Moody’s Pandemic Cost Estimate

I’ve been waiting for estimates of what the impact of a pandemic would be. Although the swine flu has now been elevated by the WHO to pandemic status, it’s far too early to say what that might mean in costs, both lives and dollar costs.

Moody’s has made a first cut. From the Financial Times:

Moody’s estimated in a research note on Tuesday that the global macroeconomic impact of a mild flu pandemic could cost 1.4m lives and reduce global gross domestic product by 0.8 per cent or $330bn.

Mild is 1.4 million? Let’s hope that assessment is too dire.

We may know a bit more tomorrow:

With little information available publicly from the WHO, the agency said it was convening an expert panel on Wednesday to provide more information on the virology, epidemiology and treatment experience with the virus.

If you are a health news junkie, you can visit HealthMap (hat tip reader Dwight), Skippy recommends Biosurveillance for “unfiltered” information. They also have a blog. And the BBC has an interactive flu map (hat tip reader Steve)

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  1. Doc Holiday

    I think The Who were great at one point, but their model is sadly broken and at this fading point — obviously Moody’s is an irrelevant organization that has no basis in reality. Our generation of Supermodel mis-calculations and super-ego abuses has come to an end. This is sort of like the point at the end of Lord Of The Rings, where Frodo relaizes that all this shit he went through was for not…

    Here is Tolken on a sequel to The LOTR model and the future fate of humanity:

    “I did begin a story placed about 100 years after the Downfall of Mordor, but it proved both sinister and depressing. Since we are dealing with men it is inevitable that we should be concerned with the most regrettable feature of their nature: their quick satiety with good. So that the people of Gondor in times of peace, justice, and prosperity, would be become discontented and restless — while the dynasts descended from Aragorn would become just kings and governors — like Denethor or worse… Not worth doing.” (J.R.R. Tolkien, Letters, #256, to Colin Bailey).

    Stupid humans, it’s all over!

    Also see and hear: And it’s whispered that soon
    If we all call the tune
    Then the piper will lead us to reason
    And a new day will dawn
    For those who stand long
    And the forest will echo with laughter

  2. skippy

    Doc H,

    Would you read me a bed time story every night P:) The one about the end of mankind for its stupidity, reality is so comforting.

    @Carrick, I’m on it but could take some work, powers are moving to control “unfiltered content” for all the normal reasons. Biosurveillance has only been around for a number of years and in my humble opinion is beating the competition to the punch, government and others. FYI I have no interests or affiliation with Biosurveillance. Just found them out of the blue, but like thier raw data, no gov or other masters.

    skippy…tell me another story Doc H, its my bed time, sorry Yves can’t help it k.

  3. Mrs. Watanabe

    I would guess that very few people will die from the swine flu in the U.S. I’m guessing that the 7000-8000 foot altitude of Mexico City pushes a lot of sick people over the edge. If people start dying here, then I’ll change my mind.

  4. Sextus

    Yves, that Moodys figure is low.

    It may seem like a lot now, but that’s the nature of exponential growth.

    We know that this particular strain is highly transmissible (i.e. it will grow exponentially). We know that it is fatal for people in the 20-50 age group (a sign of pandemic influenza). However, the fatality rate for people who get it is unknown, as well as whether it is due to a cytokine cascade which causes the immune system to attack the body, and specifically the lungs as in previous pandemics.

    As it grows exponentially across all continents it will mutate– often returning to reinfect previously recovered people (possibly fatally).

    The only rational thing to do is to avoid going out (i.e. try not to get infected) and wear an n95 respirator, wash hands, change clothes etc.

    Just counting the sick days anticipated
    (not even considering fatalities) and the amount of economic activity avoided (will people still shop for pleasure?)
    gives you a greater hit to world GDP than the Moodys estimates.

    When you factor in the health care costs, mortuary costs, etc. it becomes significantly higher.

    The greatest impact is expected in the third world where there are fewer proper-fitting respirators, antiviral meds etc. and higher population densities with lower sanitary standards.

    Unless the transmission rate falls below 1.9 new infections per previously infected individuals, simulations like EpiCast suggest that there is no hope whatsoever of containing it.


  5. Carrick

    Re: Mrs. Watanabe

    I think Mexico city lies below the equator, and thus they experience seasons opposite ours. A reoccurring bit of info I keep seeing, is that the coming summer bodes well for the U.S. because the airborne virus has a shorter half-life in hot climates.

