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Market Commentary

Bird Flu
April 10, 2013 David R. Kotok, Chairman and Chief Investment Officer

Twice in my life I have been involved in Global Interdependence Center conferences on respiratory disease, as SARS and then bird flu required global meetings.  My friend and colleague, Sharon Javie, chaired and helped organize the Philly-based global meeting on bird flu.  She and others on our GIC board know the risks.

Dear readers, please take this email seriously.  So far, there are 28 confirmed cases of the novel H7N9 influenza virus in China and 9 deaths. The Centers for Disease Control and Prevention (CDC) is taking this virus very seriously, both because it is new and because it is associated with severe disease in humans. As of April 9, the CDC activated its Emergency Operations Center (EOC) at level 2 (the highest level is level 1), increasing staff and resources devoted to investigations, communications, and intensive planning.

So far, cases of H7N9 have not been found beyond China.  But that could change at any time.  Researchers are finding that the virus does exhibit several mutations indicating that it is adapting to a mammalian host. This flu already infects human beings more easily than H5N1 does. But to date, all or almost all cases appear to have resulted from environmental exposure or exposure to infected animals.

Where a possible pandemic is concerned, the early warning sign to watch for is the emergence of clusters of infection and death in which the virus has been transmitted from one person to another.  To date, no instances of ongoing human-to-human transmission have been confirmed; however, according to the World Health Organization (WHO), two small familial clusters are being investigated now. As the WHO tweeted just this morning, “What is important is not the exact H7N9 case count, but the behavior of the H7N9 virus.”

Another consideration to keep in mind is that the reporting you see in the media is lagged as to time.  So what you see in the news and what you read in the press is already old news. Furthermore, the official case count from the WHO is likely to lag behind the case count tallied by the press (which already stands at 33). The WHO derives its official case count from the report afforded by the Chinese National Health Regulations Focal Point.

I am now carrying N-95 masks in my travels, and I wear them where risk seems heightened, as I did during the H5N1 bird flu period.  You need a mask that filters particles of the size of the virus.  Other masks filter dirt but not virus. Fitting the mask properly is also key. According to a study published in 2012 in the journal Clinical Infectious Diseases, a tightly fitted N-95 mask filters 99 percent of influenza virus particles, whereas an improperly fitted one filters only about 70 percent.

Travel from Shanghai to a US city takes only one day. A virus circulates as quickly as any traveler can.  Caution is warranted in this modern world.

Now I am going to get alarmist warning emails on the one hand, and I expect to get scolded by those who like to decry warnings on the other.

So dear readers, go for it.  I do not intend to answer your blasts.

But do take bird flu seriously.  Pay attention to the news. Hope with me that H7N9 doesn’t materialize into a pandemic.  And do not for one minute think that bird flu has no market impact.  It certainly does.

In San Francisco this past weekend I saw a few masks on faces of those who know the risk.  If you go there next weekend, you will see more of them.

Stay safe.

Recommended Reading:

Shanghai Daily, “H7N9 death toll rises as 'family clusters' probed”:

http://www.shanghaidaily.com/nsp/National/2013/04/10/H7N9%2Bdeath%2Btoll%2Brises%2Bas%2Bfamily%2Bclusters%2Bprobed/

World Health Organization “Disease Outbreak News” (follow @WHO on Twitter for more frequent updates):

http://www.who.int/csr/don/en/index.html

 

CIDRAP: “CDC activates emergency center over H7N9”:         
http://www.cidrap.umn.edu/cidrap/content/influenza/avianflu/news/apr0913cdc.html

CDC: “Travel Notice for Avian Flu (H7N9) in China”:

http://wwwnc.cdc.gov/travel/notices/watch/avian-flu-h7n9-china.htm

 

David R. Kotok, Chairman and Chief Investment Officer

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