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  • Sandy's Lessons (the Automatic Earth)

    MONDAY, NOVEMBER 12, 2012 1:46 PM




    Disaster and Preparedness: How Well Are We Doing?


    Superstorm Sandy has been a devastating experience for many, and will continue to be so for a long time to come. Much of the damage will take weeks or months to repair, and some may take years. A myriad long battles with insurance companies are a given, as the available funds are unlikely to match the damage and there will be many arguments as to what is covered. The impacts are widespread, but unevenly distributed, as the repairs will be. Like Katrina before it, Sandy will be a defining event in the lives of many people.

    Sandy illustrates a number of important points - how fundamentally dependent modern society is on centralized life-support networks, how interconnected different dependencies are, how crucial the role of energy really is, how disruption in one system can cascade into impacts in many others, and how unprepared people typically are to withstand even relatively short disruptions of essential services. Sandy provides a very useful case study in what we can do to prepare for challenging times, whether those occur due to hurricanes, ice-storms, earthquakes, financial collapse or other possible eventualities.


    Most people do not realize that their government expects them to look after themselves for several days in the event of a disaster. Here in Ontario, people are expected to cover for themselves for 72 hours before any external assistance can be provided, but this has not been effectively communicated. Most people are not aware, and many with acute dependencies of various kinds could easily be in trouble long before that, especially in a climate that can be very unforgiving. Emergency preparedness has been given far too little attention, meaning that people are far more vulnerable than they should be. Even a small amount of individual preparedness can go a long way, preparation at a family or community level is even more valuable, and well-communicated municipal emergency preparedness plans can make a major difference.

    Sandy hit with high winds, rainfall and a major storm surge at an unusually high tide, causing enormous damage to local infrastructure, particularly along the coast and where the surge was funnelled into inlets. Overhead powerlines were downed by wind, falling trees and flying debris, while underground infrastructure was flooded with salt water, transformers exploded and fires (that could not be reached due to flooding) devastated some communities. Power outages affected millions of homes, and also other essential services such as gas stations, food outlets, hospitals, water supply, and communications. People charging mobile devices in public places with power became a common sight, underlining the critical role of electronic communications.

    Transport was crippled in many places by loss of vehicles, closure of flooded subways, blocking of routes for overland travel, debris blocking the harbour to tanker deliveries, and lack of pumping capacity at gas stations. Gas stations with power were overwhelmed by demand, so that lines hours long formed, stations began to run out and tempers flared. Demand for gas was compounded by people filling additional canisters in order to have a supply cushion for vehicles, but also to run generators compensating for the lack of mains power. Gas rationing was instituted in New Jersey and New York City, limiting even numbered licence plates to even days and odd numbered plates to odd days, in an attempt to ease waiting times.

    Without adequate transport, providing relief to immobile and vulnerable people is very much more difficult. These people may already have been without food, water, power, heat and medicines for many days before public services can even begin to assess their needs. What we are seeing in affected areas is the extent to which people must look after themselves and each other in times of acute crisis, and what is possible in this regard when push comes to shove. Private initiatives of all scales have been a major part of the immediate disaster relief effort, from individual households with power providing extension cords outside to passersby, families offering to take in others, restaurants providing free meals and gathering places, and big businesses supplying generators and other emergency equipment.

    Where such measures are offered, they can make a very significant difference, especially in the immediate aftermath where rapid response time can be achieved. In other less fortunate areas - often outer areas where damage is extreme - people are already beginning to feel abandoned in the wake of Sandy. Increasingly worried about looting or other forms of crime, they are arming themselves and posting warning signs amid the debris. The potential for unfortunate incidents is rapidly escalating, and it could be a long time before the public service response makes much difference. Ironically, however, there are indications that crime rates have actually fallen with people relatively immobilized.

