Category Archives: The World
Melting Siberian permafrost threatens major methane release | TG Daily
Posted February 22, 2013 – 02:12 by Emma Woollacott
It could take as little as a 1.5 degree rise in global temperature to thaw Siberia permanently, potentially releasing catastrophic levels of cartbon dioxide and methane from the soil.
It’s good news for mammoth-hunters, but not for the rest of us, with over 1,000 giga-tonnes of the two gases set for release in the event of a thaw.
“As permafrost covers 24 percent of the land surface of the Northern hemisphere, significant thawing could affect vast areas and release giga-tonnes of carbon,” says Dr Anton Vaks of Oxford University’s Department of Earth Sciences.
“This has huge implications for ecosystems in the region, and for aspects of the human environment. For instance, natural gas facilities in the region, as well as power lines, roads, railways and buildings are all built on permafrost and are vulnerable to thawing. Such a thaw could damage this infrastructure, with obvious economic implications.”
The international team studied stalactites and stalagmites from caves located along the ‘permafrost frontier’, where ground begins to be permanently frozen in a layer tens to hundreds of metres thick.
And analysis from a particularly warm period – Marine Isotopic Stage 11 – that occurred around 400,000 years ago suggest that another 1.5°C of global warming of compared to the present is enough to cause substantial thawing of permafrost a long way north of its present-day limit.
The team used radiometric dating techniques to date the growth of the stalactites and stalagmites. Data from the Ledyanaya Lenskaya Cave near the town of Lensk – the coldest region – shows that the only period when stalactite growth took place occurred about 400,000 years ago, during a period with a global temperature 1.5°C higher than today.
Periods when the world was 0.5-1°C warmer than today did not see any stalactite growth in this northernmost cave, suggesting that around 1.5°C is the ‘tipping point’ at which the coldest permafrost regions begin to thaw.
“Although it wasn’t the main focus of our research our work also suggests that in a world 1.5°C warmer than today, warm enough to melt the coldest permafrost, adjoining regions would see significant changes, with Mongolia’s Gobi Desert becoming much wetter than it is today and, potentially, this extremely arid area coming to resemble the present-day Asian steppes,” says Vaks.
Methane may represent a ticking time bomb for global warming. It’s already been discovered bubbling up from the sea bed in the East Siberian Sea; and, as the most potent greenhouse gas, there’s a vicious circle in action. The more methane is released, the more temperatures are likely to rise, triggering the release of yet more methane.
PAKSBAB’s straw-based earthquake-resistant houses
Posted by hipstomp
An article in the Economist on using straw as a building material drew our attention to Darcey Donovan, pictured above. Formerly of California, Donovan is a structural/mechanical/civil engineer and founder of PAKSBAB (Pakistan Straw Bale and Appropriate Building), which promotes straw-bale construction in earthquake-stricken northern Pakistan.
Why straw? In addition to being an excellent insulator,
Straw bale construction…offers numerous benefits, including energy efficiency, the use of natural non-toxic materials, and resistance to earthquakes, fire and pests. However, similar to modern conventional building methods, it typically requires the substantial use of energy intensive and high-cost materials, skilled labor, and complex tools and machinery, making it largely unaffordable for the poor.In response, PAKSBAB has developed simple, unique, low-cost systems that utilize indigenous renewable materials, local labor, and adapt traditional building techniques. Our houses are up to 80% more energy efficient at about 50% of the cost of conventional earthquake resistant construction.
In the following video, Donovan breaks the process down–and one of her houses, tested in an earthquake simulator by the University of Nevada, doesn’t break down.
Follow link for Video -> http://www.core77.com/blog/materials/paksbabs_straw-based_earthquake-resistant_houses_16345.asp
The Aral Sea Catastrophe: One of Earth’s Most Shocking Disasters – 4th Largest Lake Almost Vanished
Central Asia’s Aral Sea is almost totally evaporated -called one of Earth’s most shocking disasters by U.N. Secretary-General Ban Ki-moon. Once the fourth-largest lake on the planet, the Aral Sea has shrunk by 90 percent because the rivers that feed it were largely diverted in a Soviet project to boost cotton production in the arid region. .