    Mexico City’s sanitation is also abysmal compared to NYC — whether the means they’re more likely to contract because the virus can live on surfaces or in open water longer, or that Mexico Citians(?) have more prepared immune systems, I have no idea.

    There are saying that this virus poses a greater lethal threat to healthy young adults than children, the sick, or the elderly (people with compromised immune systems.) Apparently you’re done in by your own immune response.

  6. skippy

    For consideration, kinda like the economic disintegration.

    The London Times is reporting this morning (28th April 2009): Mexico outbreak traced to ‘manure lagoons’ at pig farm. A village where residents have long complained about the smell and flies from a pig farm may be the source of the outbreak [Chris Ayres in Mexico City]

    The first known case of swine flu emerged a fortnight earlier than previously thought in a village where residents have long complained about the smell and flies from a nearby pig farm, it emerged last night.

    The Mexican Government said it initially thought that the victim, Edgar Hernandez, 4, was suffering from ordinary influenza but laboratory testing has since shown that he had contracted swine flu. The boy went on to make a full recovery, although it is thought that at least 148 others in Mexico have died from the disease, and the number is expected to rise.

    News of the infected boy is expected to create controversy in Mexico because the boy lived in Veracruz state, home to thousands of farmers who claim that their land was stolen from them by the Mexican Government in 1992. The farmers, who call themselves Los 400 Pueblos – The 400 Towns – are famous for their naked marches through the streets of Mexico City.

    The boy’s hometown, La Gloria, is also close to a pig farm that raises almost 1 million animals a year. The facility, Granges Carroll de Mexico, is partly owned by Smithfield Foods, a Virginia-based US company and the world’s largest producer and processor of pork products. Residents of La Gloria have long complained about the clouds of flies that are drawn the so-called “manure lagoons” created by such mega-farms, known in the agriculture business as Confined Animal Feeding Operations (CAFOs).

    It is now known that there was a widespread outbreak of a powerful respiratory disease in the La Gloria area earlier this month, with some of the town’s residents falling ill in February. Health workers soon intervened, sealing off the town and spraying chemicals to kill the flies that were reportedly swarming through people’s homes.

    A spokeswoman for Smithfield, Keira Ullrich, said that the company had found no clinical signs or symptoms of the presence of swine influenza in its swine herd or its employees working at its joint ventures anywhere in Mexico. Meanwhile, Mexico’s National Organisation of Pig Production and Producers released its own statement, saying: “We deny completely that the influenza virus affecting Mexico originated in pigs because it has been scientifically demonstrated that this is not possible.”

    According reports gathered on the website of James Wilson, a founding member of the Biosurveillance Indication and Warning Analysis Community (BIWAC), about 60 per cent of La Gloria’s 3,000-strong population have sought medical assistance since February.

    “Residents claimed that three pediatric cases, all under two years of age, died from the outbreak,” wrote Mr Wilson. “However, officials stated that there was no direct link between the pediatric deaths and the outbreak; they said the three fatal cases were isolated and not related to each other.”

    The case of the four-year-old boy was announced yesterday by Mexico’s Health Minister, Jose Angel Cordova, at a press conference that was briefly interrupted by an earthquake. “We are at the most critical moment of the epidemic. The number of cases will keep rising so we have to reinforce preventive measures,” he said, adding that in addition to the 149 deaths another 2,000 had been hospitalised with “grave pneumonia”, although at least half of that number had since made a full recovery.

    Mr Cordova went on to say that there have been no new cases detected in La Gloria but epidemiologists want to take a closer look at pigs in Mexico as a potential source of the outbreak.

    As the desease spread Greater Mexico City, usually a chaotic, traffic-snarled megatropolis of 22 million – where braised pork or carnitas, is prepared at taco stands on busy street corners – remained at a virtual standstill yesterday.

    A majority of people are now wearing surgical masks and or plastic gloves in public. Airport terminals are deserted. Schools and government offices are closed and will remain so until at least early May – creating a childcare crisis for millions of working parents.

    Many Mexicans are fearing the economic devastation caused by the health emergency as much as they are the prospect of swine flu. Adding to the misery, several countries including China have banned imports of live pigs and pork products from Mexico (and parts of the US) in spite of claims by farming trade groups that it is impossible to catch the virus from cooked meat.

    Is it correct that “The Mexican Government said it initially thought that the victim, Edgar Hernandez, 4, was suffering from ordinary influenza but laboratory testing has since shown that he had contracted swine flu”? If so, when was the H1N1 confirmation made and was the testing in Mexico or at US CDC?

