Pandemic alerts, by the numbers

April 27, 2009

The World Health Organization could raise its pandemic alert level to phase 4 or 5 as a deadly swine flu outbreak shows no signs of slowing.

What does this mean?

The WHO designates six phases of pandemic alert for informing the world of the seriousness of the threat and the need to launch more intense preparations and measures.

We’re currently at phase 3. A full-blown pandemic, level 6, denotes sustained, human-to-human spread over many countries of a new and serious virus.

Here are details of the six phases, along with the possible impact on financial markets:

PHASE 1: Low risk of human cases

PHASE 2: Higher risk of human cases

PHASE 3: No or very limited human-to-human transmission

  • Market impact limited to short-term swings lasting a few days though further jolts to financial asset prices could be seen if governments or major forecasters cut growth predictions.
  • Global equity markets suffer moderate setback, with underperformance in particular sectors (transport, travel, leisure, and commodity shares) that are seen most vulnerable to further deterioration in trade flows, travel.
  • Minor flows into the most liquid bond markets, causing moderate declines in yields in these markets.

PHASE 4: Evidence of increased human-to-human transmission

  • Concern about the impact on global economic activity starts to weigh on the wider equity market. Mark Bon, fund manager at Canada Life in London, estimates an upgrade to level 4 would see stock markets suffer a sudden sharp drop of 7 percent. Relative performance of stock markets could be determined by their economies’ exposure to infected countries and by their stock piles of relevant drugs and vaccines.
  • Further flight to the most liquid bond markets, with curve steepening seen on the cards as investors are expected to favour the front end and cash-like short-term bills. David Keeble, head of fixed income research at Calyon in London, says any WHO upgrade of the alert level could see 10-year Bund and Treasury yields fall about 20-30 basis points within days of such move.
  • Yen and dollar expected to continue to strengthen, particularly against higher-yielding currencies as above. Any concern about renewed stress in the financial sector will stoke speculation cash could be pulled back to the United States to bolster balance sheets in a rerun of what happened during the financial crisis.

PHASE 5: Evidence of significant human-to-human transmission

  • Further sharp and broad-based drop in equity markets. Canada Life’s Bon estimates an escalation to levels 5 and 6 could swiftly knock 15-20 percent off world shares.
  • Market trading volumes could start to dip, especially if swine flu were to become more widespread in the United States. However, most banks have disaster recovery programmes so they can continue trading in other locations.
  • Stronger move into cash. Shorter end of yield curve also continuing to outperform. Still, expectations that central banks will embark on quantitative easing or pursue such strategies for longer will also push down yields at longer end.

PHASE 6: Efficient and sustained human-to-human transmission

  • The World Bank estimated in 2008 that a flu pandemic could cost $3 trillion and result in a nearly 5 percent drop in world gross domestic product.
  • Sharp falls in market trading volumes and illiquid market conditions, especially in affected regions.
  • Sharp, broad-based decline in stock market indexes
  • Flight to cash becomes even more pronounced. Investors demand big premiums to hold all but the most liquid sovereign debt, markets risk seizing up.

Are you worried about the swine flu? Let us know in the comments section if you’re doing anything differently in light of the threat.


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“Impact on the financial markets”????
Is that really what we (or should I say the governments) are concerned about with these viruses? I do not see any mention of the impact of real human lives. This world has become completely obsessed with money. This obsession brings everybody and everything in too much trouble as it is.
What are the impacts on human lives in different parts of the world. What countries or people are more vulnerable to these viruses. What would possible impacts be on traveling abroad. what could a Pandemic possible mean in loss of lives? Is there a vaccine? i have heard a lot about certain vaccines, but never a confirmed answer on what could stop or prevent this virus from spreading.

Posted by edo | Report as abusive

It’s a good thing that we’ve spent zillions of dollars bailing out corrupt bankers and non-competitive automakers, fighting wars we can’t win, building bridges we don’t need, etc. etc., because now we can finally have a real crisis – a viral pandemic with no resources left to confront it.

Posted by Russ in PA | Report as abusive

Mexico is to blame. They should close the borders, Period!

Posted by Joshua | Report as abusive

I agree with you, it is not all about the money numbers. It is more necessary to know where it comes from, prevention, cure, are there enough medicines, what can be done to stop or help.

Posted by Lein | Report as abusive

Was this cooked up in a terrorist lab or a government lab?

Posted by kellyp | Report as abusive

this sounds more like a fear campaigne than anything else. every year hundreds of thousands die from the regular Flu. no one freaks out aout it. I guess there is a bigger agenda behind this. it sounds to fishy seeing the speed that Media jumped in to this story line.

