28 APR 2009, Tuesday

1. Interesting Chart of the Morning: There is reason for some concern about the Swine Flu scare. Mexico is a lot closer than Asia was when the SARS flu scare hit in 2002. As the chart shows the SARS scare aborted the new bull market that had begun a couple months earlier, with the S&P dropping back almost to its previous bear market low. And here's some info on the Spanish Flu of 1918.


2. Now, having said all that...some perspective. One thing in the "conspiracist" that bothers me is...believe it or not...that this may being hyped up by the politicians of the world to distract the masses from the current fiscal issues (ie, looting of the banking system). Huh? It may be a red herring to get you to shift your gaze away from what is really going on. Fact is that, in the US, over 36,000 people die annually from the flu...or 1.2% of the population (check the stats from CDC). That is the equivalent of killing all the active duty Coasties out there every year! Hard to imagine those numbers but let's put this swine flu thing into perspective. So far, only 70 people have died in Mexico City from this. Reminder, Mexico City is the second most densely populated city in the world with a population of 18.1 million. So, not to belittle it, but if 70 people died in one of the world's largest "petrie dishes" imagined, that is still only 4/100's of a percent. Let's keep this in perspective folks...does it seem like the masses are being played by fear? So, is over reaction based upon fear called for? I don't think so. Of course, reasonable precautions are always called for.
3. More history on other flu breakouts: The 1918-19 pandemic killed 500,000 in the U.S. and as many as 50 million worldwide. In 1957-58 the “Asian Flu” pandemic caused 70,000 deaths in the U.S. In 1968-69 the big scare was the Hong Kong flu pandemic. It ended after causing 34,000 deaths in the U.S. The SARS flu epidemic in 2003 created similar fears, but only 10,000 people worldwide were infected, and fewer than 1,000 died. I have great confidence that the current Swine flu will also be met with successful efforts to keep it under control.


4. Stress Test...my ass! Leak this morning is that Citibank and Bank of America need billions more. What? What happened to their "record" profits reported just a week or so ago. Hit the link to read on.


5. Da Boyz are turning on one another...and Italy seizes assets of JP Morgan over potential fraud?!! Perhaps, there may be some enforcement of the law afterall...finally???


6. "The Quiet Coup": Simon Johnson, a professor at MIT’s Sloan School of Management, was the chief economist at the International Monetary Fund during 2007 and 2008. EXCELLENT READ! See what the IMF would currently be saying to the US.


7. Now on to some lighter stuff...humorous insights into market psychology...


8. The 5 Stages of Grief: Giraffe vs Quicksand. Or what the bulls were feeling then and what the bears are feeling now.


9. Bear Trap! What the bears are going through now with this straight line advance.