Study of brokers' potential conflict of interest in routing limit orders leaked to Wall Street

A new academic paper about potential conflict of interest in large retail brokers' routing of limit orders has stirred controversy on Wall Street and caught regulators' attention -- even before the paper has been submitted to a journal.

While some in the industry have compared the study's possible impact to an earlier one that reformed Nasdaq trading, the authors caution that the paper is not yet final and the findings should be taken in proper context.

The authors, professors at Indiana University's Kelley School of Business and the University of Notre Dame Mendoza College of Business, found that some large retail brokers regularly route clients' limit orders to the exchange that pays them the highest rebates. Under certain circumstances, this can lead to some clients' trades not being executed at the best possible times -- or not being executed at all.

"Certain brokers, led by Ameritrade and including E*Trade, Scott Trade and Fidelity, were bifurcating the order flow -- sending market and limit orders to different exchanges -- but seemed to send all their limit orders to one place," said Robert Jennings, the Gregg T. and Judith A. Summerville Professor of Finance at Kelley.

"Brokers were paid for almost every order received; the conflict of interest occurs because some exchanges will pay brokers more to route limit order flows there, even if the chance that the limit order gets executed is lower on that exchange than somewhere else."

U.S. equity exchanges typically charge traders taking liquidity -- such as market orders -- and pay traders making liquidity -- such as limit orders. The payments, or rebates, are funded by take fees, so exchanges with the highest liquidity rebates also have the highest take fees. Brokers can generate revenue from customers' order flow.

According to the paper, "Can Brokers Have It All? On the Relation Between Make Take Fees & Limit Order Execution Quality," study results also indicate that, under some market conditions and for certain stocks:

-- Fill rates for displayed limit orders are lower on exchanges with higher fees. -- Limit orders executed on venues with high fees take longer to execute than those with low fees. -- On average, limit orders executed on venues with low/negative take fees are more likely to fill at the most opportune time for the limit order customer.

"Our results suggest that order routing decisions have an important impact of at least some measures of limit order execution quality and routing decisions based primarily on rebates/fees appear to be inconsistent with best execution," Jennings said. "Even if fees/rebates are passed directly through to the investor, the decision to use a single venue that offers the highest liquidity rebates does not appear to be consistent with the objective of obtaining best execution."

Paper leaked to financial community; FINRA asks brokers for data

The authors presented the paper to relevant industry representatives, including several brokerages, the Securities and Exchange Commission and the National Association of Securities Dealers. This common practice is generally accepted by all parties to be a confidential forum to test and refine study hypotheses and findings.

However in this case, the paper was leaked to the broader financial community without the authors' knowledge or permission. This led some to suggest the paper's impact could equal that of a 1994 study by Bill Christie of Vanderbilt University and Paul Schultz of Notre Dame showing implicit collusion among Nasdaq market makers; it led to sweeping reform of Nasdaq market (and a billion-dollar legal settlement).

The paper's leak -- and the Financial Industry Regulatory Authority's subsequent request for routing data from the 50 largest brokers -- has the authors concerned that the findings about brokers' maximizing liquidity rebates might be oversimplified.

Routing limit orders to maximize make rebates reduces fill rates, produces less profitable limit order executions -- and might be inconsistent with a broker's fiduciary responsibility to obtain best execution, the authors concluded.

"This is a classic case of adverse selection. If there's really bad news about the stock, everybody gets filled. If there's good news about the stock, then only the places where the order gets filled first get filled," Jennings said. "We are not alleging that the use of such rebates is illegal or that it violates securities laws, but there is a need for further transparency for consumers."

The authors expect to publish the revised and final version of the paper in the near future, after incorporating feedback they received.

"Given the competitive nature of the retail brokerage business, if brokers can get exchanges to pay for their orders, they could charge lower commissions," Jennings said. "Thus, customers may be slightly better off; if the payment was eliminated, commissions might have to be higher."

Commissions may be based on the total revenue that brokers receive, "but lower commissions do not compensate those investors who miss out on profitable limit order executions," Jennings and his colleagues concluded. "Brokers cannot have it all."

Jennings co-authored "Can Brokers Have It All?" with Robert Battalio, a professor of finance; and Shane Corwin, an associate professor of finance, both at Notre Dame. Battalio earned his doctorate at Kelley.

Source: Indiana University

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Flu at the zoo and other disasters: Experts help animal exhibitors prepare for the worst

After experiencing power outages during a 2007 ice storm in Springfield, Mo., Dickerson Park Zoo officials improved their backup power and heating systems to keep animals -- like Henry, pictured here -- safe and warm. Credit: Dickerson Park Zoo

Here are three disaster scenarios for zoo or aquarium managers: One, a wildfire lunges towards your facility, threatening your staff and hundreds of zoo animals. Two, hurricane floodwaters pour into your basement, where thousands of exotic fish and marine mammals live in giant tanks. Three, local poultry farmers report avian influenza (bird flu) in their chickens, a primary source of protein for your big cats.

What do you do?

These are among the many potential disasters the managers of zoos and aquariums ponder in their emergency preparedness drills and plans. But these stories are not just worst-case scenarios: The events described above actually happened, and the aftermath -- often heroic, and sometimes tragic -- depended in large part on the institutions' preparedness training, planning and forethought in calmer times.

When bad weather strikes or illness invades, zoos and aquariums are among the most vulnerable facilities affected, said University of Illinois veterinarian Yvette Johnson-Walker, a clinical epidemiologist who contributes to emergency response training efforts at animal exhibitor institutions. She is a clinical instructor in the department of veterinary clinical medicine at Illinois, and lead author of a new paper on emergency preparedness at zoos and aquariums in the journal Homeland Security & Emergency Management.

Some animals are likely to suffer if the electricity goes out for long, she said. Others are large, skittish and dangerous under normal conditions.

Training caretakers and keepers to minimize their own risks while attending to their animals in an emergency is a challenge, but leads to the best outcomes, she said.

