Category Archives: Non-fiction

How The Stock Exchange Works (For Dummies)

What is the Stock Exchange and how does it work?
The Stock Exchange is nothing more than a giant globally network tend to organize the market place where every day huge sums of money are moved back and forth.
In total over sixty trillion (60,000,000,000,000) Euros a year are traded.
More than the value of all goods and services of the entire world economy.
However it’s not apples or second hand toothbrushes that are traded on this marketplace.
But predominantly securities.
Securities are rights to assets, mostly in the form of shares.
A share stands for a share in a company.
But why are shares traded at all?
Well, first and foremost the value of a share relates to the company behind it.
If you think the value of a company in terms of a pizza.
The bigger the overal size of the pizza, the bigger every piece is.
If for example Facebook is able to greatly increase its profits with a new business model.
The size of the companies pizza will also increase, and as a result so will the value of its shares.
This is of course great for the share holders.
A share which perhaps used to be worth 38 euros could now be worth a whole 50 euros.
When it’s sold this represents a profit of twelve euro per share!
But what does Facebook gain from this?
The company can raise funds by selling the shares and invest or expand it’s buisness.
Facebook, for example, has earned sixteen billion dollars from it’s listing on the Stock Exchange.
The trading of shares though, is frequently a game of chance.
No one can say which company will perform well and which will not.
If a company has a good reputation, investors will back it.
A company with a poor reputation or poor performance will have difficulty selling its shares.
Unlike a normal market in which goods can be touched and taken home, on the Stock Exchange only virtual goods are available.
They apear in the form of share prices and tables on monitors.
Such shareprices can rise or fall within seconds.
Shareholders therefore have to act quickly in order not to miss an opportunity.
Even a simple rumor can result in the demand for a share falling fast regardless of the real value of the company.
Of course the opposite is also possible.
If a particularly large number of people buy weak shares.
Because if they see for example great potential behind an idea.
Their value will rise as a result.
In particular young companies can benefit from this.
Even though their sales might be falling, they can generate cash by placing their shares.
In the best case scenario this will result in their idea being turned into reality.
In the worst case scenario, this will result in a speculative bubble with nothing more than hot air.
And as the case with bubbles, at some point, they will burst.
The value of Germany’s biggest thirty companies is summarized in what is known as the DAX share index.
The DAX shows how well or poorly these major companies and thereby the economy as a whole are performing at the present time.
Stock Exchange is in other countries also have their own indices.
And all of these markets together create a globally networked marketplace.

Stars – Introduction

If you have ever observed the night sky, you surely know that it swarms with countless stars of various sizes. It is remarkable when we realise that the light of these stars has travelled many years through space-time before it reached our minuscule blue planet and hit the retina of our eyes, where we are able to detect it and interpret its originator as a peculiar tiny dot in the sky. But what is more, the light from the stars we can observe today is often even several centuries old – this is how long it takes for light to travel the enormous distances that separate us from these stars. Observing the night sky is therefore in its essence like traveling into the past. Who knows, some of the stars in today’s night sky may not even exist anymore.

But even more remarkable is the immense number of stars. If you happen to be very lucky and observe the night sky far away from the cities’ light pollution, you may behold up to 2000 diminutive dots. That may seem like an impressive number, but it is only one fifty-millionth of all the stars hiding in the heart of our galaxy. The Milky Way contains an estimated number of staggering 100 billion stars, our Sun of course being one of them. If we add all the other stars from billions and billions various galaxies of the universe, we get a truly incredible number. The entire observable universe might hold up to 100 billion billion billion stars!

And each star is a little unique. Some finish their lives in a massive explosion, others leave this world in a considerably more peaceful manner. Stars are mesmerizing and omnipresent inhabitants of the cosmos, without which life could not possibly arise. Therefore it is appropriate to understand them at least a little bit.

The life of stars begins in huge clouds (nebulae) made predominantly from the lightest elements. These cosmic clouds perpetually come into contract due to gravity, which gradually raises their temperature. Once the temperature of the nebula reaches a sufficient value, the electrons inside of it decide that they no longer wish to form atoms and a peculiar state of matter called plasma is created. At this moment, the interstellar cloud consists of negatively charged electrons separated from positively charged atomic nuclei.

