The market for rain

The market for rain
Originally uploaded by L-plate big cheese

I’ll never forget one of Seinfeld's observations which went something like this “we love water, we drink bottles of it a day which come from all over the world, we shower in it, we bathe in it but as soon as it starts dropping out of the sky in small droplets, we just can’t get away from it.Aaaaaa! Get the umbrella, I’m getting wet, look at my hair, look at my jacket eeeeee, horrific stuff whatever did I do to deserve this?!?!”

And indeed it is this fear of rain which drives a huge global market we may seldom notice even exists.

Here’s just a sample of how rain makes a lot of people winners and losers:

Have you ever noticed how much busier taxi drivers are when it rains?
Have you ever noticed how umbrellas suddenly appear outside shop fronts when the first drop falls?
In Russia it is common practice for planes to release chemicals into the atmosphere which coats clouds to prevent rain from falling – this is especially helpful when there is a big military parade in red square.
Have you ever wondered how the council plans ahead for potential flooding to get people out of their house quick before they have to float people down the street in rowing boats?
Have you ever thought about the way stock prices change when it’s about to rain? One of the things traders get regular updates about is the weather forecast in order to help them decide what stocks to buy and sell that day. Forget risk management derivatives, just make friends with Michael Fish (just don’t ask about hurricanes).

To summarise: weather is money. And people know it – why on earth would so many coat manufacturers design coats which for some reason get totally ruined by rain so you need to replace it fast? It’s a coat for Christ’s sake, it’s meant to protect you from the elements, not fall apart faster than you do! But try taking it back to the shop and guaranteed you’ll be told it’s all your fault.

But we know the answer of course - it’s the economics of rain.