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EUR 5.


Business Journal Deutsche Brse Group



Can long waves explain the global economy?

Whats next, Dr. Doom?

Does global warming also offer opportunities?

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Efficient market since 1585: Deutsche Brse Group

Bad banks, bonuses, backing certain words can create major waves in the markets. Artistically enhanced on screen, the acoustical display, as depicted on the cover, looks prettier than the real-world impact. This issue is all about waves and the question of when smoother sailing might return.



Nouriel Roubini is one of the few economists in the world who warned early on of a pending financial and economic crisis. In an exclusive interview with 1585 conducted in New York, Dr. Doom, as he was derisively known, talked to us about whats next for the global economy and what setbacks investors may have to reckon with.

Cover photo: Mehau Kulyk / Science Photo Library / Agentur Focus; photos: Win McNamee / Gettyimages, Jim Reed / SPL / Agentur Focus, RIA Nowosti / AKG




Tornados, flooding, drought global warming has particularly sharp implications for insurers. But the industry is both proactive and cautiously positive on the issue. A look behind the scenes at multinational reinsurer Munich Re.

Eighty years ago, Russian economist Nikolai Kondratiev outlined an economic wave theory of grand supercycles. Having been ignored for decades, Kondratievs theory is enjoying a revival of interest due to the financial crisis.

04 10 14 16 21 26 31 32 34

NEWS/MASTHEAD ASTRONOMY A radio telescope peers back into the early days of the universe SPOT ON La Olathe history of a mass movement BUILDING ACOUSTICS Between vineyard and shoebox FACTS & FIGURES Waves by the numbers INSIGHT Making waves PHOTO STORY Wave of light and shadow by Balthasar Burkhard GUIDE Gibraltar, financial center poised between two seas NICE TO HAVE Product ideas that make waves



Expansion wave. Deutsche Brse is increasing its investment in the growth markets of Asia, where a branch office was opened in December. In addition, Eurex opened offices in Tokyo and Hong Kong, with another opening in Singapore upcoming in July. Clearstream also has several offices in Asia, where it clears stock trades for foreign investment banks, particularly in China. That leaves us fairly well positioned for the time being, says Roland Schwinn, Director of Business Development, Asia & Middle East for Deutsche Brse. Mainly because this enables us to operate more effectively in Beijing, Tokyo, Hong Kong and Singapore, along with other Asian markets, than if based in Europe. The ongoing financial crisis changes nothing in that respect, says Schwinn: Asia will continue to grow crisis or no crisis. We have seen in the past that those markets recover faster. The next step has already been decided: the Korea Stock Exchange in Seoul has granted Eurex worldwide rights to list, trade and clear derivates on Koreas KOSPI-200 equity index starting in 2010, allowing international investors to trade KOSPI200 options while European markets are open. These are already among the worlds most liquid derivatives.

Computing wave. Alongside freighters and cruise ships, data centers too will soon be traversing the worlds seas. Search engine giant Google has plans to put servers in floating container pontoons out in the ocean. But thats not all: the mainframes are to be selfpowering. Water wheels located on the sides convert wave energy into electrical power. Diesel generators power up whenever the waters are calm. Cooling systems are thus rendered redundant, as the cold seawater prevents overheating. These maritime data centers would not only be environmentally friendly, but mobile as well. It is still unclear, however, when these seagoing server farms will actually be going online. So far Google has only filed for a single US patent application, but testing of the wave power generators is supposed to be already underway.

Japan: Trim Nation

Dieting wave. With at least 30 percent of the countrys population overweight, Japans government is taking action. Municipalities are now measuring weight and body fat and taking blood for all individuals aged 40 to 74and prescribing weight loss regimens accordingly. Businesses are supporting the initiative, with Toyota for example recording on company records the calorie count of food ordered in the canteen. Maybe a sensible move, as companies have to pay higher health insurance premiums for overweight employees. Other countries might do well to adopt similar national diet schemes, such as the US and Germany, the worlds and Europes most obese countries respectively. According to the WHO, obesity is responsible for seven percent of health care expenditure.


Security wave. Can risks be accurately quantified, measured and anticipated accordingly? They can: the new SENSIS data product from Deutsche BrseMarket Data & Analytics delivers objective data for the systematic measurement of securities risk. It makes it possible for investors to easily identify securities on a day-today basis that unnecessarily elevate portfolio risk, without having to invest in expensive analytical services or software, says product developer Christian Libor. In short: SENSIS helps investors rapidly assess the wave they are riding on.

Dozing before takeoff

Travel wave. Heres a sleeper of an idea that is a hit with frequent flyers: two napcap cabins are now located in the transit area of Munich Airport giving jetlagged business travellers a place to rest, stretch out, have a snooze and recover their energy. Or work undisturbed: in addition to a bed, these comfortable pods also provide a mini-desk, electrical power, and Web access. The idea was developed by students at Munich Technical University, who turned it into a start-up company.

Flood of spam yet to recede: according to Symantec Corp., some 80 percent of all e-mail sent worldwide is spam. Srizbi, the worlds biggest spammer, distributes 60 billion e-mails per day. A profitable business modelas unbelievable as it is. A study by the universities of Berkeley and San Diego estimates that the company probably generates annual sales of 3.5 million US dollars despite only one sale per 12.5 million spam e-mails sent. The next wave of spam ads is already rolling. Spammers have discovered opportunity in the financial crisis. Too-goodto-be-true credit offers are up sharply as a category of spam, relates Candid West, a Symantec Threat Researcher. All one can do is activate ones spam filterand ones common sense. A well-chosen e-mail address helps too. British IT expert Richard Clayton found that e-mail accounts starting with the letters Q, Y and Z receive substantially less junk mail.

Technological waves are easy to see coming, you just have to pick the ones you want to surf on. If your decision is made wisely, the waves power will slowly unfold, carrying you quite far.
Steve Jobs, founder of Apple

Still fifth place: Experts predict financial spam tsunami

7% Fraud





24% Internet

Photos: Jo Yong Hak / Reuters, Michael Boyny / Stockfood, White / Landov / Picture-Alliance


11% Health

18% Leisure 18% Products

Source: Symantec Corp.

Publisher: Deutsche Brse AG, Neue Brsenstrae 1, 60487 Frankfurt am Main, URL:, e-mail: Deutsche Brse Group main editorial office: Ulrich Meiner (legally responsible for content), Andreas von Brevern, Ralph Khn Publishing house: corps. Corporate Publishing Services GmbH, Kasernenstrae 69, 40213 Dsseldorf corps executive board: Holger Lwe, Wilfried Llsdorf Editorial department: (Man.) Florian Flicke and Christian Pietschner; Frank Burger, Daniel Ferling, Birgit Gehrmann, Mirko Hackmann, Bernd Hettlage, Katharina Hodes, Christine Mattauch, Axel vom Schemm Publications manager: Jan Leiskau Advertising manager: Ralf Zawatzky, e-mail: Art direction: Picture editorial department: Sabine Schmidt English adaptation: 24translate GmbH, Hamburg Printed by: Buersche Druckerei Neufang KG, Gelsenkirchen Reproduction: ORT Studios, Berlin Order no.: 1010-2797 All rights reserved. Reproduction and use subject to prior written permission. 2009 Deutsche Brse Group

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The 80-year-old and never fully accepted idea of a Russian economist is making a comeback: according to its disciples, Nikolai Kondratievs long wave theory of economic activity points the way out of the current crisis. They too are currently experiencing a boom of their own.

