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Coronavirus - potential Black Swan?


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A Black Swan event is supposed to catch everyone by surprise. This seems to have exploded in the last week. At the rate China is locking itself down do you think it could be the event to tip the already fragile world economy over the edge?

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8 minutes ago, LetsBuild said:

A Black Swan event is supposed to catch everyone by surprise. This seems to have exploded in the last week. At the rate China is locking itself down do you think it could be the event to tip the already fragile world economy over the edge?

I don't know why its a surprise to anyone. The next lethal pandemic is only ever a few mutations away. Its going to happen at some point and its going to be horrifying.

In any pandemic, aside from the loss in productivity through death you have to account for the fear factor. With the advent of mass air travel and 24x7 news in your pocket the effects of the next one are going to be massive. So yeah, if not this latest coronavirus then something else.

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16 minutes ago, LetsBuild said:

A Black Swan event is supposed to catch everyone by surprise. This seems to have exploded in the last week. At the rate China is locking itself down do you think it could be the event to tip the already fragile world economy over the edge?

Flu in the winter isn't really a surprise though?  And this one isn't a really nasty one like SARS, or Bird Flu or even Swine Flu.

26 people have died so far, but with China having a population of 1.4 billion the pro-rata equivalent in the UK would be 1 death.

There will be some economic disruption from it, of course, as there is from all natural disasters/events.

But basically "no" I'd say.

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4 minutes ago, Chunketh said:

I don't know why its a surprise to anyone. The next lethal pandemic is only ever a few mutations away. Its going to happen at some point and its going to be horrifying.

Absolutely, unfortunately :( This isn't it. But it will happen at some point.

I'm not sure whether a true pandemic would actually even be a "Black Swan" event - it feels to me more like an Earthquake.  We don't know when it will happen, but we do know it WILL happen, somewhere at some point.  I thought a true Black Swan event was one that no-one expects.

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most people dont even know that flu killed more people in ww1 than bullets did. no wonder governments got into chemical weapons. 

 

a virus like this could be easily planted into the common population without them even known playing havoc for the 5 days incubation period before being exposed by which time its too late. 

 

 

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1 hour ago, scottbeard said:

26 people have died so far, but with China having a population of 1.4 billion the pro-rata equivalent in the UK would be 1 death.

The current mortality rate is really hard to pin down but from the known cases and known deaths its at around 2.83%

As a guide, Spanish flu infected around 30% of the population with a mortality rate of 10-20%

If you took a 30% infection rate with a 2.83% mortality rate you would have just over 1/2 a million dead in the UK. 12.1 million in China.

The scary thing is that Spanish flu killed very fast and killed the young and fit. A "good" pathogen tends to have a lower mortality rate, leading to a widespread infection.

It's also possible that this will fizzle out. Corona viruses have a high mutation rate and previous experience tells us it might well mutate itself out of existence (see SARS).

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6 minutes ago, Chunketh said:

The scary thing is that Spanish flu killed very fast and killed the young and fit. A "good" pathogen tends to have a lower mortality rate, leading to a widespread infection.

A somewhat cold-hearted analysis of the ECONOMIC impact of flu (the OP's question was "do you think it could be the event to tip the already fragile world economy over the edge?") might also conclude that a flu bug that killed old people could potentially IMPROVE the economic position of a country if the short-term loss from disruption was outweighed by the long-term reduction in healthcare and long term care costs.

Obviously not for strains that kill young people.

(Please don't confuse this with me saying that this is how we SHOULD evaluate things, but just answering the exact question asked.  Look at how much the funding position of UK pension schemes improved over 2015-2019 thanks to all the extra flu deaths - something that is sad in human terms can be positive in economic terms).

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20 minutes ago, scottbeard said:

A somewhat cold-hearted analysis of the ECONOMIC impact of flu (the OP's question was "do you think it could be the event to tip the already fragile world economy over the edge?") might also conclude that a flu bug that killed old people could potentially IMPROVE the economic position of a country if the short-term loss from disruption was outweighed by the long-term reduction in healthcare and long term care costs.

Obviously not for strains that kill young people.

(Please don't confuse this with me saying that this is how we SHOULD evaluate things, but just answering the exact question asked.  Look at how much the funding position of UK pension schemes improved over 2015-2019 thanks to all the extra flu deaths - something that is sad in human terms can be positive in economic terms).

Yeah, I was thinking the same thing as a long term consequence. Short term might be different though, dont underestimate the power of fear.

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24 minutes ago, scottbeard said:

A somewhat cold-hearted analysis of the ECONOMIC impact of flu (the OP's question was "do you think it could be the event to tip the already fragile world economy over the edge?").... 

Prediction on the radio this morning it will drop Chinese gdp by 1% this year. 

I'd imagine there must be some kind of impact from closing 5 large cities (circa 100mn people now?) and stopping people spending money for at least the next 7-14 days. Heard yesterday they are cancelling the next coupleof weeks film releases as they don't want to encourage people to congregate in public. Could well still have a significant economic effect. 

It's an interesting question whether a less restricted society could, or would, lock cities down in this way. But an enforced 2-4 weeks with no turnover could put down a lot of struggling UK/European businesses. 

 

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16 minutes ago, regprentice said:

Prediction on the radio this morning it will drop Chinese gdp by 1% this year. 

