Vol 3 No 13…an American tragedy…

(It has been over a month since the last post…mea culpa…partly this was due to the hurricanes and the destruction they brought that put TB in a funk. Will try to be more prompt and get back to the ‘every other week’ pace. TB)

TB doesn’t want to overemphasize the disaster in Napa and Sonoma counties, but it is a big deal, perhaps second only to Houston in damage, much of which cannot be measured.

First, having lived in the Bay Area for 29 years before moving to Minnesota seven years ago, I have visited scores of wineries and gotten to know many in the wine industry. My book project on the passion these people have for what they do, brings to light their hard work…and let’s not romanticize it: it’s farming (don’t take TB’s word for it, Joe Heitz was the one who said it to TB thirty years ago)!

Many of them came from the Midwest and were farmers, others, as my friend Lane Tanner puts it: “were bitten by the bug and when that happens you’re done.”

As much damage was done to the vines, wineries, and their homes, the growth in population, fueled by both the tourist industry where many are employed, and a place where retirees see an Eden to spend their twilight years was a key factor in the loss of homes and lives, especially in Sonoma County in and around Santa Rosa.

There is much confusion due to the massive size of these fires. For instance, they refer to the one with the huge perimeter that has destroyed much of Santa Rosa as the ‘Tubbs Fire”…huh? Aren’t they talking about the wrong fire? Actually, no. The Tubbs fire stretches from Tubbs Lane just to the north of Calistoga, over the Napa range along the Petrified Forest Highway and then down to Santa Rosa. That fire is bigger in area than all other fires in the state, which includes the Orange County fire combined!

I am grateful that none of the properties owned by friends were affected, but then, it isn’t over yet. Nearly 30 are known dead, and over 60 still missing (owing to the destruction of landmark hotels in Santa Rosa and since those were tourists, likely most, if not all scattered but there are still those who were trapped in their homes.

The last fire in the Santa Rosa area was in 1964, and note that there were no fatalities…zero! So you can see the impact of growth. Of course the high winds, with gusts to 70 mph were a major cause of dissemination. Firefighters say that embers were blown ahead of the fire for one to three miles…making it impossible to control or predict where it would strike.

Consider California coming off a 500 year drought! Then the rains of early this year caused the valleys and hillsides (I drove from Orange County to Seattle in mid-February), to be the most beautiful I have ever seen them…and now this.

While it was green and beautiful, it came at the expense of mudslides, especially in the Santa Cruz area where you had to zigzag on surface streets to get from US 101 to Santa Cruz since the main (and only) highway connecting the two was inundated in a mudslide that took more than a month to recover from. Also, there are some great vineyards and wineries stretching from Santa Barbara to Paso Robles. North of there, in the flat between the coastal range and the Carrizo plain to the east, the vineyards are flat and looked like a swamp. While this concerned me, Randall Grahm of Bonny Doon noted that before budbreak it isn’t problematic. Still, I can’t help but think the wines from the area north of Paso to Greenfield, which is solid vineyards, would not be producing very good wine. For 2017,wines you are going to have to be very careful, and might want to pay attention to ratings before you buy (can’t believe I just wrote that!). Besides the rains, many areas suffered early frosts, then came the record-breaking heat, most notably in Napa Valley.

Twelve days above 100 degrees with no cooling at night, as Napa Valley traps in the heat, normally a good thing, while to the west and atop Howell Mountain there was some relief. Look for wines from there this vintage. Smoke taint is certainly a risk but over 90% of the grapes had been picked…the holdouts being some of the big cabs and zins, so you will have to be careful with these. In addition, to the record number of days, the highest temperature recorded was 115 degrees! Not good for wine…especially whites, pinot noir and merlot which are cooler climate grapes.

The combination of rain making the valley lush, then frosts, then the searing heat which dried out all that new greenery as well as the accumulated dead brush from the drought, was a prescription for disaster.

Here is another thing I bet you didn’t think of: with a lot of grapes in fermentation, they need to be tended to daily. Judd Finkelstein, whose father was a widely respected winemaker at Whitehall Lane, and owner of Judd’s Hill Winery, just off the Silverado Trail to the west of the Atlas Peak burn, had no damage but his winemaker had to be escorted in to tend to the fermenting wine, called my attention to this in an email to friends of the winery. How much wine that is in inaccessible areas will be lost? A pity.

While California took the brunt of it, Oregon and Washington were also impacted with fires. Note that all these fires are occurring at a time that fire crews are usually disbanding. This was particularly true in Washington where the largest burn was caused by a teenager setting off fireworks in the forest! It is likely that some of the California fires were due to human negligence, however the high winds toppled trees causing power lines to collapse setting off several fires.

Hopefully, while you are sipping your wine you will think of the wine people and also of those who lived nearby and are now homeless.

Lastly, a political statement, but one that shouldn’t be: there can be no doubt about climate change. First, we had 95% or more of the scientific community signing off on it, with most (all?) of the dissenters being shills for the energy industry and others. This is not from me but a friend with the National Academy of Sciences and of Engineering. Nothing new here…he told me this a few years ago.

