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Colorado Ablaze as Tens of Thousands Flee

By Rick Ackerman Posted on June 28, 2012, 3:03 am EDT Last Updated June 28, 2012, 5:33 am EDT

Those who have witnessed the epic fire in Colorado Springs’ Waldo Canyon say it looks like something out of a disaster films. “It’s  surreal,” said Gov. John Hickenlooper in an interview at-the-scene with NBC News. Behind him, monstrous flames leaped skyward, spreading through the hills at speeds that threatened to overwhelm firefighting crews at any moment. They are tasked with triaging rescue efforts, saving homes that look savable while letting others too far gone burn to the ground. Winds as high as 65 mph made their success unpredictable, and so far the fire is only 5% contained. Some who watched from lower elevations could see their homes burning, while others could only speculate. And pray.  So far, 32,000 people have been evacuated, including students and faculty at the Air Force Academy. Some popular tourist attractions are gone, including the Flying W Ranch, where millions of visitors, including your editor, enjoyed chuckwagon dinners and cowboy music since the early 1950s.

Here in Boulder, a hundred miles to the north, the so-called Flagstaff fire threatened to inundate houses and forested hillsides, although only 28 dwellings are currently under evacuation orders. Pre-evacuation notices have gone out to hundreds more residents who will at least have time to pack up essentials and valuables if their worst fears should materialize. Thundershowers and light rain on Wednesday afternoon raised the humidity slightly, but they were accompanied by lightning that sparked some small fires. Fortunately, they were quickly extinguished, but winds were expected to persist and the sun to shine on Thursday. With record-breaking 100-degree heat as a backdrop and more of the same on the way, firefighters will have their work cut out for them as the weekend approaches. Meanwhile, heroic efforts were starting to pay off in the battle to contain the High Park fire near Ft. Collins. It has scorched more than 87,000 acres and destroyed 257 homes so far, making it the most destructive fire in Colorado history. The good news is that as of Wednesday afternoon, the blaze was 65 percent contained. If you would like to donate or help, click here.

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  • gary leibowitz June 28, 2012, 10:45 pm

    Sorry for the phrasing. Thought I was being cute. Instead of “MAD” how about “Intense”. More appropriate?

  • bc June 28, 2012, 10:38 pm

    The problem with short ETF’s is they track the underlying every day, but this is compounded day by day, so if you have 10 up market days 1%, in a row (many of them by end of day window dressing and wash trades), you compound losses for ten days for a net loss of like 15%. Then a one day gap down of, say, 12% still leaves you underwater even though a sustained short position would be in the money. Any solution to this ?

    • Rick Ackerman June 28, 2012, 11:26 pm

      ETFs were created so that the smart money could sell ETF puts and calls to the rubes. If you want to make money with ETFs, you need to do the same. That said, negative-gamma positions – aka frontspreads – will obliterate you if you get caught short premium on a bad day.

    • bc June 29, 2012, 12:23 am

      Thanks. I hate being a rube. I hate when that happens.
      Is selling covered puts and calls allowed for IRA accounts?

  • Rich June 28, 2012, 9:39 pm

    Another nice call Rick…

  • Rich June 28, 2012, 9:35 pm

    Rich Cash ‏@richcash8
    Sold SPY Jul 132 puts and bought SPY Jul 131 Calls…
    Collapse
    Reply Delete Favorite
    12:09 PM – 28 Jun 12 via web · Details

  • Rick Ackerman June 28, 2012, 9:31 pm

    WordPress reliably filters out thousands of messages from spammer scum trying to hitch a free ride in the Rick’s Picks forum. One characteristic of the filter is that it doesn’t much like html links, especially several of them clustered in one post, and most especially voluminously long ones.

  • Rick Ackerman June 28, 2012, 9:27 pm

    Vlad, Hidden Pivot Analysis never allows us to be wrong for long. Here’s the update to my E-Mini S&P forecast. It was posted for the benefit of paying subscribers earlier this morning. Better late than never, eh?