    As useful as private efforts are in terms of rapid response, over time they can develop into a disaster capitalism scenario if left unchecked. Private capital may be able to deliver quicker rebuilding, but if this involves scrapping regulatory frameworks and converting public infrastructure into a private for-profit version, the benefit may not be worth the cost to the public good. The risk is that rebuilding could lead to further scaling up, greater centralization in the hands of the few, erosion of local control and local supply chains. A response weighted towards private initiatives could easily end up providing rapid and comprehensive rebuilding in wealthy areas, while neglecting repairs in poorer neighbourhoods. Getting the balance right between mobilizing all appropriate efforts to rebuild, while providing evenly distributed repairs and not ceding too much control over the results, can be very difficult.

    The initial attempt to go ahead with the New York marathon did not help matters, as people saw resources such as large generator trucks mobilized to service with event venues that could have been deployed to help suffering locals. Cancelling the race was clearly advisable, but much public relations damage was already done. Angering people under such circumstances increases the potential for antisocial responses that can have cascading effects.

    A second punch in the form of a powerful, and unusually early, nor'easter has caused significant setbacks for recovery efforts. Many people whose power had been restored have now lost it again. Those without heat are suffering even more in cold temperatures, high winds are threatening further damage to weakened structures, and several inches of snow are adding to transportation woes.

    Restoring some services is going to be a long term process. Flooded tunnels must be pumped out, but that is only the first step. The salt water will have penetrated any damaged areas and will cause rapid corrosion. This is likely to have a significant impact on the 108 year old subway system for years, until all the affected equipment has been replaced. Powerlines have been downed and must be rebuilt, often in areas that are very heavily damaged in other ways. This too will take a long time.

    There have been suggestions that powerlines should have been built underground, and there may be pressure to rebuild them this way. This is actually not the panacea one might imagine, and might not have protected the infrastructure entirely from storm damage. Building underground transmission lines is approximately twenty times as expensive as overhead. It involves costly insulated cable instead of simple wires. It sterilizes a much larger land corridor. Faults can be difficult to find and very expensive to repair. Taking this approach would add greatly to the cost and timeframe of restoration efforts.

    Gasoline supplies should be slowly normalizing, as tankers are now able to bring in supplies. Fuel distribution could be tricky in some places for quite a while though. When people are put into a mindset that supplies might be unreliable, they increase demand in the short term in order to purchase and hoard a supply cushion. This dynamic can persist for some time, meaning that stretched infrastructure and supplies may have to service higher than normal demand while not yet fully restored. Given that gas supplies may be necessary for both transport and generator fuel, increased demand is even more likely. Fuel storage at home can be dangerous, meaning that many people may be running significantly increased fire risk at a time when the ability to deal with fires may be still impacted by storm damage.

    Supply chains for many goods have been disrupted and may remain so for some time, as supply chains are often very long and complex, and can be broken in many different ways. The effects of shortages of one thing can then rapidly impact on the supply of others. Our just in time supply system, with little inventory to act as a cushion, is particularly vulnerable to cascading system impacts. In the name of economic efficiency, we have created a very brittle system, when it is resilience we need in order to be able to withstand system shocks. Resilience requires safety margins and supply cushions, but these represent a cost that we have been increasingly unwilling to bear. In whittling them away, we have left ourselves far more vulnerable than we once were.

    Personal emergency preparedness can often take much of the pressure off when disaster strikes. In general terms, it is advisable where possible to have at least two weeks worth of supplies of food, water and medicine on hand, and preferably a month's worth, although this may be very difficult for those with limited means or limited storage space. People unable to prepare much individually may be able to do so to some extent by pooling resources. For high-rise dwellers, a power outage will also mean no water above the third floor, so water supplies can be particularly important.

    Having emergency cash on hand is also highly advisable, as transport and power problems, both personal and institutional, can prevent people from accessing funds. Carrying no debt beforehand can make a major difference, as getting out of debt removes a drain on resources that could suddenly become much scarcer, rapidly amplifying the burden of debt servicing. In addition, debt servicing may become physically difficult due to lack of energy and transport options. This may lead to financial penalties that add insult to injury. In the case of Sandy, it appears that some financial penalties for late payments are to be waived, but there is no guarantee that this would always be the case.

