swine-flu1In case you’ve been in a cave the past couple weeks (at the bottom of an ocean on another planet) there’s this thing going around called Swine Flu.  My initial reaction was pretty calm.  “This is seems like it’s just another Bird Flu or SARS,” I thought to myself.  And since I still had some plastic sheeting and duct tape left over from those outbreaks, it really wasn’t that much of an inconvenience when I freaked out.

As I was sealing off the windows and front door of my apartment, I was struck by the familiarity of it all.  It was if the media was maybe blowing some illness that, though horrible in the fact that people had died, was actually pretty minor when compared to all other sickness in the world.  And maybe I was buying into to the media’s blitz of searing panic, yet again.  So I decided to watch a little of the cable news channels with a doubtful eye, keeping in mind that maybe the media wasn’t so much trying to inform me, but get me scared to keep watching.  After about 45 minutes, I grabbed a baseball bat and put on a surgical mask (the mask was to prevent any flu particles that made it past the plastic sheeting and duct tape from getting into my system and the bat was to keep away anyone that looked infected).

But something struck me as I was cowering in the corner and rocking back and forth—in between the apocalyptic warnings of the coming plague by the newscasters there was a bit of actual news.  It went something like this: “We’re all going to die from swine flu! Everyone in Mexico is dead from coughing up their lungs and bleeding out of their ass! Oh yeah, Chrysler declared bankruptcy or something.  Don’t eat pork!  The flu is in the pork!”

Did you catch it? A major American automotive company declared bankruptcy and you know what?   The economy didn’t collapse in on itself.  In fact the Dow didn’t even dip below 20 points.  If the mainstream media weren’t so busy obsessing over how we’re all going to die from the flu, they’d be pouncing all over how the failure of Chrysler is another sign of how we’re all going to die from starvation.

So, while I was building my own hazmat suit from an old poncho, a couple garbage bags, and a vacuum cleaner, I got to thinking that maybe the swine flu is a good thing.  If the news stories focused on the downward spiral of the economy were affecting the stock market by scaring investors, maybe this new obsession is a way to keep the media occupied on something else and thus give the economy a chance to rebound. And while I am an expert in many areas, from classic cartoon shows of the early 90’s to metaphors for sex in pre-Victorian English literature—I’m really just an amateur in regards to understanding economics. I decided to run my theory by an expert.“I’d agree with you 100% in the fact that it is a distraction,” Jeff Mellone, a finance blogger who also works in the industry, told me.  “However, any other negative news will further the overall downturn. Any type of additional ‘panic’ will put people further into an Armageddon type of mindset. Most of that mindset does come from the media.”

I had refused to risk infection by talking to anyone face-to-face or over the phone (it made sense at the time), but Jeff was willing to answer my questions via e-mail.  He explained that the downturn seemed to come out of nowhere because the government’s initial reaction was to conceal news about the dire economic condition while covertly trying to fix the problem behind the scenes.  But then the credit market froze up and Bear Stearns collapsed, catching people off guard and creating a panic.  “Panic causes selling, selling causes margin calls, margin calls result in more selling,” said Jeff. “It’s a snowball. So overall, I can’t agree that [the media’s reaction to Swine Flu] would be positive for the economy, because anything unknown at this point is negative. People are blind mice right now, losing their tails by the dozen.”  But what about the fact that the there was no real reaction in the markets to the new about Chrysler? “I think the market closed down only 20 points based on Chrysler’s bankruptcy because people are expecting the sky to fall,” he explained.

So maybe I was wrong. Maybe we shouldn’t be weary of the Swine Flu, but of the media and its effect on us. “I think that everyone should take in all media sources,” said Jeff. “Just don’t rely on it.” And as the swine flu panic dies down to a low murmur and people began to throw around the phrase “signs of life” in regards to the economy, a possible rosy view of the future comes into view.“Yeah,” I think to myself as I venture once more into packed subway cars and crowded office buildings.  “Maybe everything is going to be okay after all.”  Or at least until the next thing comes along that could kill us all.

Hey guys, I recommend you check out Jeff’s blog, Riding the Dollar Wave. It’s a good read, even if you don’t have any money in the markets (like me, who cashed out his 401K to invest in collectable metal lunch boxes).