Archive - Mar 14, 2011

Finally, we have a true liquidation flight to safety. We expect the Fed will come to market with an announcement before market opens tomorrow.

DJ Tokyo Metropolitan Govt: Radiation Level 23 Times Normal Amount
DJ Tokyo Metropolitan Govt: No Immediate Harm To Human Health From Radiation In Central Tokyo

Even the government is now saying high levels ...

In a scathing report, a former chief executive of the California public employee pension fund was accused of pressuring subordinates to invest billions of dollars of pension money with politically connected firms...

The only sensible thing to do in this complete market collapse

Per Kyodo, the northeastern winds have carried the radiation from Fukushima all the way to Tokyo. The only prudent thing that the authorities can do right now is to shut down all public equity markets immediately to prevent widespread panic resulting in a repeat of the liquidity collapse of 2008.

All hell is currently breaking loose following an explosion at reactor #2 and a another hydrogen explosion at reactor #4 per Kyodo, leading to a 16% drop in Nikkei futures as blind panic grips Japan. Kyodo essentially confirms there was a reactor meltdown as radiation levels at Fukushima 3 are now 400 times legal levels. And topping it all Japan's warning that all people within 30 kilometers from Fukushima should stay indoors and that the radioactive winds may reach Tokyo in as little as 8-10 hours. The BOJ has just intervened to prevent the yen from surging, as the following chart shows. Our prayers are with the people of Japan.

Arrrgggggh!

Are West Coasters in any danger?

For all who have been looking for realtime radiation data from Japan, you are in luck. Or maybe not, as the data unfortunately indicates nothing good. The System for Prediction of Environment Emergency Dose Information (SPEEDI) releases gamma radiation data online. The site is jittery and apparently not suited for major traffic which is why we represent several screen captures of the data. While it is not surprising that according to the website both Miyagi and Fukushima prefectures are entirely "Under Survey" as it makes sense that the government does not want to generate panic, SPEEDI has disclosed some tell-tale data about cities in Ibaraki prefecture, which is just a hundred or so miles north of Tokyo, and is just south of the ill-fated Fukushima prefecture. And the data is stunning: based on a N, NE and NNE wind direction (where it originates), meaning all coming from Fukushima, with a normal reading in the 80 nGy/h range, the city of Kounosu Naka is at 3,024, Kadobe Naka is at 2,416, Isobe Hitachioota is at 1,213 and many others are in the mid to upper triple digit range! Again, this is based on wind coming out of Fukushima and ultimately headed toward the capital. Indicatively, normal terrestrial plus cosmic gamma radiation is about 80 nGy/h.

RANsquawk Market Wrap Up - Stocks, Bonds, FX etc. – 14/03/11

And so the US Treasury has hit the proverbial paycheck to paycheck sustenance level. After burning $12.8 billion (without a change in gross debt) in cash today alone, and $75 billion in the month of March so far, primarily driven by a back end-loaded tax refund calendar, according to the Daily Treasury Statement, today's cash balance dropped to the scary level of just $14.2 billion. Without the benefit of incremental funding, this is the same amount that the Treasury burns on a good day! In other words, we take back what we said about the US Treasury existing paycheck to paycheck - Geithner now has to scramble to find funding on a day to day basis. If tomorrow operating outflows surpass $14.2 billion (and, again, the amount was $12.8 billion today) the world's "greatest" country (i.e. banana republic) runs out of cash, period. And as the following schedule indicates, there are no Long-Term bond issuances until next week (and the Bill issues are merely funding of rolling issues), we have some trouble seeing how the US Treasury will fund itself for the balance of the week...

When the auditor and CFO of a Chinese reverse-merger "company" resign, run for cover.

For Japan, it's nowhere near over, at least if the Pasadena Jet Propulsion Laboratory (creator of such brainiac things as the Mars rovers) is correct. While Japan has experienced numerous magnitude 5 and 6 aftershocks (405 in total to be precise), the big ones are still to come: "Japan's largest quake on record, which hurled a 7-meter (23-foot) wave
landward after one plate slid beneath another off the coast of Sendai,
had an 8.9 magnitude. The aftershocks will likely include at least one
measuring 8 and 10 of magnitude 7, JPL geophysicist Andrea Donnellan
said. All are many times larger than the 6.3-level New Zealand quake in
February that leveled the Christchurch business district and killed 160." Should we get more 8+ earthquakes, the likelihood of further tsunamis unfortunately jumps exponentially. And while scientists have long been expecting "the Big One" to hit Los Angeles so far without success, unfortunately carrying over that logic to Japan is more than naive.

A Nuke and a pothole. What does it mean?