    Not everyone will be able to provide a cushion for themselves and others, but the more people do, the fewer will require what overstretched public assistance may be available, meaning that public assistance may be able to get to the more acutely needy more quickly. It is in everyone's interest that those who can implement an emergency preparedness plan do so. Our societies have become too complacent in terms of assuming public systems capable of assisting all in a timely fashion actually exist. This leads to responsibility being passed upwards and largely forgotten, leaving people vulnerable when disaster strikes, and that which had been taken for granted turns out to have been an illusion.

    Having a supply cushion can make a very large difference to how acute situations play out, especially if a critical mass of people have such a cushion. People without one typically find themselves pitched abruptly into a state of short term crisis management, quite possibly escalating into panic quite quickly. The odds of a constructive and cool-headed response go down when too many people are afraid, and even more so if they are also angry. Both fear and anger are highly catching, and their spread can change the entire way the impact of a disaster unfolds. The human over-reaction, or unconstructive reaction, to events has the potential to cause the majority of the impact in some disaster scenarios.

    Encouraging people to make simple personal preparations, as some regions and religions already do, can greatly reduce the potential for something like this to occur. If municipalities would inform people well in advance of difficulties of the need to be self-reliant for at least two weeks, and then explained to them how to go about this, much suffering could be averted. There is a misguided notion that doing anything to encourage preparation will cause people to panic and hoard. While it is true that issuing warnings in the immediate run-up to something like a major storm about to make landfall could have this effect, issuing instructions in a calm and measured way when no disaster is actually looming should not cause a collective psychology problem. It can be difficult to strike a balance between motivating people to act and causing fear, but the answer is not to avoid the issue by failing to motivate people at all.

    Aside from the obvious food, water, medicines and cash, there are many pieces of equipment that could be very useful, most of which are not terribly expensive. Wind-up or solar powered radios can keep people informed of what has happened in their area and what is being done to reach and help affected people. Given that mobile electronic communications are so central to people's lives, solar chargers and small battery back ups could allow people to stay connected.

    Ordinary batteries and solar chargers for them could keep other equipment functioning. Solar cookers, or coleman stoves with fuel supplies, allow people to cook or heat water without access to normal energy sources. Water filters or purification tablets can provide drinkable water supplies when regular supplies cannot be trusted. Hand tools, work gloves, spare blankets or sleeping bags, candles, matches, flashlights, a first aid kit, bicycles and other basics could be very helpful.

    Community connections can allow available equipment to be shared, so that many more people may benefit. Establishing a list of residents, noting vulnerable people, would be useful, particularly in highrise buildings where isolation is all too common. The planning process for such a community initiative would be useful in terms of building relationships of trust prior to any kind of disaster, and those relationships would help people to function together later under challenging circumstances. Established local time banks can be a very valuable part of an emergency response capability, as they can serve as a local skills inventory that can be mobilized very quickly. This was demonstrated following the Christchurch earthquake in New Zealand in February 2011.

    Preparations at a neighbourhood or municipal level also make sense, particularly where there may be large numbers of people unable to prepare themselves. For instance, specific public buildings could be designated in advance as mustering areas in the event of disaster, and these could be equipped with emergency supplies. If people knew to come to a particular community space, and knew that space would be equipped to receive them if necessary, they would feel far more secure. As always, creating a resilience cushion takes resources. An emergency supply inventory and maintaining the space to house it would be no exception, but the expense could make a very large difference in times of crisis.

    Larger scale relief coordination agencies, such as FEMA, also have a role to play. Well thought out contingency plans, backed up with reserves of supplies, equipment and skilled personnel can help tremendously, although response times for larger, more complex entities are likely to be longer. In an ideal world there would be a top down/bottom up partnership between emergency preparedness plans at different scales, and plans would mesh seamlessly with each other. The reality on the ground is always likely to be rather more chaotic in practice, however.

    As devastating as storms like Katrina and Sandy can be, there are other possible disaster scenarios that could have longer lasting or more far-reaching consequences. Storms and earthquakes are relatively localized physical events. If they take place at a time when the surrounding areas are functioning normally, then resources can flow in from undamaged areas and recovery in a reasonable timeframe should be feasible, depending on the scale and cost of the damage. In extreme cases like hurricane Katrina, some areas will probably never be rebuilt due to cost and on-going risk of levee failure.