I guess the next step is forced vaccination

Posted by elche | Report as abusive

Isn’t it ironic it is called Swine Flu. I mean it is so biblical.
When Jesus cast the Devil out of the possessed man he put the demon in the Swine and they all jumped off the cliff.

Posted by Linda Linda | Report as abusive

Exactly Edo, the exact same thing crossed my mind as I was reading. Do we really live in World that cares more about financial markets than sick people?
Maybe the journalist has Mad Cow.

Posted by Kay | Report as abusive

For a virus to become an epidemic, it needs a source, a pathway and a receptor.
For an epidemic to become a pandemic, it needs ignorance, fear and blind panic.

The Pandemic about to break out may spread World-wide. Cuger Brant’s book ‘Something Wicked This Way comes’ details the spread of a flu type pandemic and what would happen to society. It also details the irrational precautions people would take and the REAL way how to survive it.

Posted by Brian Elliott | Report as abusive

I am a bit worried at the economical impact of course. We are already in the worst recession in decades in a global effectiveness. Just a brief note as to why in my area especially. A lot of the people that work for a certain company here that I was once employed by will lose their jobs if they come down with this flu. There aren’t many jobs as is. They have a point system. 12 points and you’re fired. From what the news says, a person that gets the swine flu needs to stay home 7 days. That’s 14 points. And then the gov’t said stay home one more day to be safe. So that’s 16. With a doctor’s note it’s half points. So between 7 and 8 and that’s depending on how many the person had to begin with.

That’s a lot of potential job loss there. And a lot of the people employed there are between the ages of 20 and 40. This is a global company. Trust me. It will have a giant impact on communities in more ways than one if this company has to shut down for any reason for any period of time.

I wish the government would lay off the don’t be worried. I am worried. It killed people between 25 and 40 in Mexico. The other 1100 that got it recovered. And they still don’t know how bad it will get. I am 32 years old. I am not 15 or 50. I don’t want anyone to breathe on me.

Posted by Jennifer | Report as abusive

And to add to above. Yes, it doesn’t matter if this is pandemic or not. We have snowstorms where people live miles out of town and the highways are shut down. BY THE DEPARTMENT OF TRANSPORTATION and the company still fires people. Doctors notes only give a person half points. It really is going to have an impact if it gets worse.

Posted by Jennifer | Report as abusive

I agree, edo! Unbelievable. I opened this story expecting to see a report on the health effects/dangers to humans and all I see is an economic report. If we’re all dead the markets will be irrelevant. Come on, Reuters.

Posted by Quandary | Report as abusive

Am I worried about swine flu? Not as much as I am worried about becoming sick during the typical flu season.

I would stay clear of people who look sick and are sneezing and coughing. I would wash my hands as much as I could and avoid rubbing my nose, mouth and eyes as much as possible.
Eat healthy and drink plenty of fluids. What else can you do?

If this were a pandemic like the one in 1918, then it would be a different story. But I think that the media sees this opportunity to do the same thing as always…blown things out of proportion.

Posted by bby_70 | Report as abusive

103 people with no or little health care die in Mexico and now suddenly the entire planet is bracing for a pandemic???? Why does the media fabricate overblown, panicky speculation?? And tie it to the economy?? We are talking of 103 in a global population of billions. Everyone else with proper medical care is fine. Good grief …… the media is GROSSLY irresponsible.

Posted by Ima Doutter | Report as abusive

It takes money to buy vaccines. It takes money to buy emergency supplies like cots, blankets, etc. It takes money to keep the electricity on. If the money markets completely freeze up and the entire world moves into crushing poverty, this swine flu could potentially eradicate much of the human life on Earth. Since none of us are God, we must do our best to control the factors that we actually have control of. Money makes the world go round; literally. We can try and “calm the storm” now, and keep the financial markets secure, or we can get down and pray that with no medicine, food, electricity or fresh water the human race will survive.
Let the money people keep the money flowing and let the medical people keep researching and finding solutions instead of crying about the human aspect. Of course loss of life is tragic, and doubly so when it’s needless. That part’s a given. The reason this article is about money is because we have no control over death, but we can try and keep our global economy from dieing it’s own (and hugely more damaging) death.

Posted by billy | Report as abusive

Vaccine … yep there will be one… Flu vaccine is relatively easy to make. But it does take time.