In 2012, Johnson-Walker joined forces with Yvonne Nadler, a project manager with the Zoo and Aquarium All Hazards Preparedness Response and Recovery Center, to bring vital emergency training to accredited animal exhibitor institutions in Illinois, Indiana and Missouri. This effort, funded by the U.S. Department of Agriculture and supported by the Association of Zoos & Aquariums, has since expanded, providing training to staff from zoos and aquariums in 23 states.

The trainings, dubbed "Flu at the Zoo," focus on avian influenza, a viral disease that spread in the 2000s among wild and captive birds and also infected hundreds of people, primarily in Asia, Africa and the Middle East. Bird flu serves as a useful model scenario to help train participants in basic preparedness skills.

One such skill is familiarity with the Incident Command System (ICS), a framework developed by firefighters and adopted by the Federal Emergency Management Agency (FEMA) that allows first responders to quickly set up their emergency response operation and assign vital tasks. The ICS has long been used by public safety, law enforcement and public health entities involved in emergency response.

"We wanted zoos and aquariums to have a seat at the table when there's planning for how we're going to respond to emergencies, and to be able to fit into the system, know who to talk to and how to communicate," Johnson-Walker said.

It's also important to recognize the other responders and understand their roles, she said. If the event involves a disease like bird flu, the USDA, FEMA, National Institutes of Health, state veterinarian, state and federal wildlife services, public health authorities, veterinary organizations, police, hospitals and perhaps even local poultry operations will be involved in the response. Knowing who does what can speed communication in a crisis.

Planning also helps managers make best use of the limited supplies or equipment they have on hand, Nadler said.

"There are certain types of livestock trailers, for example, that can be adapted to moving big cats," she said. "Is that your preferred method of movement? Of course it isn't, but in an emergency that might be your only option."

One beneficiary of the emergency training, Melinda Arnold, knows firsthand the value of preparedness. Arnold is public relations director for Friends of the Zoo, affiliated with Dickerson Park Zoo in Springfield, Missouri. The zoo suffered a blackout during a 2007 ice storm that shut off power for most of the city for several days.

"We did have backup generators," Arnold said. "The greatest problem with the generators was that those fueling stations in town that did have gas didn't have power, so they couldn't pump the gas."

Zoo staff had to travel many miles outside of the affected area with gas cans to collect gas to run the backup generators, she said.

"Now we have some propane-powered backups," Arnold said.

A more recent incident at the zoo, the accidental death of a zookeeper in 2013, caused Dickerson Park Zoo officials to re-evaluate all of their safety protocols. Even though the zookeeper had decades of experience and was guarded by a protective barrier, a skittish elephant rushed him at an unguarded moment, and he fell and was trampled to death.
"It made us step back, not only in our elephant management but in all areas of the zoo, and look at our safety procedures and points of contact with dangerous animals and evaluate those safety conditions and make improvements," Arnold said.

The preparedness plans, drills, discussions and training all help zoos and aquariums reassess their procedures, even those that seem to be safe after decades of operations and no major incidents, she said.

Source: University of Illinois at Urbana-Champaign

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Engineers to simulate, model tornado winds, their effects on buildings

Partha Sarkar designed and built the Iowa State University Tornado Simulator a decade ago. A recent grant will support new simulator studies of tornado winds and their impacts on homes and buildings. Credit: Bob Elbert

The Iowa State University Tornado Simulator kicked up a thick and slowly spinning funnel cloud over a model of a small town, overwhelming the miniature streets, buildings and homes.

Partha Sarkar turned from the laboratory vortex and announced, "That's an EF3."

Most tornadoes (about 90 percent of them) are EF3 or less in intensity. And so Sarkar advocates that homes and buildings within tornado alley across the middle of the U.S. be designed to withstand EF3 tornadoes and their top wind speeds of 165 mph.

Sarkar, an Iowa State professor of aerospace engineering, knows something about the biggest tornadoes. He walked the debris fields of Parkersburg in 2008 and Joplin, Missouri, in 2010, and has seen what the 200-plus mph winds of EF5 storms can do to cities, buildings and people.

To study the interaction of tornadoes with human-made structures, he designed and built a tornado simulator that can create and move a tornado-like vortex back and forth over a test bed. He, his coworkers and Iowa State students have worked with the simulator for a decade, studying the loads and pressures caused by laboratory storms passing over models of homes and buildings.

But, Sarkar said, there's still a lot engineers don't understand about tornado winds:

How, for example, do nearby structures and terrain affect those winds? How do building codes, building ages, structure shapes, roof types and even construction quality influence tornado damage? How do internal pressures inside buildings influence tornado damage? And, how are the wind loads distributed and shared by a building's components, such as roof sheathing, roof trusses, walls, studs and nails?

To find these answers, the National Science Foundation has awarded a pair of three-year, $250,000 collaborative research grants to Sarkar and to Texas Tech University researchers Daan Liang, an associate professor of construction engineering and engineering technology, and Xinzhong Chen, an associate professor of civil and environmental engineering.

As part of this new project, "We will try to quantify the uncertainties in estimating tornado winds and the corresponding structural damage," Sarkar said.

To do that, Sarkar said his research group will use the latest advances in tornado simulation, data acquisition and computer modeling to answer engineering questions about tornado winds and their effects on buildings.

One result of this research could be refinements to the Enhanced Fujita (EF) Scale that considers storm damage to measure the strength of tornadoes. Another result could be new provisions in building codes and construction practices for tornado-resistant buildings.

"The overarching goal of this research is to enhance society's resiliency to tornadoes through innovative design and construction of building components and systems in tornado-prone regions," the Iowa State and Texas Tech researchers wrote in a project summary.

At Iowa State, Sarkar said the grant will support experiments and data collection with the tornado simulator. One experiment, for example, will study actual buildings damaged in tornadoes by creating computer and physical models of the buildings and their structural failures. The computer models will be refined and verified by running lab tornadoes over the physical models. The computational models -- called finite element models -- will help researchers understand and predict the damage caused by tornado winds.

Data from the experiments and models will also be shared with the Texas Tech construction engineers who will study building performance in tornado winds.