    ______ UPDATE (10:45 a.m. EDT): It was little more than a week ago that I declaimed here that we should attempt to short every stupid rally. Now, here I am looking to milk the last ounce of upside from one before we lay ‘em out. We shouldn’t lose sight of the fact that at this early stage of a bear market, rallies will tend to fall shy of their targets and that the hellacious declines will come more or less out of nowhere, on gaps that will appear to have been well nigh unshortable.

  • Chris T. June 28, 2012, 7:07 pm

    redwill:

    usually agree with you, but here, blaming Barry for these cuts does not seem appropriate.

    First, the AF SHOULDN’T be doing domestic work anyway. If it is needed, that should be done by domestic agencies.

    Second: If proper cuts were made to the defense budget, say about 200-300 BILLION per annum, by closing just about all of our overseas bases, and stopping our foreign agressor entanglements, then there would be plenty left over for a domestic effort such as this.

    How about maintaining a domestic only, permanent MAFF C-130 force of 10-20 planes, or more, as part of a multi-state air national guard, to be delegated to state and municipal firedepartments as needed?

    No more federal military involvement, and so on.

    Won’t happen of course.

    • Benjamin June 28, 2012, 9:51 pm

      Chris,

      I won’t argue against the points you made, except that multi-state IS a matter in which federal resources can be utilized. In as far as the wildfires go…

      http://google.org/crisismap/2012_us_wildfires

      It is multi-state and it’s been a hot, dry summer thus far. Even where I live, which is nowhere near the west, the earwigs have been invading the house because it’s been so dry and hot. Anyway, granted, many of the wildfires on that map have been contained. But who knows when/if the affected states will need more resources?

      So I think you make a better arguement in saying that military adventurism abroad should’ve been cut instead.

    • redwilldanaher June 28, 2012, 10:08 pm

      Chris, I agree with your points but in the “game within the games” that these sociopols play much of the blame for this and many, many other things can be put squarely on “the most arrogant puppet in the world”.

      I hasten to add that to my knowledge, I’m one of the original peaceful secessionists here at Rick’s. A few years back Rick published a little piece that I wrote on that very subject.

    • Chris T. June 29, 2012, 3:50 am

      Except that we do not (officially at least) have a multi-state / federal non-militiry air force.

      There is a difference between multi-state and federal.
      Even if more than one state is involved, it should only be federal if delegated to the feds by the constitution.

      An example of multi-state agreements without a federal component is the traffic-points sharing amongst the states.

      As to the numbers, I am not advocting for a further reduction in the MAFF force, only pointing out how easy it would be to fund an increase of something like this that is truly necessary.

      You and redwill do understand that though.

      How libertarian would such a multi-state thing be?
      Don’t know, but at least it can leave the fed’s out.

      And no quibbles at all about the peaceful secessionsts!

  • gary leibowitz June 28, 2012, 6:57 pm

    All this complaining about Ocare and Obama’s liberal agenda yet the very rich, and pretty darn rich have seen thier income surge.

    The top 1 percent now shares 24 percent of the national income, that’s a doubling from 10 years ago.

    I never knew the liberal democratic party was for a break up of the middle class and the creation of a one class society. That is the trend today. I can’t believe any Republican could do any better.

    So as we label each party and declare which is the evil one, lets not lose sight of the fact that the rich have never become this rich and powerful in our short history as a nation.

    &&&%%

    Where do I begin? RA

    • Rich June 28, 2012, 9:02 pm

      Complaints about the rich are a form of class envy to compensate for personal shortcomings, or political machiavellianism to divide and conquer.

      Who do you think pays most of the income taxes?

      People earning over $112, 124 (Top 10%) and $343,927 (Top 1%), that’s who:

      http://www.irs.gov/taxstats/article/0,,id=102886,00.html

      Corporations with loopholes and lobbied tax credits pay less than 10% of the tax and Foundations pay nothing.

      Time to wake up…

  • Rich June 28, 2012, 6:36 pm

    Even Intrade missed this one, moving today from 80% repeal of Individual Mandate to 40% before it was removed from the website.

    0 is now 13 points ahead of MR, questioning the thesis that SCOTUS upholding HAMP, OCare, TARP and other government abortions guarantees 0 is another Carter.

    Maybe Intrade will be wrong again?:

    http://www.intrade.com/v4/home/

    Doubt it.