These hydrogen nuclei then move fiercely throughout the nebula and often come across different nuclei. But once two nuclei get too close to one another, electromagnetic interaction starts showing and swiftly splits them apart again. However, we should not forget that the temperature of the cloud still rises thanks to gravity. Eventually, it raises to such an extent that the nuclei manage to trick the electromagnetic force. The velocity of individual nuclei grows with the temperature of the cloud, so in the end they are able to overcome the immense repulsion of electromagnetism by getting so close that the enormous power of the strong interaction shows itself, and the nuclei are united into a single helium nucleus. At this moment, nuclear fusion has just began in the nebula, which can only mean one thing – a star has been born.

Our newly created star then continues with nuclear fusion, which becomes the source of tremendous energy. Due to this energy, the star is able to stop its own gravitational collapse – up to this moment, the original cloud (star) kept shrinking. Thanks to the energy from fusion, the star is able to create photons – the particles of light, which give stars their distinctive glow. Each star sends off billions of photons into the surrounding cosmos every second. These photons then travel freely through space-time until they reach an impediment that would absorb them and steal their energy.

Sometimes we do not even realize how dependent we actually are on our parental star’s photons. If the Sun suddenly stopped supplying us with its precious light, the Earth would change dramatically in no time. Eight minutes and twenty seconds after the Sun’s extinction, the Earth would submerge into an eternal darkness.

The temperature would fall beyond the freezing point in just a week, which would cause the freezing of all world’s oceans – water in its liquid form would exist just near the ocean floor, due to the heat from the Earth’s heart. Plants would immediately stop producing atmospheric oxygen by photosynthesis, and they would die shortly thereafter. This would cause starvation and early death of all herbivores. Carnivores and omnivores would follow in just a moment – including humans, understandably.

The differences in the Earth’s atmosphere would even out before long, any kind of wind would therefore cease to exist. The same goes for all the rivers of the world, since it would never rain again. All of these huge changes would significantly limit our last chance of survival – the production of electric energy. It is reasonable to assume that only a handful of lucky individuals would be able to survive, though not for long. All the remaining life on Earth would be concentrated at the bottom of the oceans. The Earth would become a dim and eternally frozen wasteland.

However, we do not have to worry about anything like that – for now. The Sun is about to stay here with us for at least a few billion years. But not all stars are this lucky. Some only live a fraction of our closest star’s life.

Four Fundamental Forces – Strong and Weak Interaction

The strong interaction is, as suggested by its name, the strongest of all interactions. It is about a hundred times stronger than electromagnetism (and about a hundred trillion trillion trillion times stronger than gravity). How is it possible that we almost never hear about this interaction if it has such an immense strength? The problem is that its range is just billionth of a millionth of a meter. It may seem that a force with such a short range would never be able to influence our universe in a significant way, but the truth is that without the strong interaction, humans would never be able to exist.

As already mentioned, the universe was flooded with elementary particles right after the Big Bang. Those then started clumping together to create composite particles – quarks started forming protons and neutrons. But what caused them to attract? Why were quarks so keen on creating more complex particles? As you may already suspect, the attraction between individual quarks was provided by the strong interaction.

It does not end here, though. The strong interaction is to blame for another crucial phenomenon of our reality – the existence of atoms. We already know from the previous chapter that the same electric charges repulse each other. However, this means that protons in the nuclei of complex atoms should repulse and escape into all conceivable directions. But the strong interaction ensures that protons remain together. If electromagnetism were just a tiny bit stronger than the strong interaction, the existence of atoms would simply be impossible.

The final force, the weak interaction, may be the least known and the least interesting of all interactions. However, this is not to say it is not important. The weak interaction has the power to turn a neutron into a proton. Why would it do that? Within some atoms, there is an unstable ratio between the number of electrons and the number of protons in the nucleus. And the weak interaction is here to make sure that this instability is eliminated. When there are too many neutrons in a nucleus, the weak force simply turns one of them into a proton. This phenomenon is called the beta decay.