"In the long run," the researchers wrote in their summary, "the research is expected to contribute to methods and strategies that can be implemented for preventing tornado hazards from becoming disasters."

Source: Iowa State University

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A fraction of the global military spending could save the planet's biodiversity, say experts: Only one in four protected areas is well managed

This image shows Murchison Falls National Park in Uganda. A fundamental step-change involving an increase in funding and political commitment is urgently needed to ensure that protected areas deliver their full conservation, social and economic potential, according to an article published today in Nature by experts from Wildlife Conservation Society, the University of Queensland, and the IUCN World Commission on Protected Areas (WCPA). Credit: Julie Larsen Maher, copyright WCS

A fundamental step-change involving an increase in funding and political commitment is urgently needed to ensure that protected areas deliver their full conservation, social and economic potential, according to an article published today in Nature by experts from Wildlife Conservation Society, the University of Queensland, and the IUCN World Commission on Protected Areas (WCPA).

The paper, The performance and potential of protected areas, comes ahead of the IUCN World Parks Congress 2014 -- a once-in-a-decade global forum on protected areas opening next week in Sydney, Australia.

According to the authors, allocating US$45 -- $76 billion to protected areas annually -- just 2.5% of the global annual military expenditure -- could help adequately manage those areas, ensuring their potential contribution to the well-being of the planet is fully met.

Many threatened species, such as the Asian elephant, the tiger, and all rhinoceros species, as well as numerous plants, reptiles and amphibians, survive thanks to protected areas. Well-managed marine protected areas contain more than five times the total large fish biomass and 14 times the shark biomass compared with fished areas.

"Protected areas offer us solutions to some of today's most pressing challenges" says Dr James Watson of the Wildlife Conservation Society and The University of Queensland and lead author of the study. "But by continuing with 'business as usual', we are setting them up for failure. A step-change in the way we value, fund, govern and manage those areas is neither impossible nor unrealistic and would only represent a fraction of what the world spends annually on defense."

According to the latest data, protected areas cover around 15% of land and 3% of oceans. Experts warn, however, that despite the significant increase in their coverage over the past century, this is still short of the global 2020 targets to protect at least 17% of land and 10% of oceans. Many ecosystems remain poorly conserved because protected areas do not always encompass the most important areas for biodiversity.

In addition, the vast majority of existing protected areas that are well placed do not have sufficient resources to be effective, with some studies finding as few as one quarter of them are being effectively managed. Growing threats from climate change and the escalating poaching crisis place additional pressures on protected areas globally.

"Some of the most iconic protected areas, such as Ecuador's Galapagos National Park, are undergoing significant degradation, partly due to an inability to manage them effectively," says Professor Marc Hockings of The University of Queensland,co-author of the study and member of the IUCN WCPA. "But governments cannot be solely responsible for ensuring that protected areas fulfill their potential. We need to find new, innovative ways to fund and manage them, actively involving government, business and community groups."

The paper also highlights an alarming increase in governments -- in both developing and developed countries -- backtracking on their commitments through funding cuts and changes in policy. A recent global analysis has documented 543 instances where protected areas saw their status downgraded or removed altogether.

For example, recent cuts to the Parks Canada budget have reduced conservation spending by 15%¬. In Uganda, active oil exploration and development is occurring inside many protected areas, including Murchison Falls National Park. In Indonesia, in 2010, mining permits were issued inside 481,000 hectares of protected areas and in the Virgin Komi Forests in Russia, significant boundary changes have been made to reserves such as the Yugyd Va National Park to allow mining. The Arabian Oryx Sanctuary in Oman was removed from the World Heritage List after the government reduced the size of the reserve by 90% to allow for oil and gas extraction.

"There is a fundamental need for an increase in support of global protected areas, including better recognition, funding, planning and enforcement" says Nigel Dudley, co-author of the paper, from Equilibrium Research and The University of Queensland, member of the IUCN WCPA. "It is government's responsibility to step up but there is also the need for the wider community to take collective responsibility for protected areas."

Protected areas conserve biodiversity and sustain a large proportion of the world's poorest people by providing them with food, water, shelter and medicine. They play a key part in climate change mitigation and adaptation and bolster national economies through tourism revenues. In Rwanda, for example, tourism revenue from visits to see mountain gorillas inside Volcanoes National Park is now the country's largest source of foreign exchange, raising US$200 million annually. In Australia, the 2012-2013 budget for the Great Barrier Reef Marine Park Authority was approximately AUS$50 million, but tourism to the reef was worth more than A$5.2 billion annually to the Australian economy.

"The growth of the modern global protected area movement over the last 100 years is arguably the greatest conservation achievement," says Julia Marton-Lefèvre, IUCN Director General. "It is also increasingly important for livelihoods and global security. The key now is for countries to recognize the return on investment that protected areas offer and realize that those places are fundamental to the future of life on earth. This is exactly what we hope to achieve at the upcoming IUCN World Parks Congress."

Effective management of protected areas, the threats they face and the solutions they offer to today's global challenges will be discussed at the IUCN World Parks Congress taking place in Sydney from 12 to 19 November 2014.

Source: Wildlife Conservation Society

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The Rising above the risk: America's first tsunami refuge

Artist rendering: entry view. Credit: TCF Architecture

Washington's coast is so close to the seismically active Cascadia Subduction Zone that if a megathrust earthquake were to occur, a tsunami would hit the Washington shoreline in just 25 minutes.

One coastal community is preparing for such a disaster by starting construction on the nation's first tsunami evacuation refuge, large enough to shelter more than 1,000 people who are within 20-minute walking distance.

The vertical evacuation-refuge will be the roof of the gym of the new school in Grays Harbor County, Washington. The Ocosta Elementary School and Tsunami Safe Haven will be the first of its kind in the nation and will be the culmination of 18 years of effort, said Tim Walsh, who is a Chief Hazard Geologist at the Department of Natural Resources and has been working on this project since The National Tsunami Hazard Mitigation Program was formed in 1995.

Walsh will present the project design for the school and structure, along with the detailed tsunami modeling used to find the best location for the refuge, at the Annual Meeting for the Geological Society of America in Vancouver, Canada, on 21 October.