    Not all disasters are physical and localized. A major financial crash, while not directly physically destructive, can nevertheless be devastating, and can affect whole countries or supranational aggregations at once. Finance is the operating system, and crashing the operating system has significant consequences in a short period of time. Witness Argentina in 2001 for an example on a small, localized scale, and then imagine something similar unfolding across the developed world within a matter of months.

    The odds of experiencing something of this nature over the next few years are uncomfortably high. Where many, or even most, regions are dealing with acute disruption, resource flow from one area to another is considerably less likely. The need for community preparedness is even greater where larger scale formal arrangements could be completely over-stretched and unable to respond effectively. Independent municipal and community systems would be the fallback, hence the need to develop functional preparedness plans at this level, with the intention of covering a longer period of time than that associated with physical disasters.

    At the Automatic Earth, our prescription for such an eventuality remains: hold no debt, hold cash on hand, gain some control over the essentials of your own existence and maintain a supply cushion if you can. Think of essential functions (such as cooking or heating your home) and see if there is more than one way to provide for that function. Redundancy confers resilience because it expands the range of potential input scenarios that can be coped with. Anything you can do at the community rather than the individual level would be more useful for more people. Pooling resources not only makes them stretch further, but also builds critical relationships of trust that are the foundation of society.

    There will probably be a period of time over the next few years when we need to look after ourselves with little or no top down assistance, and for longer than we can currently imagine. We will probably be limited to the local resource base and supply chains far more than we are used to, meaning that we need to become far more aware of what we actually have and do not have where we happen to find ourselves.

    Building preparedness requires civic engagement at a human scale. It requires working together, compromise and the human skills necessary to achieve it, and above all realistic expectations. It provides an empowering sense of purpose that is the best antidote to depression. That in itself can help to keep people focused on the constructive actions they can achieve, rather than on destructive fear and anger.

    We need to look at the lessons provided by disasters like superstorm Sandy, hurricane Katrina and the Christchurch earthquake, to name but a few recent examples. Now is the time to learn from these tragedies, so that we can be better prepared to face an uncertain future where limits to growth, and the full range of our modern dependencies, are becoming clearer by the day.

    http://theautomaticearth.com/Lifeboa...the-storm.html

  • #2
    Re: Sandy's Lessons (the Automatic Earth)

    This lesson will be lost in no time, just like the after effects of Katrina.

    Comment


    • #3
      Re: Sandy's Lessons (the Automatic Earth)

      Originally posted by doom&gloom View Post
      This lesson will be lost in no time, just like the after effects of Katrina.
      Except on those (still) displaced. Wonder if there was a contingency to bus New Yorkers out across the country, destination unknown . . . .

      Comment


      • #4
        Re: Sandy's Lessons (the Automatic Earth)

        After Katrina, I said I will build an emergecy stash -- and didn't. After Sansy, I am doing so.

        Costco has some pretty amazing deals...

        Comment


        • #5
          Re: Sandy's Lessons (the Automatic Earth)

          Originally posted by doom&gloom View Post
          After Katrina, I said I will build an emergecy stash -- and didn't. After Sansy, I am doing so.

          Costco has some pretty amazing deals...
          Yeah, I have a few months of food stocked up and other goods.

          Comment


          • #6
            Re: Sandy's Lessons (the Automatic Earth)

            I had one thought about the NY metro area while its airports were closed during and after the storm.....it definitely qualified as "flyover state" material.

            Comment


            • #7
              Re: Sandy's Lessons (the Automatic Earth)

              The biggest lesson learned for me was that you can't prepare for all contingencies. I may have mentioned my sister's neighbor with the natural gas generator back up system, and how a tree that fell - its roots destroyed the natural gas line to that house when it came down.

              Earthquakes are rarer on the east coast but not without some frequency, and they'd certainly destroy some gas lines.

              At my weekend martial arts class, a friend related a story about a peeved person not wanting to pay MORE for gas (they wanted $10 but were pumped $30, kind of the opposite problem most people were having), and how some 300 lb gorilla was headed into the store to make hell if he had to pay for the extra gas....the friend saw it all coming, approached the man and offered to split the difference of the extra he had to pay if he'd just leave and forget about it. They guy took the $10 and left.

