Midlander2
Senior Member
http://www.resourceinvestor.com/pebble.asp?relid=12106
By Stephen Clayson
17 Aug 2005 at 10:24 AM EDT
LONDON (ResourceInvestor.com) -- A new report from investment bank BMO Nesbitt Burns paints a decidedly unpleasant picture for investors as well as the population at large regarding the potential effects of a pandemic of inter human transmissible Avian Flu. The disease, as its name suggests, mainly afflicts fowl, but certain strains can be pathogenic to humans and if such a variant becomes widespread then the world could be in for a nasty shock.
Fear currently centres on Type A H5N1 influenza, which is seen as by far the most likely candidate to cause a pandemic in humans. This strain was first isolated in South Africa back in 1961, but only in 1997 was it discovered to have made the leap to being pathogenic to people in addition to birds. Type A H5N1 originated from a more common and relatively innocuous strain of Avian Flu, but has reportedly now mutated into the most lethal strain of influenza, for both birds and people, ever recorded.
Perhaps one of the most chilling aspects of Type A H5N1 is that it could, counter intuitively, be more lethal to those with strong immune systems, via an effect known as the Cytokine Storm, which in essence can entail the rather macabre death of an infected person through the over zealous response of their own immune system.
Type A H5N1 has so far caused in excess of 100 human deaths in East and South East Asia, where infections of Avian Flu tend to originate, and measures taken to limit various outbreaks in these areas have resulted in the deaths of over 120 million poultry. Providentially though, the virus currently lacks the capacity for consistent contagion between humans.
But, if a further mutation occurs whereby the virus acquires the sustainable ability to spread between humans, a pandemic or severe regional outbreak could be in prospect.
The mutation process that has created Type A H5N1 and might create an inter human transmissible variant is similar to that which formed the virus responsible for the 1918 Spanish Flu, a pandemic which by some estimates caused the deaths of 50 million people worldwide.
In a rather ominous development, Russia this week reported that an outbreak of Type A H5N1 has occurred in Siberia and that mass slaughter of infected and potentially infected birds is now underway in order to contain it. But the coming migration of multiple species of bird, some of which may be carrying Type A H5N1, from Siberia to various areas around the world, is a matter of serious concern.
Epidemiological science currently offers two main hopes of salvation from a human pandemic of Type A H5N1; an antiviral drug called Tamiflu (oseltamivir phosphate) and the development of a vaccine. Tamiflu seems to have the capacity to both prevent infection and to mitigate it once it has occurred, but production facilities and stockpiles as they stand may not be sufficient to control an outbreak. An effective vaccine may alternatively be developed against Type A H5N1, but again a lack of production capacity may be problematic. Somewhat reassuringly, progress is being made on both fronts.
The BMO Nesbitt Burns report sees economic dislocation from a pandemic or severe outbreak of inter human transmissible Type A H5N1 emerging in several ways: the disruption of global supply chains, many of which rely heavily on facilities East Asia; the debilitation of affected economies as people fall ill and die and those uninfected become too scared to leave their homes, leading to the collapse of output; and the need for huge resources to be diverted into health care.
These factors would supposedly culminate in an all round macroeconomic disaster, with serious depletion of productive capacity accompanied by a massive reduction in demand for most nonessential goods and services. Deflation and a catastrophic depression are postulated by the report to follow.
In this worst case scenario the outlook for commodities, indeed for all asset classes, would purportedly be bleak. Oil, equities, property and base metals would decline rapidly and substantially in value as demand for them evaporated. Precious metals would benefit initially as investors panicked and took refuge in them, before trending rapidly downward in price afterward in response to the large scale liquidation of jewellery and a reduction in industrial demand.
After portending such doom, the report, reasonably if rather morbidly, identifies the only investment upside from such an occurrence as the opportunities that would be created for survivors in the financial position to do so to pick up cheaply assets of abnormally depressed value.
As a template for the economic disruption that could be wrought by a pandemic of Type A H5N1 Avian Flu, the report offers the recent mild outbreak of Secure Acute Respiratory Syndrome (SARS). The impact of this event was much less than could be expected from a full-scale pandemic of Avian Flu. Yet still, Hong Kong, the economy hardest hit, saw an estimated 2.6 percentage points shaved off its annual growth figure; and Canada, afflicted by infections in Toronto, lost a noticeable quantity of output.
Altogether, it is important to keep things in perspective, though without being complacent. The chances of Type A H5N1 mutating to form a strain suitable for a full scale pandemic are still small, and the chances of such a pandemic developing still smaller. Outbreaks of the virus can be controlled and their impact minimised.
Already, governments and other organisations are diligently engaged in efforts to prevent or at least mitigate a pandemic or serious outbreak of Type A H5N1 Avian Flu infectious to humans, and given the progress made by medical science and human operational capacity since the last major pandemic, dread should be tempered with the knowledge that we are far from helpless.
