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Presenting "Things That Make You Go Hmmm"

With David Rosenberg's free economic updates soon to be a thing of the past, now that the Gluskin Sheff strategist has decided to go premium, it seemed there may be a large void needing to be filled in the economic commentary space. It appears said void may have already been filled, by Grant Williams, publisher of the fantastic Things That Make You Go Hmmm report which combines individual commentary and linked content in one delightful package, who after a brief hiatus is now back online and making readers go hmmm. Whereas Williams previously published within the editorial confines of bulge bracket wannabe Jefferies, he has since liberated himself (and his cynicism), and is now publishing, as he puts it, "under my own auspices and without any compliance filter." Zero Hedge agrees that those are certainly the best auspices and the best filter. So for those for whom TTMYGH is a new summary, here is your introduction.



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Latest And Greatest Tsunami Video

Yet another clip of the March 11 tsunami advent has emerged and this one could be by far the most jarring. Nothing but the brute force of nature here. And this is what central planners believe can be papered over with a few trillions monetary ones and zeroes?



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Guest Post: What If "What Everyone Knows To Be True" Is Wrong?

There is always someone on the other side of a trade, of course: someone originated the option or futures, and someone sold the shares that someone else bought. The problem arises when a "can't lose" trade rolls over, then there are no longer enough buyers to offset the panicky, underwater sellers who are overleveraged via margin or other forms of debt. This is in effect what still plagues the U.S. housing market: there are still plenty of sellers in the wings, hoping to unload properties, and a dearth of buyers willing to gamble that "the bottom is in." Even worse, there is a dearth of buyers qualified to buy properties at today's prices. That will become even more of an issue as interest rates rise. As a reminder of how things can play out at real bottoms: in the depths of the 1930s Depression, a Manhattan skyscraper was sold for the original cost of its elevators. In other words, the rest of the building was "free." People talk about replacement cost as a metric of value in homes and buildings. In other words, this house can't drop much below $200,000 because it would cost that much to buy the lot and construct a replacement house. That is another thing "everyone knows to be true" that is actually not true at real bottoms. Stocks can end up trading for less than the cash the company is holding.



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On The Ground Reports From Japan

Following much ongoing confusion about a fact-based reality in Japan, leading many to express somewhat extremist opinions due to persistent scarcity of facts, here are three much needed clips showing the sentiment on the ground in Tokyo courtesy of the mostly impartial BBC News.



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Following The Earlier TEPCO Reporting Flap, Here Is A Simple Way To Resolve The True Radioactivity At Reactor 2

Here is a simple way to clear up the flap over the earlier "false" reporting on whether or not TEPCO screwed up by releasing the figure of 1 sievert of radiation as emanating from the water pool at Reactor 2. From the IAEA: "As previously reported, three workers at the Fukushima Daiichi
nuclear power plant were exposed on 24 March to elevated levels of
radiation. The IAEA has received additional information on the incident
from the Japanese authorities. For two of the three workers, significant skin contamination over
their legs was confirmed. The Japanese authorities have stated that
during medical examinations carried out at the National Institute of
Radiological Sciences in the Chiba Prefecture, the level of local
exposure to the workers’ legs was estimated to be between 2 and 6
sieverts.
While the patients did not require medical treatment, doctors decided to
keep them in hospital and monitor their progress over coming days." All that needs to be disclosed now is how long these workers were in the contaminated water for. If it was between 2 and 6 hours, and the cumulative exposure was 2 - 6 sieverts, it would be rather consistent with the reported record exposure of 1 sievert/hour. If it was shorter, and the upper estimate is correct, the exposure could be as high as 6 sieverts/hour, a figure, based on the prior methodology, about 60 million times higher than permitted.



