Tag Archive | "El Niño-Southern Oscillation"

Ecuador: Rain and Drought


Ecuador goes through periods of rain and drought, but we can look at Ecuador’s weather for more, even clues about the Western U.S. droughts.

el nino

el nino

The chart from NOAA above shows changes in the Oceanic Niño Index (ONI) (1).  You can see a complex scientific explanation of what this means but in simple terms, red represents a period when the El Niño current is warmer than normal and blue a period when the El Niño current is cooler than normal.  A warmer period brings rain (and potential flooding) in Ecuador.  A cooler period creates dryer conditions in Ecuador.  This pattern in turn has an impact on weather north.

I began checking this out after reading the USA Today article “California’s 100-year drought” by Doyle Rice (2) .  The article says (bolds are mine):  California is in the third year of one of the state’s worst droughts in the past century, one that’s led to fierce wildfires, water shortages and restrictions, and potentially staggering agricultural losses.

Overall, past droughts have probably been due to subtle changes in water temperatures in the tropical Pacific Ocean. Cooler water temperatures — known as La Niñas — tend to produce drier conditions in the West.

I checked in at NOAA to see if there is a correlation between cooler Oceanic Niño Index (these take place on the Pacific Equator so Ecuador is the nearest country).  NOAA’s chart above shows three cooler events in 1975-76, 1984-85 and 1999-2000.

I checked those dates for California droughts.

1976-1977.  An article “A comparison of California’s extreme 2013 dry spell to the 1976-1977 drought” (3) by Daniel Swain says:   One of the most vivid historical examples of drought in California is the two year dry period spanning 1976 and 1977. Precipitation during each of these calendar years, and during the 1976-1977 water year in particular, was extremely low–these were two consecutive years in which statewide precipitation was ranked among the top five lowest ever recorded in California.

1984-1985.   Wikipedia (4) said: The Western United States experienced a lengthy drought in the late 1980s. California endured one of its longest droughts ever observed, from late 1986 through early 1991.

1999-2000.  NOAA, the US weather service, said  “U.S. Drought Highlights” (5):  On the national scale, severe drought affected about sixteen percent of the contiguous United States as of the end of May 2001. Drought continued in the Pacific Northwest and Southeastern U.S. Dry conditions return to the West.

Though I am sure this is a gross oversimplification of a really complex effect, there does appear to be a connection between cooler Oceanic Niño Indices and drought in California and the West.

From this simplicity, we can come to a few tentative conclusions.

First, a warmer Oceanic Niño Index is ahead.  In the short short period reviewed above, cool periods have been followed by a warm period before the next cool.

Second, this could bode well for the California drought.  The last cool period ended in 2012.  Temperatures have been in the median range since.  It’s possible that a warm period could come along at any time.

Third, a warmer period is good for California but can mean a lot of rain and flooding in Ecuador.

Those interested in living in Ecuador should check and understand the country’s weather patterns.  Especially anyone interested in living on the coast should carefully check the flood plains before deciding to buy.

Gary

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ecuador ocean view

It is situated in coastal Manabi, Ecuador, just a short distance from Bahia de Caraquez, overlooking the fishing and surf town of Canoa.

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ecuador ocean view

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ecuador ocean view

Conceptual design for kitchen.

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ecuador ocean view

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ecuador ocean view

Concept design bedroom.

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Ecuador ocean view

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ecuador ocean view

End of Advertisement

We DO NOT investigate properties when they are advertised so be sure to complete your due diligence.  Always use an independent Ecuador attorney who represents you (not the seller) when you buy real estate in Ecuador. We also recommend that you rent, become familiar with Ecuador before you buy.

Learn more about Ecuador at our upcoming International Investing seminar in Montreal.

(1) NOAA ONI changes

(2) California Megadroughts

(3) A comparison of California’s extreme 2013 dry spell to the 1976-1977 drought

(4)  Wikipedia on 1984-1985 drought

(5) NOAA on 2001 drought

Ecuador’s Season


Our belief in Ecuador, as a place to live and invest, comes in part because of its position in the seventh wave of the industrial revolution.

We conducted our International Investing & Business Course last weekend here at the Jefferson Lansing Golf resort clubhouse.

ecuador-season

We reviewed cycles and seasons… how Ecuador opportunity and business in Ecuador really pick up at about this time of the year.  Ecuador’s up season is coming up.