U.N. Secretary-General Ban Ki-moon on Sunday called the drying up of the Aral Sea one of the planet’s most shocking disasters and urged Central Asian leaders to step up efforts to solve the problem.
The vastly diminished sea has ruined the once-robust fishing economy and left fishing trawlers stranded in sandy wastelands, leaning over as if they dropped from the air. The sea’s evaporation has left layers of highly salted sand, which winds can carry as far away as Scandinavia and Japan, and which plague local people with health troubles.
Ban toured the sea by helicopter as part of a visit to the five countries of former Soviet Central Asia. His trip included a touchdown in Muynak, Uzbekistan, a town once on the shore where a pier stretches eerily over gray desert and camels stand near the hulks of stranded ships.
“On the pier, I wasn’t seeing anything, I could see only a graveyard of ships,” Ban told reporters after arriving in Nukus, the nearest sizable city and capital of the autonomous Karakalpak region.
“It is clearly one of the worst disasters, environmental disasters of the world. I was so shocked,” he said.
The Aral Sea catastrophe is one of Ban’s top concerns on his six-day trip through the region and he is calling on the countries’ leaders to set aside rivalries to cooperate on repairing some of the damage.
“I urge all the leaders … to sit down together and try to find the solutions,” he said, promising United Nations support, which is hampered by disagreements over who has rights to scarce water and how it should be used.
In a presentation to Ban before his flyover, Uzbek officials complained that dam projects in Tajikistan will severely reduce the amount of water flowing into Uzbekistan. Impoverished Tajikistan sees the hydroelectric projects as potential key revenue earners.
Competition for water could become increasingly heated as global warming and rising populations further reduce the amount of water available per capita. Water scarcity also could brew further dissatisfaction among civilians already troubled by poverty and repressive governments; some observers fear that could feed growing Islamist sentiment in the region.
Casey Kazan via AP and http://cempaka-hotspots.blogspot.com/2010/04/uns-ban-calls-aral-sea-shocking.html
More Info -> http://en.wikipedia.org/wiki/Aral_Sea
Chocolate’s Bitter Truth: How to Avoid the Unethical Aftertaste
Photo: RachelH_ Flickr stream/Creative Commons
Just in time for Easter, BBC1 aired an eye-opening special about the truth behind where many of us get our chocolate. Chocolate: The Bitter Truth follows reporter Paul Kenyon as he goes undercover as a cocoa trader to expose the reality of the industry. While in West Africa, Kenyon learned some disturbing facts, including that there is a high rate of human trafficking and child slave labor involved in chocolate production—even for those products marked “fair trade.”
According to lawyer Terry Collingsworth, a leading critic of the chocolate industry, most legislative efforts to put an end to child labor in the industry have been a “complete failure.” Collingsworth thinks new, more specific laws need to be passed:
Let’s dust off that law, and if you mean what you say and you want to stop the use of child slaves producing products like cocoa, let’s pass that law, and then we’ll have something to work with so that we can successfully stop this crime.
The chocolate companies maintain that they are working to solve the problem. The issue, they contend, is more complex than it seems, as most families need their children’s income to survive.
One thing is for certain: it’s important to know where your chocolate is coming from this holiday season. The biggest influence many of us have is in our pocketbooks. This Easter, vote for fair labor practices with your dollar and buy chocolate from fair trade and organic-certified, slave-free companies such as Camino Cocoa, AlterEco, Dagoba Organic Chocolate, Deans Beans, Equal Exchange, and Green and Black’s.
Here, you can watch the first part of the BBC special, and use the action link below to learn more about your favorite chocolate brand.
Follow link for video -> http://www.takepart.com/news/2010/04/01/documentary-exposes-chocolates-bitter-truth
Alex Lin, Teenage Activist
He’s overseen the recycling of 300,000 pounds of e-waste. He’s successfully lobbied the Rhode Island state legislature to ban the dumping of electronics. He’s used refurbished computers to create media centers in developing countries like Cameroon and Sri Lanka to foster computer literacy.
He’s Alex Lin and he’s just 16 years old.