1 st Kondratiev


2 nd Kondratiev


3 rd Kondratiev

rik Hndeler has been a very busy man recently. He is currently editing the seventh edition of his book Die Geschichte der Zukunft (The history of the future), is getting numerous requests for talks and articles for daily newspapers. Its a good feeling: Hndeler has been researching and writing about Kondratievs long wave theory for the past 15 years and frequently met with rejection. Until now. Since the economic crisis, I have found more of an audience, says the 39-yearold economics author. This is because in the current recession, potential explanations and solutions that were

scarcely regarded and even mocked, are taking centre stage. The long wave theory, based on the work of Russian economist Nikolai Kondratiev from the 1920s, is one of these. At the heart of it is the assumption that economic activity follows inevitable and recurring cycles of upturns and downturns that last a good 50 yearsa determinist view that stands in stark contrast to current mainstream economic theory. For authors like Erik Hndeler and others like him, however, the disputed theory points to ways out of the current malaise. Great innovations in environmental technology, biotechnology and healthcare are to trigger the start of a new

Kondratiev cycle, which, they say, is just around the corner.

Driven by the nature of the economy

Nikolai Kondratiev himself looked to the past: in particular, he studied the development of price statistics in England or Germany over a period of some 140 years and took the values as measured values for economic activity. He observed regular waves that repeated themselves at intervals of between 40 and 60 years. Each of these began with an upturn and ended with a recession. Kondratiev concluded: The long waves are driven by factors that form the very nature of the capitalist economy.


Photos: Foto Deutsches Museum, Wolfgang Maria Weber / TV Yesterday, Imagebroker / Imago, VW, Bianchetti / Leemage / Picture-Alliance

4 th Kondratiev


5 th Kondratiev

Kondratiev published his theory in 1926. A decade later it was taken up by the Austrian competition guru Josef Schumpeter. He named the waves Kondratiev cycles in honour of their inventor and developed the model further: Schumpeter saw basic innovations such as the steam engine and the railway as the triggers for each upturn. According to him, the first Kondratiev cycle began with the steam engine, the second with the railway, the third with electrical engineering and chemistry. Mass motorization initiated the fourth cycle and information technology the fifth. Whether this wave will continue or is coming to an end, when a sixth Kondratiev
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will begin and what will characterize it is a matter of dispute.

A reassuring message with no proof?

But let us return to the question of whether the long wave theory is tenable. Its appeal is primarily based on two facts. On the one hand, complex upheavals in the past such as industrialization and the Great Depression can be explained very simplythey were bound to happen. On the other hand, the theory contains the comforting message: things always brighten up againno matter how bad a crisis is, things will inevitably start looking up at some point.

But why? The theory lacks a convincing argument in favour of inevitable cycles. A handful of historical examples makes it difficult to infer a universally valid cyclical pattern. In addition, modern economists criticize the fact that Kondratievs model was primarily based on the prices indexes, which does not enable any conclusion to be drawn as to overall investments and growth forces. And statisticians complain that the alleged periodicity of the time series could be the result of a mathematical error, the so-called Slutzky effect. It causes the applied process of trend adjustment and data smoothing to produce the cycles in the first place.


For the past

I have been saying that structures need to be changed to prevent the

twelve years,
Erik Hndeler

crisis from coming ...

world, was the idea once again taken into consideration, though without being recognized by the macroeconomic mainstream. Erik Hndeler experienced this first-hand when, after studying economics, he was unable to find a doctoral advisor for a dissertation about Kondratiev. The long wave theory simply has no place in official economic debate. Obviously, a Keynesian hates to hear anyone side with Kondratiev and argue that factors like prices, interest rates, wages, money supplies and inflation are not the cause of economic development but its consequence.

Environment, biotechnology, health?

And even Schumpeters version of the Kondratiev cycles, which focuses on basic innovations, often meets with little enthusiasm. Rolf Kroker, Head of Economic Policy and Social Policy at the Institut der deutschen Wirtschaft Kln (Institute of the German Economy in Cologne) explains why: Firstly, innovations are usually a continuous process, not a sudden phase. Secondly, one of their characteristics is their unpredictabilityaccording to the Kondratiev cycle, by contrast, they are supposed to occur every 50 years or so. However, what can be predicted fairly accurately is when the long wave theory itself will experience a revival: in times of crisis, when people want to believe in promises of salvation. Thus, during the economic miracle, the Kondratiev cycle was dismissed as a historical quirk. Only in the 1970s and 1980s, when the oil crisis and growing unemployment produced the first cracks in the idyllic Western Hndeler was spurred on by the rejection. For a good one and a half decades, he has dedicated himself to the ostracized Russian, has written several books about his ideas, holds a around 60 lectures a year, works with prominent people such as trend researcher Mathias Horx and is delighted that interest in Kondratiev is suddenly taking root. He is finally finding a large audience for his theory: a sixth Kondratiev cycle with a booming economy and rapidly increasing employment lies ahead, provided that the power for basic innovation is employed in the right fieldthe health sector. We need to increase the productivity of our knowledge considerably. To do so, however, everyone must be able to employ their knowledge for as long and as efficiently as possible. But this is only possible if they are healthy and remain so. We therefore need to completely restructure the health service to focus on preserving health, individual responsibility, provision and increasing awareness.


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Leo A. Nefiodow, too, sees the health market as the key area for the sixth Kondratiev cycle. Like Hndeler, the 69-year-old economist and former member of the Our future economy working party of the Club of Rome sees basic innovations as the key element in the long wave theory. Yet, although Nefiodows potential candidates for the sixth Kondratiev cycle include biotechnology and the environmental market, he ascribes such vast growth potential to the health sector that he believes the return of full employment to be a possibility: In the USA between 2001 and 2007, every second new work place created was in the health sector. That is possible in every developed country on earth.

Kondratiev & Co.

Economists like to make waves: many of Kondratievs colleagues also see them as the perfect explanatory model. Thus, in 1862, French physician and economist Clement Juglar described a seven- to eleven-year cycle which he based on the development of gross domestic product (GDP), capital expenditure, inflation and unemployment in the USA, France and the United Kingdom. The existence of Jugler cycles is widely acknowledged today, with capital expenditure cycles in particular being characterized by the term. The South African statistician and bullion dealer Joseph Kitchin described a considerably shorter cycle lasting three to four years in the 1920s. He investigated the course of wholesale prices and interest rates in the USA and the United Kingdom from 1899 to 1922. The explanation for fluctuations: when economic development is favourable, companies build up their supplies significantly, when development is unfavourable, they reduce them significantly. Today, Kitchin cycles are still used in business management to assess production and sales planning and stock keeping. A third exponent is American Simon Kuznets, who published his theory of so-called long swings or Kuznets cycles in 1958 and received the Nobel Prize for Economics in 1971. The cycles identified by Kuznets last around 15 to 23 years and are based on the accumulation of means of production and the construction time and useful life of real estate.

