Swine Flu Update - Government Scamdemic and the Credit Crisis

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. In addition to the term helicopter economics, we have also coined the term, helicopternomics, to describe the current monetary and fiscal policies of the U.S. government and to update the old-fashioned term wheelbarrow economics.

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If you thought the U.S. government's handling of the Credit Crisis was bad (and you should), the handling of the current swine flu outbreak is even worse. Both have similar elements and it is those elements that need to be addressed if the financial system is to be righted, the economy is to be put back on a sustainable track, health policy is to be handled responsibly and anything else is in the U.S. is to run the way it should. Otherwise things are only going to continue to fall apart and possibly just blow up spectacularly one day.

We are living in a time where there seems to have been a complete suspension of the use of common sense and basic logic among the powers that be. You see this in the Credit Crisis, where it was believed that people who had no jobs and no history of paying their bills, even if they had a job, were considered good prospects for home mortgages. Somehow, there was surprise when large numbers of these mortgages defaulted. Government programs to extend home ownership to the poor (why should someone not own something just because they can't afford it) were at the root of the Credit Crisis and this helped support unlimited Wall Street greed in trying to make money off of these programs. The government is still trying to prop up Wall Street with your taxpayer money in its various bail out programs even though most of this mortgage debt is and always will be worthless.

The same suspension of common sense has taken place with the current swine flu outbreak. A genetic analysis of the virus released yesterday indicates that it doesn't have any elements of the 1918 virus that caused that virus be so dangerous (plus that virus was an avian flu and not a swine flu as was thought to be the case for decades, a rather major point that seems to have been ignored by the medical authorities). Instead of spending tens of thousands of dollars for this study, simple observation of the people with confirmed cases of the disease was all that was necessary. Outside of Mexico, there have been ZERO deaths so far (the one case supposedly in the United States was a resident of Mexico City who had been brought to the U.S. and he had other significant health problems). Anecdotal reports outside of Mexico indicate that many of the people who have had swine flu didn't even bother going to the doctor because they weren't that sick. Most people with swine flu have recovered quickly. If basic logic wasn't enough, you would think having the scientific confirmation that swine flu isn't deadly would be an adequate reason to stop the government's panic reaction to the situation. You would of course be wrong.

From the top all the way down, the government's desire to spend your tax dollars ($1.5 billion has been committed) to save you from a non-existent menace goes on unabated. President Obama himself in his radio address Saturday stated, "This is a new strain of the flu virus, and because we haven't developed an immunity to it, it has more potential to cause us harm. Unlike the various strains of animal flu that have emerged in the past, it's a flu that is spreading from human to human." The ability to pack so much ignorance in so few words is truly a gift (I previously thought George Bush was the master of this art). Flu arises from animals and becomes epidemic when person to person transmission is possible, so this is exactly what has happened in all past flu epidemics. The idea we have no developed immunity to the swine flu is not supported by the mildness of the cases, nor for that matter has there been any random testing to find out if people test positive for swine flu, but didn't become ill (this was indeed found to be the case in the 1976 outbreak).

Neither common sense, nor scientific evidence seems to have phased Dr. Steve Waterman, the head of a team from the Centers for Disease Control and Prevention in Mexico. Even after getting the genetic analysis stating the swine flu virus wasn't deadly, Dr. Waterman warned that more deaths were to come. Dr. Waterman stated his main goal of his CDC team in Mexico (other than to spend the unlimited government funding they have) is to find out HOW swine flu kills. He should be asking IF it kills, not how. Anyone with a wit of intelligence (it is quite possible that no high ranking medical official is in that category) should be immediately suspicious that no one has died of swine flu outside of Mexico. Many days ago, the official Mexican figures were 2498 swine flu cases and 160 deaths. As of right now, viral typing (the only way to accurately know if someone has swine flu, since there are many other diseases with similar symptoms) shows only 397 confirmed swine flu cases in Mexico with 16 of those people having died. There are no medical histories for those people (most of whom seem to be urban and rural poor with limited access to health care), so it is impossible to determine if they died from swine flu or some other disease. There is by no means out of the question, especially since there was an outbreak of virulent pneumonia this winter in Mexico prior to the outbreak of swine flu. To say that Mexican health statistics are questionable and their health care system is a mess would be an understatement to say the least. Yet, they are being given credence while the more reliable evidence from the developed world is being ignored.

