Finally, Here Come The Banks: “Ebola Is A Tail-Risk That Can No Longer Be Ignored”
by Tyler Durden
ZeroHedge.com
10/08/2014
Barclays’ FX Research team explains why Ebola can no longer be ignored…
1. Is Ebola a significant market risk?
Before the current Ebola outbreak began in December, the disease was already notorious and fear inspiring despite having afflicted only 2,345 people in the 37 years since its discovery, nearly all of whom were in remote villages in Central Africa and 1,546 of whom died. Yet, as long as sporadic outbreaks remained contained and confined, it had little impact on the global economy or markets. The current outbreak in West Africa may be changing that.
The West African Ebola outbreak that began in Guinea is notably different from prior outbreaks in ways that significantly increase its chances of having a broader impact. In particular, Ebola’s likelihood of spreading to larger, more integrated economies has increased. It remains a tail risk, but has jumped in probability to one that can no longer be ignored.
There are several important differences between this Ebola outbreak and previous episodes.
First is its size: confirmed cases and mortalities – 4,087 and 2,071, respectively – already are greater than all prior outbreaks combined and growing at an uncontrolled pace. Including probable and suspected cases increases those numbers to 7,470 and 3,431, respectively (Figure 1), and both the US Centers for Disease Control (CDC) and the World Health Organization (WHO) believe these numbers are underestimated, perhaps by a factor of 2.5.
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