You just have to look

You just have to set the right course, he believes. But Leo A. Nefiodow and Erik Hndeler feel like lone voices in the wilderness. Although their hypotheses are getting more attention, they are not consistently implemented. My findings have been published for a long time, says Nefiodow, you just have to look. For the past twelve years, I have been saying that structures need to be changed to prevent the crisis from coming, says Hndeler, and now it is here. Nonetheless, the two Kondratiev experts are not threatened with the fate of their predecessor: in 1926, Kondratiev proved that capitalist systems were not inevitably doomed to collapse but can renew themselves in periods of crisis by means of the powers of the market; a discovery that created quite a stir and, unfortunately for Kondratiev, was heard by Josef Stalin. The dictator had the economist shot a few years later as a counter-revolutionary.
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Photo: RIA Nowosti / AKG




It doesnt hear radio waves. It sees them. The 100meter (109-yard) radio telescope near Bonn can see right back to the universes infancy. One pixel is enough to peer billions of light years into space unless an astronaut happens to be making a phone call on the moon.

eople dying of thirst in the desert could hardly have been happier: water, theres water! In the middle of December, a team of scientists led by Violette Impellizzeri from the Max-Planck-Institut fr Radioastronomie (MPIfR: Max Planck Institute for Radio Astronomy) discovered water. But not just anywhere. Their desert makes the Sahara and Gobi look like wetlands. For they discovered water in the middle of MG J0414+0534, a quasar from the early days of the universeand 11.3 billion light years away from any oasis. It was a real coup and came right at the start of the UNs International Year of Astronomy. The molecular cloud that they discovered is the most distant water ever detected. And it was found with what is, by scientific standards, an ancient instrument: the 37-year-old, 100-meter (109-yard) radio telescope at the MPlfR in Effelsberg near Bonn. A precisely constructed colossus Like a UFO that has just landed, the white 3,200ton (7,000,000-pound) steel monster nestles in a valley in the hills. The surface of the fully movable parabolic reflector measures 7,850 square meters (84,497 square feet)as much as a football pitch. Nevertheless, only a tiny humming noise can be

A long look back: A depiction of the quasar where the radio telescope in Effelsberg detected watereleven billion light years away.

21 11

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Sound of space
You can listen to the pulsar PSR 2021 + 51 in the Cygnus (swan) constellation, recorded by the Effelsberg radio telescope: URL: /audioob-jekte/pulsar2021/audio.mp3 Or to 22 pulsars from the 47 Tucanae globular cluster, recorded by the Parkes radio telescope in Australia: URL: /audioob-jekte/47tuc/audio.wav

heard when this giant is turning. This is thanks to its extremely precise construction: a sophisticated array of pipes on its back ensures that its surface regains its shape after each turn. A triumph over gravity: despite its mass, the reflector deviates a maximum of 0.45 millimeters (0.02 inches) from the ideal parabolic shape. And even this difference can be reduced considerably using a new secondary reflector. Our telescope is a perfectly balanced masterpiece of German engineering, says Dr. Norbert Junkes, MPIfR spokesperson. As a comparison: the worlds largest radio telescope in Green Bank, West Virginia measures only two meters (2.2 yards) more in diameter but weighs more than twice as much. Earths natural laws apply in space too Its performance is, however, even more impressive than its vital statistics. The discovery of water was only the latest in a long line of successes: in the summer of 2008, MPIfR scientists proved that one of the fundamental natural constants in physics, the relationship between the mass of protons and electrons, is almost exactly the same six billion light years away. In other words, they proved that natural laws valid on Earth also apply in space. And of the over 200 supernova remnants in the Milky Way, 40 of them were discovered from Effelsberg. Or a little closer to home, the drift of continental plates can be measured down to the millimeter in Effelsberg. Looking at the control room reveals little of what the telescope can do. The observatorys hall is much more informative: a radio plan of the galactic plane measuring six meters (6.6 yards) in length can be seen here. 42 supernova remnants are visible on it. Junkes, who helped to discover four of them during his student days, taps his favourite region with his index fingera yellow hook in the centre of the Milky Way. Officially it is called G54.4-0.3: It is

absolutely fascinating, the astronomer says enthusiastically, a supernova remnant in the middle of a molecular cloud. And a baby station: lots and lots of new stars are born here. You can see the connection between birth and death, all concentrated in one place! Junkes is clearly crazy about it. Nine years worth of measurements were taken for the plan. 2.2 million measurement points are depicted on it, almost 6,500 compact sources of radiation were catalogued, most of which are outside our Milky Way. And with cameras that would be a bitter disappointment for even amateur photographers: the most visually stunning of the 18 receiver systems has a resolution of exactly seven pixelsa far cry from the seven million pixels of any mid-priced digital cameras. The cylindrical socalled horn aerials measure up to five meters (5.5 yards) in length, but only have a one-pixel receiver. Mobile disruption But they are highly sensitive: Junkes favourite place in the Milky Way could not be seen with optical cameras or telescopes. Theres far too much cosmic dust. Only the radio telescope can penetrate it, says Junkes. And speaking of cameras: We dont listen in, we look, he explains. We are an eye, not an ear. Radio waves are really radio light. But an extremely weak form: the strongest signals outside the solar system are emitted by the supernova remnant Cassiopeia A, which is 10,000 light years away, followed by Cygnus A, the most well-known radio galaxy, which is 750 million light years away. If an astronaut switched on a normal two-watt mobile phone on the moon, it would be the third-strongest source of radiation, Junkes says to illustrate his point. And it would eclipse a lot of other signals. So its no wonder that mobiles are strictly forbidden around the telescope in Effelsberg.



Waves from space

Radio signals are among the longest waves in the electromagnetic spectrum: their waves lie between 0.35 millimeters (0.01 inches) and 15 meters (16 yards)and constantly arrive on Earth from space. As a comparison: the wavelength of optical light perceptible to the human eye is between 400 (violet) and 800 (red) nanometers. Cosmic radio waves were discovered in 1932 by the American radio engineer Karl Jansky. He was given the task of explaining the recurrent interference affecting transatlantic radio communication. To his own surprise, he discovered that one of the sources of interference was not of earthly origin, but came from the direction of the Milky Way. Since then, radio astronomy has developed into one of the most important methods for researching the universealmost all of the astronomers awarded the Nobel Prize have been radio astronomers. Its main benefit: unlike optical telescopy, observations carried out using radio astronomy are not hindered by cosmic dust or fog clouds. It was thanks to radio telescopy that the exact structure of our Milky Way could be determined and previously unknown objects like quasars and pulsars discovered.

Like a UFO in the valley: 3,200 tons (7,000,000 pounds) of perfectly balanced steel the size of the MPIfR telescope is only apparent from a birds eye view.

Photos page 1011: A.Schaller / STScl; photos page 1213: Enker / Laif, Ekkehard Culmann

Interference is the number one problem for the MPIfR. Junkes: It would be hard for us to stop people in the village from using microwaves. The telescopes valley location does, however, protect it from many sources of interference, such as radar beams. However, it is no use for the main problem: Our work is pure research and results in knowledge alone. It is in the public interest and is therefore financed by the government, says Junkes. But sometimes the government has problems recognizing whats in its own interest. Science versus business In other words, there are a dozen protected frequency bands for radio telescopy. But, when conflict arises, astronomers are often left emptyhanded. Or to be more accurate, they are left blind. For instance, ever since the TV satellite Astra-1D went into operation in 1994, the telescope has only measured white noise on the formerly protected wavelength band of 2.8 centimeters (1.1 inches). When there is any doubt, says Junkes, industrial interests win out. The astronomers think that this type of disaster may happen again: one of their most important bands is

the wavelength of 1.3 centimeters (0.5 inches). They use it to track ammonia and water in space. But the manufacturers of distance radar systems for cars have started to use this band. They could use a higher bandbut that would mean higher costs. According to Junkes, the consequences could be devastating: The radiation from a brake assistant one kilometer (0.6 miles) away is one thousand times stronger than the strongest radio wave outside our solar system. If radio astronomy draws the short straw, discoveries like the one made in December may become impossible in the future. It is therefore extremely important that protected frequency bands be preserved for science, says Junkes. The scientists are still able to use a good two percent of the entire frequency range. They have not, however, used it to look for alien life. Junkes is fed up with what is probably the question most frequently posed by visitors: No, E.T. and his gang are of no interest to us, other people are responsible for them, he remarks. They would sooner track down cattle that have broken free. Whenever an electric fence is damaged in the vicinity, we pick up on it, he laughs. We could get a message to the farmer: hey, it looks as if youve got a pulsar there.