The Cascadia subduction zone is a 700-mile-long (over 1,000 kilometers) fault along the West Coast, where the Juan de Fuca Plate is being forced under the North American Plate. The subduction zone is capable of producing massive earthquakes; scientists have calculated that magnitude-9 earthquakes along this fault line could generate a massive tsunami that would hit the coastlines of British Columbia, Washington, Oregon, and California within 20 to 30 minutes.

"It used to be thought that Cascadia was not an active fault," said Walsh. Not only has Cascadia been found to be an active fault, it has a 10 percent chance that it will cause an earthquake in the next 50 years, he said.

"It is more than 10 times more likely than the chance you will be killed in a traffic accident," said Walsh. "But you aren't looking at the statistics of a single person, but an earthquake that would have an effect on thousands of miles of shoreline."

The biggest challenge was at the very beginning, trying to come up with a location that could be effective and accessible to people, said Walsh. "It was difficult in the beginning to go to the public meetings in these communities and present the hazards, but have no solution for them," he said.
Project Safe Haven brought together structural engineers, oceanographers, geographers, and scientists from many other disciplines to create a safe and accessible refuge.

Walsh and his colleagues used a model called GeoClaw to research the risk a tsunami, factoring in and any potential landslides caused by the wave or megaquake. Using this model in the community for Grays Harbor County, the scientists determined the best place for the school, and what how much force the structure would have to withstand to protect refugees.

The school will be built on a dune ridge, so the roof of the evacuation shelter will be about 55 feet (almost 17 meters) above sea-level. The structure is designed to withstand earthquakes and the impact of a storm surge, with reinforced concrete cores at each corner of the gym and staircases leading to the room. The school, and refuge, is expected to be finished and operating for the 2015-2016 academic year.

Walsh would like to see other scientists and community groups working together to create novel solutions for tsunami risk, he said. Currently the Washington coast has very few tall buildings, and barely any are taller than three stories, leaving thousands of people at risk in the event of a tsunami, he said.

Source: Geological Society of America

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The Massive debris pile reveals risk of huge tsunamis in Hawaii

The researchers simulated earthquakes with magnitudes between 9.0 and 9.6 originating at different locations along the Aleutian-Alaska subduction zone, and found that the unique geometry of the eastern Aleutians would direct the largest post-earthquake tsunami energy directly toward the Hawaiian Islands. The red circles are centered on Kaua‘i and encircle the Big Island. Credit: Rhett Butler

A mass of marine debris discovered in a giant sinkhole in the Hawaiian islands provides evidence that at least one mammoth tsunami, larger than any in Hawaii's recorded history, has struck the islands, and that a similar disaster could happen again, new research finds. Scientists are reporting that a wall of water up to nine meters (30 feet) high surged onto Hawaiian shores about 500 years ago. A 9.0-magnitude earthquake off the coast of the Aleutian Islands triggered the mighty wave, which left behind up to nine shipping containers worth of ocean sediment in a sinkhole on the island of Kauai.

The tsunami was at least three times the size of a 1946 tsunami that was the most destructive in Hawaii's recent history, according to the new study that examined deposits believed to have come from the extreme event and used models to show how it might have occurred. Tsunamis of this magnitude are rare events. An earthquake in the eastern Aleutian Trench big enough to generate a massive tsunami like the one in the study is expected to occur once every thousand years, meaning that there is a 0.1 percent chance of it happening in any given year -- the same probability as the 2011 Tohoku earthquake that struck Japan, according to Gerard Fryer, a geophysicist at the Pacific Tsunami Warning Center in Ewa Beach, Hawaii.

Nevertheless, the new research has prompted Honolulu officials to revise their tsunami evacuation maps to account for the possibility of an extreme tsunami hitting the county of nearly 1 million people. The new maps would more than double the area of evacuation in some locations, according to Fryer.
"You're going to have great earthquakes on planet Earth, and you're going to have great tsunamis," said Rhett Butler, a geophysicist at the University of Hawaii at Manoa and lead author of the new study published online in Geophysical Research Letters, a journal of the American Geophysical Union. "People have to at least appreciate that the possibility is there."

Hawaiians have told stories about colossal tsunamis hitting the islands for generations, but possible evidence of these massive waves was only first detected in the late 1990s when David Burney, a paleoecologist at the National Tropical Botanical Garden in Kalaheo, was excavating the Makauwahi sinkhole, a collapsed limestone cave on the south shore of Kauai.

Two meters (six and a half feet) below the surface he encountered a layer of sediment marked by coral fragments, mollusk shells and coarse beach sand that could only have come from the sea. But the mouth of the sinkhole was separated from the shore by 100 meters (328 feet) of land and seven-meter (23-foot) high walls. Burney speculated that the deposit could have been left by a massive tsunami, but he was unable to verify the claim.

The deposits remained a mystery until the Tohoku earthquake hit Japan in 2011. It caused water to surge inland like a rapidly rising tide, reaching heights up to 39 meters (128 feet) above the normal sea level. After that tsunami deluged the island nation, scientists began to question Hawaii's current tsunami evacuation maps. The maps are based largely upon the 1946 tsunami, which followed a magnitude 8.6 earthquake in the Aleutian Islands and caused water to rise only two and a half meters (8 feet) up the side of the Makauwahi sinkhole.

"[The Japan earthquake] was bigger than almost any seismologist thought possible," said Butler. "Seeing [on live TV] the devastation it caused, I began to wonder, did we get it right in Hawaii? Are our evacuation zones the correct size?"

To find out, the study's authors used a wave model to predict how a tsunami would flood the Kauai coastline. They simulated earthquakes with magnitudes between 9.0 and 9.6 originating at different locations along the Aleutian-Alaska subduction zone, a 3,400-kilometer (2,113-mile) long ocean trench stretching along the southern coast of Alaska and the Aleutian Islands where the Pacific tectonic plate is slipping under the North American plate.