Meanwhile, Trump and Co., including Secretary of State Tillerson (who, by the way was made a member of the National Academy of Engineering about five years ago for his work on fossil fuels), who while CEO of EXXON denounced climate change along with the rest of his company, despite funding many scientific studies which proved just the opposite. When challenged on this the company released all internal communications (what the hell were they thinking?), and the proof was shown that while they were denouncing it, the very studies they funded showed it to be real.

TB doesn’t know whether you believe in climate change, but if you don’t, and with the leadership (sic) of Trump, we do nothing, what will you tell your grandchildren when they bear the consequences of our inaction? Good luck on that one! I would like to add the climate change in Europe where Burgundy and Bordeaux had a huge disaster of a harvest. One winemaker in St. Estephe has predicted that in ten years there will be no more merlot!

A friend told me he was going to the wine country next week! I said, “still?” He said he was and going to both Napa and Sonoma. I tried to talk him out of it, and may have, saying they don’t need tourists there now. I added that IF he is still going he should focus on the Dry Creek and the Alexander Valley, both just out of Healdsburg and north of the fires, and further north the Anderson Valley, all of which produce some great wines.

Condolences to those who have lost their homes, or have friends or relatives that have had their lives torn apart by this catastrophe…also to the hurricane victims who continue to suffer.

Trader Bill

(c) traderbillonwine.com

 

 

 

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traderbill

How did Trader Bill originate? It was conceived by me as a way of providing information summaries of global financial markets so that friends and associates could bring themselves up to speed on events and changing market conditions upon their arrival at work. In addition, it provides information on speakers and economic releases that day with consensus estimates and level of last release so that the reader is prepared to react, or knows how the market might react upon the release of information. Who is Trader Bill? Initially any reference to me was as ‘i’. This is to remove the aura of ego and to suggest that i am but a humble reporter, albeit with 35 years of investment experience. Investments are demanding of ego, however, or one would not feel that he was qualified to manage someone else’s money in the first instance. Therefore i needed an ‘alter-ego’. Like Winchell and Mahoney, Edgar Bergen and Charlie McCarthy and especially Trader Vic and Mai Tai’s! Why Trader Vic? Because he was a likeable man who delivered pleasure to his customers and knew exactly what their desires were. The reason for the alter ego became obvious once I introduced Trader Bill into my commentaries: people started asking what Trader Bill thought. They had never asked me what I thought before, but suddenly they wanted to know what TB thought! Now mind you they KNEW that I was Trader Bill but for some reason he became bigger than life. Maybe it was the small ‘I’? What does Trader Bill try to do?His goal is to educate from his years of experience. Consider that most of the traders and people managing investments weren’t even around in 1987 for the crash! Consider that Graham and Dodd, and even Warren Buffet are not relevant to them, too old hat. Their historical perceptions of markets and fundamentals (earnings, price/earnings ratios, bonds, debt service coverage) are irrelevant in this fast moving world. This is the NEW ECONOMY, or is it? How did your style originate?Years ago i found that i had a knack and talent for writing. In addition, i developed an ability to analyze market news about 15 years ago. It took the Crash of ‘87. Prior to that i was just listening to what others said about the economy. But bond yields had been soaring in ‘87 yet the stock market just kept hitting new highs. That was when i began to learn about markets. i have both a dry and witty sense of humor (some call it inane!). Therefore i attempt to make even the worst news somewhat amusing: whether it is the absurdity of an economic release, or the comments of a CEO. This is trading desk humor (or gallows humor). It isn’t politically correct but it does ease tension. Ironically, it is seeing the light at the end of the tunnel (in the Navy they say: it’s always darkest before it’s pitch black!), that allows you to be more objective in your analysis, as bad as a situation is there will still be a tomorrow! You will see that i practice three-dot journalism, a style made famous by San Francisco reporter Herb Caen, whom i idolized. At least to me it is effective. What is so special about your analysis?Frankly, i don’t know that it is special, but at least it beats “the market closed down today on profit taking.” What i do know is that most of what you read is spat out without considering whether or not it is rational, like the above statement. Is it right? Sometimes yes and sometimes no, and that is the key to what is different about my analysis: it is meant to make you think. Is Dan Rather right or is Trader Bill right? If it causes you to stop and think about it, regardless of whether you agree, i win! Because THAT is my goal…not to have you think i am a guru, got that? Bet you never heard that ANYWHERE before in my business! Instead they want you to think just how smart they are but remember in this business if you are right 60% of the time you ARE a genius! Another thing that is different is when i am wrong on an analysis i will tell you, not hope you forget what i said. So now you have the tools to do what the speculators and hedge funds do: challenge authority, and if you make money it is because YOU did it not me. i was just a tool, your flunky to do the grunt work and let you decide…course you could be wrong too but at least you looked at the big picture. But the goal is also to have fun! This shouldn’t be a business of hushed tones and grim faces. It is a living, breathing thing and nowhere else in the world do you have the odds as much in your favor as here. Just beware of the guy who wants to put his arm around you and tell you he is your friend. So there you have it. I hope you select me as one of your sources for market information. If you do I promise to work my best for your financial success. Trader Bill

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