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_____ A MASS It sweeps through all the stadiums in the world and is known as the Mexican Wave, La Ola, the Stadium Wave or simply The Wave. Yet the legends surrounding the invention of the tremendous spectator spectacle are more numerous than its many names. _____ BATTLE OF THE Two former US cheerleaders are involved in a bitter dispute about its origin: Rob Weller claims to have set off the first wave during a football match on 31 October 1981 at the University of Washingtons Husky Stadium. But Krazy George claims that a video proves that he began The Wave on 15 October 1981 during the American League Championship Series at the McAfee Coliseum in Oakland. _____ YET MORE Other experts claim that Bill the Beerman is the inventor. He is said to have kick-started The Wave among the football fans at Seattles Kingdom back in 1976. Russian and Canadian ice hockey teams are also alleged to have invented it. Or perhaps it wasnt a sporting occasion at all. Perhaps it was Frank Zappa? Back in 1969 at the Denver Pop Festival, The Wave was said to have swept around the Mile High Stadium after the rock rebel used sound and gestures to call for audience participation. To which song is not clearpossibly Lemme take you to the beach. _____ HOW WAVES Where and when the first wave started remains unclear. But how it did has been the subject of intense research: a team of German and Hungarian scientists published their findings in Nature, suggesting that fans act just like chemical components during The Wave. They also found that, as in chemical processes, a critical mass is required for La Ola in order to get the reaction going. And that The Wave usually moves in a clockwise direction at twelve meters (13 yards) per second. _____ NOT JUST But this form of group exercise isnt everyones idea of fun. For example, US sports journalist Lincoln Areal says it is evil. It is, he says, an indication of boredom and thus suggests a lack of respect for the athletes involved. In addition, it destroys the atmosphere of the game because it is tantamount to the spontaneous outbreak of a collective attention deficit disorder.
Photo: Walter Spaeth






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The Sound of Waves

High-quality architecture caresses the eye. And the ear; acoustics is all about the hidden art of transforming mechanical waves within a space into sound. For a long time now, professional acousticians have been involved in more than just the building of concert halls.

enice has lost its soul, cried Luciano Pavarotti: on the night of 29 January 1996, Venices magnificent opera house La Fenice burnt down. Five of Verdis operas had been performed for the first time there, and Enrico Caruso and Maria Callas had enchanted audiences there. The lagoon city mourned. But not for long. The very next day, the city authorities decided to rebuild it. The Phoenix, as La Fenice means in English, was to rise out of the ashes. And comera e doverahow it was and where it was. Even its famous acoustics were to be reproduced with the same or even better quality. It was a huge challenge for Jrgen Reinhold from the renowned acoustics company Mller-BBM from Planegg near Munich, who was entrusted with the task. Particularly since, according to Mller, audiences today prefer longer reverberations to those in historical opera houses. Reverberation time is the most important factor for acousticians. It is the key quality criterion for a concert hall, a stage, a lecture hall or even a large office and describes the time required for the sound in a room to decay to one-thousandth of its original value. For a conference room or a theatre, where

Temple of waves by the Elbe

The most spectacular new concert hall currently under construction is in Hamburg on top of a former warehouse surrounded by the Elbe: the Elbphilharmonie (Hamburg Philharmonic Hall, see renderings). Its irregular, interlocking terraces rise up around the conductor and orchestra to form a steep-sided bowl of spectators. The concept guarantees optimal views from every seatand is a real challenge for acousticians.



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Mini loudspeaker for maximum pleasure: Acousticians are using a wooden model on a scale of 1:10 to simulate and optimize the sound in the future Hamburg Philharmonic Hall.

Acousticians piece together tiny parts of a mosaic.

The shoebox
The classic shape for a concert hall is that of a shoebox: long, comparatively narrow and often very high. The stage lies at the end of the cuboid. The great concert halls of the 19th century were constructed in this way. The Golden Hall of the Wiener Musikverein (Viennese Music Hall), which opened in 1870, is an excellent example. Its acoustics are still famous today. A successful example of a modern-day shoebox is the concert hall in the Culture and Convention Centre in Lucerne, which opened in 1998. Due to its imposing height, it is also known as the cathedral of acoustics.

Only reflections guarantee enjoyment Soundsbe they music, speech or noisesmake the air vibrate. These vibrations reach our ears as sound waves. But the multitude of individual notes in a concert only becomes a rich tapestry of sound for the audience thanks to the knowledge of acousticians. Acousticians piece together tiny parts of a mosaic, says Reinhold. They begin with the shape of the hall and the seating arrangements and go right through to details such as the optimal covers for seats. And a roundabout route is essential: were the sound to travel directly from the orchestra to the listeners ear, it would seem much too cold and dry. So-called reflections are required to enhance the experience: the sound must also bounce off the walls and the ceilings of the hall, from where it is guided to the audience's ears. This is the only way in which a rich, warm sound can be created.

And dont forget, you listen with your eyes too. The size of a space orientates concert visitorsthe bigger the hall, the more reverberation they expect. The Japanese acoustician Yasuhisa Toyota, probably the most famous member of his guild today, believes that psychology also plays a role in acoustics (see

Photos page 1617: Herzog & de Meuron; photos page 1819: Jrg Fokuhl, Ralph Larmann, Ruault / Keystone / Picture-Alliance

every word spoken must be clear when it reaches the listeners ear, reverberation time needs to be as short as possible and certainly under one second. For a classical concert, it may well be twice as long. On the other hand, the full drama of an organ concert in a church can only be experienced with a reverberation time of up to ten seconds.

Acousticians have a lot of tricks up their sleeves to achieve the desired reflections: Walls are lined with materials with large pores, which reflect the sound at exactly the right level. Wall panels can be turned in various directions depending on how large the orchestra is. Even balconies, balustrades, mouldings and boxes make a contribution to the overall tone, since they scatter the sound and thus prevent echoes. In La Fenice, Reinhold inclined the previously flat ceiling above the orchestra a few degrees in the direction of the audience, in order to improve the sound in the very back rows. Some halls, such as the concert hall in the Kultur- und Kongrezentrum (Culture and Convention Centre) in Lucerne in Switzerland, whose acoustics are famous throughout the world, even have an echo chamber behind the stage so as to expand the volume of the hall and thus ensure a longer reverberation time. The once in Lucerne was created by Russel Johnson from New York, one of the most respected acousticians in the world, who died two years ago.



