As wildfires tear through California, the footage of motorists speeding past walls of flame is a stark metaphor for the broader economic landscape. We are witnessing a market of destruction where the cost of these infernos is not measured solely in acres burned but in the staggering volatility of insurance premiums, the flight of capital from vulnerable regions, and the fiscal strain on state budgets. The notion that government spending can simply extinguish these risks is as naive as expecting a fire hose to calm the bond market.
The true cost of climate change is appearing on balance sheets, and the market is always right: it is pricing in higher risks, higher yields, and a more uncertain future.
