Those Darn Arsonists
As people fled Merchant West, the stories turned alternately darker, or stranger, or both. First a fire, then a rampaging arsonist, then a monster, then a demon (as if). Then soldiers from all over the Compact show up, racing to the scene and called there by the rumors and hysterical people. Almost immediately firefighting efforts get under way, and brave fighters confront the evil creature who would do such a terrible thing.
By the time the fire goes out, those who have been brave enough to come back to the scene have come to some sort of agreement that it was probably some crazed arsonist, or maybe a really terrible cultist of some bizarre fringe sect or something. Just a crazy person, setting fire to the street, and it could have been much, much worse if it weren't for the brave heroes of the Compact. Some folks just want to watch the world burn.