By Stephen Clayson
17 Aug 2005 at 10:24 AM EDT
LONDON (ResourceInvestor.com) -- A new report from investment bank BMO Nesbitt Burns paints a decidedly unpleasant picture for investors as well as the population at large regarding the potential effects of a pandemic of inter human transmissible Avian Flu. The disease, as its name suggests, mainly afflicts fowl, but certain strains can be pathogenic to humans and if such a variant becomes widespread then the world could be in for a nasty shock.
Fear currently centres on Type A H5N1 influenza, which is seen as by far the most likely candidate to cause a pandemic in humans. This strain was first isolated in South Africa back in 1961, but only in 1997 was it discovered to have made the leap to being pathogenic to people in addition to birds. Type A H5N1 originated from a more common and relatively innocuous strain of Avian Flu, but has reportedly now mutated into the most lethal strain of influenza, for both birds and people, ever recorded.
Perhaps one of the most chilling aspects of Type A H5N1 is that it could, counter intuitively, be more lethal to those with strong immune systems, via an effect known as the Cytokine Storm, which in essence can entail the rather macabre death of an infected person through the over zealous response of their own immune system.
Type A H5N1 has so far caused in excess of 100 human deaths in East and South East Asia, where infections of Avian Flu tend to originate, and measures taken to limit various outbreaks in these areas have resulted in the deaths of over 120 million poultry. Providentially though, the virus currently lacks the capacity for consistent contagion between humans.
But, if a further mutation occurs whereby the virus acquires the sustainable ability to spread between humans, a pandemic or severe regional outbreak could be in prospect.
The mutation process that has created Type A H5N1 and might create an inter human transmissible variant is similar to that which formed the virus responsible for the 1918 Spanish Flu, a pandemic which by some estimates caused the deaths of 50 million people worldwide.
In a rather ominous development, Russia this week reported that an outbreak of Type A H5N1 has occurred in Siberia and that mass slaughter of infected and potentially infected birds is now underway in order to contain it. But the coming migration of multiple species of bird, some of which may be carrying Type A H5N1, from Siberia to various areas around the world, is a matter of serious concern.
Epidemiological science currently offers two main hopes of salvation from a human pandemic of Type A H5N1; an antiviral drug called Tamiflu (oseltamivir phosphate) and the development of a vaccine. Tamiflu seems to have the capacity to both prevent infection and to mitigate it once it has occurred, but production facilities and stockpiles as they stand may not be sufficient to control an outbreak. An effective vaccine may alternatively be developed against Type A H5N1, but again a lack of production capacity may be problematic. Somewhat reassuringly, progress is being made on both fronts.
The BMO Nesbitt Burns report sees economic dislocation from a pandemic or severe outbreak of inter human transmissible Type A H5N1 emerging in several ways: the disruption of global supply chains, many of which rely heavily on facilities East Asia; the debilitation of affected economies as people fall ill and die and those uninfected become too scared to leave their homes, leading to the collapse of output; and the need for huge resources to be diverted into health care.
These factors would supposedly culminate in an all round macroeconomic disaster, with serious depletion of productive capacity accompanied by a massive reduction in demand for most nonessential goods and services. Deflation and a catastrophic depression are postulated by the report to follow.
In this worst case scenario the outlook for commodities, indeed for all asset classes, would purportedly be bleak. Oil, equities, property and base metals would decline rapidly and substantially in value as demand for them evaporated. Precious metals would benefit initially as investors panicked and took refuge in them, before trending rapidly downward in price afterward in response to the large scale liquidation of jewellery and a reduction in industrial demand.
After portending such doom, the report, reasonably if rather morbidly, identifies the only investment upside from such an occurrence as the opportunities that would be created for survivors in the financial position to do so to pick up cheaply assets of abnormally depressed value.
As a template for the economic disruption that could be wrought by a pandemic of Type A H5N1 Avian Flu, the report offers the recent mild outbreak of Secure Acute Respiratory Syndrome (SARS). The impact of this event was much less than could be expected from a full-scale pandemic of Avian Flu. Yet still, Hong Kong, the economy hardest hit, saw an estimated 2.6 percentage points shaved off its annual growth figure; and Canada, afflicted by infections in Toronto, lost a noticeable quantity of output.
Altogether, it is important to keep things in perspective, though without being complacent. The chances of Type A H5N1 mutating to form a strain suitable for a full scale pandemic are still small, and the chances of such a pandemic developing still smaller. Outbreaks of the virus can be controlled and their impact minimised.
Already, governments and other organisations are diligently engaged in efforts to prevent or at least mitigate a pandemic or serious outbreak of Type A H5N1 Avian Flu infectious to humans, and given the progress made by medical science and human operational capacity since the last major pandemic, dread should be tempered with the knowledge that we are far from helpless.