interview). Jrgen Reinhold is well aware of this: Musicians feel happier surrounded by wood. If you cover a concrete wall with wood, even though the acoustic values remain the same, most musicians still think that the sound is better. The opera hall of La Fenice is almost fully lined with wood. The problem there was different: The interior was completely destroyed. Nevertheless, the hall was to be reconstructed true to the original, meaning that the acousticians had little room to manoeuvre. There was, however, one benefit: Because the internal structure of the building had been completely destroyed, we were able to build in soundproofing between the opera hall and the rest of the building. Between the halls wood-panelled brick wall and the concrete wall separating the outer rooms, a layer of hard fiber board was added to soundproof the hall and reliably deflect all external noise. Silence has reigned inside ever since. And silence is, however paradoxical it may sound, an

important factor for acousticians: it is the basis for a good sound. Parliamentary buildings also depend on acoustics. Whilst Reinhold tackled La Fenice, his colleague Karlheinz Mller racked his brains to find a solution for the Reichstag building in Berlin. The 66-yearold brother of Mller-BBMs founder is widely recognized as the German acoustics doyen and is mentioned in the same breath as Toyota and Johnson. Mller was responsible for the acoustics in the German parliament, the Bundestag, in Berlin. The problem: the hall is really much too big a space for speeches. Had no measures been taken, the politicians would probably have sounded as if they were giving sermons in a cathedral. Mller thus had sound-absorbing chambers built under the floor, which extend down as far as five meters (5.5 yards). The countless small halls in the ground, through which the sound is absorbed, cannot be seen beneath the carpet. Operatic ocean liner But concert halls remain the biggest challenge: from the very first performance, their sound must be perfect. One of the most spectacular concert halls currently under construction is in Hamburg: the Elbphilharmonie (Hamburg Philharmonic Hall). The Swiss architects office Herzog & de Meuron is creating a wave-shaped building made of glass on top of an old warehouse surrounded by water. The whole building is reminiscent of an ocean steamer. The hall will have 2,150 seats. Yasuhisa Toyota is in charge of the acoustics. The Japanese master of sound is a champion of the vineyard design: concert halls in which the orchestra sits in the middle of the room surrounded by rows of spectators. This is in complete contrast to a traditional shoebox like Lucernes Culture and Convention Centre (see margins). Toyotas most famous work to date is the Walt Disney Concert Hall in Los Angeles, which opened in 2003. It looks like a whole host of sails made from steel and was designed by top architect Frank Gehry. It was a compromise between two shapes: from the outside it looks like a rectangular shoebox, but inside it has a vineyard design. The symbiosis worked; critics praised the clarity of the individual instruments and the warmth and directness of the sound. According to the Japanese acoustician, the Hamburg Philharmonic Hall is unique, both in terms of shape and the materials used. In order to guarantee a

The vineyard
Unlike in shoeboxes, in vineyards the orchestra is seated in the centre of the room surrounded by terraced seating. The circular arrangement and the gradual incline in the rows of seats mean that concert visitors can see the musicians well from all areas. The vineyard model is thus seen as the democratic concert hall. The Berlin Philharmonic Hall, built in 1963, was the first of its kind. Critics at the time labelled it a grandiose fortress of sound.

Planning game: 56 measuring points on the model should guarantee that acoustics calculations for the Hamburg Philharmonic Hall are accurate.

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Master of the acoustics mystery: Yasuhisa Toyota

Acoustics is an artistic discipline

perfect sound, he had a five-by-five-meter (5.5-by5.5-yard) model of the hall built. Inside, each of the 2,150 seats is occupied by a doll in order to simulate a full house. The problem is that early reflections are difficult to achieve here. Early reflections are sound waves that bounce back off the side walls and reach the ear in less than 60 milliseconds. These are much coveted in concert halls. They provide a sense of space, as human ears are able to detect where sounds are coming from within this time. However, someone sitting close to the orchestra in Hamburg is a long way from the nearest wall. The solution is a horn-shaped reflector that hangs from the ceiling and can be adjusted in terms of height. Incidentally, the first vineyard in the world was very controversial: when top German architect Hans Scharoun won the competition to design the Berliner Philharmonie (Berlin Philharmonic Hall) in 1956 and placed the orchestra in the centre of the concert hall, he caused quite a stir. There was strong resistance to the unconventional shape of the building and the hall. Herbert von Karajan, who was the conductor of the Berlin Philharmonic Orchestra at the time, had to threaten to leave the city before Scharouns design was finally implemented. The acoustics impressed everyone.

The acoustics maestro Yasuhisa Toyota on perfection, compromise and the joy of the first note.
Mr Toyota, you have said that the acoustics of a concert hall always remain something of a mystery. Does this mean that acoustics is not an exact science? It is both a science and an art. We are unable to perceive acoustics, in other words sound, without music. In an empty room, we hear nothing. So when we talk about acoustics, we always mean the music we can hear at the time. So acoustics is an artistic discipline. Thus, for acousticians, there always remain many unknown quantities. Are you involved with the design of a concert hall or does your work begin only once the design is complete? Naturally, the design of the building is primarily the job of the architect. We can only provide support with acoustics. But we usually help the architect to develop the shape of the hall. There are always discussions and we are usually included in them. Of course, every architect is different. No two architects are the same to work with. You are seen as someone who never makes compromises. Compromise is not the right word. It sounds too negative. Discussions are always necessary and a balance must be found. I wouldnt call working together to find the best possible solution a compromise. Does any one concert hall have the perfect sound? A perfect sound is always a subjective experience. You need perfect music to create it, but can you imagine perfect music? It is always relative to the moment and to the concert that you are in. It is a combination of acoustics, music and psychology. You never miss the first concert in a hall where you were responsible for the acoustics The first concert is important, but the first orchestra rehearsal is much more important. I am always terribly nervous (laughs). The most difficult moment for me is the sound of the first note. Beforehand we know absolutely nothing. The product of many months work then becomes obvious. If the acoustics are just the way I wanted them, I am happy.
Photo: Christian O.Bruch / Visum





470 10 2,600




The AMAZON WAVE POROROCA can travel a distance of 970 kilometers (603 miles). This tidal bore phenomenon occurs every spring at full and new moon, when the tides of the Atlantic push ocean water upriver. THE LOWEST TONE audible by most people has a wavelength of exactly 21.4375 meters. This is about one octave lower than the lowest key on a piano. The FIRST PERM was done by the Romans 2,600 years ago, who created waves in hair using the worlds earliest curling iron. The chemical permanent wave treatment only came along much later, invented by Charles Nessler in 1906. The GIANT HONEY BEE APIS DORSATA forms a wave of defence with 1,000 of its species to ward off threats. In coordinated fashion, each bee elevates its abdomen, one after the next, creating a wave of stingers up to two meters wide within a fraction of a second. According to its inventors, the prototype SEARASER WAVE POWER PUMP can generate enough electricity to power 470 households. The WAVE ROCK formation is 2.7 million years old. It is one of Australias most popular natural attractions, with over 130,000 visitors each year. GAMMA RAYS not only have an extremely short wavelength at less than 10 picometers, they also hold a tremendous amount of energy, able to pass through over a meter of lead (3.3 ft.). 10 picometers equals 10-12 meters. By comparison, the element hydrogen, the smallest atomic unit, has an atomic radius of 37 picometers. A MARSHMALLOW heated in a microwave oven will expand by 400 percent. Light bulbs on the other hand will light up in a microwaveas will a computer mouse. INFRARED LIGHT of type A (wavelength 750 to 1,400 nanometers) penetrates four centimeters (1.6 inches) into the human body before turning into heat.



Nouriel Roubini was just about the only economist to predict the global financial crisis and recession. Ever since, the New York economist has simply been known as Dr Doom. 1585 spoke to him about the causes of the crisis, global cyclical volatility and what is in store for us.