Seasonality is a really important factor of investing to keep in mind… especially right now… as we will see below.

First, in that course we looked at the Asset Allocation of my portfolio and…

Ecuador Property      15%
US Property                46%
Total Real Estate   61%
Equities                           3%
Emerging Bonds            9%
Bonds                             14%
Cash                                13%
Total Liquid              39%

Why I have so little in the stock market now is due to cycles, seasonality and personal values.

Regarding seasonality, October is the bewitching month of  shares.

We viewed how, since the beginning of the Industrial Revolution, the western economy has been moving through fifteen-year upward and downward cycles.  We saw how we are in the tenth year of a potentially 15 year downward wave.

Since the 1800s the stock market has moved in 30 year waves, peaking in bubbles and ending in troughs. Technology, warfare and politics are all related to these cycles. The phrase that coined this great social economic transformation we call the “Industrial Revolution,”  according to historian David Landes, was first in a letter of 1799 written by French envoy Louis-Guillaume Otto.

Since that time mankind has enjoyed ten boom cycles… each created by new technology. Each boom has been followed by a bust… a bear market… a down wave that lasts about 15 years…. for 310 years.

So it is appropriate that in information era up wave  (the dotcom bubble) the Dow topped at 10,336  and then crashed Oct 1, 1999… 300 years after the first revolution began.

Here is a chart of the Dow in that 10th upward period from www.finance.yahoo.com.

ecuador-season

That crash began the current 15 year side ways model that marks the downward cycle.   The peaks and valleys, consistent with the downward wave has slaughtered many investors which, I explained at the course,  is why I have so few equities now.

Seasonality is why I  am not buying equities in October as well.

We viewed how seasonality was at work. Over 30 years the Dow has grown 8.16% overall but all of that growth and more (8.36% per annum average)  has come in the months of November through April. The average annual growth per annum over thirty years in May  to October is only 0.37%.

In other words… October is a volatile month for shares.  In fact the worst days of  the US stock market have been in October.

Black Thursday was October 24th in 1929. During that frenetic day nearly 13 million shares changed hands, nearly four times the norm.  Black Tuesday was October 29, 1929.   The market was slashed again leaving the Dow 40% down in that week.

ecuador-season

Black Monday  was October 19, 1987, global equity markets crashed, starting in Hong Kong. Panic rushed to Europe and then knocked the Dow Jones Industrial Average (DJIA) down 22.61%, its largest one day drop ever.

ecuador season

In short the good equity growth season is about to begin.

Market timing is never more important than the search for value… but it sure can help the search for value.

Seasonality studies give support to the current bear market recovery but suggest the support is best after October.

Plus watch out for a severe October market correction!

Thomas Fischer from Jyske Global Asset Management was with us and pointed out that JGAM’s  low risk portfolios have a very underweight position in equities as well.

During the course we also looked at the importance of personal values in investing by enjoying the process.

We saw some great autumnal beauty…

ecuador-intuition

in the Blue Ridge during the course.  We walked some glorious paths.

ecuador-intuition

Yet this is an El Nino year… a cold winter is predicted.  A long one maybe.

Excerpts from a 19 August 2009 UN New Center article entitled “El Niño weather pattern likely to continue into 2010, explains why: The United Nations agency dealing with weather, climate and water says an El Niño event has begun in the tropical Pacific and is likely to continue into early 2010.

El Niño and La Niña bring significant temperature fluctuations in surface waters of the tropical belt of the Pacific Ocean: an El Niño event sees a rise in temperatures and La Niña witnesses a drop in normal temperatures.

These temperature changes are strongly linked to major climate fluctuations around the world, especially in Latin America, Australia and East Asia, which can last for a whole year or more. Both El Niño and La Niña can disrupt the normal weather patterns and have widespread impacts on climate in many parts of the world.

The UN World Meteorological Organization (WMO) said today that sea-surface temperatures in the eastern equatorial Pacific had risen to between 0.5 and 1 degree Celsius warmer than normal by the end of June, with similar temperatures in July.

“Scientific assessments of these observations indicate that this warming resembles the early stages of an El Niño event,” the Geneva-based agency stated in a news release.

