I often write that the world we live in today is an extremely hyper-complex system that relies on energy and capital to move long distances around the world to give us the lifestyle we have today. But such hyper-complex systems also have a degree of fragility. That is, to increase efficiency and productivity, robustness is sacrificed. This is no surprise; robustness costs money, it is expensive.
So when a black swan of a disaster hits, the world's complex system can easily go into a tailspin. We are witnessing such an episode right now on the macro level these past few years. But occasionally, we have one-off events that really throw us for a loop. The 2008 Wall Street meltdown was one such event. Now we have the Earthquake and Tsunami in Japan to contend with. It is no longer a natural disaster, as it has now affected Japan's nuclear industry - it is now an environmental disaster involving radiation.
And now as Japan is losing control at the Fukushima plant, things are getting worse fast. I am in Greece right now, and it is approaching 9 am. It is 3am in the US right now. Markets in Aisa are plummeting. The Japanese Nikkei is down over 10%, the Hang Seng, over 3%. It is no longer a human catastrophe for the Japanese people living near the reactor and near the tsunami's path. It is a chain reaction that is being felt outside of Japan around the globe.