MISTER ROUBINI, what question are you asked

most frequently at the moment? Most people want to know if the worst is behind us. Mr Roubini, is the worst behind us? The worst is yet to come. In the majority of the world, representing a total of 60 percent of the global domestic product, economic output is shrinking. The collapse of the banking system has been prevented so far, but there are still huge burdens to be shouldered. Credit losses may rise to 3.6 trillion US dollars, further banks are threatening to go under and there will be another wave of nationalizations. Can you understand that people have gradually had enough of this bad news? Of course I can. But there is no point in predicting an end to the downturn just because people want it to happen. After each shock last yearthe collapse of Bear Stearns, the near collapse of AIG, the bankruptcy of Lehmannpeople hoped that the worst was over and that the events would have a cathartic effect leading ultimately to recovery. But we are still in the midst of a vicious circle: the financial crisis leads to a credit crunch, which in turn leads to a recession, as a result of which even more loans will go bad. No, we have not reached rock bottom yet. You have become famous as Dr Doom. You might be able to increase your fame by telling us what will come after the crisis. Any ideas? I am not a professional pessimist. After deleveraging, or eliminating high-risk options, a period of recovery will set in. Nonetheless, it will be a slow process and will continue to feel like a recession at first. This year, the US economy will not experience any growth at all. In 2010, it may grow by 1 percent.
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Does the economy need its ups and downs, in the same way that day and night go together? It doesnt need them, but they are probably unavoidable. The waves are often triggered by external shocks, for example, increasing oil prices or wars. However, in recent years, it has almost become possible to speak of credit cycles. Innovations in the financial sector were not supported by appropriate regulations. This ultimately caused speculative bubbles to grow. Until recently, many people thought that stabilization had been successful. The economy was growing, inflation remained low ... ...but in reality the combination of high growth, low inflation and low interest rates encouraged the formation of speculative bubbles. It sounds paradoxical, but the result was the exact opposite of what we were hoping to achieve. The negative sides to a downturnbankruptcies, unemploymentare well known. Are there any positive aspects? Schumpeter described them in the principle of creative destruction: the weak vanish from the market, while the strong expand. But a small recession is somewhat different to the crisis that we are now experiencing. Enormous assets have been destroyed. The budget deficits that governments are using to finance deposit guarantees and anti-recession packages will mean a significant burden for future generations. It is obviously fashionable at the moment to look for patterns in economic development. For instance, historian David Fischer claims to have observed recurring, long-term waves of

Photo: Win McNamee / Gettyimages



inflation lasting over 100 years. Kondratievs theory too (see page 6) is being rediscovered. Do you think there is something in it? I have my doubts. The economy does not develop mechanistically. Technological progress, geopolitical and economic eventssuch as the abolition of fixed exchange rates or the increased role of central banksare not subject to any regularity. But all these factors have a considerable influence on economic events. On the other hand, there is the Black Swan theory coined by epistemologist Nassim Nicholas Taleb: a rare phenomenon that occurs by chance upsets normal development. Is the financial crisis a black swan? No. I met the author recently and he believes that the financial crisis is a white swan or a logical development caused by imbalance and political errors. It was not a bolt from the blue. Which theory are your predictions based on? My approach is rather eclectic. I try to observe the whole system: the development of global data, historical examples, behavioural patterns in crisis situations. You have to be creative. The world cannot be explained in simple terms. I have nothing against stringent analysis but, in order to grasp complex developments, you have to approach them holistically and assess all useful information. You are warning of a combination of stagnation and deflation ...yes, I am worried that the US economy may take an L-shaped course, as happened in Japan in the 90s. It is possible. But other economists fear inflation in the medium term. Do you think their fears are unfounded? Nouriel Roubini, 50, has made a career out of the financial crisis. Since he was one of very few economists to predict it, not only Inflationary fears are based on very early but also correctly, the son of Persian Jews has become a peoples concern that the state revered star of the international financial community. The professor is printing money in order to of economics teaches at the Stern School of Business, which is part of New York University. At the end of the 90s he was, for a short reduce its debts with the aid time, a member of Bill Clintons council of economic advisors at the of price increases. This would, White House. In 2004, he founded the advisory and analysis comhowever, go hand in hand with pany RGE (Roubini Global Economics), whose expert reports are said to be amongst the best in the industry. high economic costs and would undermine the credibility that

the central banks have built up over the last 25 years. I dont think that the Federal Reserve will allow that to happen. Because lessons have been learnt from the past? Politics no longer deals with problems the way it did during the Great Depression and has also learnt from the crisis in Asia. Furthermore, the Europeans are pressing the USA to implement real reforms and not to carry on as usual after the crisis and thus risk the next bubble. We now have the chance to regulate the system in such a way that we can avoid excessive developments. What makes me confident is that the BRICs (Brazil, Russia, India and China) are so strong. Larry Summers, currently Obamas national economic advisor, once compared the integration of China and India in the world economy with the Renaissance and the Industrial Revolution. This may be somewhat exaggerated, but what is certain is that China alone has contributed some 1.3 billion people to the global workforce. This is a radical change. The growth prospects in the emerging markets are enormous. The global economy will benefit from this. Optimistic words from Dr Doom. As I said, I am not a professional pessimist. We can place the economy on a long-term stable footing, provided that we find ways to deal with the limited resources available to us and create energy security, solve the problem of global imbalance, establish a stable financial system, and develop a global economic code of conduct. All this will not happen by itself. There is a lot of work ahead of us. Perhaps you will be able to contribute to making sure this is done. After all, ministers, government officials, bankers, and CEOs the world over are queuing up for your advice. I do not wish to overrate my own personal role. In times of uncertainty, people look for reliable information. My advice and that of my company are in demand because we are independent. We endeavour to provide honest, intelligent and realistic analyses. This business is a bit like the film industry. Actors are not only judged on their last film. It is a question of performing well over a longer period of time.

Photo: James Leynse / Corbis


Ceramica. High-tech ceramics.



Waves are more than just water sloshing monotonously back and forth. Scientists have been trying to better understand waves for centuries. But until recently the breakers have kept their secret, defying all kinds of heavy mathematical artillery brought to bear against them. Until a few years ago, monster waves towering 40 to 50 meters high (131164 ft.) on the open seas were considered just an old fishermens tale. It wasnt until the advent of satellite photography that their existence was proven beyond doubt. Modern quantum mechanics managed to explain how waves are createdonce again turning theories of traditional, linear physics upside down in the process. Reality eventually sunk distribution models that for decades had been used as the basis for calculating wave lengths. Today we know that mega-waves tear across the oceans hundreds of time every yearcausing many a captain to break into a cold sweat. Because they are unable to conduct research on monster waves on the open seas, scientists make do with lab simulations. They now can reproduce every type of wave inside of wave channels. The University of Hanover and the Hamburg Ship Model Basin (Hamburgische Schiffbau-VersuchsanstaltHSVA) utilize basins measuring 300 x 20 meters (984 x 66 ft.) that are among the largest in Europe.


Wind is literally the driving force behind the formation of water waves. Put simply, the different velocities of the elements at the point where air meets water creates shear stress, causing the sea to get out of balance. Wind force and duration are key determinants of a waves character, in addition to exposed surface (strike length and fetch). High waves are regularly observed on large inland waters like Lake Constance or the US Great Lakes, which are long enough for wind to have this effect.


There are three theories as to how monster waves arise. Theory 1: Superposition. Fast, larger waves catch up with slower ones. In certain constellations these can build up to form a monster wave. Theory 2: Where a current meets storm waves, the drift causes the wave fronts to collide. Because water is not compressible and the waves energy remains constant, they rise up to form a monster wave. Theory 3: In the intersecting sea theory, freak waves are created through the interplay of vortices with turning windseven in calm waters. A waves velocity depends on its length and the sea depth. The greater the depth and the longer the The orbital movement of microscopically small water particles is another important factor. These particles flow in spirals in the oceans deeps when a wave passes them. This phenomenon occurs even at depths of roughly half of the wave length. Experts refer to these as deep-water waves. With flat-water waves the orbits are elliptical and reach to the bottom. wave, the faster it will get. A deep-water wave of about one kilometer in length (.62 miles) travels at around 140 km per hour (87 mph).



