreaked on affected cities or countries, including Toronto. But even with that fresh experience to draw from, she admitted it was hard to envisage how widespread the implications of a flu pandemic might be...
posted by Asparagirl at 1:51 PM on March 14, 2006

By the way, you missed one of the recent AskMefi threads: January 30, 2006: What will happen to cities if a pandemic occurs?
posted by Asparagirl at 1:56 PM on March 14, 2006

The good news, if I'm reading their flowchart correctly, is that the massive shortage in labor and material inputs resulting from a virulent pandemic will flood the market with capital, which will allow me to realize my childhood dream of owning a thunderdome.
posted by eddydamascene at 2:20 PM on March 14, 2006

Sorry, I can't share your outrage on this one. In fact, I would go so far as to say that any reasonable person would give some consideration to the best way to protect their ass(ets) in the event of a pandemic. Whether that means investing in certain securities, or converting their life savings to gold and stuffing it under the mattress, is really beside the point.
posted by pardonyou? at 2:30 PM on March 14, 2006

"Do you really want your pension fund manager to ignore the possible consequences of Avian Flu?"

Not to go overboard, but I'm more concerned with the health consequences of me, my friends, and my family than my (or their) wealth. Time and energy spent of the financial consequences of the possible pandemic will be considered grossly misguided if it turns out near anywhere as bad as it could.

If it doesn't turn out that bad, well, then they spent their time wisely. Let's all hope the people more concerned with money than health are right.
posted by pwb503 at 3:42 PM on March 14, 2006

Donald Rumsfeld isnt worried.
posted by Liquidwolf at 4:09 PM on March 14, 2006

Let's all hope the people more concerned with money than health are right.

They're fund managers. I want them being more concerned about my money than my health.

Similarly, I want health specialists being more concerned about my health than the performance of the markets.
posted by BaxterG4 at 5:08 PM on March 14, 2006

Not to go overboard, but I'm more concerned with the health consequences of me, my friends, and my family than my (or their) wealth.

False dichotomy. You can be concerned about both, and actually, you probably should be.
posted by jikel_morten at 6:46 PM on March 14, 2006

An Analysis of the Potential Impact of the H5N1 Avian Flu Virus - Wholesale and Retail Grocery and Foodservice Industry - August, 2005 [pdf]

posted by roboto at 9:28 PM on March 14, 2006

This contrarian view on the causes of the avian flu problem suggests that it is very possible to stop the problem cold. We lack only the will to do so.
posted by Western Infidels at 2:07 PM on March 15, 2006

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