“I don’t see anything uncommon in it,” says Lin, a high school senior from Westerly, Rhode Island. “My friends and I have been doing this since fifth grade. It’s become part of our lifestyle.”
Lin’s catalytic moment came in 2004 when he chanced upon a Wall Street Journal article. “It first alerted me to the e-waste problem, and warned of an e-waste tsunami to come.”
E-waste, or electronics garbage, is the quickest growing section of the U.S. trash stream. In 2007, Americans discarded more than 112,000 computers daily, according to the Environmental Protection Agency. Even worse, just 18 percent of discarded televisions and computer products were collected for recycling.
While there is no federal law banning e-waste, 20 states have passed legislation mandating statewide e-waste recycling.
If only the states with e-waste laws in their 2010 legislative pipeline—Kentucky, Massachusetts, Nebraska, and Utah, to name a few—had an Alex Lin at their disposal.
Alex Lin, third from right, has taken e-waste matters into his own hands. Photo: Courtesy Alex Lin
The Rise of E-Waste, the Birth of Team WIN
Almost all electronic devices contain varying amounts of hazardous chemicals and heavy metals—lead, mercury, and cadmium being among the most deadly to the human body.
“When improperly disposed of—i.e. dumping, burning, etc.—these chemicals can seep into the surrounding environment, harming humans, crops, and ecosystems,” says Lin. “With the advent of the computer in the 1970s, electronics use has increased exponentially, bringing with it ever-increasing amounts of waste. In the majority of the world, this waste is improperly disposed of, resulting in untold damage to the environment.”
Reduce, reuse, and recycle. These are the so-called 3R’s of eco-friendly behavior. To start, Lin and his student-led community service team, Westerly Innovations Network (WIN), concentrated their efforts on recycling.
“We worked with Metech International to hold an e-waste recycling drive that collected over 21,000 pounds of electronics,” says Lin. With assistance from a private recycling company and the municipal government, they established a permanent receptacle that collects up to 5,000 pounds of e-waste per month, and more than 300,000 pounds to date.
However, once Lin and his team discovered that reusing computers was much more efficient than recycling, they decided to create a computer-refurbishing program. “To make this sustainable,” says Lin, “we worked with the Westerly School System to incorporate computer refurbishing into the A+ Certified Computer Repair class’s curriculum.”
More than 300 refurbished computers were donated to low-income students without home computer access. “It was an eye-opening experience,” says Jeff Brodie, 16, of the moment when he, Lin, and other WIN teammates walked into one Westerly residence to set up a computer. “The kids were running around very excited.”
A Field Trip to the State House
Mission accomplished, right? Not quite. Lin’s e-waste eradication efforts were only ratcheting up. “We recognized that the true sustainability of our project lay in legislation,” says Lin. Through research, they learned of an e-waste bill that had been in the works for years in Rhode Island.
Seizing on the opportunity to translate their local success into the language of a state law, Lin and his team met with Arthur Handy, the state representative sponsoring the bill, and testified before both the House and Senate Environmental Committees. “He came across very well,” recalls Handy of Lin’s presentation as an 11-year-old. “They were clearly well prepared and had clearly thought the issue through.”
The bill, however, did not pass. “We were all disappointed—we had put in all this time and they didn’t listen to us,” says Brodie.
“Looking back at what might have gone wrong, we came to realize that bill was too complicated,” says Lin. To combat this, they drafted a local ordinance encompassing all the positive points of the law. “It was simple—ban e-waste dumping,” says Lin.
This go-round, Lin and his WIN Team sent out thousands of flyers, made radio announcements, wrote articles for local newspapers, and made presentations in front of both student and town council audiences. Handy says he was impressed that Lin had not given up after the failure of the first bill. “It showed that it was not just a school project,” says Handy. “It showed that it was something he had a passion for.”
Local media got wind of the story and helped spread the word to more than a million people in the greater Westerly area. “The biggest challenge against progress is simply awareness,” says Lin. “When my team and I first surveyed our town, only 12 percent of the residents knew how to properly dispose of e-waste.”
