It was difficult to find an appropriate topic for this first Risk Report of 2025. In true New Year’s fashion every common risk topic—inflation, interest rates, dollar strength, bank regulation, and more—has been thrown into the air like confetti and it is not yet clear where it will land.
Also, in the last week, all news stories have been overshadowed by the absolutely devastating bulletins about the Los Angeles wildfires. Having lived in Pasadena for almost fourteen years and just returned home from celebrating the holidays with friends and family there, I cannot find the words to describe the horror and heartache of seeing these neighborhoods, our neighborhoods, burned to the ground.
So far, everyone we have heard from has made it to safety, but many have lost their homes and schools and corner stores and dog parks and everything else that has framed their lives and local community.
What prevails is a strong spirit and genuine kindness and willingness to help that aren’t always the first traits mentioned about Angelenos, but that thankfully are real and present.
The situation is still immediate and dire.
At writing time, the two largest fires, Palisades and Eaton, are only minimally contained, new fires keep starting, and winds could very likely pick up again.
And the longer the fires rage on, the worse is the secondary impact: unhealthy air quality, microscopic soot particles everywhere, undrinkable water, dangerous or no access for emergency personnel to affected neighborhoods, no power, downed trees, the feelings of uncertainty and helplessness because it’s not over yet.
Though everyone is keeping tabs, no one knows the magnitude of the damage caused, only that it is enormous. It goes beyond what can reasonably be called a stress scenario because even severely adverse stress scenarios have an implicit assumption that the infrastructure—the models—of life and business are unchanged.
The fires have already changed Los Angeles profoundly and permanently. They have broken the models, and the damage may be too big to be measured in numbers alone.
There is a long way ahead, in time and effort, to develop new models for living in Los Angeles, and we don’t know the starting point yet. Aid, collaboration, and innovation will be needed.
If you want to help, now or later, laist.com is a good place to find out what and where to contribute.
Thank you!
Regitze Ladekarl, FRM, is FRG’s Director of Company Intelligence. She has 25-plus years of experience where finance meets technology.
This article is part of the FRG Risk Report, published weekly on the FRG blog. To read other entries of the Risk Report, visit frgrisk.com/category/risk-report/.