More 'bubble trouble' on the way
Calgarians lined up for hours to get H1N1 vaccine
On a highway not too far from the bunker is a yard where a local bus company keeps its rigs. These guys make their money in the charter business. You know, hauling old ladies to the casino, providing transportation for conventions, trucking tourists from the airport to Niagara Falls.
In the yard are tie-ups for about 30 buses.
One summer day in 2003 I was driving by, and noticed that every slot has a bus sitting idle. Then I heard that most drivers had been laid off. If bus rentals were a measure of economic activity, we were in trouble.
In fact, if you lived anywhere near Toronto, you might remember that summer.
More than 800 bus tours were scrubbed, costing businesses about $6 million. During one month alone hotel cancellations cost $39 million. The following month, area hotels were half empty. The dazzling shows at Torontoâ€™s Prince of Wales Theatre played to rows of vacant seats. Restaurant receipts were down by about a quarter.
The mayor of Toronto pleaded with banks to provide more loans to struggling small businesses. The provincial health care system was burdened with $945 million in additional expense.
The Conference Board said the GDP of Canada as a whole declined by about $1.5 billion, while Torontoâ€™s economy shrank by .5%. Nationally the travel industry lost $1.1 billion in bookings.
What caused this massive set of losses? A respiratory ailment called SARS, of course. It ended up killing about 50 people before disappearing â€“ but not before forcing the quarantine of hundreds of thousands of people, and turning thoroughfares like Bay Street into the equivalent of quiet country roads.
I mention this in the context of H1N1. As you know, the US president has declared a state of emergency and there are lineups hours long in American cities of people desperate to get the vaccine. Troubling, there’s a serious shortage of the stuff stateside. In Canada, the sudden death of several children, as well as thousands of new cases are turning Swine Flu into the major media story of the day. Maybe the year.
The economic impact of this is completely unknown, but it will not be small. After all, eight million doses of vaccine in Canada are the result of one contract worth at least $400 million. More significant will be the toll on businesses if the next few months bring widespread school closings, forcing parents stay at home, or if the virus sweeps through offices and factories.
Doubtlessly many people will thump me for even raising this topic, since the conspiracy types already believe H1N1 is exaggerated, some kind of hoax, or (sheesh) an excuse to inject a microchip into everyoneâ€™s bloodstream. And I have no idea.
But I do know this: SARS hurt, a lot. If H1N1 is half the thing we keep hearing about from humourless public health officials, then itâ€™s hard to see how this will not impact the economy and them, ultimately, the markets. If the US is as unprepared as the CDC and CNN make out, it could be another Katrina.
As you know, it also comes at a time when weâ€™re already vulnerable, sinking wildly into public debt and our tourism sectorâ€™s trying to cope with an out-of-control currency.
Hopefully the thing will fizzle, victims will recover and the media can move on to the latest diddling bishop. But until that becomes clear, Iâ€™d be taking some profits, shorting the airlines, holding puts on the indexes, and sitting on cash.
Might be some great deals coming on motor coaches.