China Goes From 50 Year Record Drought To 200 Year Record Deadly Floods
Too bad there is no central bank to sell weather future puts and induce a "great moderation" in climatic conditions, which lately have seen volatility surge through the roof. The most recent example of why the CBOE needs a weather VIX is China, where following weeks of inflation spiking near-record drought conditions, the weather has flipped, and heavy rainfalls since June 3 have created floods that have killed at least 52 people led to 32 more missing, and much more is coming. According to Xinhua, "Heavy rains have inundated parts of 12 provinces in
central and southern China and affected 4.81 million people so far since
the flood season arrived, Shu Qingpeng, deputy head of the Office of
State Flood Control and Drought Relief Headquarters, told a conference. Floods have destroyed 7,462 houses and submerged 255,000 hectares of farmland, incurring direct economic losses of 4.92 billion yuan (760 million U.S. dollars), he said. Heavy rainfalls since June 3 have drenched the previously parched lower and middle parts of the Yangtze River basin, increasing water of rivers to alert levels in the provinces of Jiangxi, Hunan and Guizhou." The PBoC's, which is preparing with spinning a record 5.5% CPI print imminently, just can't catch a fair weather break.
Wangmo County in Qianxinan Autonomous Prefecture of Guizhou recorded maximum one-hour precipitation of 122.5 millimeters, the most in 200 years, he said.
Shu asked local authorities to monitor closely rainfall and water levels and step up prevention against floods as more downpours are expected to hit many parts of China from June 9 to 12.
Perhaps this is one of those legitimate cases where one really can blame the weather.