Japanese Tsunami, The Impact on Hawaii and...

As I write this Hawaii braces by 8:46 AM EST for the effects of the tsunami in Japan. The question is not whether Hawaii will be hit - it's a question of how bad it will be. There are reports of the first wave traveling at the speed of an airliner. This will also impact the entire west coast of the U.S by days end.

A massive 8.9-magnitude earthquake and several powerful aftershocks struck the eastern coast of Japan Friday afternoon, triggering a tsunami that devastated the coastline north of Tokyo.

Japan's Kyodo News agency had tallied more than 130 deaths by about seven hours after the quake, with officials saying that number will surely rise. The Japan Meteorological Agency said the earthquake was the strongest in the country's history.

Television stations showed footage of tsunami waves, measuring upwards of 20 feet that surged toward the northeastern shoreline pulling cars into the water and knocking boats and buildings onto their sides. Houses floated like rafts along the waves. In some areas, the wall of water looked more like a black shroud of debris and sludge, consuming the patchwork of farmland.

Tsunami warnings or alerts were issued for dozens of countries, including the West coast of the United States, Hawaii and Alaska, as nations throughout the Pacific braced for the quake's ripple effects.

The waves, according to experts' predictions, were threatening the coastlines of Taiwan, the Philippines and Indonesia. A spokesman for the International Federation of Red Cross and Red Crescent Societies told CNN the waves could wash entirely over some smaller Pacific islands.

President Obama, who was briefed on the quake about 4 a.m., said the United States "stands ready to help the Japanese people in this time of great trial." He instructed the Federal Emergency Management Agency to be ready to assist Hawaii, where a tsunami was expected to hit about 3 a.m. local time (9 a.m. in Washington) and warning sirens woke residents in the middle of the night.

Hawaii Gov. Neil Abercrombie told residents of coastal areas to head for higher ground or to a shelter. "Residents should take this tsunami warning seriously," Abercrombie said in a statement. ". . . This is a time to be sensible and act with aloha [love and respect]."

People waited in long lines stocking up on gas, bottled water, canned food and generators, news services reported. Authorities also ordered evacuations from low-lying areas on the U.S. island territory of Guam in the western Pacific. But Guam initially appeared to have emerged unscathed, with no waves reported during the first part of the four-hour window when the tsunami was expected, Reuters reported.

In Japan, the massive earthquake struck at 2:46 p.m. local time (12:46 a.m. in Washington). According to the U.S. Geological Survey, the quake struck at a depth of about six miles, about 80 miles off the coast east of Miyagi Prefecture, a mostly rural but still densely populated part of Honshu, Japan's largest island.

Tokyo -- which is also on Honshu and about 230 miles south of the epicenter -- appeared to escape substantial damage, though some fires were reported and buildings shook violently for several minutes during the initial quake.

At least 2 million people were without power in the capital. Rail service was halted, and one government official said the normally clockwork-perfect transportation system could be stalled for days. Mobile phone communication--a staple in Japan--was largely disrupted. Narita International Airport, the main international gateway, cancelled all its flights for the day.

Workers and residents fled from buildings, terrified by the aftershocks that continued for hours and refusing to return indoors. With mass transit shut down, thousands of commuters from Tokyo's expansive suburbs were stranded, unable to find a taxi. Shelters opened their doors to accommodate them.

Chief Cabinet Secretary Yukio Edano, the government's top spokesman, said Japan's Self-Defense Force had been dispatched to Miyagi Prefecture to assist in recovery efforts. The earthquake will strain the resources of a country already struggling with a two-decade economic stagnation and a burdensome public debt.

"Our initial assessment indicates that there has already been enormous damage," Edano said. "We will make maximum relief effort based on that assessment."

As one of the world's most earthquake-susceptible countries, Japan has invested significant resources in guarding itself. A strict building code enacted in 1981 requires structures to be built using ductile reinforced concrete, which provides flexibility that can help withstand significant tremors.

The 1995 Kobe earthquake--which until Friday was the country's most devastating--leveled many buildings built before the 1981 code was in place. The death toll from that earthquake, which struck a much more heavily populated area, rose above 6,000.

Improvements to wall designs were implemented in Japan within one year of the Kobe quake. In recent years, many public buildings have been reinforced. Every year, Japan also conducts disaster-preparedness exercises.

The country has invested millions to fortify its coastal cities against quake-triggered tsunamis--Tokyo, for example, has a system of flood gates to divert the walls of water that a tsunami can generate. But Japan's NHK broadcasting network showed footage of a devastating tsunami in the north, as water first receded and then crashed forward, moving faster than anybody who tried to outrun or out-drive it.

On land, there were reports of fallen buildings and people buried beneath them. In Sendai, the port city nearest the quake's epicenter, the airport was underwater, and employees and passengers crowded on the building's roof. Television footage showed scenes of chaos -- flooding dislodging the foundations of buildings from the bottom, fires consuming them from the top.

Japanese media reported at least 36 fires throughout the country. In industrial Chiba Prefecture, just east of Tokyo, a fire blazed at an oil refinery.

Japan's stock market closed down 1.7 percent, and markets fell sharply elsewhere in Asia and in Europe as well.

Prime Minister Naoto Kan addressed the nation, saying the government will do "everything possible to minimize the damage."