The researchers found that the unique geometry of the eastern Aleutians would direct the largest post-earthquake tsunami energy directly toward the Hawaiian Islands. Inundation models showed that an earthquake with a magnitude greater than 9.0 in just the right spot could produce water levels on the shore that reached eight to nine meters (26 to 30 feet) high, easily overtopping the Makauwahi sinkhole wall where the ocean deposits were found.

The authors used radiocarbon-dated marine deposits from Sedanka Island off the coast of Alaska and along the west coasts of Canada and the United States dating back to the same time period as the Makauwahi deposit to show that all three sediments could have come from the same tsunami and provide some evidence that the event occurred, according to the study.

"[The authors] stitched together geological evidence, anthropological information as well as geophysical modeling to put together this story that is tantalizing for a geologist but it's frightening for people in Hawaii," said Robert Witter, a geologist at the U.S. Geological Survey in Anchorage, Alaska who was not involved in the study.

According to Witter, it is possible that a massive tsunami hit Hawaii hundreds of years ago, based on the deposits found in the Kauai sinkhole, but he said it is difficult to determine if all three locations experienced the same event based on radiocarbon dating alone.

Radiocarbon dating only gives scientists a rough estimate of the age of a deposit, he said. All three locations offer evidence of a great tsunami occurring between 350 and 575 years ago, but it is hard to know if it was the same tsunami or ones that occurred hundreds of years apart.

"An important next thing to do is to look for evidence for tsunamis elsewhere in the Hawaiian island chain," said Witter.

Fryer, of the Pacific Tsunami Warning Center, is confident that more evidence of the massive tsunami will be found, confirming that events of this magnitude have rocked the island chain in the not-so-distant past.

"I've seen the deposit," said Fryer, who was not involved in the study. "I'm absolutely convinced it's a tsunami, and it had to be a monster tsunami."

Fryer is so convinced that he has worked with the city and county of Honolulu to update their tsunami evacuation maps to include the possibility of a massive tsunami the size of the one detailed in the new study hitting the islands. The county hopes to have the new maps distributed to residents by the end of the year, he said.

"We prepared ourselves for the worst tsunami that's likely to happen in one hundred years," Fryer said of the current tsunami evacuation maps based on the 1946 event. "What hit Japan was a thousand-year event … and this scenario [in the eastern Aleutians] is a thousand year event."

Source: American Geophysical Union

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Many older adults still homebound after 2011 Great East Japan Earthquake

2011 Great East Japan Earthquake

A new study, published online in the journal Age and Ageing, shows that the homebound status of adults over the age of 65 in the aftermath of the 2011 Great East Japan Earthquake is still a serious public health concern. Of 2,327 older adults surveyed, approximately 20% were found to be homebound.

A team of researchers led by Naoki Kondo of the University of Tokyo's School of Public Health studied data from the city of Rikuzentakata, an area that was seriously damaged by the disaster. Of its total population of 23,302 before the events of 2011, 1,773 people died or are still missing. Of 7,730 houses, 3,368 (43.6%) were affected with 3,159 "completely destroyed." Much of the population had been concentrated in flat coastal areas, and since the community infrastructure was totally shattered, many people who lost their houses insisted on moving to areas in the mountains.

This study used home-visit interviews with 2,327 adults over 65 years old (1027 men; 1300 women), and was carried out between August 2012 and October 2013. Interviewers gathered information of current morbidity, socio-economic status, health behaviour (diet, smoking, and alcohol intake), frequency of going out, and social support. 19.6% of men and 23.2% of women were shown to be homebound, defined as only leaving the house every 4 or more days. Of those older adults who were classified as homebound, around 40% also had no contact with neighbours.

Information was also obtained on the locations of grocery stores, convenience stores, and shopping centres from the online community directory database in August 2012. Information on shopper bus stops and hawker sites was provided by a disaster support team, and the team also collated road network data. This geographical analysis indicated that distances to retail stores was associated with the risk of people being homebound.

Lead author Naoki Kondo says: "This study has important implications for public health, especially in the setting of post-disaster community reconstruction. First, community diagnoses in a post-disaster setting should cover the built environment, including access to shopping facilities. Second, to prevent older victims of a disaster such as the Great East Japan Earthquake being homebound, it is clearly essential to provide access to the facilities that fulfil their daily needs.

"Given the findings of this study, such access could be increased by the private sector, suggesting the importance of public-private partnerships for post-disaster reconstruction."

Key messages:

• The homebound status of older victims of the 2011 Great East Japan Earthquake is a matter of public health concern
• Geographical analysis indicated that distances to retail stores was associated with the risk of people being homebound
• Hawker and shopping bus services contributed to improved access, providing more opportunities for going out

Source: Oxford University Press (OUP)

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Study of Chilean quake shows potential for future earthquake

The Iquique earthquake took place on the northern portion of the subduction zone formed when the Nazca tectonic plate slides under the South American plate. Credit: USGS

Near real-time analysis of the April 1 earthquake in Iquique, Chile, showed that the 8.2 event occurred in a gap on the fault unruptured since 1877 and that the April event was not what the scientists had expected, according to an international team of geologists.

"We assumed that the area of the 1877 earthquake would eventually rupture, but all indications are that this 8.2 event was not the 8.8 event we were looking for," said Kevin P. Furlong, professor of geophysics, Penn State. "We looked at it to see if this was the big one."

But according to the researchers, it was not. Seismologists expect that areas of faults will react the same way over and over. However, the April earthquake was about nine times less energetic than the one in 1877 and was incapable of releasing all the stress on the fault, leaving open the possibility of another earthquake.

The Iquique earthquake took place on the northern portion of the subduction zone formed when the Nazca tectonic plate slides under the South American plate. This is one of the longest uninterrupted plate boundaries on the planet and the site of many earthquakes and volcanos. The 8.2 earthquake was foreshadowed by a systematic sequence of foreshocks recorded at 6.0, 6.5, 6.7 and 6.2 with each foreshock triggering the next until the main earthquake occurred.

