stocks volatility

Exploding Trees

"After a short period of time, after about 18 months, they become very dry, they become really like a match stick", Donald Trump said Monday in Sacramento, describing the conditions that turn forests into tinderboxes. "And they become very, very...", the president paused. "They just explode. They can explode". Trump went on to rekindle (no pun intended) his characterization of Europe as a vast expanse of what he calls "forest nations", a description the president habitually attributes to an unnamed foreign dignitary with whom he once spoke. On Monday, Trump reimagined that conversation. "He said we have trees that are far more explosive than California", the president said, citing the same discussion with a "forest nation" leader.   As side-splitting as that is (assuming you can get past the tragic circumstances), I didn't roll it out solely for laughs. Or, actually I did, but there is a market parallel. For years, those apprised of the feedback loop created by the inverse relationship between volatility and market depth, and the forced, mechanica
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6 comments on “Exploding Trees

  1. Anonymous says:

    H- I completely agree with you that Trump’s communications are easy to make fun of. However, I live in Colorado and have lived in (too) close proximity to forest fires over the years. In this instance- I think he said something important, but it got lost in his poor delivery.

    The US forest service has studied this issue for decades. A well known study that looked at 2 separate 30 acre parcels- where one parcel was left alone and the second parcel was “managed”, yielded very different results.
    The “managed” parcel cleared underbrush, dead trees resulted in a healthier forest on almost every measurable level- pine beetle, regrowth, forest health and fire prevention.

    Millions of people have moved to “forests” in the last few decades and most forest fires are started by people. Currently, the backstop for these people’s homes is privately purchased insurance.
    This is in contrast to those who build/ own houses on the beach, where the Federal government provides flood insurance to backstop people’s investments regardless of which state the seaside is located.

    Some forests are Federal lands and others are state owned lands- however, there needs to be some agreement between western states and the Federal government as to forest “management”, including the cost to do so.

    Otherwise, buyer beware.

  2. runamok says:

    ‘Europe as a vast expanse of what he calls “forest nations”’…reminds me of a description of Europe from the time of the Battle of the Teutoburg Forest.

  3. Analysis is very good and helpful for me. Thank you.

  4. Why do I get the feeling that clearing out all the undergrowth and the dead trees from the millions of acres of forest in North America is not going to be finished in my lifetime. Or yours.

  5. mattzito says:

    Why is that? It took the lumber trusts just a few decades to clear nearly all the old growth from the nation.

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