I'd imagine there must be some kind of impact from closing 5 large cities (circa 100mn people now?) and stopping people spending money for at least the next 7-14 days. Heard yesterday they are cancelling the next coupleof weeks film releases as they don't want to encourage people to congregate in public. Could well still have a significant economic effect. 

It's an interesting question whether a less restricted society could, or would, lock cities down in this way. But an enforced 2-4 weeks with no turnover could put down a lot of struggling UK/European businesses. 

The question is though...how much expenditure is "lost forever" and how much is just deferred until after the flu bout is finished?

For example, if I was going to go shopping for a new sofa I'll just do it after the flu is finished.  If I was going to go out for dinner, I probably just won't go....but when the flu is over i'll have an extra £30 in my bank account as a result.  Won't I just buy something else then?

It's like all these arguments about how much an extra bank holiday "costs" the economy that just adds up the GDP derived from 1 day's work, and misses how much the positivity of a holiday boosts people productivity on other days.

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2 hours ago, scottbeard said:

A somewhat cold-hearted analysis of the ECONOMIC impact of flu (the OP's question was "do you think it could be the event to tip the already fragile world economy over the edge?") might also conclude that a flu bug that killed old people could potentially IMPROVE the economic position of a country if the short-term loss from disruption was outweighed by the long-term reduction in healthcare and long term care costs.

Obviously not for strains that kill young people.

(Please don't confuse this with me saying that this is how we SHOULD evaluate things, but just answering the exact question asked.  Look at how much the funding position of UK pension schemes improved over 2015-2019 thanks to all the extra flu deaths - something that is sad in human terms can be positive in economic terms).

Snake Flu seems to killing the old/sick and is apparently easier transmitted than SARS. A lot of the infected are seriously ill  which could have long term implications for those infected..

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That is a video for the ground zero. I think we will know in a week or two how serious the outbreak is.

The mortality seems quite high around 1%.  Number of cases seems to increase a few times per week.  If not contained we will have a full crisis in the UK in a a few months, it will probably last a month or two.

 

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1 hour ago, longgone said:

Is there a possibility that remainers have a particular strain of dna with could be infused with a carrier to destroy its host ?

You could perhaps target people with above average IQ?

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I doubt it will have any affect as someone already said we have had worse scares in years gone by.  It seems the media are looking to hype it up so it justifies being escalated as the next "CRISIS!!!!!!" to out do the recent ones...proroguing/constitutional, Oz/climate, Prince Andrew, Megan/mexit they are all mega super crises worse than the one before if the media are to be believed!    ie everything now is a crisis.

That said its been hundreds of years since the last plagues so maybe we are due another although this one doesnt sound like it

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10 minutes ago, nightowl said:

That said its been hundreds of years since the last plagues so maybe we are due another although this one doesnt sound like it

Well about a hundred years since the Spanish flu, as already mentioned on this thread - and that was pretty bad.

We're overdue a pandemic I'd say, and the prospect of something highly contagious and highly lethal (with enough latency to keep transmission high) could be quite scary in today's ultra-connected world. Perhaps more scary than the disease itself would be people's behaviour - it would be interesting to see how it would pan out, that's for sure.

Hard to say about the current one - to me it sounds like it might be worse than they are letting on, with the lock-downs going on in China now. At least it doesn't seem too lethal yet.

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9 minutes ago, mattyboy1973 said:

Well about a hundred years since the Spanish flu, as already mentioned on this thread - and that was pretty bad.

We're overdue a pandemic I'd say, and the prospect of something highly contagious and highly lethal (with enough latency to keep transmission high) could be quite scary in today's ultra-connected world. Perhaps more scary than the disease itself would be people's behaviour - it would be interesting to see how it would pan out, that's for sure.

Hard to say about the current one - to me it sounds like it might be worse than they are letting on, with the lock-downs going on in China now. At least it doesn't seem too lethal yet.

Yes the authorities hiding it severity versus the media overplaying it makes it hard to know the real state, but im guessing we are OK this time.

It is odd that there is a unquantified risk from a super-pandemic (ebola strain?) or an asteroid coming at us (like the russian one a few years ago) yet some are totally focused on  CO2?

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27 minutes ago, nightowl said:

It is odd that there is a unquantified risk from a super-pandemic (ebola strain?) or an asteroid coming at us (like the russian one a few years ago) yet some are totally focused on  CO2?

Not really. We know with some certainty that we are buggered, certainly by the end of this century, if we don't sort out climate change, but you can't really live your life worrying about an asteroid hit. 

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6 hours ago, regprentice said:

Prediction on the radio this morning it will drop Chinese gdp by 1% this year. 

I'd imagine there must be some kind of impact from closing 5 large cities (circa 100mn people now?) and stopping people spending money for at least the next 7-14 days. Heard yesterday they are cancelling the next coupleof weeks film releases as they don't want to encourage people to congregate in public. Could well still have a significant economic effect. 

It's an interesting question whether a less restricted society could, or would, lock cities down in this way. But an enforced 2-4 weeks with no turnover could put down a lot of struggling UK/European businesses. 

 

Yes this what I was alluding to in the original post. This virus seems fairly mild at worst and is not going to destroy the economy on its own - it’s more the absolute and massive response by the authorities to lock it down that will cause the problems. I’m thinking exporter/importers/transport companies that are already on the margin of going bust in the current climate being pushed over the edge in significant numbers due to cash flow issues that triggers the big events.

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