    Only Ron Paul can defeat 0…

  • Rich June 28, 2012, 6:29 pm

    Rick, are you inhaling smoke?

    Re “Silver Lining”:

    With respect, W nominated John Roberts who sold out,
    just as Nixon nominated Harry Blackmun, who invented Roe v Wade.

    Obamacare does not cover pre-existing conditions for children or better medical care. It is a tax (the power to destroy) as SCOTUS ruled. Welcome to Brit/Canadian waiting lists.

    Bain MA MR who designed 0Care represents more of that status quo.

    Only Ron Paul, who can still be nominated at the GOP Tampa Convention by unbound delegates per RNC Rule 38, represents government reform per Constitutional principles.

    Re “Buying this Market for a Bounce”:

    Would not dare get in front of this market collapse after the Fed has had its foot on the brakes since Valentine’s Day as posted.

    Most institutions/people are too numb to sell yet.
    They will.

    TYX targeting 1.7% from 2.668% implies a +36% capital gain, plus a real return of 2.66*% plus whatever the GDP deflator is, currently as much as 3% by Gary Shilling’s estimate…

    • Rick Ackerman June 28, 2012, 9:08 pm

      Rich, concerning who is inhaling, most unfortunately it is those who cling to the hope that Ron Paul can somehow end-run the mainstream media’s deliberate selection of a weak GOP candidate. Paul ran a strong and principled race, and he was most surely the people’s choice — a man whose time had finally come, but for the fact that the news media never took him seriously. It is clear in retrospect that he never had a chance. It is also clear that “Abolish the Fed” will never see the light of day, politically speaking.

      Regarding Roberts, the point is arguable, but I think he is too deeply principled to have “sold out.” To the contrary, I would argue that he has laser-focused scrutiny on the fact that the Commerce Clause effectively allows Government to tax us to any extent it chooses and for any imaginable purpose. Voters will reject this idea in November by turning Obama out of office. Meanwhile, it’s not as though Roberts’ vote will have made the execrable Obamacare or Obama himself any less unpopular.

    • Rich June 28, 2012, 10:21 pm

      Re the Commerce Clause, not sure how regulating becomes taxing:

      http://en.wikipedia.org/wiki/Commerce_Clause

      Did we not fight a Revolutionary War over Taxation without Representation?

      Drudge:

      FLASHBACK: Obama: Mandate is Not a Tax…
      Health Care Should ‘Never Be Purchased With Tax Increases On Middle Class Families’
      Congress off to play baseball!
      Holder goes to DISNEY WORLD…

      Who elected and appointed these clowns and why are we not holding them accountable?

      Is voting rigged, or does MSM really have more power than free people?…

    • Rich June 29, 2012, 12:23 am

      ‘In Health Care Ruling, Roberts Steals a Move From John Marshall’s Playbook’

      http://www.theatlantic.com/national/archive/2012/06/in-health-care-ruling-roberts-steals-a-move-from-john-marshalls-playbook/259121/?google_editors_picks=true#

      Nothing like the House Organ for East Coast Establishment telling us why Roberts was so clever by half to rule and write for Obamacare…

  • Rich June 28, 2012, 4:14 pm

    Be safe Rick.
    Can anyone say Market Crash on the Supreme Sellout?

    • Robert June 28, 2012, 4:58 pm

      HA!

      Conspiracies everywhere… but isn’t it coincidental that the press release came out right before the London PM fix?

  • casey June 28, 2012, 2:57 pm

    How soon will it take for the libs to blame this on global warming? Real blame goes to bad forestry management by the hippies in the relevant Federale agencies

    • gary leibowitz June 28, 2012, 3:37 pm

      Global warming? Voodoo science.

      We all know this has nothing to do with the fossil fuel, and other man made chemicals in our atmosphere. Logic would dictate that man can’t alter nature. We are a benign species.

      &&&&&

      Very out of character for you to say something that I or anyone else in here agrees with, Gary, especially at a time when exceedingly hot summer weather would seem so clearly to indict the villainous automobile. RA

    • gary leibowitz June 28, 2012, 6:20 pm

      Rick, did I say something that you agree on? In that case I change my position.