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Exit Polls Indicate Merkel's CDU Set To Lose Key Baden-Wuerttemberg Regional Election; SPD, Greens To Win With 48.5% Of Votes

And more bad news for European cohesiveness. From Reuters: "Chancellor Angela Merkel's Christian Democrats
will lose control of Germany's most prosperous state to the centre-left
opposition in a major upset to her centre-right government, according to
TV exit polls
.
  In Baden-Wuerttemberg state, the Greens and Social Democrats (SPD) looked set to win a combined 48.5 percent in an election on Sunday where Japan's nuclear disaster played a major role. The centre-left has long pushed to end the use of nuclear power. The Christian Democrats (CDU) and their Free Democrat coalition partners, big backers of prolonging the use of nuclear power in Germany, won a combined 43 percent of the vote, network ARD said shortly after polls closed at 1600 GMT." For Merkel, this is probably the last nail in the political coffin as the troubled premier is no longer able to placate either a broader Eurozone demanding far greater taxpayer concessions from her citizens in preventing the fall of the Euro (and the return of the Deutsche Mark, which would surge upon reimplementation, crippling Germany's export market, as a the old system reasserts itself), nor can she convince her own people that she has their best interests in mind, with the latest flap over nuclear power plants certainly not helping.



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Nash Equilibrium Fail: Ireland Wants Senior Bondholder Haircuts

And so the great decade + old eurozone game theory project of Europe is about to come crashing down. Following Europe's decision to leave Ireland out in the cold, due to the country's ongoing unwillingness to pander with unilateral concessions to the global banking syndicate, the Emerald Isle has apparently decided to call the EU's bluff. Reuters reports: "Ireland's government wants to impose losses on some senior bondholders in Irish lenders to reduce the burden on taxpayers from a prolonged banking crisis, a senior minister said on Sunday...Analysts widely expect the government to impose losses on senior
bondholders in nationalized lenders Anglo Irish Bank and Irish
Nationwide because they have sold their deposits and are being wound
down. Hitting any unsecured unguaranteed senior bonds in Bank of
Ireland and Allied Irish Banks (AIB), which amount to over 11 billion
euros, would be more controversial
." Yet most controversial would be the fact that the Eurozone is now unable to control its wayward son, which seems set on actually following the will of its people than that of the plutocrats. And just like Tunisia set a precedent to the MENA region with an act many thought was unthinkable, should Ireland follow through with this near-revolutionary act of a debt impairing chain-reaction, most other countries are set to follow suit, leading not only to the inevitable end of the one currency block, expected for so long by many euroskeptics, but yet another US taxpayer funded bailout, as was revealed on Thursday of last week, when we observed the upcoming "threat to the international monetary system" as predicted by the IMF.



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Radiation At Fukushima Water Jumps To Over 1 Sievert, 10 Million Times Higher Than "Normal", Plutonium Tests Ordered For The First Time

And the hits just keep on coming. Earlier today, TEPCO announced that the radiation in the water pool of reactor #2 had been measured at 1,000 millisieverts/h (1 sievert/h) - the highest reading so far recorded since the Fukushima disaster started. As a reminder, the U.S. Environmental Protection Agency says a single dose of 1,000 millisieverts is enough to cause haemorrhaging, which a ten hour exposure to this dose is enough to result in death. "The situation is serious. They have to pump away this water on the floor, get rid of it to lower the radiation," said Robert Finck, radiation protection specialist at the Swedish Radiation Safety Authority, speaking before the operator expressed doubt about the high reading. "It's virtually impossible to work, you can only be there for a few minutes. It's impossible to say how long it will take before they can gradually take control." From Kyodo: "Plant operator Tokyo Electric Power Co. said the concentration of radioactive substances of the puddle was 10 million times higher than that seen usually in water in a reactor core, but later decided to reanalyze the data because it found some errors." And keep in mind this is the idiocy that is resulting after last week the brilliant geniuses at TECPO came up with the plan to water each and every reactor: now it's time to remove the water, but the water just happens to be so radioactive, nobody can remove it. In the meantime the leak into the ocean keeps getting worse: "Radioactive iodine-131 at a concentration 1,850.5 times the legal limit was detected in a seawater sample taken around 330 meters south of the plant, near a drainage outlet of the four troubled reactors, compared with 1,250.8 times the limit found Friday, the agency said." And while Zero Hedge has long believed that the only possible outcome here is the Plan Z concrete entombment, which will guarantee an 80 km non-inhabitable radius around Fukushima in perpetuity, finally the "experts" are warming up to this idea: per Reuters: "Experts say there is still too much heat in the reactor cores and spent fuel at the Fukushima plant for a similar last-ditch solution to be considered yet."