"We ask the people of Japan to exercise the spirit of fraternity and act fast and to assist one's family and neighbors," Kan said. He urged people to watch television reports for news and to stay calm, evacuating areas if necessary.

Japan called for international assistance, and Kan said that Japan has set up an emergency response headquarters.

The country's nuclear power plants automatically shut down when the earthquake struck, and Kan said there was no evidence that any radioactive material had leaked. But residents near Fukushima nuclear plant were being urged to evacuate, and the government declared a nuclear emergency.

According to the U.S. Geological Survey, an 8.9 magnitude quake would be the fifth-largest earthquake in recorded history (see a list of the largest quakes since 1900). It was significantly more powerful than the 7.0 magnitude earthquake that struck Haiti in 2010, killing more than 300,000. The earthquake that struck Christchurch, New Zealand, last month was a 6.3-magnitude quake.

The survey detected 19 aftershocks in the hours after the crash, some of which measured as high as 6.4, 6.8 and 7.1 in magnitude. In the days before this earthquake, Japan had experienced a series of smaller tremors.

New concerns about a widening U.S. trade gap and slowing Chinese growth combined Thursday with other signs of economic trouble to undercut some of the confidence about a recovery that has been building.

With the global economy appearing more vulnerable, investors dumped U.S. stocks, sending the Standard & Poor's 500-stock index down 1.9 percent and the Dow Jones industrial average below 12,000 for the first time in more than a month. All of the world's major stock markets were down sharply.

The developments, which also included new worries about Europe's debt crisis and continued turmoil in North Africa and the Middle East, painted a picture of a world economic recovery that is menaced from all directions.

"The sell-off today is really about people saying maybe the growth picture isn't as bulletproof as we thought," said Jim McDonald, chief investment strategist at Northern Trust.

Economists have become increasingly confident over the past few months that 2011 would be a year of steady, if uneven, recovery in the global economy. Just Friday, the U.S. Labor Department reported solid job creation in February. The International Monetary Fund has forecast that the world's economic output will increase 4.5 percent this year and that developed nations will hike their output by 2.6 percent.

The latest economic news is not enough to deflate that optimism. The U.S. stock indexes fell just enough to knock the market back to early-February levels, showing that investors are still reasonably upbeat. Still, Thursday illustrated the variety of risks facing the world economy, any of which could undermine global growth.

"Growth in the first quarter will be much weaker than many had forecast," said Diane Swonk, chief economist at Mesirow Financial, citing the weaker trade data and bad weather in January.

In the United States, the trade deficit widened to $46.3 billion in January, up from $40.6 billion in December. That was far more than analysts had expected. While U.S. exports rose, imports rose faster, with particularly large increases in imports of automobiles and other long-lasting products.

The numbers for February, which are to be released next month, could show the trade deficit widening further, because those figures will take into account the steep run-up in fuel prices in recent weeks.

Also Thursday, the Labor Department said the number of people filing new claims for unemployment insurance benefits rose to 397,000 last week, from a revised 371,000 the previous week. While the uptick was greater than analysts expected, it occurred during a week when many schools were on spring break, which can distort numbers.

New data out of Beijing, meanwhile, shows that China's gangbusters growth, which was barely touched by the global recession in 2008 and 2009, may be slowing. Exports, which have long driven China's economy, rose only 2.4 percent in the year ending in February, the Chinese government said.

Those results were distorted by the Chinese New Year, according to analysts, but led investors to fear that the economic juggernaut could be losing momentum. With China an engine of global growth, any slowdown there could be bad news for other economies.

In Europe, meanwhile, the euro fell against the dollar amid reminders that debt problems confronting many European nations remain unresolved. Moody's downgraded Spanish debt, chiding Spain's regional governments for failing to make needed cuts in their budget deficits, and the Spanish central bank said many of the country's financial institutions need to raise more capital.

While the sense of crisis in Europe has waned, challenges remain. Bond investors on Thursday demanded 5.5 percent interest from the Spanish government to lend it money for 10 years, far above the 3.2 percent rate that applies to Germany, which is in better financial health.

"Europe is a ticking time bomb," said Desmond Lachman, a resident fellow at the American Enterprise Institute. "The underlying problem is that countries on the periphery like Greece, Ireland and Portugal have solvency problems, and the efforts to solve it by cutting budgets are driving those countries deeper into recession, which causes them to lose the political will to make cuts."

European leaders are to meet at a summit in Brussels beginning Friday, and financial markets have been hoping they reach an agreement on committing more money for the financial rescue of troubled European nations. That progress will be difficult, however, because bailouts are immensely unpopular in Germany, Europe's largest and most influential economy.

Turmoil in the Arab world, meanwhile, continues to pose perhaps the most dangerous threat to the world economy. The price of oil fell Thursday, with West Texas Intermediate Crude falling $1.68 to $102.70 on signs of slower growth in China.

However, there were more reminders of political instability in the Middle East, including media reports of shots fired at a protest in Saudi Arabia, the world's largest oil exporter. Any disruption of the Saudi supply could spark a steep rise in oil prices, analysts said.

President Obama is scheduled to discuss rising energy prices at a news conference Friday morning.

Despite the risks, many analysts remain generally optimistic.

"There is a steady global expansion underway," said McDonald, of Northern Trust. "These things tend to be pretty durable."