These earthquakes relieved the stresses on some parts of the fault. Then the 8.2 earthquake relieved more stress, followed by a series of aftershocks in the range of 7.7. While the aftershocks did fill in some of the gaps left by the 8.2 earthquake, the large earthquake and aftershocks could not fill in the entire gap where the fault had not ruptured in a very long time. That area is unruptured and still under stress.
The foreshocks eased some of the built up stress on 60 to 100 miles of fault, and the main shock released stress on about 155 miles, but about 155 miles of fault remain unchanged, the researchers report today (Aug. 13) in Nature.

"There can still be a big earthquake there," said Furlong. "It didn't release the total hazard, but it told us something about this large earthquake area. That an 8.8 rupture doesn't always happen."
The researchers were able to do this analysis in near real time because of the availability of large computing power and previously laid groundwork.

The computing power allowed researchers to model the fault more accurately. In the past, subduction zones were modeled as if they were on a plane, but the plate that is subducting curves underneath the other plate creating a 3-dimensional fault line. The researchers used a model that accounted for this curving and so more accurately recreated the stresses on the real geology at the fault.

"One of the things the U.S. Geological Survey and we have been doing is characterizing the major tectonic settings," said Furlong. "So when an earthquake is imminent, we don't need a lot of time for the background."

In essence, they are creating a library of information about earthquake faults and have completed the first level, a general set of information on areas such as Japan, South America and the Caribbean. Now they are creating the levels of north and south Japan or Chile, Peru and Ecuador.
Knowing where the old earthquake occurred, how large it was and how long ago it happened, the researchers could look at the foreshocks, see how much stress they relieved and anticipate, at least in a small way, what would happen.

"This is what we need to do in the future in near real time for decision makers," said Furlong.

Source: Penn State

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Storm-triggered landslides: Examining causes of devastating debris flow

Storm-triggered landslides cause loss of life, property damage, and landscape alterations. For instance, the remnants of Hurricane Camille in 1969 caused 109 deaths in central Virginia, after 600 mm of rain fell in mountainous terrain in 6 hours. More recently, on 8 August 2010, a rainstorm-induced landslide devastated the Chinese county of Zhouqu, causing more than 1000 deaths. A new modeling study by Ren examines the multiple factors, both natural and human caused, that came together to produce this event. The triad of storm-triggered landslides is geological condition, surface loading and vegetation roots, and extreme precipitation.

Extreme precipitation can be explained by three factors: low-level moisture buildup, conditional instability, and a lifting mechanism. When several factors (e.g., El Niño years, hurricane remnants, lifting mechanisms (e.g., orography, cold fronts, jets, and differential heating from land cover contrast), and weather pattern phase-lock) work in synergy in a region, extreme precipitation may occur.

Using a multiple-phase scalable and extensible geofluid model, the author considered geological features of the region, as well as an earthquake, drought, deforestation, and topsoil erosion before the triggering storm. Previously, drought conditions created cracks and crevices in the surface; these cracks and crevices were deepened by the 2008 M7.9 Wenchuan earthquake.

Another key factor in setting up the conditions for the landslide was human-induced deforestation and topsoil erosion, the study found. The results "underscore the urgency for a high priority program of re-vegetation of Zhouqu County, without which the region will remain exposed to future disastrous, progressive bulking type landslides," the author reports.

Source: Wiley

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The Personal resiliency paramount for future disasters

A mayo Clinic researcher says individuals need to build disaster readiness and resiliency in order to better recover from the effects of earthquakes, tsunamis, hurricanes, tornadoes, wildfires and other natural disasters. Those who prepare well for disasters are more likely to have a sense of spiritual and emotional well-being and be satisfied with their life. Those findings appear in the journal Health and Quality of Life Outcomes.

Health scientist and geologist Monica Gowan, Ph.D., says how well people are prepared for adversity through the presence of meaning and purpose in their lives can play a positive role in how well they manage the uncertainties of disaster risk and recover from devastating experiences to regain health and quality of life.

"Even prior to the 2010-2014 New Zealand earthquakes and 2011 Japan tsunami, we recognized a need to explore how well-being was related to evacuation preparedness for future earthquake and tsunami disasters, Our findings are now relevant to any disaster experience, whether it's an earthquake or tsunami in the Pacific or a tornado in the American Midwest," says Dr. Gowan. She says if someone consciously cares about his or her well-being and that of others, and is aware and engaged enough to act on that basis, they have a stronger chance of being better off. She and her colleagues say this is the first scientific study of personal resilience and evacuation readiness prior to large disasters.

How to be resilient
* Decide you care enough to act. Your sense of personal agency, your desire to make choices and act, will be one of your greatest health assets.

* Know your resources. What are your greatest strengths? Physically? Mentally? Emotionally? Socially? Spiritually? Identify what you can do well and what helps you be well, and tuck this information in your mental "resilience toolkit."

* Optimize what you have. Creatively think about how, by combining two or more of your top resources or strengths, you can uncover new solutions to challenges.

* Imagine yourself acting. How might you respond when you're in crisis? Make a plan for how you can keep growing your resources and how you can deploy them in emergencies.

* Know your evacuation needs. If you had to flee or be displaced from home, what would be most essential for you? All disasters are local -- find out what your community recommends for an evacuation plan and go-kit. Then check your checklist and kit too.

*Just Do It. Act on your plans and communicate them to others. Let nature be natural. If the cause is natural, then nature is doing what nature does. Protect yourself and remember that everything is temporary.

"Along with the robust survey findings we obtained from our random sample of 695 adults, many people in the study shared anecdotes about why they were preparing for disaster," says Dr. Gowan. "Profoundly personal reasons were a common theme, whether due to their own vulnerabilities and desire to survive, to concern for a loved one, being part of a community, or wanting to serve some other greater good or higher purpose. A number had survived a prior disaster, with experiences ranging from the Holocaust to 9/11, and nearly every type of natural disaster. They all seemed to have found meaningful ways to transcend their unthinkable experiences."

The researchers say the study has far-reaching implications. Growing populations and global travel make everyone vulnerable to disaster, and so the need for resilience is universal.