Scientists have only been studying so-called rogue, monster, killer or freak waves for some 30 years, though extensive research is virtually a new thing. Waves of up 25 to 40 meters (82131 ft.) in height are not a rarity. Today experts distinguish between three types: rogue waves are relatively fast and move against the sea current. The term Three Sisters describes the phenomenon of typically three very large waves in succession. A White Wall is the term for an extremely steep monster wave, named after the foam coming down off the crest.

[40 METERS (131 FT.)]

[15 METERS (49 FT.)]


While passengers aboard the luxury liner Queen Elisabeth II came away with only a fright and a few broken windows in 1995, the 111-meter-long MS Bremen (364 ft.) fared much worse. In February 2001, in the South Atlantic, a 40-meter-high breaker smashed

through the windows of the bridge, destroying the ship electronics. Listing, the ship was tossed about in stormy seas for 30 minutes, unable to manoeuvre until the crew was able to start the auxiliary engine and escape to Buenos Aires. In 1978, the 260-meter-long container ship Mnchen (853 ft.) disappeared off the radar north of the Azoresnever to be seen again.
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Global warming = bad news, right? Not necessarily, according to Ernst Rauch. A climate expert at reinsurance firm Munich Re, Rauch is able to see two sides to the equation, namely that some businesses, and even entire national economies, stand to gain from climate change.

he 2003 heat wave in Europe, the record 2004 hurricane season in the Caribbean and Florida, Hurricane Katrina in August 2005 extreme weather events like these are becoming more frequent. Cyclone Nargis that struck in Burma and Hurricane Ike caused the third-highest damage total in history just last year. No doubt about it, the Earth is warming, resulting in economic losses. Yet opportunities are being created as well. It is amazing that climate change is discussed almost exclusively in negative terms, says Ernst Rauch, but this is due to the unfortunate and unscientific way in which the subject tends to be discussed. A one-sided picture emerges

as a result, concealing the fact that many industries and regions will be the winners in this changed situation. More than 30 years experience Rauch knows what he is stalking about. The 49year-old geophysicist runs the Corporate Climate Centre maintained by the German reinsurer Munich Re. Accordingly, his job includes finding ways how his company can benefit from the weather. We see global warming not only as a risk management issue, but also as a business opportunity, says Rauch. After all, the new technologies used by industrialized nations to effectively respond to global climate change, will need insuring too.



Photos: NASA / SPL / Agentur Focus, J.Bttner / dpa / Picture-Alliance, Jim Reed / SPL / Agentur Focus, EPA / dpa / Picture -Alliance

Munich Re offers insurance products relevant to such areas as solar, wind and geothermal energy and emissions trading. These products can only be developed with the necessary precision on the basis of a superb data stock. Thus, the Munich Re Corporate Climate Centre has tracked all weather phenomena around the world for over 30 years, with over 25,000 individual events recorded in the proprietary NatCat database. Rising risk The data housed in Munich prove how damagecausing disasters are clearly on the increase. Geological risks such as earthquakes and volcanic eruptions have remained largely constant over our
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period of observation, says Rauch, but extreme weather events have increased significantly in frequency. And risk continues to rise. According to a recent study, there is a 90 percent likelihood that mankind is responsible for weather-related disaster risk having more than doubled. Business, government and civil populations can no longer afford to stand by and watch this development. It is imperative that we work to reduce the amount of damage our economy and society is exposed to, says Rauch. This means for example that buildings need to be constructed to be more storm-resistant. Land usage also must be planned so as to minimize the risk of flooding. Both of these tasks present major oppor-



Wait and see not an option: Businesses have to react, emphasizes Ernst Rauch, Director of the Munich Re Corporate Climate Centre.

Munich Re and climate change

Munich Re began addressing the phenomenon of global warming in the early 1970s. Some insurance and legal analysts became aware of a paradigm shift underway in the area of disaster damage. In a 1973 study the company warned cautiously of the potential consequences of climate change. In 1974, Munich Re organized an in-house research department to study the phenomenon, laying the foundation for todays Corporate Climate Centre. The Centre is built around the worlds largest natural disaster database, in which the insurer has tracked details on some 25,000 events going back to 1970, in addition to all major disasters having occurred since 1950 and a number of mega-events of the past 2000 years.

tunities for the construction industry, as new design vistas open up for architects and engineers. Property owners will benefit as well over the long term. Though the real estate market is troubled currently, in a number of years, things like storm-resistance and environmentally-compatible construction will increase property values and reap lower insurance premiums. All this does not mean of course that we can simply continue ejecting unlimited amounts of CO2 into the atmosphere, comments Rauch, who clearly distances himself from the naysayers of manmade global warming. A group of researchers associated with Republican US Senator James Inhofe has advanced such skeptical views in a recently published Minority Report. Rauch counters: Socioeconomic development, population growth and shifting values are in fact the true drivers of the global warming phenomenon. Costs nearly manageable Even if certain regions and industries will benefit from climate change, warming may not be permitted to go on forever. To maintain a stable global system, the change must be confined within certain

limits. For businesses these limits are typically demarcated by the extent to which risks can be insured, says Rauch. The associated costs are quite manageable one would have to say, at least in comparison with the bank and economic bailout figures we are seeing today. In a recent study, consulting firm McKinsey concluded that only 810 billion euros needs to be invested in new technologies worldwide to halt global warming by the year 2030. That figure represents roughly one third of Germanys gross domestic product last year. Nicholas Stern, former chief economist at the World Bank and now an adviser to the British government and professor at the London School of Economics, has produced a sophisticated cost/benefit study. In the widely respected publication, the Stern Review on the Economics of Climate Change (Stern Report), he has analyzed the economic impact of global warming, concluding principally that if governments act now, it will cost roughly 1% of global GDP to keep atmospheric greenhouse gases at an acceptable level. Damage caused by failure to act, on the other hand, will eat up at least 5 percent of global GDP, rising to as much as 20 percent if you factor in collateral damage. Stimulus similar to an economic package Stern also sees opportunities in these developments, believing that the necessary climate change adjustments would have a long-term impact similar to a highly effective economic stimulus package. To adapt to the consequences of climate change will demand many new technologies, especially in the energy sector, says geophysicist Rauch. For this reason, highly industrialized nations with technological know-how will be among the global warming winners. Certain marginally industrialized regions like northern Russia will benefit as well, however, where in only a few years it will be possible to cultivate grain thanks to global warming. No one can simply afford to wait and see what the weather and climate effects will be. The concentration of CO2 in the atmosphere will continue to rise, resulting in further warming and ever more frequent weather disasters causing unspeakable damage. Businesses have to react, emphasizes Rauch, by identifying the changes relevant to them and weighing potential opportunities and risks associated with various response strategies.

Grim forecast: Alarming increase in weather disasters Major weather disasters 19502008 (total damage) in billion US dollars
200 180 160 140 120 100 80 60 40 20 0
1950 1955 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005

Source: Munich Re

Photo: Eric Nguyen / corbis



ART COLLECTION: Waves of light and shadow

he wind created the dunes of Namibiaa work of art composed of millions of grains of sand, created over a period of thousands of years. It took Swiss photographer Balthasar Burkhard only a fraction of a second, however, to create his own artwork, with a click of the shutter. Colossally dimensioned at nearly 3 m wide (9 ft.), the black-and-white photo captures an extraordinary interplay of light, shadow and the majesty of the dunes. The work reflects Burkhard's photographic style of taking large, clearly structured
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Photo: Balthasar Burkhard

images imbued with a depth that draws the spectator in. Black-and-white photography is wellsuited for exploring effects of light and shadow colour would just be a distraction, Burkhard firmly believes. He is more interested, he says, in bringing out the essence of the subject than in recording details. Hailing from the city of Bern, the artist has long been fascinated by the view of our world from abovenot just of the Namibian desert. Burkhard's bird's eye perspective works are among his most famous, including aerial photos of Mexico City and other megacities.