              The art of fighting without fighting.

              Point is - the toughest lesson about preppping is being prepared to be surrounded by, and deal with, people on the verge of cracking!

              Comment


              • #8
                Re: Sandy's Lessons (the Automatic Earth)

                Originally posted by wayiwalk View Post
                The biggest lesson learned for me was that you can't prepare for all contingencies. I may have mentioned my sister's neighbor with the natural gas generator back up system, and how a tree that fell - its roots destroyed the natural gas line to that house when it came down.

                Earthquakes are rarer on the east coast but not without some frequency, and they'd certainly destroy some gas lines.

                At my weekend martial arts class, a friend related a story about a peeved person not wanting to pay MORE for gas (they wanted $10 but were pumped $30, kind of the opposite problem most people were having), and how some 300 lb gorilla was headed into the store to make hell if he had to pay for the extra gas....the friend saw it all coming, approached the man and offered to split the difference of the extra he had to pay if he'd just leave and forget about it. They guy took the $10 and left.

                The art of fighting without fighting.

                Point is - the toughest lesson about preppping is being prepared to be surrounded by, and deal with, people on the verge of cracking!
                I live in earthquake country, so my prepping will include freeze dried food, powdered milk, rice, 55 gal water barrel w/filter, honey, probably lots of beans (protein), hot sauces, peanut butter, and...

                at least 35 gallons of regular gas, 15 gallons of diesel, and 4 propane tanks for the bbq and 30k heater. Plus a coleman stove, two gals of white gas, Coleman gas lantern, extra mantles, water purifier (Big Berkey), protein bars, matches, candles, crank radio, a few hand tools, axe, flashlights and prolly some other odds and ends.

                If a flood ever got to my elevation, there is no saving anyone at that point.

                Comment


                • #9
                  Sandy's Fiscal Lessons to Come

                  by Doug Noland

                  October 30, from Dr Jeff Masters of Weather Underground: In a stunning spectacle of atmospheric violence, Superstorm Sandy roared ashore in New Jersey last night with sustained winds of 90 mph and a devastating storm surge that crippled coastal New Jersey and New York. Sandy's record size allowed the historic storm to bring extreme weather to over 100 million Americans, from Chicago to Maine and from Michigan to Florida. Sandy's barometric pressure at landfall was 946 mb, tying the Great Long Island Express Hurricane of 1938 as the most powerful storm ever to hit the Northeast US north of

                  Cape Hatteras, NC. New York City experienced its worst hurricane since its founding in 1624, as Sandy's 9-foot storm surge rode in on top of a high tide to bring water levels to 13.88 feet at The Battery, smashing the record 11.2-foot water level recorded during the great hurricane of 1821.The Financial Times (Stephen Foley) Friday reported that
                  Trillions of dollars of stock certificates are feared ruined after Hurricane Sandy flooded a vault at the Depository Trust & Clearing Corp, the Wall Street-owned organization that manages important parts of the US trading infrastructure ... As businesses in the affected areas continued efforts to pump out flooded basements, the DTCC admitted on Thursday that its vault remained underwater and officials had still not been able to assess the damage.
                  Of course, with loss of life and such destruction, stock certificates are the least of our worries. And the world somehow survived with US equities markets inoperable for a couple days. But, really, why not a little forward thinking here? Today, millions in the northeast wait for electricity, and the New York area struggles with incredibly long gas lines, widespread fuel shortages and emptying grocery shelves. Phone service is intermittent, while millions wait for subway and train service to resume. In the past few days, estimates of the economic damage from Sandy have doubled to as much as US$50 billion. I'm no expert, but the scope of devastation and associated economic costs would appear to just dwarf Katrina.

                  In the face of human hardship, the big debate seems to be whether Sandy will be a positive or negative for gross domestic product (GDP). Will rebuilding provide a needed boost to the US economy? Is it good for stock prices? In the end, does a (Frederic Bastiat) "broken window" lead to wealth creation? Keynes, of course, argued that in desperate times the government should simply pay workers to dig and fill holes. We have instead incredible amounts of sand, debris and water.

