What if a Sierra megafire overruns the Lake Tahoe corridor?
A Tahoe-corridor megafire is a California insurance/credit event — record insured losses accelerate carrier exit (the linked State Farm scenario), freeze coastal mortgage lending, and reprice property; grains are irrelevant. Rhymes with the Jan-2025 LA Palisades/Eaton fires that drove insurers out and stressed the FAIR Plan. Transmission runs through CA homeowners' carriers, FAIR Plan reinsurance, and CA muni/property — not the wheat/corn shown.
how we built this number — every step
The class rate is measured from our dated, sourced event library (decade-normalized Poisson — the full table is public at base_rates.json). The variant’s share within its class is the analyst’s editorial call, published so you can audit it. A wider range means thinner precedent. Full recipe: methodology · scored at Reality Check.
The butterfly cascade
How this trigger trickles across markets, left → right — the root shock, its first‑order moves, then the ripple effects. Drag any node; tap a market for its real price history.
Resolution timeline — how this probability is moving
Our model's odds (gold) over time vs the crowd's (Polymarket, blue), from the past toward the 0–6 months horizon. Each dot is a real macro event that nudged the probability — green pushed it up, red pushed it down. Tap a dot for the source. The gold path is an illustrative reconstruction anchored to today's estimate — real dated events, not a live re-estimate history.
What it would mean
If this plays out, it is a risk-off shock. A wind-driven 2026 Sierra megafire overruns Lake Tahoe-corridor towns, posting record insured losses and accelerating California carrier flight. :: 1133 :: State Farm exits California :: State Farm fully quits California homeowners statewide; FAIR Plan overflows, lenders tighten, and high-fire-zone property values and sales seize up. :: 1137 :: Dengue establishes in Paris :: Self-sustaining local dengue transmission takes hold in metropolitan Paris and northern France, the disease's furthest-north European foothold, straining clinics. The trigger decomposes into signed root‑shocks — Credit spreads ▲ · Climate/crop supply ▲ — which propagate through our causal graph to the markets below.
If it happens — the markets it would move
Biggest moves first. Projected moves are cascade-model priors; hist A–B% = what comparable past events actually did (measured abnormal returns), and model prior · unmeasured marks markets with no analogue backing yet. Tap any market for its price history.
| Market | Class | Projected move | |
|---|---|---|---|
| 1 | High-yield credit HYG 📈 chart | Rate | ▼ -0.4% hist -0.63–+0.05% · other way -0.33% (n=11) |
| 2 | Financials XLF 📈 chart | Equity | ▼ -0.2% hist -0.89–+0.2% · other way -0.05% (n=11) |
| 3 | Wheat WHEATon Hyperliquid 📈 chart | Commodity | ▲ +0.2% hist -0.43–+1.27% · other way -4.35% (n=11) |
| 4 | Corn CORNon Hyperliquid 📈 chart | Commodity | ▲ +0.2% hist -0.43–+0.37% · other way -2.96% (n=11) |
| 5 | MicroStrategy MSTRon Hyperliquid 📈 chart | Equity | ▼ -0.2% hist -4.42–+1.5% · other way +27.34% (n=11) |
| 6 | JPMorgan JPM 📈 chart | Equity | ▼ -0.2% hist -1.59–+0.28% · other way +1.69% (n=11) |
| 7 | Volatility (VIX) VIXon Hyperliquid 📈 chart | Vol | ▲ +0.2% hist -2.81–+7.95% · other way -6.09% (n=11) |
Probable recommendation
Why we may diverge from history
Trust the cascade's MSTR short: the +6.8% history is pure 2023 regional-bank windows riding BTC's structural bull, a crypto regime signal that says nothing about a California wildfire-insurance shock.
Historical precedent — what analogous events actually did
Across 40 analogous events (overlap‑weighted), as abnormal returns — market beta stripped, so it's the event's own effect, not the market backdrop. Shown at 20 days (persistent) and 5 days (immediate); ↺ fades = the two horizons disagree. Confidence = consistency × sample × significance.
| Asset | History says | Abnormal (20d · 5d) | Hit | n | Confidence | vs cascade |
|---|---|---|---|---|---|---|
| JPM JPM | SHORT | -1.3% · 5d -1.8% | 69% | 38 | 0.32 | ✓ matches cascade |
| Bitcoin BTC | SHORT | -0.1% · 5d -0.2% | 64% | 11 | 0.25 | · |
| High-yield credit HYG | SHORT | -0.4% · 5d -0.0% | 60% | 30 | 0.16 | ✓ matches cascade |
| XLF XLF | SHORT | -0.7% · 5d -1.0% | 59% | 32 | 0.16 | ✓ matches cascade |
| Volatility VIX | LONG | +7.3% · 5d +2.3% | 59% | 34 | 0.16 | ✓ matches cascade |
| MSTR MSTR | SHORT | -4.0% · 5d -3.0% | 59% | 32 | 0.14 | ✓ matches cascade |
| 10y yield DGS10 | SHORT | -11bp · 5d -5bp | 54% | 40 | 0.08 | · |
| WHEAT WHEAT | LONG | +1.1% · 5d -1.4% ↺ fades | 53% | 32 | 0.06 | ✓ matches cascade |
| US dollar DXY | LONG | +0.4% · 5d +0.2% | 51% | 40 | 0.01 | · |
| CORN CORN | SHORT | -0.6% · 5d -0.4% | 50% | 32 | 0.00 | ⚠ differs |
| Gold XAU | SHORT | -0.1% · 5d -0.1% | 47% | 32 | 0.00 | · |
Why this probability
Sierra/Tahoe megafire possible but specific town-overrun + record losses in 6mo is conditional. A base‑rate‑anchored prior, continuously scored against what actually happens — not a forecast.