Monday, April 19, 2010

The Daily Note - Nature's Power

The thought that nature's power can strike at any moment without warning is obvious and known my all of us yet most of us do not think about it from day to day because it would be depressing if not paralyzing to development, so the best we can be is prepared. Some are easier to prepare for than others and some of nature's force is far more reaching than others. 

The dreadful damage brought on by a hurricane can be prepared for planned and because it is visually observed in development, we can be forewarned about its timing. Others such as tsunamis are less predictable, yet we are in development of a track and warning system, so the can be minimized. Then there are earthquakes which strike without warning and still without a system which can predict its timing.  Volcanic eruptions are somewhere in between. By observation, scientific measurements of gaseous clouds, we can predict an eruption and warn of imminent danger for evacuation, yet it has  the potential to create the most costly and disastrous effect. 

 All of nature's power can wreak havoc and cause great cost in damage, but the damage is limited to the area of occurrence. A volcano, as now witnessed by the current generation, has a much wider area of fallout, and a much larger associated cost. 

The ash cloud of Iceland's volcanic eruption is the prime cause of damage currently being assessed. As I stated last week on twitter, the then reported airline industry's halt of operations was just the beginning of this cost "fallout".  The IATA (International Airline Transportation Association) estimated conservatively that the airline industries cost would be about $200 million per day. That cost does not include the additional costs to the industry  due to re-routing, and care taking of passengers. The cost is conservative also because there are no real measures of cost to airline travel other than the cost per passenger mile, which presumes that an aircraft can fly. In this case however, aircraft are stranded in one place reduces the ability of service at another, requiring additional stress of the airline fleet and possible reduction in service at other areas due to reduction of flight staff; but none of that includes the cost to the travel industry as a whole. 

Airline travel supports more than airlines. Airports lose landing/take off fees, airport vendors lose fresh customers to just name the immediate. But the nature of travel is that the passengers traveling need necessary amenities which are provided by ground transportation, restaurants and hotels. Additionally, the sight seeing or tourism industry on ground suffer as well, so the cost can run into the billions and we are not done yet. 

Mount St. Helen's eruption of 1980 had a cost estimate loss of 2-3 billion dollars which included tourism and cost of housing damage. It effected a large area and buried 24 square miles (62 square kilometers) yet the detectable ash fallout covered 22,000 square miles (57,000 km2). Compare that to the size of Austria at 32,378 square miles, or the size of Maine at 33,265 square miles. Once put into perspective we are beginning to see the potential damage to Europe, and we are still not done.

Besides ash fallout, there are other gaseous materials which are spewed into the atmosphere eventually to fall down somewhere. The SO2 released is by far the most damaging. It produces acid rain wreaking havoc with plants, crop growth, wild life and buildings in addition to human tissue and other internal complications.  It also produces a reflective cloud which can account for as much as a  measured 5 degree of cooling. This cooling effect may be good news to the global warming enthusiasts in a way, but it is not good news for the agriculture industry, as long as this fine ash cloud stays aloft, consequences will be felt. 

The good news however in this is that we, humans, adapt well as things change but the bad news is that human society is territorial by nature and therefore will invade in order to lay claim to better areas as climate or other disasters necessitate. Further bad news is that cultures, civilizations have declined and disappeared much more often due to nature's power rather than man made disasters.  

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Happy Trading, Living and Dancing

P.S. I had a disaster of my own this morning. As I was about to publish my first draft of this article my entire essay except for one smidgen of a sentence, disappeared. I still cannot remember which button I hit for that to happen, but it did.  Some of you who write may know that it takes a bit of time to put a piece together but with research like for this article,  it took much longer.  Needless to say, I was not in a jovial mood following my disaster since I wanted it out before today's trading for the airline stocks of course re-creating it fast was impossible so I took some downtime to adapt. This, my current work now published is the second draft, and I will say again that everything happens for a reason, because I consider it much better than the first. You, my readers, of course will not be able to judge so just take my word for it.  I scrubbed today's trade since it was an airline stock and it is now past it's prime.

Copyright DayTrading with Anni 2010