                  My work focuses on risk. Sandy has been called a "once in a lifetime storm", "a storm of unprecedented proportions". It is worth noting that of the top ten costliest storms (prior to Sandy) to hit the US, eight (Katrina, Ike, Wilma, Ivan, Charley, Rita, Frances and Jeanne) have come over the past eight years. Allison hit in 2001 and Andrew slammed Florida as a Cat 5 back in 1992. At $108 billion, record Katrina (2005) costs are more than triple those of runner-up Ike (2008).

                  As for size, at 945 miles (1,520 kilometers) of tropical force winds, Sandy is said to be the largest ever to hit the US. Sandy is followed by Igor's (2010) 920 miles, Olga's (2001) 865 miles, Lili's (1996) 805 miles, and Karl's (2004) at 780 miles.

                  Storms have become much bigger and the big storms much more frequent and atypical. The associated costs have grown exponentially. A decade or so ago, I would use my fictionalized "little town on the river" parable. I highlighted how a speculative bubble in flood insurance led to a huge building boom along the riverfront. From both financial and economic perspectives, the boom distorted risk perceptions and, in the process, momentously increased systemic exposure to the inevitable devastating flood.

                  I'll avoid the politics of climate change. I just believe it has become a reality and will profoundly impact our future. From my perspective, global warming adds an important additional layer of systemic risk upon already historic global financial and economic risks. I am amazed at how the world remains in this remarkable mode of disregarding risks of all kinds.

                  I admit to a fascination for weather and the issue of global climate change. Perhaps it dates back to my youth and love for watching how a big Pacific storm system would unleash crashing waves on the beautiful Oregon coastline. From my reading, a major North Atlantic storm was inevitable - the classic "when and not if". And the probabilities were increasing by the year.

                  Hurricane Irene (sixth most costly hurricane!) last year was a warning unheeded. Some years back I casually studied the flood maps for the New York region and was quick to revisit them last week when the National Weather Service warned of "Frankenstorm". The vulnerability was well-understood, as were the fragile levees in New Orleans prior to Katrina. I'll let others explain why the northeast was not better prepared. For me, it's part of a national affliction.

                  From a market perspective, Sandy was a so-called "tail" event - or "black swan". Similar to the 2008 crisis, conventional wisdom would claim it as both an unpredictable and low probability occurrence. A "100-year" financial crisis followed by a "100-year" storm - what are the odds of that? Not worth worrying about - at least beforehand. Yet I've argued that the 2008 crisis was predictable. Indeed, a catastrophic bursting of the mortgage finance bubble was inevitable; it was just the timing that was unknown.

                  While the true long-term odds of a Sandy or a bursting mortgage bubble scenario were alarmingly high, the near-term probabilities were viewed as quite low. And we live in a world where the overwhelming focus is on the near-term. Like the focus of financial market professionals, it's imperative to keep one's eye on the ball: what's going to happen next week or, for politicians, the next election cycle? Endemic short-sightedness comes with huge associated costs, some visible right now on cable news.

                  After beginning 1990 at $12.8 trillion, Total System Marketable Debt ended June 2012 at $55.0 trillion. And Washington politicians and central bankers are now doing everything they can to sustain the credit boom and avert the downside of an historic credit cycle. Similar efforts are afoot globally. In Europe, we are witnessing the dire consequences unleashed when the markets resist buying suspect credit instruments. And, importantly, when the credit spigot is inevitably tightened, economic revelations soon follow. Suddenly, economic structure matters. Is the system generally robust or fragile? And if the economy proves fragile, the systemic predicament will soon be compounded by huge debt and confidence issues.

                  From a credit bubble and economic structure perspective, Sandy and climate change are very relevant. The prolonged credit boom has had a particularly profound effect on the northeast. From beachfront homes and mansions, to automobiles, marinas, boats, and recreation and related businesses, the boom greatly increased the potential for catastrophic storm losses. This is in addition to the inflated economy-wide cost structure that will see repair and rebuilding costs profoundly higher than would have been the case in the past.