The Law of the Land
Fast-forward to October 28, 2005—the day local officials in Westerly unanimously passed Lin’s e-waste ordinance. “It was then proposed as a bill to the State House,” says Lin. “This time we brought a petition with 400 signatures and again testified before both the House and Senate. Bill H7789 passed on July 6, 2006.”
It is now illegal to dump electronics in Rhode Island. Proudest of all might have been Lin’s father, Jason, 47, an engineer who served as the team’s mentor. “It was a tremendous amount of work,” he says with a chuckle.
The bill set the stage for more comprehensive legislation that passed in 2008. “Now Rhode Island requires manufacturers to take back their computers and televisions, and to pay for the collection and recycling of them,” says Sheila Dormody, the Rhode Island Director for Clean Water Action, a non-profit environmental advocacy organization that worked with Lin.
The youth activist awards were piling up nearly as fast as the heaping piles of e-waste were vanishing. In 2005 alone, WIN won first place at the Community Problem Solving Competition, third place at the Volvo Adventure Competition sponsored by the United Nations Environment Program, and a gold prize at the Christopher Columbus Awards.
Scaling Up
As Lin crisscrossed the country and the globe attending these award ceremonies—from Lexington, Kentucky, to Gothenburg, Sweden; from Orlando to Aichi, Japan—he came up with the idea for WIN’s next e-waste endeavor.
“Cooperating with satellite WIN Teams that we established through connections made at conferences and competitions, we have worked to create media centers in areas in need of information technology,” says Lin.
And like that, the WIN Network went global.
“To date, we have sent out over 60 computers in seven media centers to countries such as Cameroon, Kenya, Mexico, Sri Lanka, and the Philippines,” says Lin.
Lin hopes that these media centers will become a model for the sustainable and responsible reuse of computers between nations.
He also wants to “raise awareness of e-waste in developing countries so that they will be able to create the infrastructure to handle e-waste before it becomes a problem.”
According to a report last month issued by the United Nations Environment Programme, the amount of e-waste in developing nations is expected to greatly increase. By 2020, the report says, e-waste from old computers in South Africa and China will have jumped by 200 to 400 percent from 2007 levels, and by 500 percent in India.
For all of his success, Lin’s most far-reaching legacy might prove to be the one closest to home. Like his father did for the original team, Lin has begun mentoring his 11-year-old sister Cassandra’s Junior WIN Team, shepherding their efforts to recycle used cooking oil into biodiesel to help heat homeless shelters.
http://www.takepart.com/news/2010/04/05/alex-lin-teenage-activist
The Internet Nominated for Nobel Peace Prize
The Internet is in the running for this year’s Nobel Peace Prize, the Norwegian Nobel Committee has confirmed. Championed by Wired magazine in Italy, the nomination has been backed by OLPC founder Nicholas Negroponte.
Italian Wired suggests that the Internet should receive the highly regarded prize for helping to advance “dialogue, debate and consensus.”
The nomination from Wired has been dismissed by some as a publicity stunt — and the support of long-time Wired columnist and investor Nicholas Negroponte is hardly surprising. Although currently seeing some success with the One Laptop Per Child program, Negroponte’s past projects have included such dubious endeavors as as Swatch Internet Time.
The award is to be given to the person (or organization) who has “done the most or the best work for fraternity between nations, for the abolition or reduction of standing armies and for the holding and promotion of peace congresses.” The creators of the World Wide Web — Tim Berners-Lee, Larry Roberts and Vint Cerf — have been nominated, too.
The final nominations will be now be considered by the Committee with the winner due to be announced on October 8, while the awards ceremony will take place in December.
Do you think the Internet should be awarded the Nobel Peace Prize? Or should it go to a person or organization? Is Wired’s campaign just a PR stunt? Have your say in the comments below.
Where Will the Next Food Crisis Strike? Extended Geographical Monitoring Using Satellite Observation
Somalia’s Integrated Food Security Phase classification map. (Credit: Image courtesy of European Commission Joint Research Centre)
The European Commission Joint Research Centre (JRC), the Food and Agriculture Organization of the United Nations (FAO) and the American Famine Early Warning Systems Network (FEWS NET) are working to innovate and reinforce their food security monitoring systems and to develop more efficient early warning tools. These efforts come as a response to the 2007-2008 global food crisis that increased significantly the number of countries under threat of famine.
