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Kyodo Reports Radiation Eight Times Normal Near Fukushima Nuclear Plant, 1,000 Times Normal In Control Room

Per Reuters, which cites Kyodo news agency, the radiation levels near the main gate at the Fukushima Nuclear Plant are already 8 times normal. This probably supersedes a prior report by Kyodo according to which radiation could already have been released at the plant. That's pretty much a given the rather dramatic surge in ambient gamma waves. And Reuters has just released this unpleasant development: "Radiation levels in Fukushima Daiichi plant central control unit is 1,000 times normal, Kyodo says"

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According To Goldman, Tsunami Puts 2011/2012 Japanese Rice Crop At Risk, Sees Vicious Snapback In Crude Prices

A just released report by Goldman's Jeffrey Currie attempts to quantify the impact of the Tsunami on the Japanese economy from a commodity standpoint. Currie summarizes his conclusions as follows: "Assuming that the broader power grid infrastructure has not been permanently damaged, we believe today’s events are likely to put upward pressure on residual fuel oil and diesel cracks, LNG, UK natural gas and rice; downward pressure on naphtha cracks and Dubai spreads relative to other crude grades." Yet the thing we found more interesting than energy related bottlenecks was the disclosure toward the end of the report discussing the threat to the Japanese rice harvest: "In addition to the damage to energy infrastructure from the earthquake, the tsunami also impacted rice producing regions in Japan. While Japanese rice inventories are large, this puts the 2011/12 crop production at risk and may in turn drive Japanese rice imports higher, posing upside risk to current prices." Granted, Japan is not a big exporter of rice, but it is a top 10 consumer. Should the country's consumption (which is estimated at around 9 million metric tons) need to be satisfied by a surge in imports, and with the price of rice already dependent on the margin on speculative money, this could be the catalyst that send the grain, which has plunged in price over the past month, finally break beyond any potential manipulative price suppression schemes.

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Federal Magistrate Decision Renders Twitter Privacy Obsolete

As we reported two months ago, the DOJ had secretly subpoenaed the personal information of several "twitters" who may have had a relationship to Wikileaks. Among the people to discover they were the subject of a secret subpoena was Iceland Member of Parliament Birgitta Jonsdottir. Furthermore the only reason those being investigated even realized this was the case is because Twitter notified them, unlike other social networks which may have been also subpoenaed, yet have remained quiet so far. Twitter had said: "We're not going to comment on specific requests, but, to help users protect their rights, it's our policy to notify users about law enforcement and governmental requests for their information, unless we are prevented by law from doing so." Alas, today AP reports that while this inititial request had been challenged by objects of the inquiry, "a federal magistrate ruled that prosecutors can demand the Twitter account information of certain users in their criminal probe into the disclosure of classified documents on WikiLeaks." Simply said this means that virtually anybody's electronic communication on Twitter, and most certainly elsewhere too, can be intercepted by the DOJ for whatever reason, without anyone having to be notified of this gross privacy breach. It makes one wonder just how many additional benefits is JPM getting from its 10% investment in Twitter?

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Guest Post: When Things Fall Apart

There is no pleasure in "I told you so" when things fall apart. Many of us recognized the artifice and folly of the credit-housing bubble "Bull market" as early as 2004, but few cared to listen because they were deeply complicit in the Status Quo's legerdemaine: their home was rising in value, their pension fund was being fattened, their sales were rising on the onrushing tide of abundant, cheap credit, their tax revenues were soaring, and their benefits/perquisites were notching higher with every tick up of the stock and housing markets. Faith in a centrally planned economy operating under the flimsy guise of cartel-State "capitalism" was supreme, as were greed, self-absorption and an overweening sense of entitlement to consumerist "prosperity." Both corrupt political parties enthusiastically embraced the bubble-culture of fraud and speculative excess, for they too benefited from the illusory glow of "permanent economic growth" and the ever-richer contributions from the fiefdoms, cartels and Financial Elites who gained the most from the credit-based frenzy. The "prosperity," "growth" and "wealth" were all illusory, but the pain is real. Hardworking, dedicated, smart, experienced people are being laid off into an economy with few prospects. Young people are graduating from university into the same bleak atmosphere of a paper-thin facade of magical thinking and propaganda finally crumbling. Things are falling apart because the economy has been undermined by financialization and the extreme concentrations of capital and State power. I think these charts tell the story rather well...

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As Greece Embarks On The Road To Hades, Here Is How To Trade The European Implosion

While a crippled Europe continues to gladly enjoy being in the shadow of Fed-driven revolutions and natural disasters, its time in the sun is coming to an end. Soon everyone will realize that just today, 2 Year Greek bonds traded at all time wides of over 17%. That's right - holders of Greek bonds for 2 years will be rewarded with a 17% gain if the country actually repays these at maturity. Alas, for those who are paying attention, this has a snowball's chance in Hades of happening. And speaking of Hades, Knight Capital's Alfredo Viegas has released a note explaining not only why Greece has just passed the Rubicon following the release of its disastrous budget deficit details earlier, but also advising those who care, how to be positioned to best profit from Greece's descent into Hades, which will be promptly followed by the rest of the Eurozone. His advice: short Spanish and Italian cash bonds (this trade will work just as well using horrible, evil CDS which no politician still understands and therefore continue to be the scapegoat for everything).

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Some Bad And Some Good News On That Radiation Leak

First the bad news:

  • It is coming. According to Japan's trade minister a leak will likely take place as the pressure is released imminently by TEPCO.

The good news:

  • The radiation released will be small.

