Do Investors Want More Correlation?

The weekly Market Update is posted at Alpha Baskets and includes the following; The history of earnings recessions was that they lead to economic recessions but this did not happen (yet?). This is one of several supposed to’s in the aftermath of the crisis that did not pan out as people expected. Another one was maintaining a zero percent interest rate policy would cause extreme price inflation and obviously CPI has been floundering for years, the bigger risk to ZIRP arguably was deflation and luckily things didn’t play out that way either. Please click through to read the entire update. A couple of pictures of Klamath National Forest Water Tender 17 filling up at our station house during the Goodwin Fire. And Finally a type 6 from Timber Mesa...

The Goodwin Fire

On June 24th a fire broke out southeast of Walker that was quickly named the Goodwin Fire (pretty much any fire bigger than a smoldering stump gets a name). The terrain was very thick with manzanita and chaparral at the lower elevations (about 5000 feet) and Ponderosa pine higher up. This was what the smoke looked like from my house around 4-5pm on June 24th. At around 6pm on that first day I went out with one other firefighter to scout the fire. There really wasn’t much to do or worry about for a couple of days in terms of an immediate threat but we knew very early that it was going to be declared a Type 1 incident, the most serious, because of how tricky the terrain was and the massive values at risk (houses). I got a call on Sunday from the Type 1 Incident Management Team (IMT) liaison on Sunday the 25th inviting me to a briefing Monday at 11am at the Incident Command Post (ICP). I worked with the same liaison in 2012 when the Gladiator threatened Walker, far less of a threat than the Goodwin Fire turned out to be. This first meeting was not worrying as the fire was a long way from threatening my area (Pine Flats and Turkey Creek on the other side of the fire were different stories). I had plenty of time to take pictures of fire apparatus at the ICP. Before that first briefing on Monday I had gone several times to one spot that offered a great lookout of the fire, and Monday afternoon I took our...

The Unfightable Wildifre

My latest blog post for Alpha Baskets looks at the overlap between wildfire behavior and stock market behavior with inspiration taken from the Goodwin Fire which for a time was unfightable. We caught a huge break with the weather last Thursday. From the post; There are certain fire behaviors that need to be understood as basic building blocks of understanding. Much like with markets, these building blocks aren’t infallible but do account for the vast majority of fire behavior. Understanding the basics is likely to reduce panic. As an example, at night, fire crews will conduct burning operations. Fire is less active at night because the temperature is lower and the humidity goes up. Fire tends not to rip at night so burning out removes fuel that it might otherwise rip through during the day. This night burning creates smoke that tends to hang low in the morning, trapped under an inversion layer that dissipates late in the morning and the smoke is then gone (toward the end of the fire). Please click through to read the entire post. More pictures from the incident. Gila Hotshots from New Mexico Sequoia National Forest Type 3 Engine National Park Service Type 3 from Yosemite National...

Jawboning Works?

The weekly Market Update is posted at Alpha Baskets and includes the following; The yield on the Ten Year US Treasury Note jumped 16 basis points to 2.30%. To the extent a flattening curve leads to an inverted curve, the FOMC was in a bit of bind but for now, anyway, appear to have steepened the curve giving them more flexibility to hike later, assuming the recent steepening sticks.The euro jumped above 1.14 which is the highest it has been against the US dollar in 14 months. The steeper curve should be good for bank stocks and it was, with one of the larger bank stock ETFs rising 3.8% for the week versus a slight decline for the S&P 500. Please click through to read the entire update. The last week has been one of the most amazing of my life for both good and bad reasons stemming from the start of the Goodwin Fire June 24. It was a serious threat to overtake Walker, the threat has very probably subsided but we are still under evacuation as I write this Sunday afternoon July 2nd. I will write a blog post about the entire experience in a couple of days. For now here are a couple of pictures. That is Big Bug Mesa. The fire never crested the mesa. There were two threats here, one was that it come around the corner to the left of the picture and make its way through the community of Breezy Pine which would allow it to make its way to Walker. Or it could have gone to the right of the picture,...