CHAPTER I
They Didn’t See It Coming
It was Boxing Day, December 26, 2004, and a beautiful morning at Patong Beach on Phuket Island, Thailand. The sun was shining, the temperature was about 80°F, and the waterfront was filled with tourists lounging beneath colorful umbrellas. All in all, a perfect day in the midst of a perfect winter vacation at this seaside resort.
Then, unexplainably, the water in the bay retreated. Everyone stopped to gaze at this strange event. Then it struck. A wall of water more than fifteen feet high moving at 500 miles per hour crashed into the beach and drove inland for a half mile. More water continued to rush in. Tons of fast-moving seawater in a series of huge waves crushed everything in its path. Survivors later reported the seawater was relentless.
In the blink of an eye, this blissful scene of serenity and peace was now a fight for survival. Debris of all kinds swirled and rearranged everything from deck chairs to local economies. Water overturned cars and destroyed hotels. Families were separated, businesses were disrupted, and chaos reigned. What happened? A tsunami. It was later named the Boxing Day Tsunami.No one saw it coming.
Tsunamis Are Powerful
Tsunamis are powerful, and they are known for their invisible start. Except for the seismology reading that tells of a major change deep under the sea, there is no visible evidence of the destruction coming. NOAA, the American National Oceanic and Atmospheric Administration, monitors the ocean for sudden displacements in the sea floor. It could be a tectonic plate shift, a landslide, or volcanic activity.
The Pacific Warning Center in Hawaii knew that an earthquake had taken place but there was confusion about its size and magnitude. There was no tsunami warning system in the Indian Ocean. The people on Patong Beach did not know it was coming.
As shown in the graphic, a tsunami wave increases in height as the shock of the disturbance rebounds off the sea floor. As the tsunami wave nears the shore, the shock waves rebound more quickly, causing the ocean’s waves to grow higher and higher. By the time a tsunami wave reaches land, the wave is very high, moving very quickly, and transporting enormous amounts of water.
At Patong Beach, the impact was massive and very destructive.
Business Tsunamis
Today, we hear similar tsunami warnings in the business community, but there is no one central voice like NOAA. Instead, there are many voices, often providing conflicting information. But when a tsunami hits, it rocks the business world with many of the same effects as the Boxing Day Tsunami at Patong Beach.
The most recent business tsunamis were the housing bust and financial crises of 2008 and the dot-com bust of the year 2000. Like literal tsunamis, both had beginnings in circumstances that went practically unnoticed.
The 2008 financial crisis started very quietly. Some say it was the result of mistrust between banks. Other say it started with the Graham-Rudman act in 1986 when banks we