                  I would further argue that exorbitant costs are an important reason why more was not done to protect against a major Atlantic storm. The piper will now require payment. Our economy's entire resource allocation system has been so distorted for too long. Finance flowed way too easily into home building, recreation and consumption. Our nation's infrastructure has been badly underfinanced and neglected. This was made sadly clear with Katrina and again with Sandy. Our nation's power grid is a bad joke.

                  Insurance companies will take a hit. From an economic perspective, a much greater cost will be borne by the millions of individuals and businesses impacted by Sandy and its aftermath. There will be enormous uninsured losses that will push many individuals, families and businesses to - or past - the edge. The impact on cash-strapped municipal governments is unclear, although most analysts seem to assume that Washington will be there with open checkbook in hand. In the grand scheme of things, the associated costs will barely impact the massive federal debt load. Along with recession or, even, subpar growth, Sandy will provide politicians another reason to defer fiscal restraint.

                  But let's get back to climate change. Unfortunately, the issue gets bogged down on whether warming and associated extreme weather is a manmade or natural phenomenon. As such, most would surely argue that global warming and the prolonged/increasingly vulnerable global credit bubble are mere coincidental phenomena.

                  In particular, my trips to China have left me fearing an unfolding environmental catastrophe. In a sad way, it doesn't really matter if global warming is a human phenomenon or not. It's pretty clear that no one is going to meaningfully confront the issue anyway. Politicians, central bankers and governments are trapped in "do whatever it takes" late-cycle reflationary measures. You can bet on it. Many have. And the global credit bubble dynamic will ensure that the world remains short-sided and blind to myriad serious risks until it's too late.

                  We're today in the midst of the manic financial bubble phase. Especially here in the US, the markets will finance virtually anything. There's hardly a junk bond the market doesn't love. collateralized debt obligations are back. Relatively higher-yielding municipal debt induces salivation. There are, then, no worries regarding the ability to finance Sandy recovery and rebuilding efforts. Costs really don't matter. Wealth destruction is basically irrelevant. If it's "money" that's needed, well, we've got the Ben Bernanke Fed.

                  And why not just rebuild on the water's edge and buy cheap federal flood insurance. "Broken windows", broken subways, broken transformers, broken communication hubs, and broken neighborhoods are sure to incite a borrowing and spending boom. Dr Bernanke's "mopping up" strategy in action.

                  Yet caution is in order. There will be more storms, some weather-related. And there will come a post-bubble environment and a profoundly altered backdrop. Previous credit excesses, suspect debt and market revulsion will make it profoundly more difficult to finance all types of spending. Deeply entrenched structural shortcomings will have surfaced conspicuously. And, importantly, I would expect previous consumption-based borrowing and spending excesses to restrict the system's ability to finance needed investment and infrastructure projects. Along with economic structure, market confidence really matters.

                  The market's love for all things debt today ensures a lot of hatred down the road. Over-issuance and malfeasance risk destroying faith in money. And when that day of reckoning finally arrives, "Keynesian" stimulus will have already exhausted its capacities in a futile effort to sustain an unsustainable bubble. And perhaps people, businesses and investors will belatedly contemplate risk and head to safer grounds.

                  http://www.atimes.com/atimes/Global_.../NK14Dj02.html

                  Comment


                  • #10
                    Re: Sandy's Fiscal Lessons to Come

                    Sandy's real lesson: no matter how wealthy an area is, incompetent government can still screw it up.

                    Sandy was very strong for the North East, but those of us who live in/around the Pacific Ocean laughed ourselves silly at the prospect of merely 70 to 100 mph winds.

                    In 1976, Hurricane Pamela struck Guam when I was on it. 150 mph winds - I saw entire (tin) rooftops lifted off and swirled around my apartment building. 11 fatalities - although certainly a much smaller population covered.

                    The failure of a multi-billion dollar budget state and local government, plus the trillions in real estate on Manhattan, to prepare for such a storm has little to do with nature and much to do with incompetence.