Deutsche Brse Art Collection

DesertNamibia, 2000 by Balthasar Burkhard is part of the Deutsche Brse Art Collection. The collection was begun ten years ago and continues to grownow encompassing roughly 700, primarily largeformat, works by some 70 international artists.




Tomasz Garlinski, CEO of ARB FinancialGroup, trades on Eurex and Xetra; he showed us around the British overseas territory of Gibraltar in southern Spain.

Gibraltar Superb vantage point

Tomasz Garlinski loves the tremendous view: The limestone rock rises 426 meters (1,398 ft.) above the rolling waves between the Atlantic and the Mediterranean Sea. Gibraltar has a population of around 30,000 residing on a space of 6.8 square kilometers (4.2 sq. miles), though this number is increasing thanks to land reclamation. The territory has its own airport, the runways of which intersect the four-lane highway to Spain. Flights from the United Kingdom arrive and depart here, including Royal Air Force aircraft. The peninsulas military importance has waned since the end of the Cold War, but tourism is now booming, especially with the easing of tensions with Spain and simplified border control.



he wreck of the Fedra rises above the waves beneath the lighthouse. This 225 m (738 ft.) freighter smashed against the cliffs last year in an October storm. The crew was rescued just in the nick of time, recalls Garlinski, who drove us down to the southern tip of Gibraltar. You can see over to Africa and a distinct, elongated wave line where the Mediterranean and the Atlantic meet. Some forty huge ships are anchored off the two coasts. About three times more than usual! They are waiting on ordersglobal trade is stagnating, says Garlinski. Things are still busy at the port on the western side, one of the biggest fueling docks in the Mediterranean. The best view of the ships and the two seas is from up on the limestone rock. On the way up, by cable car, taxi or on foot, you encounter the islands most famous inhabitants. Some 200 to 300 macaques live on the rock, and occasionally descend to the eastern coastline; they are Europes only wild monkey colony, and protected under conservation laws. Garlinski maintains a prudent wariness towards these sometimes comical animals, but even more so towards the large seagulls that circle here: I was out jogging here recently and one of them chased me all the way into townthese birds can be really dangerous!

Garlinski graduated from an elite mathematics high school, going on to attend university in the city of Wroclaw, where he was born. Yet it was his other talent that propelled him westwards: tennis. Having won the Juniors Championship back home in Poland, he played professionally and gave lessons in Bavaria in the early 1980s, which is when he obtained German citizenship. Only then did he begin devoting himself to his true passion, the financial markets, completing his studies in Wroclaw in the early 90s as one of the first graduates with the new specialisation in financial mathematics.

Crises cannot be calculated in advance

Despite his mathematical penchant, Garlinski remains clear about what the discipline can and cannot do. Such as generate guaranteed profits. Waves do not always observe the Gaussian normal distributionneither in the ocean nor in the financial markets. The Nobel prize-winning Black/Scholes option pricing model, based on the normal distribution, only affords an approximation of reality. Crises cannot be calculated in advance, says our financial professional. But Garlinski has made money from the market ups and downs in recent years. Currently he is mainly involved in arbitrage transactions, in addition to market making, which enhances liquidity depth. The automated trading program he uses, VALUES API, is now run from a dedicated data center in Gibraltar via a standardized open interface. Garlinskis core business is computer-aided trading on Eurex and Xetra. Other businesses now include asset management and managing a strategy fund. What about the global financial crisis? Garlinski is optimistic about the markets, despite the prevailing pessimism. Cyclical crises are a normal phenomenon in a healthy market, as are waves of speculative euphoria. A group of physicists once ran a set of simulations establishing that a perfectly efficient system would fall apart entirely given the slightest element of crisis. Therefore, Garlinski emphasizes, crises are in fact a necessary part of life, seen from a long-term perspective.

Fauna and finances

Gibraltar is famous for its macaques, but for other things as well. Like its dominant financial industry, the main driver of economic growth for over ten years now. One of the most prominent fixtures of the industry is located in a new district built on land reclaimed from the sea outside the casemates enclosing the old town. Eurex has had an access point here since 2004, now used by more than half a dozen members. The strength of the financial industry rests on the tax regime. A European Court only recently upheld the territorys right to conduct its own fiscal policy. Gibraltar celebrated the decision by declaring a onetime public holiday. But for Garlinski the British overseas territory is above all an ideal place to work and liveunder English law, but with a Spanish vibe and lifestyle. He appreciates Gibraltars strict but unbureaucratic Financial Services Commission, the terrific weather and all the friendly people from all over the world. He himself is, after all, a European world citizen: I was born in Poland, have a German passport, a UK drivers license, and I came to Gibraltar as an independent trader via the Netherlands and Switzerland.

Europes rock-solid southern outpost: Gibraltars economy is powered by shipping, telecommunications, tourismand above all the financial industryand real estate here continues to go up.

Photos: Markus Altmann

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A good many fashion trends may be purely and simply the result of good marketing, but some products survive the ups and downs of being in and out time and again. 1585 presents five new candidates that shouldnt fall into oblivion too soon:

Cult Style
No-one stands out on the beach anymore, not even in the hippest sunglasses. But youre sure to be noticed in a pair of Gucci Wellington boots: the first original Italian designer shoes that even keep aggressive salt water at bay. Price: approx. 220 euros URL: Confess! In the 1960s, no self-respecting German TV police superintendent ever solved a case without his KAISER idell desk lamp. Its now the turn of design fans to own up: the new version of this original Bauhaus lamp is retro design at its most beautiful. Price: 599 euros URL:

Its a well-known fact that people eat with their eyes as well as their mouths. But true gourmets keep every last detail in sight even when preparing food: the hand-crafted Danubia Hocho Sontoku by cutlery maker Dick from Metten appeals not only through the use of the finest Japanese steel and a highly polished reindeer antler handle but also through the spectacular wave-like structure of the 64-layer, high-grade Damascus steel. Price: 385 euros URL:

Wave Bikes high-grade carbon wheels demonstrate that less is more: even in mass production, its true monocoque frame weighs under a kilo (two and a half pounds)and stays ahead of its competitors; at least when top triathletes like Olaf Sabatschus are sitting on it. Price: from 3,700 euros URL:

Perfect shape
When form and function go hand in hand the result can be both stylish and nippy: the Windy 44 Chinook, Europes Motor Yacht of the Year in the class up to 15 meters (50 feet) easily manages 40 knots. Price: from approx. 570,000 euros URL:

Photos: PR




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Eine Chilischote ist auch nur Gemse. Bis man reingebissen hat. Der neue Boxster S.
Wir haben nachgewrzt: die Benzindirekteinspritzung (DFI). DFI spritzt den Kraftstoff direkt und millisekundengenau in den Brennraum ein. Fr mehr Leistung und ein hheres Drehmoment. Bei modellabhngig bis zu 15% weniger Verbrauch und bei bis zu 16% weniger CO2-Emissionen.

Porsche empfiehlt

Kraftstoffverbrauch l/100 km: innerstdtisch 14,1 auerstdtisch 6,6 insgesamt 9,4 CO2-Emission: 221 g/km

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