NBBT: Swine Flu

We've commented in the past on NBBT {Next Big Bad Thing}. Usually for us NBBT is an event or a series of events over which markets or governments focus which usually turns out to be less of a problem than first thought or a nonexistant issue. But Swine Flu could turn out to be the real thing in terms of the markets.

First though let's be clear about one thing. There is no indication at this point that swine flu is going to turn into a reprise of the 1919 flu pandemic that may have globally killed 20-40 million people. True over a hundred have died from this in Mexico. But there have been no other reported deaths in this country or in the other places so far where the flu has shown up. I'm no doctor {I don't even play one on TV!} but I think that the fact that the authorities have jumped on this quickly and the advances modern medicine has made when fighting pandemics means that this outbreak might be contained quicker than thought with less loss of life than feared.

However, it does have the capacity to throw a wrench in any nascent global economic recovery, especially if international travel and shipping becomes either delayed or comes to a halt. For that reason this is the kind of event that will need to be closely monitored. I said earlier this year that I thought we had seen the market and economic lows given what we knew at the time. I also said that unless something else comes over the gunnel's stocks had probably seen their lows for this cycle. This falls into the "something else coming over the gunnel category".

So far for me it is nothing more than a watching or worrisome event. But a significant change or spread of the disease might force us to become more defensive in the game plan. We are already more on alert given the market's rise these past seven weeks. This kind of thing causes us to ratchet up the defensive plan a bit more than we might have seen a week or so ago.