As of today (Saturday, May 2), there are 161 confirmed cases of swine flu in the U.S. New York leads the way with 50 cases. Few new cases seem to be appearing in New York even though the head of the city's Health and Human Services irresponsibly tried to panic the public earlier in the week by warning there were already hundreds of cases (so where are they?). More than 430 schools are closed in the U.S. affecting about 245,000 children in 18 states. Has the U.S. Secretary of Education said this is ridiculous and there is no justification for this. Not at all. Even after the scientific study indicating swine flu is not deadly was available, new guidelines were released to keep schools closed 14 days instead of the shorter times that had been planned. How else could we prepare today's students for future government service other than to keep them totally ignorant and uneducated?

Like the boy who cried wolf, the government is playing a dangerous game with swine flu. When a truly serious crisis arises, it is likely to be ignored in the future. Of course, that would assume that the goverment would actually realize a serious crisis existed. It didn't with the Credit Crisis and it still isn't reacting properly to fix it. Don't assume things are likely to be any better in the health arena.

NEXT: Pandemic of Government Stupidity Over Swine Flu Sweeps Globe

Daryl Montgomery
Organizer,New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

Markets Rise Despite Swine Flu Scamdemic

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. In addition to the term helicopter economics, we have also coined the term, helicopternomics, to describe the current monetary and fiscal policies of the U.S. government and to update the old-fashioned term wheelbarrow economics.

Our Video Related to this Blog:

U.S. stock indices were all up over 2% yesterday despite the increasing hysteria about a swine flu pandemic. The market was clearly not buying that story, nor should you (more below). The markets were giddy over comments coming from the Fed meeting yesterday. The Fed said the rate of the economy's decline had slowed considerably. It further stated that it would consider additional funding for its programs if necessary. Expect the printing presses to be running full time well into the future with bail outs needed in the insurance industry, commercial real estate and for state and local governments. And don't forget that we will be bailing out Mexico too, probably sooner than later thinks to the recently totally unjustified brouhaha over swine flu.

Rarely if ever have I seen more irresponsibility on the part of the medical authorities and media than in the handling of the current swine flu outbreak. Coverage seems much worse than during the outbreak in 1976, when 200 people were sick with swine flu and one person supposedly died from it. That swine flu outbreak started at an U.S. army base at Fort Dix, New Jersey. The first person to have been identified with swine flu, was the only recorded fatality (it is not clear from the available information that other causes of death could be ruled out). Four other army recruits had to be hospitalized. However, it turns out that 500 other soldiers at the base tested positive for swine flu, but didn't even become sick. Somehow, the U.S. government used this data to justify spending $135 million on a large-scale immunization program, which had to be halted once it was realized that people were dieing and being horribly crippled - from the vaccine! No swine flu epidemic ever materialized.

The facts of today's swine flu outbreak also tell a very different story than the one you are hearing from the media. The glaring front page headline in a major newspaper yesterday, "Swine Flu, Why You Should Worry" is typical of what the public has seen and heard and which have caused needless panic throughout the world. In reality, NOT ONE PERSON outside of Mexico has died from swine flu (how many have died inside Mexico may also have been grossly exaggerated). But what about the reports of the first American death, even mentioned in this blog yesterday? Well, it turns out the unfortunate toddler who died after two weeks in a Houston hospital came from Mexico. His parents claim he only became sick once they crossed the border and arrived in Brownsville, Texas. The toddler also had other significant health problems, which the medical authorities refuse to reveal. Without knowing what these were, it is impossible to say if he actually died from another medical condition or swine flu.

It needs to be kept in mind that the symptoms of swine flu are identical to other types of flu and similar to many other illnesses as well. Swine flu can only be identified by viral typing, something the Mexicans didn't have the ability to do during the beginning of the outbreak. They had to send samples to the United States. As of April 26th, only 18 cases of swine flu had been confirmed in Mexico by viral typing, yet the media reported 160 people dead from swine flu there (how did they know this?). Not only is it quite possible many of these people actually died from something else, it is the logical conclusion if you consider that there aren't any deaths elsewhere. As for the viral typing that has been done in the United States on suspected cases, a large majority of the tests have come back negative for flu. Of the few that were positive, twice as many indicated already known forms of the disease and not swine flu.