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US Naval Update: CVN 65 Enterprise Abandons Libya, Reinforces CVN 70 Vinson In Straits Of Hormuz

Wonder why the administration made such a stink of reducing the US airborne presence around Libya, and handing it off to France, Italy, Canada and Turkey? Here's the answer: the CVN65 Enterprise which last week was within striking distance of Libya, has quietly left the Red Sea and is now virtually swimming in the wake of CVN 70 Vinson in the Strait of Hormuz. Because obviously whatever is about to happen in the Persian Gulf will need not one but two aircraft carrier formations. And meanwhile in Japan the Washington is doing all it can to put radiation free miles between itself and Fukushima, even as the Essex, chock full of marines is sitting on the coast waiting for orders.



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Videos From The Violent Syrian Revolution: Will A "No Oil Zone" Mean Syrians Can Kiss Dreams Of A "No Fly Zone" Goodbye?

The one revolution currently rocking the Levant region (more fitting than MENA as it include Greece which at last check was also not all that peaceful, as well as Italy, which soon won't be all that peaceful either) that few are talking about is that of Syria, which has been put on the backburner as no holy crusade is currently in place to liberate its people, but, far more importantly, its oil, nor does it even have oil, is that of Syria. Which is unfortunate because all the public outcry crusaders who just look for their chance to express their disapproval of the latest toppling regime (after quietly sitting on the sidelines for ages saying nothing), would have a field day with what is going on in Damascus, but primarily the city of Daraa for the time being. Per Haaretz: "Syrian security forces killed on Saturday two protesters who tried to
torch the ruling Baath Party headquarters in the port city of Latakia,
rights activist Ammar Qarabi told Reuters in the Egyptian capital. Protesters set fire to offices of the ruling
party in southern and western Syria on Saturday, burning tires and
attacking cars and shops in a religiously mixed city on the
Mediterranean coast, according to accounts by government officials,
activists and witnesses. More than a week of protests centered in Daraa exploded into nationwide unrest Friday when tens of thousands of protesters marched in cities, town and villages around the country, posing the greatest threat in decades to the Baath party's iron-fisted rule." Unfortunately for the people of Syria, they should prepare for the same kind of retaliation that Gaddafi rained upon his own discontents, until France, pardon the UN, pardon the US, pardon NATO, pardon not the Arab League, pardon total chaos, decided to step in and order a no fly zone. Alas, rule #1 in international economics: "No oil Zone", means no "No fly zone." Syria, you are on your own.



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London Rioters Attack Ritz Hotel, Fail To Dent Reinforced Glass

Just your typical London protest. The Telegraph has recorded the attempted break and entry into a bank, which however proves too much for scattered "anarchists" courtesy of reinforced glass. The same can not be said for the Ritz hotel unfortunately.



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Of The Fed's $120 Billion In "Other Assets" - An $80 Billion Gift To Primary Dealers?

