I went to Kobe during my 2012 Japan trip. In 1995, Kobe suffered a 7.2 magnitude earthquake which caused a loss of 6,000 lives. I was not interested in this event while I was in Japan, but I watched the episode on Seconds to Disaster that I gleaned lessons applicable to our financial markets.
Unknown unknowns
Prior to this, Kobe was not known to be vulnerable to Earthquakes. The traditional Japanese houses were built with heavy tiled roofs to protect against typhoons. However, the Japanese were not totally oblivion to a possible earthquake so they constructed the Hanshin Expressway according to the strict building code to withstand against 8.1 magnitude earthquakes.
Uncovering the unknowns
The epicentre was at Awaji Island, 20km away from Kobe. It uncovered a subterranean fault line that links Awaji to Kobe that was never known before. This allowed the shocks to be propagated along the path ......