Fear of Ebola 101814

How quickly markets fall I think. Yet if I look at a chart of EWG (Germany) the exit signal occurred back in 6/14 or if I look at EWC (Canada) the exit signal occurred in 9/14. Because I am biased towards US markets, I look at SPY and that was the last to show weakness (exception being IIF the India fund). This time it was a multitude of reasons but the one standing in front of 95% of Americans is the fear of Ebola virus. Just last month I took my regular once a year flu shot knowing that it covers a majority of flu issues but not the grand master of all, the ebola virus. I was curious to read what my classmates posted on Nassim Taleb of “Black Swan” fame about Ebola. After reading this article I felt his opinion was quite sound.

http://www.businessinsider.in/Nassim-Taleb-Heres-What-People-Dont-Understand-About-Ebola/articleshow/44864143.cms

Ebola is a multiplicative virus. The growth rate is certainly non-linear. The number of people catching it doubles every 20 days. The key to controlling it is at the beginning and at the source. Travel bans may seem excessive but travel bans in the 3 affected areas is more important than trying to close borders – we know we are not effective at border control anyway. Reminds me of the old movie “Outbreak” I think… building a dome around the contagion? This all sounds crazy and rarely do our politicians agree on anything other than that which helps them all get elected. I expect we will see both parties calling for travel bans. And do we prevent Texas folks from traveling to the rest of the US? After all the nurse that stepped on the Frontier plane risked spreading the disease all around the country?

My cab driver from the airport last week has his home in Sierra Leone, West Africa. He is 69 years old, has been driving a cab for 15 years and will keep working for another 2 years till his oldest son can complete his Dentistry schooling….. He worries about his family in Sierra Leone. He says that all schools are closed. Taleb is right. See article in Forbes on the devastating effect on its economy...

http://www.forbes.com/sites/mfonobongnsehe/2014/10/16/ebolas-impact-on-sierra-leones-once-flourishing-business-sector/

We need to take the fight to Africa. I think the real heroes are the Doctors and social workers and organizations who are sending medical supplies to Africa and some with the incredible courage to go to Africa to help. I include as heroes the Doctors and Nurses in the US who stepped up to the front line in this fight.

The markets have shown a significant increase in volatility as we well know. I have been on the side lines and was considering dipping my toes back as I think we have seen a reversal but work and travel has kept me busy. I will most likely add to my negative stance when the market bounces a little more, as I expect a retest of the lows or another leg down. Overall the drop in oil prices have been catastrophic for “oil” countries such as Russia, Saudi Arabia, Canada etc. Question is will the US economy hold up and keep the rest of the World stable or the other way around…no one really knows.