On 1/11/2025 2:16 PM, Alan Grayson wrote:
On Saturday, January 11, 2025 at 1:55:12 PM UTC-7 John Clark wrote:
On Sat, Jan 11, 2025 at 2:17 PM Alan Grayson <agrays...@gmail.com>
wrote:
/> What isn't being discussed is the likely banking crisis as
a result of these fires. With entire neighhoods burning out of
existence, I wouldn't be surprised if there's a Trillion+
dollars of bad debt being created, as homeowners default on
their mortgages./
*The figure I've heard is $135 billion in fire damage,it would
take more than that to cause a banking crisis. *
*
*
*John K Clark See what's on my new list at Extropolis
<https://groups.google.com/g/extropolis>*
That's just a preliminary estimate for rebuilding houses and *total
*infrastructure replacement. Three months ago, State Farm, a major
insurance company, cancelled 70% of its fire insurance policies in the
LA area, so I infer that most homeowners are uninsured, and those that
are, likely won't collect anything since insurance is not structured
for this type of near global disaster and many will declare bankruptcy
to avoid paying and going under. Fire Insurance works when there are
sporadic fires, not as in this case where entire towns are wiped out,
like Altadena, north and east of Pasadena where I resided when I
worked for JPL, and Pacific Palisades, and some others. Given the
number of homes totally destroyed and the likely lack of insurance
among a majority of residents, IMO the total damage, including
mortgage defaults, could exceed one TRILLION dollars. AG
Remember, those properties were almost all insured. The insurance
companies also buy reinsurance so they spread the risk further. A
trillion dollars is probably high for rebuilding everything. There were
around a thousand homes and buildings burned, I'd estimate around 500K$
per house to rebuild. The insurance companies will pay off. They many
not want to insure new homes, but the state may require them to or else
not do any business in CA.
Brent
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