    Best regards

    Colin Greenstreet

    skippy…acountability in systems keep them truthful.

  7. Purple

    Most of the world is a lot more like Mexico City , and Mexico, than the U.S.

    In fact, Mexico is a middle income country, and not especially poor.

    Having spent considerable time in the slums of Manila, for instance, a disease like this would cause havoc there. Even a 1 % fatality rate would be catastrophic.

  8. Brick

    I read the unedited biosurveilance timeline and came to the conclusion that they were dealing with two separate strains of disease. There does not seem to be any evidence that the H1N1 swine influenza came from La Gloria in Veracruz. Tests show that most of those tested for flu there had the normal versions of flu H2N3 and H1N2, yet here seems to be where they had the most problems. The original diagnosis of an unspecified bacterial pathogen which responded to antibiotics also points to two separate things going on. It is my understanding that flu does not really respond to antibiotics so this can not be right if flu is the only thing going on here. The most frightening thing is if we have two separate pandemics at the same time coming from the same region.

  9. Dan Duncan

    Moodys issuing a Swine Pandemic Estimate….This is so stupid.

    How can such ridiculous claims be taken seriously?

    Moodys' estimate reminds me of a Coca Cola commercial…with a couple college kids watching football and making fun of each other. It's the kind of commercial which really has nothing to do with a soft drink, but is broadcast simply because Coke wants to remain in our consciousness. Moodys' "estimate" is branding, plain and simple.

    How many times I've read people on this blog railing against Moodys and S&P, etc…Yet, here we are with an "estimate" that's nothing but a pure guess…and it's being taken seriously.

    Not only is Moodys' estimate nothing but a guess, but it also is laden with false precision and a hearty dose of anchoring.

    The Regular Flu (the kind we've all had before):

    The CDC estimates the approx 35,000-40,000 people die from the flu…in the US…each year.

    35,000 to 40,000 each year.

    Dozens of people in the US and Europe have been sick with the Swine flu. Their symptoms have been quite mild. In fact, most of them were back on their feet in less than a week. We have 1 death, thus far, and it was an infant–who might have succumbed to any flu.

    Nevertheless, we have "interactive flu maps" and reminders of just how bad things got in the Pandemic of 1918. [Which, interestingly enough…when the Spanish Flu is invoked, the commentators always seem to leave out the fact that it came on the heels of freaking WWI. Close quarters of soldiers, trench warfare and malnourishment certainly played a part in the deaths of so many younger adults from that pandemic…but, of course—not a word from Biosurveillance commentators.]

    I fully appreciate the situation in Mexico is a cause for concern and that this is a new strain…but please….get a grip.

  10. DownSouth

    There was a pertinent article in yesterday’s NY Times:

    But even if this virus were to peter out soon, there is a strong possibility it would only go underground, quietly continuing to infect some people while becoming better adapted to humans, and then explode around the world.

    What happens next is chiefly up to the virus.~

    @Carrick–Mexico lies well north of the equator. Even Colombia lies north of the equator.

    Now is the hottest and dryest time of the year in Mexico City. I live about two hours north of DF in what is called the bajio. It is extremely dry here this time of year and yesterday when I went out about 4:00 p.m. the thermometer on my car registered 95 degrees farenheit. Mexico city is about 500 ft. higher in altitude and is therefore a little cooler. But daytime highs are certainly in the 80s.

    It usually doesn’t begin to cool off until the rainy season begins, which normally begins in July.

    I’m also not sure I agree with your statement that “Mexico City’s sanitation is also abysmal compared to NYC.” While there may be some truth to this, it seems like an exaggeration. And it’s not clear to me, given the way this disease spreads, what relevance this would have. After all, we’re not talking a disease of the gastrinal tract here.

    Your comment strikes me as being a polemic, searching for reasons why the epidemic can’t be severe in the U.S.

  11. LeeAnne

    Obama micromanaging with talk of closing schools, a local responsibility, is very disappointing. Particularly since New York City figures so prominently in this and has a very well known efficient Mayor who, oddly, was pointedly left out intentionally in the flyover incident.

    I don’t even want to go there. There’s a connection but I fail to see what it is.

    Obama is supposed to be a national leader and, as I remember it, campaigned as a WORLD leader.

    A leader would be using this opportunity to mobilize the country and set an example for a reformed distribution system for a vaccine once it is developed.