                    Comment


                    • #11
                      Re: Sandy's Fiscal Lessons to Come

                      Established local time banks can be a very valuable part of an emergency response capability, as they can serve as a local skills inventory that can be mobilized very quickly. This was demonstrated following the Christchurch earthquake in New Zealand in February 2011.
                      Does anyone understand what this fella is on about in the article above?

                      I'm in Christchurch and played a role in the response to both major quakes and this is the first I've heard about time banks.

                      Is this some sort of esoteric/mystical/ethereal/intangible reference?

                      Because I'm not aware of a single "time bank".

                      However I am aware of ties than bind communities.

                      Comment


                      • #12
                        Re: Sandy's Fiscal Lessons to Come

                        Originally posted by c1ue View Post
                        Sandy's real lesson: no matter how wealthy an area is, incompetent government can still screw it up.
                        Government is ill-equiped to deal with environmental events that happen every hundred years or so. Thankfully, we choose not to fund that sort of competence. If one chooses to live on the seashore, at some point it will flood. At some point California will experience "the big one". When it does, Californians will whine like New Yorkers are today about how government is incompetent. Of course, one could understand the possibility of danger and move away from it. I prefer the personal responsibility meme to the government incompetence meme.

                        Comment


                        • #13
                          Re: Sandy's Fiscal Lessons to Come

                          Originally posted by c1ue View Post
                          Sandy's real lesson: no matter how wealthy an area is, incompetent government can still screw it up.

                          Sandy was very strong for the North East, but those of us who live in/around the Pacific Ocean laughed ourselves silly at the prospect of merely 70 to 100 mph winds.

                          In 1976, Hurricane Pamela struck Guam when I was on it. 150 mph winds - I saw entire (tin) rooftops lifted off and swirled around my apartment building. 11 fatalities - although certainly a much smaller population covered.

                          The failure of a multi-billion dollar budget state and local government, plus the trillions in real estate on Manhattan, to prepare for such a storm has little to do with nature and much to do with incompetence.
                          70-100 mph winds are nothing- my mobile home was periodically buffeted by 65+ mph winds in Albuquerque and it held together. But isn't most of the damage from Sandy due to storm surge flooding rather than wind?

                          In 1969 I was on vacation in New Orleans with my family when Hurricane Camille hit. Recorded sustained winds of 190 mph. They say no one will ever know how high the winds got because she destroyed all the wind recording equipment along the coast.

                          Be kinder than necessary because everyone you meet is fighting some kind of battle.

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                          • #14
                            Re: Sandy's Fiscal Lessons to Come

                            Originally posted by santafe2 View Post
                            Government is ill-equiped to deal with environmental events that happen every hundred years or so. Thankfully, we choose not to fund that sort of competence. If one chooses to live on the seashore, at some point it will flood. At some point California will experience "the big one". When it does, Californians will whine like New Yorkers are today about how government is incompetent. Of course, one could understand the possibility of danger and move away from it. I prefer the personal responsibility meme to the government incompetence meme.
                            +1

                            The extreme storm surge from Sandy was such a rare event; I don't see how government and builders could have forseen it decades ago and built to withstand it. That's not to say that people who build vacation homes directly on the beach aren't responsible for their fate. People who live on a beaches, fault lines, flood plains or forests shouldn't expect taxpayers to bail them out when nature destroys their homes.

                            Be kinder than necessary because everyone you meet is fighting some kind of battle.

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                            • #15
                              Re: Sandy's Fiscal Lessons to Come

                              Originally posted by santafe2
                              Government is ill-equiped to deal with environmental events that happen every hundred years or so. Thankfully, we choose not to fund that sort of competence. If one chooses to live on the seashore, at some point it will flood. At some point California will experience "the big one". When it does, Californians will whine like New Yorkers are today about how government is incompetent. Of course, one could understand the possibility of danger and move away from it. I prefer the personal responsibility meme to the government incompetence meme.
                              Your opinion is your own.

                              The onset of Sandy was talked about for weeks; yet where were the sand bag barriers? I'm not talking about building a 100 foot tall sea wall, I'm talking about putting in 10 feet of sandbags around the most valuable area of real estate in the United States.

                              At least you're admitting that Sandy was a weather anomaly and not a signal of climate change.

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