Source: Mayo Clinic

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The Three years since Japan's disaster: Communities remain scattered and suffering

While western eyes are focused on the ongoing problems of the Fukushima Daiichi nuclear reactor site, thousands of people are still evacuated from their homes in north-eastern Japan following the earthquake, tsunami and nuclear emergency. Many are in temporary accommodation and frustrated by a lack of central government foresight and responsiveness to their concerns.

With the exception of the ongoing problems at the Fukushima Daiichi nuclear reactor, outside of the Tohoku region of Japan, the after effects of the Great East Japan Earthquake of 2011, and the subsequent tsunami and nuclear disaster, are no longer front page news. The hard work of recovery is the everyday reality in the region, and for planning schools and consultants across the country the rebuilding of Tohoku dominates practice and study.

But while physical reconstruction takes place, progress is not smooth. Many victims of the disasters and members of the wider public feel that the government is more interested in feeding the construction industry than addressing the complex challenges of rebuilding sustainable communities. This is a region that was already suffering from the challenges of an aging population, the exodus of young people to Tokyo and the decline of traditional fisheries-based industries. In the worst cases people are facing the invidious choice of returning to areas that are still saturated with radioactive fallout or never going home.

The frustration is reflected in four short pieces in Planning Theory and Practice's Interface Section from architecture, design and planning practitioners working with communities in four different parts of Tohoku.

Christian Dimmer, Assistant Professor at Tokyo University and founder of TPF2 -- Tohoku Planning Forum which links innovative redevelopment schemes in the region says:

"The current Japanese government's obsession with big construction projects, like mega-seawalls that have already been shown to be not likely to be effective, is leading to really innovative community solutions being marginalized, the voices of communities being ignored, and sustainability cast aside."
According to community planner and academic, Kayo Murakami -- who edits this Interface section: "The troubles of the Tohoku reconstruction are not just a concern for Japan. They highlight some of the fundamental challenges for disaster recovery and building sustainable communities, in which people are really involved, all over the world."

Source: Taylor & Francis

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The Disaster planning: Risk assessment vital to development of mitigation plans

Wildfires and flooding affect many more people in the USA than earthquakes and landslide and yet the dread, the perceived risk, of the latter two is much greater than for those hazards that are more frequent and cause greater loss of life. Research published in the International Journal of Risk Assessment and Management, suggests that a new paradigm for risk assessment is needed so that mitigation plans in the face of natural disasters can be framed appropriately by policy makers and those in the emergency services.

Maura Knutson (nee Hurley) and Ross Corotis of the University of Colorado, Boulder, explain that earlier efforts for incorporating a sociological perspective and human risk perception into hazard-mitigation plans, commonly used equivalent dollar losses from natural hazard events as the statistic by which to make decisions. Unfortunately, this fails to take into consideration how people view natural hazards, the team reports. Moreover, this can lead to a lack of public support and compliance with emergency plans when disaster strikes and lead to worse outcomes in all senses.

The researchers have therefore developed a framework that combines the usual factors for risk assessment, injuries, deaths and economic and collateral loss with the human perception of the risks associated with natural disasters. The framework includes risk perception by graphing natural hazards against "dread" and "familiarity." These two variables are well known to social psychologists as explaining the greatest variability in an individual's perception of risk, whether considering earthquakes, landslides, wildfires, storms, tornadoes, hurricanes, flooding, avalanche, even volcanic activity. "Understanding how the public perceives the risk for various natural hazards can assist decision makers in developing and communicating policy decisions," the team says.

The higher the perceived risk of a natural disaster, the more people want to see that risk reduced and that means seeing their tax dollars spent on mitigation and preparation. For example, far more money is spent on reducing earthquake risk than on reducing the risk from wildfires, perhaps because the perceived risk is much greater, even though both will cause significant losses of life and property. The team's new framework for risk assessment will act as an aid in decision making for these types of situations as well as perhaps even offering a way to give members of the public a clearer understanding of actual risk rather than perceived risk.

Source: Inderscience Publishers

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The Urbanization exposes French cities to greater seismic risk

French researchers have looked into data mining to develop a method for extracting information on the vulnerability of cities in regions of moderate risk, creating a proxy for assessing the probable resilience of buildings and infrastructure despite incomplete seismic inventories of buildings. The research exposes significant vulnerability in regions that have experienced an 'explosion of urbanization.'

"Considering that the seismic hazard is stable in time, we observe that the seismic risk comes from the rapid development of urbanization, which places at the same site goods and people exposed to hazard" said Philippe Gueguen, co-author and senior researcher at Université Joseph Fourier in Grenoble, France. The paper appears today in the journal Seismological Research Letters (SRL).

Local authorities rely on seismic vulnerability assessments to estimate the probable damage on an overall scale (such as a country, region or town) and identify the most vulnerable building categories that need reinforcement. These assessments are costly and require detailed understanding of how buildings will respond to ground motion.

Old structures, designed before current seismic building codes, abound in France, and there is insufficient information about how they will respond during an earthquake, say authors. The last major earthquake in France, which is considered to have moderate seismic hazard, was the 1909 magnitude 6 Lambesc earthquake, which killed 42 people and caused millions of euros of losses in the southeastern region.

The authors relied on the French national census for basic descriptions of buildings in Grenoble, a city of moderate seismic hazard, to create a vulnerability proxy, which they validated in Nice and later tested for the historic Lambesc earthquake.

The research exposed the effects of the urbanization and urban concentrations in areas prone to seismic hazard.

"In seismicity regions similar to France, seismic events are rare and are of low probability. With urbanization, the consequences of characteristic events, such as Lambesc, can be significant in terms of structural damage and fatalities," said Gueguen. "These consequences are all the more significant because of the moderate seismicity that reduces the perception of risk by local authorities."

If the 1909 Lambesc earthquake were to happen now, write the authors, the region would suffer serious consequences, including damage to more than 15,000 buildings. They equate the likely devastation to that observed after recent earthquakes of similar sizes in L'Aquila, Italy and Christchurch, New Zealand.

