Original｜Odaily Planet Daily
Author: jk
Los Angeles is experiencing an unprecedented natural disaster. Several large wildfires have not only destroyed communities in northern Los Angeles, but also triggered a chain reaction of social and economic effects. As of the time of writing, two large wildfires in Los Angeles have killed at least 24 people. Although firefighters have made some progress in controlling the fires over the weekend, strong high winds are expected before Wednesday and may fuel the spread of the fires again. These wildfires have become one of the most destructive events in Los Angeles history in terms of the extent of building damage.
Fire status
The largest wildfire is in the Pacific Palisades area, which has burned more than 23,000 acres of land as of Monday. Thousands of firefighters worked to contain about 14% of the fire over the weekend. However, the fire is spreading eastward, threatening upscale communities such as Brentwood, including the famous Getty Center art museum, which has evacuated all staff. Another wildfire, the Eaton Fire, has killed 16 people, the most deadly fire so far, and many people are missing.
At present, major domestic and foreign media have reported a lot on this fire. Odaily summarizes several specific focus issues here as follows:
No water?
Some fire departments have experienced water supply interruptions to their pipes and hydrants, and there are reports that the reservoirs have been closed. Some firefighters said that because the water pressure was too low, the hydrants could not be used and they had to rely entirely on water tanks to fight the fire. The incoming US President Trump even cursed on social media, calling California Governor Newsom the new Newscum, believing that he did not take action on the main problem of the Los Angeles wildfire.
Los Angeles Fire Department spokesman Erik Scott explained on January 8 that water supply in the Highlands area was affected by the slow replenishment of reservoirs, which posed a great challenge to firefighting.
California Governor Newsom stressed that the current water storage in large reservoirs in southern California is at or above the historical average for the same period. He said: This fire has gone beyond the scope of ordinary urban fires. The fire storm has caused water resources to be exhausted due to its abnormal intensity. He currently hopes to get answers through an independent investigation, but it will obviously take a lot of time.
According to the Times, some independent experts said that no water resource system can withstand the fire pattern of hurricane + fire tornado.
No money?
Throughout this week, there has been widespread discussion about whether firefighting budget cuts have affected the Los Angeles Fire Departments (LAFD) ability to fight wildfires. The Los Angeles Times criticized Los Angeles Mayor Karen Bass on social media. The fires in Los Angeles were not surprising, but the mayor cut the LAFD budget by $23 million.
Los Angeles Fire Department Chief Kristin Crowley also criticized the city and Mayor Karen Bass on Fox 11. She said the budget has definitely been cut, and its really impacting our ability to serve. She added: We remain understaffed, under-resourced, and underfunded.
California Governor Gavin Newsom denied the claim that the firefighting budget had been cut. He said in a social media post: California has not cut the firefighting budget. We have nearly doubled the size of our firefighting fleet and built the largest aerial firefighting fleet in the world.
No power?
Los Angeles County Sheriff Robert Luna said detectives are investigating possible causes of the fires. Lightning has been ruled out as a cause of the Palisades and Eaton fires, but there is no official word yet on arson or electrical utilities. However, in the Eaton fire investigation, a law firm has filed a lawsuit against Southern California Edison (SCE), alleging that its wires may have caused the fire by not shutting off power in a timely manner.
Later, according to Reuters, Southern California Edison said in a statement that about 413,639 SCE customers were without power, and another 453,872 customers were being monitored under the Public Safety Power Shutoff (PSPS) program. The company statement said: Due to the current unsafe conditions, it may take several days for power to be restored. SCE will restore power as soon as it is safe to do so.
Some accounts on the X platform said that the power outage caused some equipment to be unable to pump water, resulting in a water shortage, and this measure made it likely that the fire would continue to spread. If the power was not cut off, the power station and electric poles in the fire would become a bigger source of fire.
Crypto Market Plunge: Will It Matter?
Since January 1, the crypto market has been generally not optimistic: According to Coingecko data, Bitcoin fell 6.8% in the week, Ethereum fell 13.3% in the week, and Solana fell 14% in the week. The previously popular AI concept, Virtuals, fell 30.8% in the week, and ai16z fell 46.4% in the week, almost halving.
Crypto market value shrinks from 3.76 trillion to 3.45 trillion. Source: Coingecko
At present, a logic generally accepted on the X platform is that the Los Angeles fire mainly affected wealthy areas, and residents in these areas suffered significant asset losses in the disaster, especially real estate and luxury goods. Faced with the huge financial pressure of post-disaster reconstruction, many people chose to sell highly liquid assets to obtain cash, and cryptocurrencies became the first choice. This selling behavior formed a chain reaction in the market, further depressing the price of cryptocurrencies.
In addition, investors in wealthy areas usually hold a larger proportion of crypto assets, and their concentrated selling behavior amplifies market volatility. Coupled with the high leverage and low regulation of the crypto market itself, this local event quickly spread to become a price shock for the entire market, causing a sharp drop in the cryptocurrency market in the short term.
Some specific examples can also be found in the history of the U.S. stock market: Hurricane Katrina in 2005 and Hurricane Sandy in 2012. Hurricane Katrina caused severe damage to oil production facilities in the Gulf of Mexico, causing energy stocks to fall and triggering market concerns about the overall outlook for the U.S. economy. Hurricane Sandy directly hit economic centers such as New York and New Jersey, not only causing the New York Stock Exchange to be closed for two days, but also severely hit the stock prices of industries such as retail and tourism in the short term, and caused the overall decline of U.S. stocks.
A more obvious example is that after Hurricane Irma in 2017, some analysts pointed out that the sell-off of real estate and related risky assets in retirement communities in Florida exacerbated the turmoil in local financial markets. Florida is a gathering place for famous elderly people and wealthy people in the United States, and natural disasters such as the Los Angeles wildfires have brought them a lot of financial pressure.
Crypto assets, which are relatively newer, have a wider range of fluctuations, are more worth selling and have stronger risk attributes than U.S. stocks and bonds, have become one of the victims of this fire.
Odaily previously reported that Kevin Rose, founder of PROOF and Moonbirds, recently posted on X that his home in Los Angeles was completely destroyed in the California wildfires. Rose shared a picture of himself walking past the burned cars and houses, and said: Unfortunately, we lost everything in the fire. We only had a few minutes to pack up. The safety of my family is the most important thing.
Another person posted that his aunt lost her wallet and mnemonic phrase in the fire, which contained most of her savings.
Source: X
Moreover, it is still impossible to predict the exact end time of the Los Angeles wildfire. According to experts, the fire may continue and spread further in the next few days, especially after Wednesday.