Satellite observation is the key instrument that will allow to double in 2010 the number of countries monitored in real time for detecting first indications of adverse agricultural outcomes. The new Integrated Phase Classification (IPC) system facilitates and accelerates the reaction time to food security crises by allowing a common and internationally recognised classification of their severity.
According to the Food and Agriculture Organization, more than 1 billion people go to bed each night with an empty stomach. In addition, the latest global food crisis resulted in more countries being added to the list of food insecure populations. This is probably the most urgent and dramatic problem that humankind faces today. Food security is not only a crucial issue for developing countries and their more vulnerable inhabitants; it is also key to building a more stable, equal, wealthier and safer world.
Special programmes are run and significant funds are mobilised every year by the international community in an effort to combat the increasing number of food insecure populations. Identifying the times and places where aid is required is crucial to deliver targeted and effective responses. Here is where the scientific community comes into play by developing methodologies and tools to provide timely information and objective assessments of the food requirements, thus supporting the decision-making process with solid evidence.
The power of satellite imagery
Several organisations dealing with food security both in Europe and in the United States traditionally rely on satellite observations to support their assessment activities. As a consequence of the alarming spike in global food prices in 2008, many more countries are potentially threatened by food insecurity and need to be constantly monitored in order to detect early signs of adverse agricultural conditions. Satellite-based forecasting systems will therefore take on increased importance in the next years, allowing organisations to monitor a larger number of countries than it is currently possible to do with in-country offices.
The Joint Research Centre (JRC) will extend this year the real time monitoring system it has developed to forecast food crises. It will cover not only the Horn of Africa, but all the most food insecure countries in Sub-Saharan Africa. As the earth observation and agroclimatic data regularly received by the JRC are global, other countries outside Africa can also be monitored in case of food security crises.
This JRC operational system for regional crop monitoring and forecasting is based on satellite data and innovative agro-climatic models. More than 40 regional bulletins provide each year quantitative and qualitative yield forecasts for food insecure countries around the world, with a particular emphasis in Africa. In 2009, JRC provided for instance an early warning of the drought affecting Kenya, and correctly predicted a 15% below average maize yield one month before harvest.
In the United States, the Famine Early Warning Systems Network (FEWS NET) will extend this year its food security monitoring system from the current 20 to 50 additional countries around the world. The US Geological Survey (USGS), the National and Oceanic Atmospheric Administration (NOAA), and the National Aeronautics and Space Administration (NASA) are establishing expedited procedures for processing of satellite data and model runs to support FEWSNET in this task.
Integrated Food Security Phase Classification (IPC): bringing scientific results closer to the decision making process
When it comes to taking decisions on committing aid resources, policy makers need to have clear and reliable information integrating all dimensions of food security (climate data, economic analysis, nutritional and health data) and a common language on the basis of which all stakeholders can agree on the analysis of the food security situation and possible response options.
The new Integrated Food Security Phase Classification (IPC), built on a large consensus and accepted internationally, makes it possible, avoiding at the same time contradictory results deriving from the use of different scales. Facilitating therefore the donors’ response.
This common classification has been recently developed by seven organisations (JRC, FAO, FEWS NET, Care International, Oxfam GB, Save the children and World Food Programme) dealing with food security information management. It is a standardised scale that integrates the following parameters: food security, nutrition and livelihood information, leading to clear statements about the nature and severity of a crisis.
It covers the full spectrum of possible situations — from ‘food-secure’ to humanitarian crisis — and takes into account the multiple dimensions of food security, i.e. availability, access/livelihood and nutrition. It provides as well a comprehensive framework of concepts, indicators, scales or benchmarks and a common, internationally accepted language. This facilitates the technical consensus on diagnostic among experts and allows sending clearer and coherent messages to decision-makers. Appropriate reporting and mapping tools provide synthetic views on the severity, extension and nature of the food security concerns and their likely evolution in the near future.
