It’s Official: Biggest Nino Ever, Killer La Nina to Follow

This morning NOAA released its data for the Pacific Ocean temperatures for the week of November 9th. We hit a record – the current El Nino is the strongest in recorded history.

Before 2015 the largest recorded weekly reading of El Nino occurred during the week of November 26 in 1997. We passed that milestone last week. The data from 1997 – The El Nino index set a record of 2.8:

As of last week the Pacific Ocean in region 3.4 (where El Nino is measured) hit a new record of 3.0:

So another weather record has been set. What does it mean? In the very short term it means that there will be some hellacious weather in the US Pacific West/Texas in the next 90 days. It also means there will be a drought in Australia and Indonesia. Other parts of the globe will feel the consequences of the mega Nino.

However, there is another consequence of this year’s El Nino that is virtually a sure thing to happen within the next half year. A very rapid change in El Nino water temperatures will follow – in nine months we will have gone 180 degrees in the opposite direction and we will be dealing with a very strong La Nina.

The following plots the changes from El Nino (red) to La Nina (blue). Note the rapid change that occurred from November of 1997 to the fall of 1998. A very big La Nina followed the record El Nino:

The numbers:

A chart of the 1998 event:

This chart from today’s NOAA report is a synopsis of the computer forecasts for the for the collapsing El Nino and soon-to-be La Nina.

What will the coming La Nina bring us? If history is the gauge, then we should be preparing for a record hurricane season in the summer/fall of 2016, and a return to the crushing droughts in the Pacific West. This is what NOAA reports for the hurricane season of 1998:

In March of 2015 the Australian Meteorology department issued its first warning that a big El Nino was in our future. I wrote about it, and in the blog I made some predictions/recommendations of what it meant. Many of those things have now proven correct. So I’ll go out on a limb with some deep thoughts on the coming La Nina:

– If you live anywhere along the US coast from Virginia all the way to Texas (especially Florida) make some preparations.

-If you’re thinking of putting your house up on stilts to avoid flood damage, do it now. By March of 2016 the “Coming La Nina” story will be in the media – too late to hire the construction crews to raise the house.

-To the extent possible increase flood and wind insurance protection.

-Short the stocks of those insurance companies that have large risk exposure to the US east coast.

-If you’re thinking of buying that dream house on the ocean in the Sunbelt, wait a year – there will be some bargains. If you’re a seller – call the broker soon….

The La Nina will result in a resumption of drought conditions in the West. So consider:

-Enjoy the West Coast skiing this year – the next two years will suck.

-Don’t buy a vegetable farm (or heaven forbid a grape grower) in California just yet.

-Pot growers in Cali (huge biz) are going to get squeezed – these growers use a ton of water.

I wonder about Phoenix and Las Vegas (more than SF or LA). These cities are highly dependent on the Colorado River/Lake Mead. In a year the headline will be; “Drought Returns – Lake Mead Level Resumes Drop”. What might be the implications of that? I can’t think of anything to be ‘long’ of in that scenario – including casinos…..

There is even a political side to this. Assume that we get the La Nina, and we have an over-sized hurricane season that brings with it significant damage. This would happen 30-60 days before the election. Would it make a difference at the ballot box? The Press reaction to a big storm would be:

“Super Storm Lolita – More Evidence of Climate Change!”

And what are the positions of some of the candidates?

Rubio:

“We’re not going to make America a harder place to create jobs in order to pursue policies that will do absolutely nothing, nothing to change our climate.”

Trump:

“So I am not a believer, and I will, unless somebody can prove something to me, I believe there’s weather.”

Carson: (WTF?)

“I believe that God gave the creatures he made the ability to adapt to their environment. Because he’s very smart and he didn’t want to start over every 50 years.”

About Bruce Krasting 208 Articles

Bruce worked on Wall Street for twenty five years, he has been writing for the professional press for the last five years and has been on the Fox Business channel several times as a guest describing his written work.

From 1990-1995 he ran a private hedge fund in Greenwich Ct. called Falconer Limited. Investments were driven by macro developments. He closed the fund and retired in 1995. Bruce also been employed by Drexel Burnham Lambert, Citicorp, Credit Suisse and Irving Trust Corp.

Bruce holds a bachelor's degree in economics from Ithaca College and currently lives in Westchester, NY.

Visit: Bruce Krasting's Blog

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