As for worrying about the markets: if the global economy seizes up there will be even less capacity to save lives. Vaccines for example can be produced much more efficiently if supplies are cheaply and readily available in the global market. Also, they are easier to distribute if trade barriers remain open. And finally rich countries are much more charitable, and efficient when the threat of a sovereign default in the middle of an epidemic is not a possibility.

Posted by jack_84 | Report as abusive

The Republicans, led by senator Susan Collins stripped flu pandemic preparedness from the stimulus package.

Posted by Dave Hinkel | Report as abusive

In 1918:

In large U.S cities, more than 10,000 deaths per week were attributed to the virus. It is estimated that as many as 50% of the population was infected, and ~1% died. To compare, in “normal” (interpandemic) years, it is estimated that between 10-20% of the population is infected, with a .008% mortality.

The fact the current ‘swine flu’ has shown to be contagious is alarming. So far the virus has shown to have a 6% to 6.3% mortality rate. It may not seem like much, but please consider the following: The deadly influenza panic in 1918 had a mortality rate of under 1%.

This virus went on to kill tens of thousands of healthy people a day in large cities and up to 100 million people world wide.

Viruses, like this strain of swine flu, kill their host by over-stimulating active immune systems that are robust and healthy. That is why the victims in Mexico were between the ages of 20 and 45.

Some have said that no one in the United States have died from the virus, so we need not worry. Experts say it is only a matter of time. The virus is not prevalent enough to reach statistical significance in the United States, with only a handful of confirmed cases. 93.7% of all Mexicans with the virus recovered.

More cause for worry: The 1918 virus started off ‘mild’ before it mutated into a raging storm. It also does not mean we will see millions of deaths. It is too early to draw sweeping conclusions. Nevertheless, there is potential for a disastrous pandemic. If 50% of Americans catch this flu in the next two years, and the mortality rate stays at 6.3%, we would witness 20+ million deaths.

This strain of virus is more potent and more deadly than the virus that hammered the world in 1918 and 1919. Viruses come in waves. There are striking similarities to this virus and the virus that killed up to 100 million people in 1918. The first wave is historically more mild than the later waves.

In addition to this virus becoming more severe, it is mutating faster than previous virus that we have seen. In addition, this virus is nothing like we have ever seen before because it combines features from viruses natural in different parts of the globe. We are in uncharted territory.

If it follows the same path as the 1918 flu, we will see very damaging results. However, we must remember we are a global society now and the virus can spread quicker than we have ever witnessed in history. This is very concerning especially since the drugs we have now seem resistant.

While there have been no deaths in America, it is shadowed by the fact the common variable among the deaths seem to be age. While most American cases have involved the very young and very old (under 10 and over 50) the Mexican cases that ended fatally involved the robust and healthy (over 20 and under 45).

This virus kills the host by over-stimulating the immune system. The term that is used when the immune system over reacts is called a Cytokine Storm. It is usually fatal. During this “Storm” over 150 inflammatory mediators are released. This would account for the high mortality rate in 1918-19.

Posted by Barb Lamont | Report as abusive

I agree with Ima, more humans are killed around the world every day by tripping on the pavement, or by walking in front of cars. It is truly shocking how quickly the media have latched onto this thing, rather similar to the supposed killer Avian Flu some years ago -What happened to that?
Now that the credit crunch has sold as many papers and TV advertisising minutes as it possibly can, these monkeys need a new issue to scare us stupid with. I am a retailer in central London and find people just as wealthy as ever, its just that the media has told them there’s a recession and now they feel guilty about spending. Likewise people want to travel but now trhey can’t because teh media has told them to stay indoors. The Independent should be the lone voice of reason in the midst of all this nonsense but it too seems to love the odd lurid headline

Posted by Noel | Report as abusive


Unfortunately yes that what they are talking about. But put it this way. Dollars lost in the economy are not only not going to your garden variety not-for-profit or even your overseas mission charity, they are not going to research labs and other things. People are going hungry, losing hope and becoming the living dead.

This is a bit of a stretch for me to say even in hypothetical terms, but hypothetically, I would take 1000 lives (hopefullly more than the extent of this) over a worsened and prolong global economic crisis. 5 billion people affected by an economic crisis is a lot of people. It should be mentioned.

And yes the world revolves around money. Love, peace and happiness won’t feed my kids.

Posted by Joethedrummer | Report as abusive

I myself am not too worried, I take the facts from 6 different news sources, compare them and then come to my own conclusion. From what I can tell this is the flu on steroids, not bubonic plaugue. There is no need for fear mongering to sell more news.

Posted by Big Mr Chimps | Report as abusive