In December 2009, the European Commission decided to allocate € 1 276 269 (more than 1.7 million US dollars) over a period of 14 months to the Food and Agriculture Organization of the United Nations (FAO).Together with the JRC, FEWS NET and the other organisations involved in the development of the classification, the FAO will implement the second phase of the IPC initiative in at least 8 focus countries (6 of which located in Sub Saharan Africa) through improved technical development, field support and institutionalisation.
Further information
- Integrated Food Security Phase Classification (IPC): http://www.ipcinfo.org/
- EU’s FOODSEC action: http://mars.jrc.ec.europa.eu/mars/About-us/FOODSEC
- Famine Early Warning Systems Network (FEWS NET): http://www.fews.net/Pages/default.aspx
Story Source:
Adapted from materials provided by European Commission Joint Research Centre, via EurekAlert!, a service of AAAS.
http://www.sciencedaily.com/releases/2010/02/100221200859.htm
Big quake question: Are they getting worse?
This color-coded map shows earthquakes that have been recorded over the previous seven days. The size of the box indicates the quake’s strength, and the color indicates how recently the quake occurred. Notable quakes include the cluster of red boxes in Chile, and the blue box indicating a seismic event in Japan.
Seismic shockers are to be expected, but planet seems to be more active
Chile is on a hotspot of sorts for earthquake activity. And so the 8.8-magnitude temblor that shook the region overnight was not a surprise, historically speaking. Nor was it outside the realm of normal, scientists say, even though it comes on the heels of other major earthquakes.
One scientist, however, says that relative to the time period from the mid-1970s to the mid-1990s, Earth has been more active over the past 15 years or so.
The Chilean earthquake, and the tsunami it spawned, originated on a hot spot known as a subduction zone, where one plate of Earth’s crust dives under another. It’s part of the active “Ring of Fire,” a zone of major crustal plate clashes that surround the Pacific Ocean.
“This particular subduction zone has produced very damaging earthquakes throughout its history,” said Randy Baldwin, a geophysicist with the U.S. Geological Survey.
The largest quake ever recorded, magnitude 9.5, occurred along the same fault zone in May 1960.
Even so, magnitude-8 earthquakes occur globally, on average, just once a year. Since magnitudes are given on a logarithmic scale, an 8.8-magnitude is much more intense than a magnitude 8, and so this event would be even rarer, said J. Ramón Arrowsmith, a geologist at Arizona State University.
Is Earth shaking more?
The Ryukyu Islands of Japan were hit with a 7.0-magnitude quake on Friday night. News of that tremor, the Haiti quake and now Chile may make it seem as if Earth is becoming ever more active. But in the grand scheme of things, geologists say this is just Mother Nature as usual.
“From our human perspective with our relatively short and incomplete memories and better and better communications around the world, we hear about more earthquakes and it seems like they are more frequent,” Arrowsmith said. “But this is probably not any indication of a global change in earthquake rate of significance.”
Coupled with better communication, as the human population skyrockets and we move into more hazardous regions, we’re going to hear more about the events that do occur, Arrowsmith added.
However, “relative to the 20-year period from the mid-1970s to the mid 1990s, the Earth has been more active over the past 15 or so years,” said Stephen S. Gao, a geophysicist at Missouri University of Science and Technology. “We still do not know the reason for this yet. Could simply be the natural temporal variation of the stress field in the earth’s lithosphere.” (The lithosphere is the outer solid part of the Earth.)
While the Chilean earthquake wasn’t directly related to Japan’s 7.0-magnitude temblor, the two have some factors in common.
For one, any seismic waves that made their way from Japan to the Chilean coast could play a slight role in ground-shaking.
“It is too far away for any direct triggering, and those distances also make the seismic waves as they would pass by from the Haiti or Japan events pretty small because of attenuation,” Arrowsmith told LiveScience. (Attenuation is the decrease in energy with distance.) “Nevertheless, if the Chilean fault surface were close to failure, those small waves could push it even closer.”