      I must give Mad Vlad a gold star today for his market call. I still don’t see this as the beginning of the end, but timing has never been my strong suit.

    • Chris T. June 28, 2012, 7:14 pm

      There is also the problem with building and living in these places in the first place:

      It would still be destructive, but if it was in the wild only, a lot more manageable.

      And virtually all of these homes are built of wood, hardly the most appropriate material in these fire prone areas.

      If construction were more like in most of Europe, where wood is not nearly as commonly used, that might help.
      Sure, even a stone/brick/concrete construction can collapse from the vacuum created by a fast moving fire-storm (remember the Malibu canyon with fire at way more than 100mph), but somehow the general wood-frame construction used stateside seems a big problem in places like CO

  • Mark Uzick June 28, 2012, 11:12 am

    Rick,
    my correction of the logic in your comment to me about Face Book may have been a little too forceful considering that you’re probably under a lot of stress right now. Maybe I should have let it pass.

  • Robert June 28, 2012, 6:02 am

    I did a summer in college on a Forest Service Hot Shot crew, and another summer up in Glenwood Springs working on a civil surveying crew in the I-70 tunnels East of town, so Colorado is the birthplace of many very fond personal memories, as well as the setting of many of my personal lessons on what “work” really is, and how it qualifies as the most basic and legitimate form of capital.

    Unlike Nobel winning “geniuses” like Krugman, I never look upon destruction in any form as economically advantageous, but I do have a deeper respect for the validity of economic destruction brought about as a result of nature just acting naturally …

    I only hope that property damage is the final extent and limit of the damages these fires cause… I know all to well how dangerous it is for the men and women swinging shovels and picks on the break lines

  • redwilldanaher June 28, 2012, 4:50 am

    Check Drudge and you can read about how “the most arrogant man in the world” slashed the budget that funds fighting fires such as this one…

    • redwilldanaher June 28, 2012, 5:11 pm

      http://www.weeklystandard.com/print/blogs/colorados-epic-firestorm-reveals-danger-air-force-cuts_647897.html

    • Benjamin June 28, 2012, 8:00 pm

      Nice. Real friggin’ nice. What especially rakes my coals is that with any other matter, it’s always “but the world is so much more complex today”. But not when it comes to our internal defense; we can apparently afford to lose modernization there. Anyway, I’m reminded of a similarilty…

      http://wattsupwiththat.com/2009/02/11/weve-lost-two-people-in-my-family-because-you-dickheads-wont-cut-trees-down/

      This isn’t the only example where people weren’t allowed to defend all they have. The story mentions the Lake Tahoe fires, but I also recall that with wildfires in CA in recent years, fire departments also have their hands tied by reduced resources and a policy of letting nature do her thing… even when it’ll cost lives and massive amounts damage and loss.

      But, as Robert pointed out (or rather, Krugman)… Look at the bright side. At least life insurance payouts and rebuilding will “stimulate the economy”. And hey, we can even combat global warming by leaving alone so many trees, thus freeing up money from the carbon credits (not that they had much to begin with) for other worthwhile things!

      Utterly insane.

    • Robert June 29, 2012, 12:25 am

      What ever happened to “you pays your money, and you takes your chances…?”

      Humans seem to be sentimentally drawn to living in dangerous areas… It seems the prettiest real estate on Earth always lies over a fault, or on a flood plain, or next to a frigging volcano…

      Now, I don’t care where anyone lives, but when you surround yourself with trees (which are Nature’s combined lightening rod, and fuel of choice all in one) then you can’t really be surprised when nature does it’s thing…

      Thinning forests is wasted time for fire control- forests still burn. Thinning works best for maximizing wood yield. Thinning forests is an agricultural practice. Any benefit in fire control as a result of thinning is purely coincidental.

      Actively reducing undergrowth is even more a fool’s errand, because when you go in and thin out the undergrowth, you disturb the soil, leaving conditions ripe for seed germination, and even heavier undergrowth as a result. stripping undergrowth is like trying to pull the dandelion weeds in your lawn, the more you pull out, the more seeds you release, and the more dandelions you end up with….