As we know from the first chapter, the number of protons in the nucleus determines what atom we are dealing with. But this means that any time an atom undergoes beta decay, which adds one proton into its nucleus, the whole atom changes into a different element. The weak interaction can therefore turn carbon into nitrogen or hydrogen into helium just by turning neutrons into protons.

And that is all. We have reached the end of the story of interactions. They make sure that our universe functions the way it does and without them, we would have never existed – perhaps with the exception of the weak interaction, which is the only one that does not affect the course of the cosmos in a significant way. Now, we can focus our attention on another fascinating element of our universe – huge fusion factories which are making billions of photons each moment.

The Gulf Stream Explained

The ocean conveyor belt and the Gulf Stream.
Ocean currents have a direct influence on our lives.
They determine our weather, our climate, and much more.
The ocean currents and wind systems transport heat from the equator to the poles and operate like a large engine for the global climate.
In the oceans, there are numerous currents.
The so-called ocean conveyor belt is very important for our climate.
This term describes a combination of currents that result in four of the five global oceans exchanging water with each other.
They form a worldwide circulation system.
The conveyor belt is also called the thermohaline circulation, with “thermo” referring to the temperature, and “haline” to the salt content of the water.
Both determine the density of the water.
While the masses of water may be moved in part by wind, primarily the different densities of the global oceans are responsible for their movement.
Warm water has a lower density and rises while cold water sinks.
The water’s density also increases with a higher salt content.
At the equator the heat from the sun is especially strong, resulting in a lot of evaporation and thus a rise in the water’s salt content.
That is where the Gulf Stream begins.
The Gulf Stream is very important for the European climate.
Its length of 10,000 km makes it one of the largest and fastest currents on Earth, and it’s very warm.
At roughly 2 m/s it brings up to 100,000,000 m³ of water per second towards Europe.
A constantly blowing wind, the southeast trade wind, drives warm surface water to the northwest, into the Gulf of Mexico, where it heats up to 30 °C.
The turning of the Earth and the west winds then direct the Gulf Stream towards Europe and split it up.
One part flows south, another east to the Canary Current, and a third part flows north where it releases a lot of heat into the atmosphere as the North Atlantic Current.
The water becomes colder there.
Its salt content and density rise on the account of evaporation and it drops down between Greenland, Norway, and Iceland.
There we also find the largest waterfall on Earth.
The so-called Chimneys, roughly 15-km-wide pillars with water falling up to 4,000 m.
17,000,000 m³ of water per second, or roughly 15 times more water than is carried by all the rivers in the world.
This creates a strong maelstrom, which constantly pulls in new water and is the reason that the Gulf Stream moves towards Europe.
Countless species use the Gulf Stream as a means of transport on their trips from the Caribbean to northern areas.
But it doesn’t just bring us animals; an enormous quantity of warm air also comes with it.
In order to produce the same heat that it brings to the shores of Europe, we would need 1,000,000 nuclear power plants.
That’s why we also call the Gulf Stream a heat pump.
Without it, the temperature would be significantly colder here, at least five to ten degrees.
Instead of lush fields, we would have long winters and sparse ice-covered landscapes in Europe.
In the last few years, scientists and pundits in the media have repeatedly expressed the fear that the Gulf Stream could come to a standstill due to climate change.
Because if the polar caps actually melt, the salt content in the water off Greenland would fall, as would its density.
The North Atlantic Current would no longer be heavy enough, and so it woundn’t sink as usual.
In the worst case, that would bring the Gulf Stream, our heat pump, to a stop.
Some climate experts also assume that climate change could compensate for this effect.
We know that it can be normal for the climate to change by looking at the development of the Earth over the last few million years.
There are ice ages and warm periods.
In the last ice age, a gigantic flood of melting water crippled the heat-bringing North Atlantic Current, covering the northern hemisphere in ice.
Scientists have different views on the impact that climate change will have on the global ocean conveyor belt, but one thing is clear: when the climate changes, then the complex system of ocean currents and winds, which has remained fairly stable since the last ice age, will change in ways that we don’t yet understand.