Op-Ed: Swine Flu, a View From Within
The shift from fear to anger.
Editor's Note: This is a piece from Minyan Carlos Rello.
I wanted to send you an update on Mexico, and let you know how the swine flu is affecting the stock market and the people here.
Some of the traders here (including me) are surprised at the behavior of the market, after a decent correction on the flu (virus/media-created) announcement, the market has made its way up to almost pre-swine-flu levels. Encouraged by the rise on the US indexes, I'm starting a short position on this levels, and these are the main reasons:
Mexico City -- which is the alleged epicenter of this flu epidemic -- is also the greatest contributor to Mexico's GDP. The estimated daily loss (with the stoppage of activities) is already around the $500 million - and that's only in Mexico City. The panic from these alerts (now at phase 5) looks like it's going to get worse before it gets better. And the fear is spreading all over the country.
Although people are spending more at supermarkets (for water and canned food), the city --which is normally too crowded to even get around in -- has completely stopped. Restaurants are empty and no one is on the street if they don't have to be. I estimate that the daily number of cars moving around the city has dropped 40 to 50% - and that's during peak hours. During non-peak hours, nobody is around. And from what I understand, this is the case all over the country. In fact, Mexican President Calderon just made a speech yesterday suggesting that everyone stay at home this weekend with their families. Every public and private event has been canceled, and many theaters and restaurants are simply closed.
I'd say that if this World Health Organization (WHO) alert remains for more than a month, the global recession could get seriously bad in Mexico.
But what's even more interesting is the switch in people's perception of this epidemic strain.
I'm starting to see a change in reaction from fear to anger - mostly because of emails being sent around suggesting this panic is media-created, and scrutinizing the proximity of Obama's visit to these events. The IMF emergency loan was approved just a few weeks ago, and some see this epidemic as a conspiracy to get people to spend more. I actually think it's the other way around, but I guess that's just another example of what the 'Ville has been talking about with the societal acrimony of this crisis.
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