"There is a certain type of cosmic explosion that becomes, in a flash, the brightest thing in the universe, emitting for a few seconds as much radiation as a million galaxies. Don't bother looking for one in the sky, though, since most of the light is in the gamma-ray part of the spectrum, a realm we can't see." As taken from, http://www.msnbc.msn.com/id/18398244/

Question is, do these occur near Earth and if they did what would the affects be?

Absence of evidence is not evidence of absence.
Carl Sagan