In addition, both regions reside within the Ring of Fire, which is a zone surrounding the Pacific Ocean where the Pacific tectonic plate and other plates dive beneath other slabs of Earth. About 90 percent of the world’s earthquakes occur along this arc. (The next most seismic region, where just 5 to 6 percent of temblors occur, is the Alpide belt, which extends from the Mediterranean region eastward.)
Colliding plates
The Chilean earthquake occurred at the boundary between the Nazca and South American tectonic plates. These rocky slabs are converging at a rate of 3 inches (80 mm) per year, according to the USGS. This huge jolt happened as the Nazca plate moved down and landward below the South American plate. This is called a subduction zone when one plate subducts beneath another.
(Over time, the overriding South American Plate gets lifted up, creating the towering Andes Mountains.)
The plate movement explains why coastal Chile has such a history of powerful earthquakes . Since 1973, 13 temblors of magnitude 7.0 or greater have occurred there, according to the USGS.
In fact, the Chile earthquake originated about 140 miles (230 kilometers) north of the source region of the magnitude 9.5 earthquake of May 1960, considered the largest instrumentally recorded earthquake in the world. The 1960 earthquake killed 1,655 people in southern Chile, unleashing a tsunami that crossed the Pacific and killed 61 people in Hawaii, Japan and the Philippines.
In November 1922, a magnitude-8.5 earthquake occurred about 540 miles (870 kilometers) to the north of Saturday’s earthquake, triggering a local tsunami that inundated the Chile coast and crossed the Pacific to Hawaii.
Because Saturday’s earthquake was so huge, the amount of shaking experienced in Chile would likely have caused just as much damage had a similar-sized event occurred elsewhere, said Baldwin, the USGS scientist.
“If [the quake] were in Los Angeles you’d probably have massive destruction too,” Baldwin said in a telephone interview.
Gaddafi Calls For Jihad Against Switzerland
Libya’s dispute with Switzerland was intensified Thursday after Libyan leader Muammar Gaddafi called for ‘jihad’ against the European nation “with all means” due to its referendum to ban minarets.
“Any Muslim in any part of the world who works with Switzerland is an apostate, is against (the Prophet) Mohammad, God and the Koran,” Gaddafi said. “The masses of Muslims must go to all airports in the Islamic world and prevent any Swiss plane landing, to all harbors and prevent any Swiss ships docking, inspect all shops and markets to stop any Swiss goods being sold.”
Libya’s feud with Switzerland stems from a 2008 incident in which Gaddafi’s son, Hannibal, was arrested in Geneva over accusations that he had abused his domestic servants.
Switzerland did not comment on Gaddafi’s remarks.
http://www.huffingtonpost.com/2010/02/25/gaddafi-calls-for-jihad-a_n_477155.html
Banks Bet Greece Defaults on Debt They Helped Hide
The police in Greece pushed back against demonstrators on Wednesday as unions staged a one-day general strike to protest austerity measures by the government to reduce its deficit.
Bets by some of the same banks that helped Greece shroud its mounting debts may actually now be pushing the nation closer to the brink of financial ruin
Echoing the kind of trades that nearly toppled the American International Group, the increasingly popular insurance against the risk of a Greek default is making it harder for Athens to raise the money it needs to pay its bills, according to traders and money managers.
These contracts, known as credit-default swaps, effectively let banks and hedge funds wager on the financial equivalent of a four-alarm fire: a default by a company or, in the case of Greece, an entire country. If Greece reneges on its debts, traders who own these swaps stand to profit.
“It’s like buying fire insurance on your neighbor’s house — you create an incentive to burn down the house,” said Philip Gisdakis, head of credit strategy at UniCredit in Munich.
As Greece’s financial condition has worsened, undermining the euro, the role of Goldman Sachs and other major banks in masking the true extent of the country’s problems has drawn criticism from European leaders. But even before that issue became apparent, a little-known company backed by Goldman, JP Morgan Chase and about a dozen other banks had created an index that enabled market players to bet on whether Greece and other European nations would go bust.
Last September, the company, the Markit Group of London, introduced the iTraxx SovX Western Europe index, which is based on such swaps and let traders gamble on Greece shortly before the crisis. Such derivatives have assumed an outsize role in Europe’s debt crisis, as traders focus on their daily gyrations.
