Broker Check

FEAR and What Wall Street Knows

May 11, 2020
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Like you, I am ready for this pandemic to end and for us to go back to our lives. While talking to my daughter, I began to understand the fear that permeates most both young and old. It is not just the press focusing on the negative, it is past viruses, particularly the Spanish flu of 1918. My daughter points to that flu as an example of waves of the flu for years. Is that true? Is the pandemic of 1918 a model of what is going to happen in 2020 and 2021? Will we see years of the pandemic with new strains appearing at each season?

I think it would be helpful for all of us to know the truth so that we can start planning our lives going forward. Some have said that f.e.a.r. is false evidence appearing real. I think that the fear of a repeat of 1918 is just that, false evidence appearing real. Allow me to explain.

The Spanish flu pandemic of 1918, the deadliest in history, infected an estimated 500 million people worldwide—about one-third of the planet’s population—and killed an estimated 20 million to 50 million victims, including some 675,000 Americans. (understand that record-keeping throughout the world at that time was at best bad.) The 1918 flu was first observed in Europe, the United States, and parts of Asia before swiftly spreading around the world. At the time, there were no effective drugs or vaccines to treat this killer flu strain. Citizens were ordered to wear masks, schools, theaters, and businesses were shuttered and bodies piled up in makeshift morgues before the virus ended its deadly global march.

What Is the Flu?

Influenza, or flu, is a virus that attacks the respiratory system. The flu virus is highly contagious: When an infected person coughs, sneezes or talks, respiratory droplets are generated and transmitted into the air, and can then be inhaled by anyone nearby.

Additionally, a person who touches something with the virus on it and then touches his or her mouth, eyes or nose can become infected.

Flu outbreaks happen every year and vary in severity, depending in part on what type of virus is spreading. (Flu viruses can rapidly mutate.)

Flu Season

In the United States, “flu season” generally runs from late fall into spring. Hot humid air is said to kill the flu. In a typical year, more than 200,000 Americans are hospitalized for flu-related complications, and over the past three decades, there have been some 3,000 to 49,000 flu-related U.S. deaths annually, according to the Centers for Disease Control and Prevention. (Understand, that these numbers are based on what is reported to them. Most that get the flu do not report their sickness nor go to the doctor.)

Young children, people over age 65, pregnant women, and people with certain medical conditions, such as asthma, diabetes, or heart disease, face a higher risk of flu-related complications, including pneumonia, ear, and sinus infections and bronchitis and death.

A flu pandemic, such as the one in 1918, occurs when an especially virulent new influenza strain for which there’s little or no immunity appears and spreads quickly from person to person around the globe.

Spanish Flu Symptoms

The first wave of the 1918 pandemic occurred in the spring and was generally mild. As a result, some would argue that it was not the same flu that struck the following fall. The sick, who experienced such typical flu symptoms as chills, fever, and fatigue, usually recovered after several days, and the number of reported deaths was low. It was the typical flu. 

However, a second, highly contagious wave of influenza appeared with a vengeance in the fall of that same year. Victims died within hours or days of developing symptoms, their skin turning blue and their lungs filling with fluid that caused them to suffocate. In just one year, 1918, the average life expectancy in America plummeted by a dozen years. There is little evidence of what the real cause of the new strain was. Remember the record-keeping was minimal and the ability to communicate around the globe was not possible or minimally possible.

What Caused the Spanish Flu?

It’s unknown exactly where the particular strain of influenza that caused the pandemic came from; however, the 1918 flu was first observed in Europe, America, and areas of Asia before spreading to almost every other part of the planet within a matter of months. (I believe that our prolific ability to spread news makes us more negative and fearful than is merited. Read on to understand what I mean.)

Despite the fact that the 1918 flu wasn’t isolated to one place, it became known around the world as the Spanish flu, as Spain was hit hard by the disease and was not subject to the wartime news blackouts that affected other European countries. (Even Spain's king, Alfonso XIII, reportedly contracted the flu.)