Following our latest Fed balance sheet update, where we get another confirmation that for another week the Fed's assets have hit a fresh all time record (Bernanke now owns nearly $200 billion more Treasurys than China), there are two items that we believe deserve far closer scrutiny. The first is the as expected drop in MBS and Agency prepayments, which after seeing an initial surge in activity when rates were low enough to merit prepaying existing mortgages, has now plunged. In fact in the last several weeks the average prepay activity is roughly half of what it was in the September-December period. This is critical as it impacts the amount of debt the Fed can monetize via the QE Lite component of the ongoing monetization procedure. Should this weekly prepayment amount remain constrained, the Fed will have far less of a marginal impact on share prices (which is what POMO ultimately is) then if QE Lite was working at its expected $25-35 billion a month monetization run rate (in addition to the $70-80 billion from QE 2). Yet far more questionable is the recent surge in "Other Federal Reserve Assets" - an observation we have commented on previously, yet which we attributed merely to capitalized accrued interest on the Fed's portfolio. However, following the recent remittance of tens of billions in interest expense from the Fed to the Treasury we now know that is not the case, so we kindly request that the Fed answer the following simple question: just what is the key driver in the growth of this asset category, which in the week ending March 23 hit a fresh all time high of $120.4 billion? In fact, we are rather stunned that nobody before has asked just what "other assets" comprise a line item that is greater than the GDP of about 80% of the world's countries.



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TEPCO Admits To Another Cover Up As Radioactivity In Seawater Near Fukushima Soars To 1,251 Above Legal Limit

The latest news out of Fukushima confirms fears that irradiated water containment at the radioactive plant has been complete breached, after Radioactive iodine-131 at a concentration 1,250.8 times the legal limit was detected Friday morning in a seawater sample taken around 330 meters south of the plant, near the drainage outlets of the four troubled reactors, the government's Nuclear and Industrial Safety Agency said Saturday. As Kyodo updates: "The level rose to its highest so far in the survey begun this week,
after remaining around levels about 100 times the legal limit. It is
highly likely that radioactive water in the plant has found its way into
the sea, TEPCO said." It's all good though: the government has a prepared strawman for this unprecedented surge in radioactivity as well."Radioactive materials ''will be significantly diluted'' by the time they are consumed by marine species, the agency said, adding it would not have a significant impact on fishery products as fishing is not being conducted in the area within 20 kilometers of the plant because the government has issued a directive for residents in the zone to evacuate." But none of this matter as we get the latest confirmation that no news coming out of the stricken plant can be trusted: "TEPCO's Fukushima office acknowledged Saturday that it had known earlier that the radiation in the underground level of the turbine building of one of the reactors was extremely high, but had not made the information available to pertinent parties."



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Follow London's Biggest Demonstration In A Decade As 300,000 Protest Austerity And Public Sector Cuts

After leading to the collapse of the Portuguese government, anti-austerity anger is now ramping up at the very heart of the old continent, where the biggest demonstration in over a decade has struck in London. Per the Guardian: "More than a quarter of a million protesters against public sector cuts are expected to flood central London today in the biggest political demonstration for nearly a decade. Police sources, normally cautious about estimating numbers, said last night they were braced for up to 300,000 people to join the march – far higher than previous forecasts from TUC organisers. More than 800 coaches and at least 10 trains have been chartered to bring people to the capital from as far afield as Cornwall and Inverness. The Metropolitan police, under fire for their use of kettling in previous protests, said "a small but significant minority" plan to hijack the march to stage violent attacks. Organisers, however, insist it will be a peaceful family event. Union members are expected be joined by a broad coalition, from pensioners to doctors, families and first-time protesters to football supporters and anarchists. Ed Miliband said the government was dragging the country back to the "rotten" 1980s. Labour is calling today's event the "march of the mainstream"." Some of the protesters, already pigeonholed as "anarchists", have already become unruly as a splinter group has formed on the iconic Oxford street where it is engaged in altercations with the Police, including throwing smoke bombs, lightbulbs filled ammonia..



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Charting The Week Ahead: Triple Divergence In EURUSD, Fib Support Holds In S&P, And More

John Noyce is back with his bag of charty goodness in his latest "Charts that matter." While the whole presentation is provided for our readers' perusal, the three charts of note are those of the EURUSD (where we  observe a potentially bearish Triple Divergence), the DAX, which is an important leading indicator of risk, the USDJPY where following last week's fireworks, things appear to have stabilized somewhat, and naturally the S&P, where an important Fib support held, and with the 55 DMA resistance now turning to support. Of course, none of these charts actually matter - the only thing the world cares about is whether all engines are go for Bernanke to spread his Wealth EffectTM some more.



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