In its most recent update on the subject, WMO stated that the expectation is for El Niño conditions to very likely prevail through the remainder of 2009 and into the first quarter of 2010.

Last year our autumn paths in October turned…

ecuador-season

to this in November.

ecuador-season

Here was the weather report yesterday Oct.14 2009 at Asheweather.comRainy, cold, and raw about sums it up for today. High temperatures for the day were early this morning; We’ll slip into the lower 40s for the rest of the daytime as rather steady rain continues. Watch out for thick, dangerous fog along the Blue Ridge today through much of Thursday. And yeah, we weren’t kidding about that weekend snow shower thing. Gory details below.

Here are some weather statistics for our area that suggest what  happens in Southwest Virginia and Northwest North Carolina (where we are in the Blue Ridge) during an El Nino year.

Roanoke’s snowiest month on record was January 1966, with more than 41 inches. That was during an El Nino.

Roanoke’s coldest winter on record was that of 1977-78, which also had more than 37 inches of snow. That was during an El Nino.

Roanoke got 19 inches of snow on Feb. 10 and 11, 1983. That was during an El Nino.

Roanoke’s snowiest year of the 1950s (1957-58), second snowiest of the 1990s (1992-93) and snowiest of the 2000s (2002-03) each in the 28-to-30-inch range occurred during El Ninos.

Long term patterns in weather or stock markets are no guarantees… but by looking at the odds wouldn’t you rather invest in equities at a time that historically has shown the highest appreciation year after year.   And though snow and cold are not guaranteed up north, wouldn’t you rather have this in the dead of winter (Mt Imbabura) or…

ecuador-season

this?

ecuador-season

Ma, Merri and our friend Steve Hankins at our condos in San Clemente, Ecuador.

This is why we added three more courses and tours in December in our 2009 schedule and will have even more Ecuador courses in January though March 2010.

The remaining 2009 courses are below.

Gary

Join our Ecuador courses and tours October, November or December.

The greatest asset of all is the ability to labor at what you love wherever you live. This brings everlasting wealth.

This is why we are providing a special three for one offer with our  course Tangled Web… How to Have an Internet Business

This course can help you create your own internet business.

Our emailed course “Tangled Webs We Weave – How to Have Your Own Web Based Business” is a continuing educational program.  You receive the first 28 lessons when you enroll and a new lesson every week or two.

This course teaches how to create a web based business and is developed from the ongoing experiences that we have from our successful and profitable internet business.

This course is well worth the enrollment fee of $299… but currently you also receive two additional courses FREE.

The other two courses are #1: International Business Made EZ, and #2: Self Fulfilled – How to be a Self Publisher.

These two courses have sold for $398 and thousands have paid this price. We add them to your course, at no added cost, as I believe they will help you develop a better business in these crucial times..

Even Better Get All three Courses Free

To make this offer even more compelling,  I am giving everyone who enrolls in all our seminars or tours for any one month, October, November or December, “Tangled Web… How to Have an Internet Business Course,”  “Self Fulfilled- How to be a Self Publisher” and “International Business Made EZ” free.

Head south to Ecuador!

ecuador-hotel

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

ecuador-hotel

In Cotacachi the weather is always Spring like.  Here is the village plaza near our hotel Meson de las Flores.

ecuador-hotel

Let our friendly staff at Meson de las Flores serve you.

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

ecuador-hotel

This shorts weather photo was taken from our beach penthouse in February.

Oct. 21-24 Ecuador Import Export Tour

Oct. 25-26 Imbabura Real Estate Tour

Nov. 9-10 Imbabura Real Estate Tour

Nov. 11-14 Ecuador Coastal Real Estate Tour

December 6-8 Beyond Logic Shamanic Tour

December 9-10 Imbabura Real Estate Tour

December 11-13 Ecuador Coastal Real Estate Tour

Join us in the mountains and at the sea.  Attend more than one seminar and tour and save even more plus get the three emailed courses free.

Attend any two Ecuador seminar or tours in a calendar month…$949 for one.  $1,349 for two.

Attend any three Ecuador courses or tours in a calendar month…$1,199 for one.  $1,799

Read the entire UN article El Niño weather pattern likely to continue into 2010, says UN agency