One unusual aspect of the 1918 flu was that it struck down many previously healthy, young people—a group normally resistant to this type of infectious illness—including a number of World War I servicemen. It is the worst of all worlds for troops from numerous countries moving throughout Europe.

In fact, more U.S. soldiers died from the 1918 flu than were killed in battle during the war. Forty percent of the U.S. Navy was hit with the flu, while 36 percent of the Army became ill, and troops moving around the world in crowded ships and trains helped to spread the killer virus.

Although the death toll attributed to the Spanish flu is often estimated at 20 million to 50 million victims worldwide, other estimates run as high as 100 million victims - around 3 percent of the world's population. The exact numbers are impossible to know due to a lack of medical record-keeping in many places.

What is known, however, is that few locations were immune to the 1918 flu—in America, victims ranged from residents of major cities to those of remote Alaskan communities. That should not be a mystery when the military included those from every state and every location in that state. Even President Woodrow Wilson reportedly contracted the flu in early 1919 while negotiating the Treaty of Versailles, which ended World War I. 

Where Did the Spanish Flu Come From?

Scientists still do not know for sure where the Spanish Flu originated, though theories point to France, China, Britain, or the United States, where the first known case was reported at Camp Funston in Fort Riley, Kansas, on March 11, 1918.

Some believe infected soldiers spread the disease to other military camps across the country, then brought it overseas. In March 1918, 84,000 American soldiers headed across the Atlantic and were followed by 118,000 more the following month. They then brought it back with them from overseas to every community in the US. 

Fighting the Spanish Flu

When the 1918 flu hit, doctors and scientists were unsure what caused it or how to treat it. Unlike today, there were no effective vaccines or antivirals, drugs that treat the flu. (The first licensed flu vaccine appeared in America in the 1940s. By the following decade, vaccine manufacturers could routinely produce vaccines that would help control and prevent future pandemics.)

Complicating matters was the fact that World War I had left parts of America with a shortage of physicians and other health workers. And of the available medical personnel in the U.S., many came down with the flu themselves.

Additionally, hospitals in some areas were so overloaded with flu patients that schools, private homes, and other buildings had to be converted into makeshift hospitals, some of which were staffed by medical students.

Officials in some communities imposed quarantines, ordered citizens to wear masks, and shut down public places, including schools, churches, and theaters. People were advised to avoid shaking hands and to stay indoors, libraries put a halt on lending books, and regulations were passed banning spitting. But this happened after the disease had already spread throughout the country. 

According to The New York Times, during the pandemic, Boy Scouts in New Youk City approached people they’d seen spitting on the street and gave them cards that read: “You are in violation of the Sanitary Code.”

Aspirin Poisoning and the Flu

This is the most interesting aspect of the 1918 pandemic. With no cure for the flu, many doctors prescribed medication that they felt would alleviate symptoms… including aspirin, which had been trademarked by Bayer in 1899—a patent that expired in 1917, meaning new companies were able to produce the drug during the Spanish Flu epidemic. 

Before the spike in deaths attributed to the Spanish Flu in 1918, the U.S. Surgeon General, Navy, and the Journal of the American Medical Association had all recommended the use of aspirin. Medical professionals advised patients to take up to 30 grams per day, a dose now known to be toxic. (For comparison’s sake, the medical consensus today is that doses above four grams are unsafe.) Symptoms of aspirin poisoning include hyperventilation and pulmonary edema, or the buildup of fluid in the lungs, and it’s now believed that many of the October deaths were actually caused or hastened by aspirin poisoning.

The Flu Takes Heavy Toll on Society

The flu took a heavy human toll, wiping out entire families and leaving countless widows and orphans in its wake. Funeral parlors were overwhelmed and bodies piled up. Many people had to dig graves for their own family members.

The flu was also detrimental to the economy. In the United States, businesses were forced to shut down because so many employees were sick. Basic services such as mail delivery and garbage collection were hindered due to flu-stricken workers. Not true today.

