Spending a lot of timely lately mulling some issues related to catastrophe finance and spurious correlations. Anyone find interesting patterns in these two photos of burned homes from last October's wildfires in San Diego County? How would you apply risk models in these two cases to capture salient differences? Could you?

Case 1:

Case 2:

[via RMS]

Don't miss the fireworks today as hedge fund manager George Soros testifies before the Senate Commerce Committee. He apparently will say that oil is a bubble, and that commodities are not a legitimate institutional asset class.

Right, but are commodities an attractive nuisance, like venture capital? That's what we really want to know.

A developer here in southern California is getting lots of attention for a 2-for-1 deal wherein you buy a $1.6m house near Escondido and you get a $400,000 rowhouse for "free". While nothing is for free, and people haven't exactly been knocking them down with offers, I was intrigued to notice the location of the development: In the area burned in last October's catastrophic wildfires.

See the following figure. The development is right near the tip of the Witch Creek pop up.

Further to my post earlier this week explaining why venture capital is an attractive nuisance, we have more evidence today. We now have the fine city of New York launching a New York City Venture Fund.

New York City Mayor Michael P. Bloomberg announced the debut of NYC Seed, a venture firm for early-stage technology companies in the city, CNET News.com reported.

Unveiled on Monday evening as part of New York’s Internet Week, NYC Seed will provide up to $200,000 of investment into New York-based technology start-ups.

It is a public-private partnership between the New York City Economic Development Corp. the New York City Investment Fund, the Partnership for New York City’s economic development arm, Polytechnic University, the New York State Foundation for Science, Technology, and Innovation and the Industrial and Technology Assistance Corp.

At Monday’s event, Mr. Bloomberg hailed the diversity of New York and its possibilities as a hub for technology in addition to fashion, entertainment, finance, and media. “We accept each other in ways that I don’t think happens anyplace else,” he said.

Color me awe-struck that the financially savvy mayor of New York is buying his own illogic.

[via NYT]

Turns out kindergarten-ers get socked by the business cycle too:

This study examines the impact of the business cycle on the timing of enrollment. I find that during economic downturns kindergarten enrollment increases. To explore a potential mechanism through which this effect may arise, I propose an instrumental variables approach to identify the causal effect of fluctuations in household resources due to the business cycle on the timing of kindergarten enrollment.

[via SSRN]

I'm glad the courtroom kids in Canada are having a nice time ruling on the BCE private equity buyout. But I'm still puzzled. Ruling that the deal should go ahead strikes me as ruling that gravity should be different: You're not going to change Wall Street's unwillingness to fund it today on yesterday's terms.

Dan Primack makes a similar point here.

Crude oil prices are off 2.7% percent today, touching $124.30. There has been a more or less straight line crude oil decline for two weeks now, dating back to May 21st, with prices down 7.5% in the period.

Hmm, May 21st. Now what could have been special about that day? I wonder, I wonder. Oh, now I remember: That was the day the Senate Judiciary committee hauled in some oil executives so they could do a little election-year posturing.

Nothing like the Senate "tell" for marking a market top.