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Remember the California drought? It was all over the news a year ago, when the state took the unprecedented step of mandating statewide water cutbacks. The Sierra Nevada snowpack was at its lowest recorded level. Rivers and reservoirs were getting shallower and shallower. Wells in rural towns were literally running dry. That drought is still very much a thing. More than 62 percent of California remains in severe to exceptional drought conditions, according to the U.S. Drought Monitor. And without a wet winter the state could be facing a sixth-consecutive year of severe drought.

For those with a financial stake in water, drought can mean boom or bust, depending on the investment. And even without a specific market to trade water, there are numerous ways to invest in it – from buying land with water rights to stocks in water-dependent companies to municipal bonds. Take Michael Burry, for instance, the hedge fund manager featured in the book and movie “The Big Short” who outsmarted the subprime housing market crash. The end of the movie includes the line: “Michael Burry is focusing all of his trading on one commodity: Water.”

We are far from out of the woods when it comes to California’s historic drought. But forecasters gave a glimmer of hope with the first winter weather prediction of the season.The forecast doesn’t bode well for seeing major drought relief and actually may expand the drought a bit in the southeast. But while we have equal chances of wetter or dryer precipitation in California, the state has had a pretty good start to rainfall in October. An atmospheric river of moisture started the wet season.

 

 

 

Remember the California drought? It was all over the news a year ago, when the state took the unprecedented step of mandating statewide water cutbacks. The Sierra Nevada snowpack was at its lowest recorded level. Rivers and reservoirs were getting shallower and shallower. Wells in rural towns were literally running dry. That drought is still very much a thing. More than 62 percent of California remains in severe to exceptional drought conditions, according to the U.S. Drought Monitor. And without a wet winter the state could be facing a sixth-consecutive year of severe drought.

Plans announced today to dedicate more Sacramento River flows to fish will harm farms and ranches statewide, according to the California Farm Bureau Federation. By limiting the amount of water that could be stored in reservoirs, CFBF President Paul Wenger said, the draft proposal from the State Water Resources Control Board would reduce surface-water supplies on which much of California depends. “This plan is part of a one-two punch aimed at rural California,” Wenger said.