      Let nature be nature. If you choose not to fight her, then she might leave you alone as well; but if you try to actively fight her, it will only guarantee that you will end up losing.

    • Benjamin June 29, 2012, 1:22 am

      Robert,

      “What ever happened to “you pays your money, and you takes your chances…?”

      Even though the practices of controlled burns and fighting fire from air have proven their worth? Or for that matter, the combating of nature when it came to small pox and malaria in the U.S.? And just because Robert says it ain’t worth it doesn’t make it so. If you don’t believe any of it, then use the internet to check your story. But regarding this point…

      “Actively reducing undergrowth is even more a fool’s errand, because when you go in and thin out the undergrowth, you disturb the soil, leaving conditions ripe for seed germination”

      So do the fires themselves do this. Tress that spring from cone especially, but some grasses and plants also require fire/heat to produce and/or germinate seed. The difference between controlled burning and all-natural should be readily apparent, so I won’t go into explanations. It might also interest you to know that controlled burning has been use for at least the past 10,000 years, upon the advent of agriculture. Maybe there is a good reason why?

    • Robert June 29, 2012, 7:24 am

      Benjamin-

      I think you are confusing the term “controlled burn” with “prescribed burn”… both terms refer to slightly different concepts.

      A controlled burn is typically still ignited by natural (unplanned) means. A prescribed burn is where they go in and deliberately start a low intensity fire to clear an area of excess fuel accumulation.

      The largest forest fires of the past 50 years (the Lone fire in Arizona, The Dude Fire, also in AZ, and Yellowstone in 88 all started out as “controlled” burns. Unfortunately, the USFS has not mastered how to control the wind yet, and every one of those “let it burn in a managed fashion” fires soon went feral and scorched some serious area.

      Low intensity prescribed burns, on the other hand, I agree are a proven and advantageous deterrent to the risk of raging, destructive infernos.

      The challenge many can’t rise above is that once a low intensity prescribed burn has moved through an area, it does not look natural, it does not feel natural, and it does not smell natural, which is why many residential areas that back up to forested areas typically play the “take our chances” card as opposed to having to wait 3 or more years for the area’s aesthetics to recover from the ugliness that results from a prescribed fire.

      When I was referring to actively reducing undergrowth above, I was referring to the practice of doing so via mechanical means, not via prescribed burning.

      And when my viewpoints that fighting nature is “not worth it” (your words, not mine) I am speaking from the context of personal philosophy- one person’s opinion… There is no right or wrong in it. You may think that just because I think it or say it does not make it so, but statistically, there is equal probability that I am 100% correct and your choice not to consider my position puts you at odds with the natural harmony of the Universe… just sayin…

      Free speech, brother. Just speaking my mind.

      You want to fight against a Universal set of natural laws that you can’t overcome? Have at it, bro. Just remember this discussion when you read the possible future headlines about the epidemic of some newly discovered strain of smallpox that shows resistance to all current antibiotics…. 🙂

      Nature does not SEEK balance and harmony – Nature GUARANTEES balance and harmony…

    • Benjamin June 29, 2012, 6:41 pm

      Robert,

      Alright, you got me on semantics. But in my defense, I’ve seen the words used interchangably so many times that I didn’t figure it mattered. Anyway, yes, I was refering to the deliberately set and managed ones, well ahead of time where it would be critical.

      But I have to take issue with your insistance that thinning down patches of trees doesn’t matter. I’ll tell ya what… You go stand in that shed admist all those dry pines and grass and I’ll light the match 🙂

      That’s the point made in the link that I posted. It’s not about preventing wildfires. Yeah, I said ounce of prevention, but I didn’t specify what I meant. It’s about protecting ones property and life, via reduction/elimination of nearby fuel sources. I raised that point to complement redwill’s point because… Well, frankly I smell a wide-spread agenda, that being the discouraging of rural dwelling as well as making life for those who stubornly stay a lot more difficult and dangerous than it needs to be. A reduced budget in the U.S., an idiotic policy in Oz (and in Europe, I’ve read)… Doesn’t seem unlikely.

      Anyway, hope I’ve managed to clear up the misuderstandins between us.


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