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Markets just don’t care about human suffering

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Could China’s New Coronavirus become a Global Epidemic?[1]

That’s the headline of a wired article published yesterday, the same day the first case was confirmed in the US.

The same day, a Forbes article headlined

“Global markets fall amid growing fears over deadly China virus”[2]

It must take a ton of confidence on the part of financial journalists to attribute market movements to non-financial developments. Sure, if a nuclear weapon takes out a small city and markets crash, the cause-and-effect relationship is reasonably evident.

But on 21st Jan, markets fell by under 2%. And yet, financial journalists felt they had enough evidence to attribute the markets’ behaviour to the latest threat to our species (notice how I used dramatic language there?)

What if this virus is as bad as the worst epidemics of the past? Surely that’s good reason for markets to collapse?

Well, not quite.

There have been some pretty bad disease outbreaks in history. Outbreaks that have killed distressing numbers of people. Enough to probably have got enough people around the world thinking “This is it. This is how humanity ends”.

You’d think, at times like these, there couldn’t have been many buyers for frivolous things like stocks of public companies. And therefore markets ought to have crashed. It only makes sense.

In the 20th century, we’ve had four epidemics that were not limited to a single country and have killed more than 10,000 people. All but the last one killed people in the millions.

Table below shows 5 cases that impacted enough countries and affected enough people to be considered worldwide epidemics, their human impact and how markets reacted or did not.Markets just don't care about human suffering

The distressing takeaway from the above table seems to be that participants in the global financial system are just indifferent to human suffering. Markets just don’t seem to care.

Will the latest one be any different?

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