By every measure so far, the current version of swine flu seems to be the mildest form of influenza that has ever existed. No deaths in the U.S. versus 36,000 a year from other flu related illnesses and 7 hospitalizations versus the usual 114,000 annual number (thats 0.006%). Yet, that's not how the medical authorities have reacted. They have done everything possible to fan the flames of panic among a naive and gullible public (and increase their budgets - the federal government has already promised $1.5 billion). The New York City Health Commissioner, Thomas Frieden, stated that there were many hundreds of school children in the city with suspected cases of swine flu (that word suspected got buried in the coverage). Health and Human Services Secretary, Kathleen Sebelius, warned that the child who died in Houston would not be the first death in the U.S. form swine flu. Perhaps she's planning an airlift of the seriously ill from Mexico? You got to find some way to spend that $1.5 billion.

NEXT: Market at Key Resistance; Scamdemic Update

Daryl Montgomery
Organizer,New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.

Buy When There's Flu in the Streets

The 'Helicopter Economics Investing Guide' is meant to help educate people on how to make profitable investing choices in the current economic environment. In addition to the term helicopter economics, we have also coined the term, helicopternomics, to describe the current monetary and fiscal policies of the U.S. government and to update the old-fashioned term wheelbarrow economics.

Our Video Related to this Blog:

Reports of a possible flu pandemic are permeating media coverage today. This news caused a significant sell off in the Taiwan and Hong Kong markets last night where memories of SARS are fresh on everyone's minds. While I have frequently criticized the media for their irresponsible coverage of the stock and commodity markets, coverage of medical issues seem to be even more problematic. As usual, instead of a responsible recitation of the facts with the logical conclusions that can be drawn from them, media reports are geared toward sensationalism meant to panic the public (when you really should panic, silence or boosterism from the mainstream media is much more likely).

The first thing that needs to be considered is that a major influenza epidemic in the summer is highly unlikely, if not impossible. Recent studies indicate that flu is most contagious under dry conditions at 20 degrees Fahrenheit (minus 6 Celsius). This is why flu epidemics take place in the winter and not the summer. In the case of the 1918 pandemic, flu broke out early in season in September and October. This took place at the end of World War I when there were large concentrations of military personal confined in close quarters (ideal for spreading disease). Examining a map of the disease's spread in the U.S. flu seems to have started in port cities and around military bases. There was a small initial outbreak of flu in the spring of that year which the authorities ignored. The disease then became dormant in the summer as should have been the case. Since we are already at the end of April, weather conditions favorable to flu are quickly dissipating. This gives the authorities plenty of time to react (it is already known that antivirals are effected in combating this new incarnation of the flu and the U.S. has large amounts of these in storage). None of the small number of cases identified in the U.S. so far have been fatal and all but one person with the flu travelled to Mexico (the exception was the wife of someone who travelled to Mexico).

How does this affect your investments. It depends on when you think the news will become better. It took quite awhile before the news coverage on SARS indicated the problem had passed. In this case, the news is likely to shift to a more positive tone or disappear in a relatively short time. The market sell offs that take place during medical panic should be bought into just like those that take place because of market panics. There was already likely to have been some selling this week as is. So if this blows over quickly, look to Friday as a possible good rally day.

The important take away is that markets will sell off because of panic inflamed by the mainstream media. Often, as in this case with this new version of the flu, the media blows everything out of proportion because hype sells papers and gets big viewing audiences. Unfortunately, it can loose you money if you sell into the panic instead of buying into it. Buying high quality goods at fire sale prices is always a good way to make money and this should never be forgotten by any investor.

NEXT: Markets Catch Swine Flu

Daryl Montgomery
Organizer,New York Investing meetup
http://investing.meetup.com/21

This posting is editorial opinion. Like all other postings for this blog, there is no intention to endorse the purchase or sale of any security.