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Latest Fukushima Headlines

The latest in the tragic story that just gets weirder by the minute.

  • TEPCO's mishandling of info on nuclear crisis 'unacceptable': Edano
  • Partial meltdown of fuel rods believed to be temporary: Edano
  • Radioactive water from No. 2 reactor due to partial meltdown: Edano
  • Contaminated water due to condensed steam, not reactor crack: Edano

And our personal favorite:

  • Locals within 20-km evacuation zone asked not to return for now

As this whole farce has gone beyond the surreal, we are now actively waiting for a cartoon Mr. Burns to show up at any ongoing press conference and announce that Springfield Nuclear Power Plant has LBOed Fukushima with Discount Window financing, at a #Ref! EV/EBITDA considering 9501.JP will not see any positive cash flow for millennia, and is appointing Mr. Sparkle (aka Homer Simpson) chief safety inspector.

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Bernanke On The Effects Of Oil Price Shocks, And Why The Fed Will Never Tighten In Response To Oil At Any Price

Curious what Bernanke thinks of ongoing oil price shocks? Wondering how long before the great Chairsatan will tighten in response to $120 Brent? The shorts answer - never. But don't take our word for it. Here is a paper titled by the eponymous nemesis of printer cartridge conservation, titled "Systematic Monetary Policy and the Effects of Oil Price Shocks" written when the urge for genocide was just a germ, a seedling if you will, back in the good old 1997. In it, Bernanke, who was yet to make his epochal statement about paradropping crisp Benjamins, makes it all too clear why neither oil at $120 nor oil at $1,120 will be enough to push the FOMC to hike: "an important part of the effect of oil price shocks on the economy results not from the change in oil prices, per se, but from the resulting tightening of monetary policy.” And there you have it: it is not the natural price response to a period of extensively loose monetary policy that is the issue, it is the Fed doing the right thing and ending the spigot that will be the end of the economy, sayeth the Bernank. And somehow this man runs the world...

Full paper below:

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Guest Post: The Governance Of A Free Society

Because the state is inherently antisocial, we make a distinction between government and governance. We distinguish, that is, between an overarching entity on the one hand and an underlying process on the other, answering Thoreau’s question by asserting that the next step “towards recognizing and organizing the rights of man” will be taken via the latter, i.e., via the self-organization that is but another term for the spontaneous order by which human society came to be in the first place and has evolved ever since, concomitantly evolving the rules necessary for its governance. And the fact is, all one really need do to know that this is true is to look around...If looking around does not suffice, of course, one can explore the matter in depth, mindful, however, that to whatever extent rational argument and empirical analysis fail to persuade, the fact remains that actual experimentation is prohibited. That is, the state does not allow free societies to be attempted for the simple reason that the state depends on the legalized theft of taxation for its existence. And simply put, a successful experiment in a free society would therefore threaten the state’s chokehold (for that is what it is) on humanity.

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Latest Japanese Supply Chain Disruption Summary

By now the only homo sapiens in the world who don't realize that the Japanese earthquake/tsunami/nuclear disaster will have profound implications on supply chains, inventory levels, profit margins, corporate bottom lines and broad economic output are Wall Street sell side analysts, who remain convinced that the Lemming view is the right one, at least until management teams start coming out, most likely in the upcoming week, and issuing profit warnings, conveniently blaming their declining profitability on Japan, the weather and other "one time items." In fact, in the old tried and true mentality of "he who defects first, loses the least" and the even trieder and truer mentality of "never let a crisis go to waste" we may suddenly see a scramble of management teams taking advantage of the economic adversity posed by Japan to buffer their own declining margins, therefore buying them at least a quarter before the market realizes that the entire QE2 inspired "golden age" is now over. After all, one would be stupid not to blame an event which most will perceive as non-recurring, thereby eliminating its follow through to the top and the bottom line in future quarters and minimizing the impact on the stock price. So while corporate treasurers and CFOs are wording their press releases appropriately, which we expect will start hitting the tape as soon as tomorrow, here is the most recent recap of known auto and electronic-maker disruptions as reported by Reuters.

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Goldman On Ireland And Paddy Paper: "Expect High Volatility"

When even Goldman's summary update on Ireland, which conveniently ignores today's news that the country may be preparing for a senior bondholder haircut and most certainly ignores last week's dump of Irish paper by LCH Clearnet from the repo market), is unable to find much if anything good to say about Irish bonds it is really time to get out of dodge (not like anyone was still left in it). The kicker in Francesco Garzarelli's just released analysis: "With around EUR 30bn worth of senior bonds maturing in 2011-12 (40% of
which is not already government guaranteed) and under continued
reduction of funding efficiency of the covered bond program, rolling
over maturing debt remains indeed one of the biggest challenges faced by
the Irish banks." Everything else is noise. Add to this the Portuguese government crisis, its own funding crunch, and the rapidly deteriorating German political crisis and Europe will be a very fun place over the next few months. In fact for once we agree with Goldman: "In light of this, Irish bonds [ZH: aka Paddy Paper] will continue to exhibit high volatility, in our view."

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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
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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