It is unclear if the same measurement methods as are used in the calculation of Core CPI will be applied in calculating leakage. As to whether this "small amount" of radiation is alpha, beta or gamma, those interested to find out will get an answer based on the amount of extra fingers grown over the next month.

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Former Goldmanite And Head Of New York Fed Bill Dudley: "Let Them Eat iPad"

Earlier today, Goldman New York Fed plant, and Jan Hatzius predecessor, Bill Dudley, emerged from his ivory tower to make a trek to Queens to deliver prepared remarks written by some intern, discussing the prospering state of the New York burrough (speech link). Unfortunately for the multi-millionaire, things quickly went from Unicorny and Rainbowy to horribly wrong. During the Q&A, one audience member asked: "When was the last time, sir, that you went grocery shopping?" A stunned Dudley did not have the heart to elaborate that the caviar and ambrosia eaten on the Dudley family table is hand delivered through the Fed's G-6 from Kamchatka, so instead, as Reuters reports, he "tried to explain how the Fed sees things: Yes, food prices may be rising, but at the same time, other prices are declining. The Fed looks at core inflation, which strips out volatile food and energy costs, to get a better sense of where inflation may actually be heading." At which point he proffered his sage advice to the increasingly restless natives: "Let them eat iPad."

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Radiation Leak Feared At Fukushima Nuclear Power Plant As Radiation Level Rising

Per CNN: Radiation level rising in Fukushima No. 1 nuclear plant turbine building, Kyodo News Agency reports.

That's not good.

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Gold And Silver Surge On QE3 Expectation Rerack

Who'd a thunk that BTFD works for commodities even better than it does for stocks. Desks now advising clients that QE3 is likely (whether or not due to this article is irrelevant) and the result is presented below.

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Skyscrapers vs Earthquake: The Benefits Of Reinforced Concrete

This is why people tend to pay a premium for "Made in Japan"...

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It's Official: Wisconsin Gov. Walker Signs Bill Taking Away Public Worker Collective Bargaining Rights.

While the signature of Governor Walker to the Bill that had passed both the Senate and the Assembly, was inevitable, it is now also history. The first shot across the bow at America's unions is now official. What happens in Wisconsin next is anyone's guess. Probably nothing much. And any union member who may consider protesting today should carefully evaluate whether they should be doing so at the Senate building or on Wall Street/D.C. where the root of America's insolvency, and all of its financial problems stems from.

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Market Down => NYSE Börse Breaks

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$440 Billion Drop In Shadow And Conventional Banking System Liabilities In Q4 Gives Bernanke Carte Blanche For QE3

When we last updated on the size of the shadow banking system, the financial "system" that is far more important to the economic prosperity of the US economy than the traditional liabilities held by conventional banks, we observed that after declining for 9 consecutive quarters, having hit a peak of $21 trillion in 2008, the shadow banking system had reached an inflection point and had posted a very modest increase at around $16 trillion in total liabilities in the third quarter of 2010. Well, following yesterday's Z.1 release, it seems the bulk of the data was revised, and it appears that not only was last quarter's upward pre-revision data a fluke, when in reality it was another decline of $191.7 billion, but the Q4 data further reinforced the negative trend, with shadow liabilities declining by an even greater $206.4 billion. The components responsible for the decline were ABS Issuers whose liabilities declined by $94 billion, securities loaned by funding corporations declining by $40 billion and lastly repos, which dropped by $79 billion. In other words, speculation that the Fed had achieved its goal of stimulating an organic reflation in the shadow banking system at which point it would be able to end QE and hand off releveraging over to the private sector were premature, and recent data confirms that the Fed has no choice now but to continue with its quantitative easing process, as it does more of the same: take capital from the public sector and proffer it to Primary Dealers in an attempt at ongoing asset reflation, which will, the theory goes, be matched by a comparable hike in liabilities. Botton line - Bernanke has once again failed to spark a "virtuous leveraging cycle" even with QE2, which after all is the fundamental goal of the Fed, far beyond even getting the Russell 2000 to 2000. Which means that the Fed will have no choice but to continue "printing" money, and monetizing bonds, as it (in conjunction with the Treasury of course) continues to be the only incremental source of leverage, and thus money, for the world's biggest economy.

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Will The Japanese Earthquake Be The Straw That Breaks Europe's Back?

Two months ago many were scratching their heads when Japan announced it was buying Eurozone bonds.  After all - why would Europe want to have a marginal buyer (or as the case may be seller) of its debt be the country that is known by all to be the most indebted entity in the world? Of course, it became promptly clear that it was not the Japanese government doing the buying, but mostly its financial companies, with an emphasis on its insurance and reinsurance companies. Fast forward to today when Japanese insurance companies are getting pummeled in local trading on concerns the payoffs to the decimated Japanese infrastructure will be unprecedented. So what will happen? Why a scramble for liquidity of course, just like we saw back in September 2008, when cash stricken companies sold all their liquid assets first, resulting in a toxic loop of self-fulfilling prophecy selling which almost tobbled the $25 trillion shadow banking system. And what will said Japanese insurance companies sell first? Why the very same Eurozone bonds they acquired with so much pomp and circumstance, by the minions of the insolvent Eurozone, back in January of course. Furthermore, now that Japan will have no choice but to launch a mini round of Quantitative Easing and flood the market with JGBs, there will be a dramatic spike in supply for sovereign paper, which of course means yields across the board will rise. Which begs the question: if an earthquake flips its wings in Japan, does the Eurozone go bankrupt, especially in the month when its most insolvent countries face billions in debt rollover requirements, tens of billions in maturity funding needs, even more in deficit funding requirements... and no cash?

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