    I’m sorry that my verdict on Obama is now ‘in.’ He is a weak leader with the rhetorical skills to mobilize sentiment enough to get elected -period. His calling is for public relations, maybe diplomacy.

    This blog is concerned with economics, the science of incentives. Are the financial incentives in the system on the side of flu prevention or are they on the side of panic and profits from paliatives like Tamiflu which merely, at best, helps with symptoms?

    Reporting is necessary; investigative journalists would learn and report accurately the names of government/military insiders poised to gain financially from the spread of fear of a ‘deadly’ pandemic. That is the big story in America today as incentives in the economy have been skewed to benefit the finance sector at the expense/tax on the real economy.

    Already CBS in Monday’s reporting referred to the New York school students struck with the flu as ‘the sometimes deadly flu when it is known that every year people die from common flu. So we have evidence already of big media revving up the scare rhetoric. And this requires watching.

    Where are the funds for speedy development of a vaccine that would ‘prevent’ a pandemic? Where is leadership from the White House for mobilizing the distribution system for a vaccine once it is developed?

    Following is a long read but worthwhile for a rundown of past abuses:

    The pattern in this country the last 30 years is more on the side of increasing benefits at the expense of public safety and public health than for the well being and needs of the public. And Without investigative journalism the people are victims at every turn. Backward looking reporting is entertaining and useful but does not help victims since the game (bankster driven economy) morphs into ever more creative and insidious scams.

  12. Alex

    @Dan Duncan: Well said. As a veteran of the SARS “outbreak” in Toronto, where a total of _44_ people died from what could have been any flu, it feels like deja ‘flu’ (sorry, couldn’t resist).

    It really is amazing how gullible people are in how effectively panic has been stirred up; either that, or the disconnect between what our news media reports and the reality on the streets and in the minds of people will have decayed to the level of totalitarian regimes, where reports of surpluses and plenty are looked at in puzzlement by people without anything to eat.

    If 20-30y old people in good health start dropping like flies in the streets with visible sores on their limbs, then we should begin to worry.

  13. DownSouth

    LeeAnne said… “A leader would be using this opportunity to mobilize the country and set an example for a reformed distribution system for a vaccine once it is developed.”

    Here’s another NY Times story that explores the timeline, assuming the U.S. moved as fast as it could, for getting the U.S. and world populations vaccinated:

    Federal officials said it would take until January, or late November at the earliest, to make enough vaccine to protect all Americans from a possible epidemic of swine flu.

    And beyond the United States and a few other countries that also make vaccines, some experts said it could take years to produce enough swine flu vaccine to satisfy global demand.~

    However, the government still hasn’t decided whether or not to proceed with vaccine production:

    Federal officials have not yet made a decision on whether the swine flu is enough of a threat to warrant vaccine production.

  14. LeeAnne

    To expand/correct on ‘mobilize the country:’

    By ‘mobilize,’ I mean inspire and provide financial incentives for private sector innovation in vaccine distribution systems which are known to be inadequate.

    I think the time for change and innovation has been declared at the highest levels as ‘now’ and stimulus funds widely publicized as ideal for that purpose?

    Production cannot be decided until a vaccine is developed.

    My understanding as a reader is that to complicate things there is a possibility of 2 different flu- like diseases being reported.

  15. VG Chicago

    Not that anything the crooked morons at Moody’s are spewing out bears any value anymore, but I was wondering whether they have factored in the extra cash that the drug/vaccine companies, greedy doctors, and grave diggers are going to make out of this pandemic? I bet it would be an overall economic boost.

    Vinny GOLDberg

  16. Thomas

    Here’s a particularly rational reaction to the outbreak:

    BBC reports that Egypt has decided to immediately slaughter all Egyptian pigs. Reportedly, none of those pigs show any signs of illness, but never mind.

    The head of the Muslim Brotherhood approved and issued a statement that “Pigs are more dangerous than hydrogen bombs”. Presumably, it serves the world right to be punished for disobeying the teachings of the Holy Qu’ran…

  17. skippy

    Hay Doc H.

    Chinese agribiz giant eyes Smithfield takeover (Smithfield, the owners of the piggery claimed to be the epicenter).

    Check out the photo with caption “want some Chinese dollar reserves in that rations” ROFL

    Skippy…swine in the Financial sector, in the Government and Now in us, cough, cough. You are so correct, its a piggy take over!

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