In some places, there weren’t enough farm workers to harvest crops. Even state and local health departments closed for business, hampering efforts to chronicle the spread of the 1918 flu and provide the public with answers about it.

How U.S. Cities Tried to Stop The 1918 Flu Pandemic

A devastating second wave of the Spanish Flu hit American shores in the fall of 1918, as returning soldiers infected with the disease spread it to the general population—especially in densely-crowded cities. The soldiers continued to return over a period of six months! (The reference to a second wave assumes that the virus in the spring of 1918 was the same virus even though it was quite mild.) Without a vaccine or approved treatment plan, it fell to local mayors and healthy officials to improvise plans to safeguard the safety of their citizens. With pressure to appear patriotic at wartime and with a censored media downplaying the disease’s spread, many made tragic decisions.

Philadelphia’s response was too little, too late. Dr. Wilmer Krusen, director of Public Health and Charities for the city, insisted mounting fatalities were not the “Spanish flu,” but rather just the normal flu. So on September 28, the city went forward with a Liberty Loan parade attended by tens of thousands of Philadelphians, spreading the disease like wildfire. In just 10 days, over 1,000 Philadelphians were dead, with another 200,000 sick. Only then did the city close saloons and theaters. By March 1919, over 15,000 citizens of Philadelphia had lost their lives. Look to NYC having their celebrations and parades defying the severity of the disease today and what happened in New York as a result. Because of the speed of communication today, that was not duplicated anywhere in the US. 

In 1918 St. Louis, Missouri, was different: Schools and movie theaters closed and public gatherings were banned. Consequently, the peak mortality rate in St. Louis was just one-eighth of Philadelphia’s death rate during the peak of the pandemic.

Citizens in San Francisco were fined $5—a significant sum at the time—if they were caught in public without masks and charged with disturbing the peace. Yes, even in 1918, the constitution was abused, but we did not lose our freedom after that, so that fear should be abated. 

Spanish Flu Pandemic Ends

By the summer of 1919, the flu pandemic came to an end, as those that were infected either died or developed immunity. For those that have said that there were numerous strains of the flu in 1918 and that there were waves of the flu that lasted years, they are wrong. Despite it starting in the spring of 1918, it was mild. The real pandemic did not start until the fall of 1918, which also meant that it was not present during the summer of 1918 and pretty much disappeared in the summer of 1919.

The 1918 flu started in the fall and ended that next summer…one season. No new waves and no vaccines and little to no remedies to reduce the severity. Were some of the deaths misdiagnose…probably. Did everyone that had the flu have the “Spanish flu”? Probably not. 

My point is that even the “most deadly flu” was one season and spread principally because of a world war and because medical science was still in its infancy. And yet, this flu lasted one fall and one spring and ended one summer…without a vaccine. 

Why am I writing this? Because we are running on false narratives that have no basis on reality or history. They are theories with no proof. I am not insensitive to the plight of those who have died from this disease, but I have yet to hear any evidence that makes me believe that we are going to see multiple waves of this flu for years to come. There has never been anything like that even in 1918 where technology and medical science were almost nonexistent.

I think that those of us as investors need to stay positive and stay invested because the news will be more positive than negative going forward. Will the economy turn on a dime? No, because we have devastated the economy with measures that essentially shut it down. But we will get back on our feet by Christmas and shop like we never had a virus…remember we are still a nation of spenders, not savers. 

Wall Street does know something that most are denying. Our economy is going to recover and will be stronger than before because we have revealed the dangerous intentions of the Chinese. More countries will be trading with us versus the Chinese because we are a safer bet. The pandemic has made us smarter and our country is the most innovative economy in history and will develop new products and industries as a result.

Do not believe the naysayers as I believe they have an agenda and they will do whatever is necessary to convince us that their agenda is the truth. As of yet, my research tells me that they do not have the truth…just an agenda. 

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