A result, some traders say, is a vicious circle. As banks and others rush into these swaps, the cost of insuring Greece’s debt rises. Alarmed by that bearish signal, bond investors then shun Greek bonds, making it harder for the country to borrow. That, in turn, adds to the anxiety — and the whole thing starts over again.
On trading desks, there is fierce debate over what exactly is behind Greece’s recent troubles. Some traders say swaps have made the problem worse, while others say Greece’s deteriorating finances are to blame.
“This is a country that is issuing paper into a weakening market,” said Ashish Shah, co-head of credit strategy at Barclays Capital, referring to Greece’s need for continual borrowing.
But while some European leaders have blamed financial speculators in general for worsening the crisis, the French finance minister, Christine Lagarde, last week singled out credit-default swaps. Ms. Lagarde said a few players dominated this arena, which she said needed tighter regulation.
Trading in Markit’s sovereign credit derivative index soared this year, helping to drive up the cost of insuring Greek debt, and, in turn, what Athens must pay to borrow money. The cost of insuring $10 million of Greek bonds, for instance, rose to more than $400,000 in February, up from $282,000 in early January.
On several days in late January and early February, as demand for swaps protection soared, investors in Greek bonds fled the market, raising doubts about whether Greece could find buyers for coming bond offerings.
“It’s the blind leading the blind,” said Sylvain R. Raynes, an expert in structured finance at R&R Consulting in New York. “The iTraxx SovX did not create the situation, but it has exacerbated it.”
The Markit index is made up of the 15 most heavily traded credit-default swaps in Europe and covers other troubled economies like Portugal and Spain. And as worries about those countries’ debts moved markets around the world in February, trading in the index exploded.
In February, demand for such index contracts hit $109.3 billion, up from $52.9 billion in January. Markit collects a flat fee by licensing brokers to trade the index.
European banks including the Swiss giants Credit Suisse and UBS, France’s Société Générale and BNP Paribas and Deutsche Bank of Germany have been among the heaviest buyers of swaps insurance, according to traders and bankers who asked for anonymity because they were not authorized to comment publicly.
That is because those countries are the most exposed. French banks hold $75.4 billion worth of Greek debt, followed by Swiss institutions, at $64 billion, according to the Bank for International Settlements. German banks’ exposure stands at $43.2 billion.
Trading in credit-default swaps linked only to Greek debt has also surged, but is still smaller than the country’s actual debt load of $300 billion. The overall amount of insurance on Greek debt hit $85 billion in February, up from $38 billion a year ago, according to the Depository Trust and Clearing Corporation, which tracks swaps trading.
Markit says its index is a tool for traders, rather than a market driver.
In a statement, Markit said its index was started to satisfy market demand, and had improved the ability of traders to hedge their risks. The index and similar products, it added, actually make it easier for buyers and sellers to gauge prices for instruments that are traded among players over the counter, rather than on exchanges.
“These indices have helped bring transparency to the sovereign C.D.S. market,” Markit said. “Prior to their creation, there was no established benchmark index enabling investors to track the performance of segments of the sovereign C.D.S. market.”
Some money managers say trading in Greek swaps alone, not the broader index, is the problem.
“It’s like the tail wagging the dog,” said Markus Krygier, senior portfolio manager at Amundi Asset Management in London, which has $40 billion in global fixed-income assets. “There is a knock-on effect, as underlying positions begin to seem riskier, triggering risk models and forcing portfolio managers to sell Greek bonds.”
If that sounds familiar, it should. Critics of these instruments contend swaps contributed to the fall of Lehman Brothers. But until recently, there was little demand for insurance on government debt. The possibility that a developed country could default on its obligations seemed remote.
As a result, many foreign banks that held Greek bonds or entered into other financial transactions with the government did not hedge against the risk of a default. Now, they are scrambling for insurance.
“Greece is not a small country,” said Mr. Raynes, at R&R in New York. “Credit-default swaps give the illusion of safety but actually increase systemic risk.”
http://www.nytimes.com/2010/02/25/business/global/25swaps.html?ref=business
