Mar

1

people run from an approaching tsunami in Hilo ,HawaiiOne wonders about the impact of this earthquake on copper and basic materials prices. Is the infrastructure (rail, ports, etc.) in Chile damaged to the extent that copper shipments will be impaired for several weeks/months? And what of the demand for basic materials to repair all the other infrastructure? More ominously, is there a trend in increasingly destructive earthquakes (and collateral effects such as the 2004 tsunami disaster?)

Anton Johnson comments:

I found the paper "Measuring the Impact of Natural Disasters on Capital Markets" by Worthington and Valadkhani of Queensland University of Technology to be interesting.

George Parkanyi adds:

On vacation in Hilo last summer, we went to the tidal wave museum. There have been many major earthquakes around the Pacific rim in the past 100 years, yet only two generated killer tsunamis in Hilo Bay. The profile of an earthquake is very important to how much and how the energy propagates. The ones that tend to spawn dangerous tsunamis are the ones that cause a shearing and shift up or down of one side of the ocean floor, like the 2004 one in Indonesia. It is always correct to take the precaution of evacuating low-lying areas, because you can never know if any given earthquake will be one to generate a killer, but I don't think it is something to be overly feared, because of the relative infrequency, and the fact that there is usually plenty of time to evacuate. When you don't have a lot of time, and need to move really fast, is when you feel the earthquake, because that means it happened nearby, and is its own warning.

The risk of anyone's being hurt, in Hilo at least, is also lessened by the fact that Hilo was smart and didn't allow any re-building of residential buildings in the low-lying mapped out flooding zone. There are commercial buildings, but the chances of anyone being surprised at night in their beds is near 0. I'm pretty sure that Japan has similar measures in place along its coasts.

Kim Zussman writes:

Thanks to Big Al for the link, which produced the following academic study:

Looking just at earthquakes >7 magnitude, since 1900 has the death/year increased over time?

Running two regressions, one (death count) vs year, and the other (death count) vs year only for deaths>10, the slope coefficient was not statistically significant. Here for the second regression:

The regression equation is
deaths10+ = - 121592 + 66.3 Year

Predictor     Coef   SE Coef      T      P
Constant   -121592   131916  -0.92  0.358
Year             66.27    67.36   0.98  0.326

S = 30633.2   R-Sq = 0.4%   R-Sq(adj) = 0.0%

Note however the "Year" coefficient of 66 is positive (ie, rate increasing by 66 per year), so perhaps it will become significant sometime before Nasdaq 5000.

Jim Sogi comments:

There are interesting google results on earthquake and full moons. The theory is that gravity and tides contribute to geological pressures. We've discussed the full moon effect before on markets. Similar result for geological phenomena, but anecdotally very compelling.


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2 Comments so far

  1. Craig Bowles on March 2, 2010 7:37 am

    The full moon was Sunday and Arch Crawford showed how every short-term bottom has reversed around a full moon since summer. All short-term highs have reversed at new moons. The Bradley model is supposed to have a lot of these tidal forces and turns down this month through summer in one of the biggest declines ever, according to Arch. If you watch the Old Faithful Geyser, the market tends to go up the 30 minutes around eruptions. When the geyser goes off around 9:45AM, it goes off at 3:45PM if it remains constant. So you get more bullish periods than bearish and markets tend to go up. Scientists say you can predict other than one eruption out but it seems to be connected with the moon. So you get constant cycle days roughly 4-5 days after the new or full moon. The cycle is bullish right now but due to shift to a bearish day on maybe Wednesday. You can't really tell exactly when but only that it will be constant when it does. It runs about 19 trading days after the last. The constant days are the only ones helpful as everything can shift on the other days mid-session. It sounds crazy but can't be coincidence when so constant with intraday trends.

  2. vic on March 2, 2010 12:55 pm

    It is good to know that Arch is still astrologing as I knew him 45 years ago with his ability to predestinate after it happened. Give him regards from Frank Cross from below and myself. vic

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