Source: Seismological Society of America

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Japanese Town: Half the survivors of mega-earthquake, tsunami, have PTSD symptoms

Though just two of Hirono's 5,418 residents lost their lives in Japan's mega-earthquake and tsunami, a new study shows that the survivors are struggling to keep their sanity.

One year after the quake, Brigham Young University professor Niwako Yamawaki and scholars from Saga University evaluated the mental health of 241 Hirono citizens. More than half of the people evaluated experienced "clinically concerning" symptoms of post-traumatic stress disorder. Two-thirds of the sample reported symptoms of depression.

Those rates exceed levels seen in the aftermath of other natural disasters, but what happened in Japan wasn't just a natural disaster. Leaked radiation from nuclear power plants forced residents of Hirono to relocate to temporary housing far from home.

"This was the world's fourth-biggest recorded earthquake, and also the tsunami and nuclear plant and losing their homes -- boom boom boom boom within such a short time," said Yamawaki, a psychology professor at BYU. "The prevalence one year after is still much higher than other studies of disasters that we found even though some time had passed."

Yamawaki got the idea for this study while shoveling mud from a damaged Japanese home one month after the tsunami flooded coastal towns. She had just arrived for a previously scheduled fellowship at Saga University. During her off-time, she traveled to the affected area and volunteered in the clean-up effort. One seemingly stoic homeowner broke down in tears when Yamawaki and her husband thanked her for the chance to help.

"She said 'This is the first time I have cried since the disaster happened,'" Yamawaki said. "She just said 'Thank you. Thank you for letting me cry.'"

Back at Saga University, Yamawaki collaborated with Hiroko Kukihara to conduct a study on the mental health and resilience of survivors. Their report appears in the journal Psychiatry and Clinical Neurosciences.

Participants in the study lived in temporary housing provided by the Japanese government when Hirono was evacuated. With an average age of 58, the people are noticeably older than the populations of normal Japanese towns. Yamawaki suspects that young people were more likely to permanently relocate elsewhere in Japan following the disaster.

The researchers didn't just measure the rates of mental illness; they also performed a statistical analysis to learn what fostered resilience among the survivors. Eating right, exercising regularly and going to work all promoted resilience and served as a buffer against mental illness.

"Having something to do after a disaster really gives a sense of normalcy, even volunteer work," Yamawaki said.

As the researchers got to know survivors, they heard from so many that they missed seeing their former neighbors. The mass relocation outside the radiation zone broke up many neighborhood ties.
"Japanese are very collectivistic people and their identity is so intertwined with neighbors," Yamawaki said. "Breaking up the community has so much impact on them."

While it's hard to fathom the scope of the devastation in the coastal region of Fukushima, most survivors believe something like this will happen again. If so, this new study provides a blueprint for how to help them put their lives back together again.

Source: Brigham Young University
Summary: A new study shows that more than half the survivors in one Japanese town exhibited 'clinically concerning' symptoms of PTSD following the country's mega-earthquake and tsunami. Two-thirds of survivors also reported symptoms of depression. Having work to do has proven important in increasing resilience.

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The Outsmarting nature during disasters: Instead of winging it, planners need to think carefully about costs and benefits

Natural Disasters

The dramatic images of natural disasters in recent years, including hurricanes Katrina and Sandy and the Tohoku, Japan, earthquake and tsunami, show that nature, not the people preparing for hazards, often wins the high-stakes game of chance.

"We're playing a high-stakes game against nature without thinking about what we're doing," geophysicist Seth Stein of Northwestern University said. "We're mostly winging it instead of carefully thinking through the costs and benefits of different strategies. Sometimes we overprepare, and sometimes we underprepare."

Stein will discuss his research in a presentation titled "How Much Natural Hazard Mitigation is Enough?" at the American Association for the Advancement of Science (AAAS) annual meeting in Chicago. His presentation is part of the symposium "Hazards: What Do We Build For?" to be held Feb. 17.

Stein is the William Deering Professor of Geological Sciences in Northwestern's Weinberg College of Arts and Sciences. He is the author of a new book, "Playing Against Nature: Integrating Science and Economics to Mitigate Natural Hazards in an Uncertain World" (Wiley, 2014) and the book "Disaster Deferred: A New View of Earthquake Hazards in the New Madrid Seismic Zone" (Columbia University Press, 2010).

Sometimes nature surprises us when an earthquake, hurricane or flood is bigger or has greater effects than expected. In other cases, nature outsmarts us, doing great damage despite expensive mitigation measures or causing us to divert limited resources to mitigate hazards that are overestimated.

"To do better we need to get smarter," Stein said. "This means thoughtfully tackling the tough questions about how much natural hazard mitigation is enough. Choices have to be made in a very uncertain world."

Stein's talk will use general principles and case studies to explore how communities can do better by taking an integrated view of natural hazards issues, rather than treating the relevant geoscience, engineering, economics and policy formulation separately.

Some of the tough questions include:

• How should a community allocate its budget between measures that could reduce the effect of future natural disasters and many other applications, some of which could do more good? For example, how to balance making schools earthquake resistant with hiring teachers to improve instruction?
• Does it make more sense to build levees to protect against floods or to prevent development in the areas at risk?
• Would more lives be saved by making hospitals earthquake resistant or by using the funds for patient care?

The choice is difficult because although science has learned a lot about natural hazards, Stein says, our ability to predict the future is much more limited than often assumed. Much of the problem comes from the fact that formulating effective natural hazard policy involves combining science, economics and risk analysis to analyze a problem and explore costs and benefits of different options in situations where the future is very uncertain.

Because mitigation policies are typically chosen without such analysis -- often by a government mandate that does not consider the costs to the affected communities -- the results are often disappointing.


Source: Northwestern University
Summary: The dramatic images of natural disasters, including hurricanes Katrina and Sandy and the Tohoku, Japan, earthquake and tsunami, show that nature, not the people preparing for hazards, often wins the high-stakes game of chance. In a recent presentation, a geophysicist uses general principles and case studies to explore how communities can do better by taking an integrated view of natural hazards issues, rather than treating the relevant geoscience, engineering, economics and policy formulation separately.

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