Out Of Home Today is the leading source for news and information on the out of home industry.

- Advertisement -

It’s the end of the world as we know it

OOH …Here’s One Thing  

0 861

OOH …Here’s One Thing  

by Jim Johnsen,
Managing Director, Johnsen, Fretty & Company



It’s the end of the world as we know it

“Team by team, reporters baffled, trumped, tethered, cropped
Look at that low plane, fine, then
Uh oh, overflow, population, common group
But it’ll do, save yourself, serve yourself
World serves its own needs, listen to your heart bleed
Tell me with the Rapture and the reverent in the right, right
You vitriolic, patriotic, slam fight, bright light
Feeling pretty psyched
It’s the end of the world as we know it
It’s the end of the world as we know it
It’s the end of the world as we know it and I feel fine”

See and hear it here⇒ YouTube REM 


Let’s call a spade a spade. This coronavirus and all the publicity around it, has us all soiling our underwear.  I’m not smart enough to know whether the press has really dialed in the right epidemiologists or has just put some mustard on it because it sells.  So rather than give you my uneducated opinion, I thought it would be interesting to look at what the influenza epidemic of 1918 did to the economy and try to draw some parallels to that.  Here are some relevant quotes from two articles I read on the 1918 situation to get your brain cells humming:

“Although the influenza pandemic of 1918 may be an event that has been relegated to the shadows of American history, the event had significant economic effects. The fact that most of these effects were relatively short-lived does not make them less important to study, especially given the nonzero probability of a future influenza pandemic.”

“1918-19 influenza epidemic killed at least 40 million people worldwide and 675,000 people in the United States (nearly 0.8 percent of the 1910 U.S. population), far exceeding the combat deaths experienced by the US in the two World Wars…To put this in perspective…This epidemic caused a decline in life expectancy of 11.8 years for both men and women in 1918.”

“In all of recorded history, only the Black Death that occurred throughout Europe from 1348-1351 is estimated to have killed more people (roughly 60 million) over a similar time period.”

“The influenza pandemic in the United States occurred in three waves during 1918 and 1919.7 The first wave began in March 1918 and lasted throughout the summer of 1918.

The more devastating second and third waves (the second being the worst) occurred in the fall of 1918 and the spring of 1919.”

“The second wave began in August 1918 with new, deadly outbreaks of influenza occurring nearly simultaneously in Brest, France; Freetown, Sierra Leone; and Boston, Massachusetts. Undoubtedly fueled by the troop movements and demobilization surrounding the end of World War I, the virus spread explosively around the world in the second wave, with worldwide mortality from the epidemic peaking in October and November 1918. Only extremely isolated areas of the world – such as eastern Iceland – escaped the influenza epidemic altogether, and even the strictest quarantines proved ineffective in preventing the epidemic in most regions (Patterson and Pyle 1991). A third wave affected some areas of the world in early 1919, principally England and Wales, Australia, and other countries in the southern hemisphere.

“One source reports that out of 272,500 male influenza deaths in 1918, nearly 49 percent were aged 20 to 39, whereas only 18 percent were under age 5 and 13 percent were over age 50.13 The fact that males aged 18 to 40 were the hardest hit by the influenza had serious economic effects”

Okay, now that you have the good news, here is the good news:

“The World Bank estimates that a global influenza pandemic would cost the world economy $800 billion and kill tens-of-millions of people.” 

“Researchers at the U.S. Centers for Disease Control and Prevention calculate that deaths in the United States could reach 207,000 and the initial cost to the economy could approach $166 billion, or roughly 1.5 percent of the GDP.”

“There is also relatively strong evidence that capital returns were negatively affected by the pandemic. However, we find robust evidence that the influenza had no discernible effect on earnings.”

“Most of the evidence indicates that the economic effects of the 1918 influenza pandemic were short-term. Many businesses, especially those in the service and entertainment industries, suffered double-digit losses in revenue. Other businesses that specialized in health care products experienced an increase in revenues.”

“We argue that the influenza epidemic was likely a contributing factor to the immediate post-WWI 30 recessions. U.S. states with higher influenza mortality also had higher business failures between 1919 and 1921 and were shocked further from trend as a result. At least some of the faster growth between 1919-1921 and 1930 in states with higher influenza mortality likely reflects not a change in trend, but a return to trend after this negative shock. Nevertheless, this epidemic was a large shock that had substantial macroeconomic effects”

Okay, let me break that down for you as I interpret it.  The corona virus hits in a big way.  That really sucks for business as people go into hiding for a while.  When it passes everyone comes back out and buys what they didn’t during the scare…and then some.  So rock on folks.  Wash, sanitize, don’t sneeze and don’t shake and lets get back to business. 

Jim Johnsen


Securities transacted through StillPoint Capital Member firm FINRA/SiPC


Source 1: https://www.stlouisfed.org/~/media/files/pdfs/community-development/research-reports/pandemic_flu_report.pdf

Source 2:  http://www.birdflubook.org/resources/brainerd1.pdf





- Advertisement -

- Advertisement -

Leave A Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: