Seismic hazard map for Europe

This is a recently compiled standardized map of seismic hazard over Europe (Ukraine not yet included!). In older maps, the seismic hazards were defined differently in different countries, using different scales, making cross-border extrapolation uncertain. This model used harmonized data sets from all over Europe.

As you might expect, the deeper red colours represent the areas to be avoided (or at least the areas where you need to build to a high standard).

The map is a map of expected ground motion, which is dependent not only on the location and strength of probable earthquakes, but also local factors (ground condition being of critical importance). There is a lot more shaking experienced in soft sediment than on exposed bedrock.

The seismic hazard is an important consideration in building design.

Giardini, D., Wossner, J., and Danciu, L., 2014. Mapping Europe's seismic hazard. Eos, 95 (29): 261-262. 

Patience while silver does its thing

What will happen with silver? Wish I knew.

There is what should happen--or rather what would be healthy for the market to happen. And then there is what will probably happen.

Here we see what silver has been doing for the last seven years. There have been four areas of stability, all of which appear to be approximately the same size on the log scale.

The last year has been spent within the confines of one area of stability, in S3. It must be frustrating for those who are eager to see its price go to the moon, but silver has been doing useful work over this time, filling in what had been an obvious gap (much like S4) prior to July 2013. The longer it stays in S3, the more certain this area will serve as a base after any future advance in the silver price.

Being long silver, I hope to see its price advance. I would feel more comfortable if after filling its current area of attraction, it would fill the gap in the chart in the $25-27 area (labelled S4 above)--something that could take at least another year to do satisfactorily. Once this is filled in, the price can advance to S5, with the $25 area becoming a new floor. Considering that it has taken a year to fill in S3 to its current level, which still doesn't really seem adequate, it could be a couple of years before silver is ready to return to $35.

Given its past volatility, however, it seems to me more likely that we will see a bump up to the S5 area or even higher before crashing back to the S3 or S4 areas, followed by a long period of consolidation within. If silver is in a long-term bull, it has to discourage the majority of those who wish to ride it. Consequently  each cycle will be different. It would not surprise me if after the next major rise we see the price appear to stabilize in the $50 range for as long as necessary, followed by a crushing return to S3 or S4. For this reason, I suspect it will remain difficult for silver mining companies to be profitable even over the longer term.

Quickie update on dengue in Singapore

After a slow start to the year, the dengue numbers have really taken off this year.

The most current information available on the status of the Pacific Decadal Oscillation suggests it is higher (warmer) than last year, which should facilitate an increase in dengue cases over last year.

Keep swatting!

Some notes on network and hierarchy in complex systems

Well, now, this is an interesting point of view.

But it is a false dichotomy. It is like titling an article "Men vs women--which will win?" when in fact life goes better when both are present.

I offer a little perspective from the natural world. Networks and hierarchies are both present in complex natural systems. In fact, the two appear to be inseparable. There is presently considerable debate as to what exactly the role of each is in complex systems which are both robust and adaptable.

Natural complex systems show a complex hierarchical structure, which can be partially extracted using some of the techniques described on this blog here and here, and presented here and here. The technique represents an extension of the method of reconstructing state spaces from observations of a single variable--the more recent work (including much in progress) suggests that a hierarchy of processes from large-scale tectonic evolution to shorter sea-level variations to shorter-still climatic cycles driven by variations in the earth orbital parameters can be extracted from a 20 million-year long "record" of atmospheric CO2 (reconstructed from isotopic records from sediments).

The figures below show multiple regions of stability for atmospheric CO2 at different points in time (ka means thousands of years ago). Although the amount of global CO2 has varied widely over the last 20 Ma, there is always stability in the system, which is due to the network architecture of global climate (whether we would be happy at radically different levels of atmospheric CO2 has not been established).

We are able to indirectly perceive the hierarchical structure of the earth system, but cannot deduce the detailed structure of the hierarchical levels. To interpret these we look at what we do understand about the earth system. It appears that each level in the hierarchy is composed of interlocking networks. The network architecture is largely responsible for the stability of the system, by way of interacting feedbacks, both positive and negative.

Although this aspect of the science is young, there is much to suggest that the hierarchical structure is responsible for the interesting behaviour of complex systems. Hofstadter argued that improperly nested hierarchical structure may lead to evolution in the behaviour of complex systems (his argument related to the origination of conscious thought within natural and artifical brains).

The hierarchical structure lends itself to adaptibility--although the networking is a necessary part of this. High-level hierarchical changes lead to stunning reorganizations of complex systems--which the network architecture allows to happen without the system dissolving into chaos.

An unfettered economic system will naturally develop both networks and hierarchy--both of which are key to its healthy operations. Think of what Ford Motor Co. was like 60 years ago--or what Google was like (before we knew it was telling everything it knew about us to the bad guys).

The conflict today is not hierarchy vs. networks--the conflict is between an artificial hierarchy that has been superimposed on the economy by agents with political power--which is siphoning wealth and power from the system--and the natural hierarchical agents that have arisen through natural organizing processes.

Nucleation

 in coconut oil, as the weather cools.

The changing correlation between the S&P 500 and oil

Today we investigate the relationship between oil and the broad US market, using the S&P 500 index as a proxy.

A common thought is that the two functions are inversely correlated, with the US market in danger whenever oil rises too high.

The relationship has been a complex one over the past 11 years, but the correlation is positive most of the time.

In particular, we see from 2003 until late 2007, both oil and the market rose in tandem. The only time the two records show an inverse correlation was during the windup to the financial crisis--from late 2007 to July 2008.

The collapse in both market index and oil price through the second half of 2008 shows up quite clearly. The two prices rise in tandem from early 2009 to the end of 2012.

It doesn't seem logical that the S&P should be positively correlated to oil prices--so it is more likely that both records are correlated to the same thing--inflation. But what to make of the last 18 months, in which we see an almost vertical rise in the stock market without an increase in the oil price? Is an American renaissance in the works, powered by increased American oil production? Or is it due to the much rumoured mass purchase of securities by financial institutions, powered by monetary creation? Is it being done to prevent another period of negative correlation, which might foretell another economic crisis? Stay tuned . . .