Why Do We Choose To Ignore Black Swan (Pig) In Front Of Us?

Discussion in 'Psychology' started by shortie, Apr 29, 2009.

Number of American Casualties for SPY To Drop >5%?

  1. 10

    3 vote(s)
  2. 100

    7 vote(s)
  3. 1,000

    11 vote(s)
  4. 10,000

    5 vote(s)
  5. >10,000

    12 vote(s)
  1. Today US got its first casualty from Flu and the market ignored it. The majority thinks this is not a big deal. I understand it is impossible to predict a black swan like a pandemic that happens avery 10-50 years (a low probability even). But right now we really have preconditions for it, so the likelyhood of a pandemic is pretty high. Yet, the market ignores it for now.

    I think the market will keep the flu on ignore until/unless flu casualties in US start piling up. The question is what is the threshold?
  2. It was easy to ignore this first death - it was a Mexican toddler who had been visiting Texas.

    I don't know how many deaths will be the threshold, so I didn't answer the poll, but I don't think it will be until the fall or winter. With the 1918 flu, the first wave was not that bad, the second wave starting in the fall accounted for 90% of the deaths.

    Scary stuff, no matter how you look at it.
  3. Daal


    The black swan will get stuck in the green shoots, buy all dips
  4. I am bullish on this. Death rate isn't pandemic at all. It's not the main story, though it may seem that way.
  5. CET


    The death was of a Mexican citizen that had traveled here for treatment. You sound too scared to be in the market, it is for adults.
  6. Nexen


    Seems like his nickname and the current trend are colliding.

  7. yeah, i shitted my shorts because of the damn flu.

    good point that the kid was not american (but it is american healthcare that was not able to help the poor kid). maybe they brought the kid in too late, who knows...

  8. As harsh as it sounds, old people and toddlers dying of this flu probably won't hurt the market much. As they say, medical statistics are people with the tears wiped away and tears won't kill the economy.

    The real cause for fear coming from Mexico was the reports that many deaths were in the 20-50 year old group. If (and only if) that proves true outside of Mexico and if the infection rate is 20-30% and the death rate is even as high as 3% we will have a market crushing event ( some suggestions have been 50% and 5-10% but current stats are garbage in garbage out territory).

    Say the US has 250M people and 25% get sick ... thats 62M. And 5% of the sick die. Thats 3.1M dead US Americans.

    Someone posted that its the second wave in Fall that would cause the big problem. Fall flu season for you guys is nearly 6 months away so you'll probably get a vaccine first ... I suspect the virus has one shot. Unless of course it mixes with the H5N1 in Indonesia in which case all bets are off and housing is about to get really cheap.
  9. yes, the pattern with bird flu and swine flu is that they kill young and healthy.

    i think the strain that is in circulation now is not super-deadly because the number of total cases in Mexico is unreported. for now the market assumes it is going to be the same strain for the rest of the world. nobody knows if this is true since 1000s(?) novel variants are appearing as the flu is spreading.
  10. The threshold for fear and panic is not quantifiable. All you can do is watch for the signs of something that could but might not occur.
    #10     Apr 29, 2009