Archive - Mar 16, 2011

Reuters reports that Tokyo Stock Exchange firms are seeking market closure as the markets are too volatile. We agree. This means we may get the first post September 11 bank holiday as early as tonight. If so, keep an eye on the USDJPY. "Some foreign financial institutions are calling for Japan's stock market to halt trading, while the Tokyo Stock Exchange and Japanese financial regulators are planning to keep markets open, news agency Nikkei reported. The news agency said officials from more than 10 non-Japanese financial firms held a conference call Tuesday afternoon, with some firms calling for the market to be closed immediately, Nikkei reported, citing people familiar with the discussion. Some participants argued that the market was too volatile to continue trading, according to the report." And if Japan closes, watch for rolling market shutdowns westward as the sun rises over each individual stock market.

That's the total amount of money rumored to be injected by the BOJ in order to keep the Nikkei going for a whopping 4 days. According to PTI the BOJ has offered to add an additional ¥13.8 trillion today, to go with the tens of trillions already noted previously on Zero Hedge. If proven true, this would bring the total taxpayer backstop injected in just 4 days to $700 billion dollars! This whole exercise to keep the bank holiday away is starting to be just a little expensive to Joe Peasant.

The "powerline" meme which suddenly everyone is talking about, may be a little premature according to TEPCO:

• TEPCO CANNOT CONFIRM IF THE POWERLINE IS ALMOST DONE OR NOT

And in the meantime the NRC's Chairman Jaczko comes out swinging with some more bull in china shop statements:

• JACZKO SAYS PEAK NUCLEAR RADIATION LEVELS IN JAPAN `VERY HIGH'
  
• JACZKO SAYS PEAK LEVELS `LETHAL' AFTER `FAIRLY SHORT' EXPOSURE

And the worst news comes from AP:

• NO MORE MORE WATER IN SPENT FUEL POOL AT JAPAN NUCLEAR PLANT:AP

To all trading this headline driven market, our sincerest condolences.

While the future of the free market now hinges on some power cord which according to the AP "may solve the crisis", yet which we are a little skeptical is merely the latest deux ex machina that the prevaricating Japanese authorities are pulling out of their collective derrieres (remember the water and boron baths that were supposed to fix everything), a far more troubling report has emerged from the New Scientist (citing Kyodo) which may explain why TEPCO and Japanese authorities have been so tight lipped about the actual truth of what is happening at Fukushima. To wit: "The situation at Japan's Fukushima Daiichi nuclear power plant has
become extremely unnerving. The Tokyo Electric Power Company has now
admitted that the spent fuel rods could go critical - that is, a nuclear
chain reaction could restart." This would be an absolute worst case disaster which would make Chernobyl look like a dress rehearsal. Incidentally while hope and pray (to Ben Bernanke) may have been a viable strategy for stocks over the past two years, it will fail disastrously when dealing with a nuclear catastrophe.

Why is it that the average investor has a firmer idea of what his next $50 clothing purchase should be than his next $5,000 stock purchase?

Let's do it ourselves ...

Just a few more pips in the USDJPY and we are in uncharted territory. Below 79.75 in the USDJPY there is little support, except for the BOJ. Flash crashes in assorted index tracking futures are being witnessed everywhere, with an emphasis on Europe. In the meantime, following the rush to safety (in the Yen), the market is plunging to day lows, and the S&P has just turned negative for the year.

As the effects of the nuclear disaster in Japan remain unclear, panicked US residents are doing whatever they can to get their hands on Potassium Iodide pills. Distributors of the FDA recommended pills have run out of stock, with one manufacturer reporting that they sold some 250,000 individual packets in a single weekend. As we reported in What Your Grocery Store Will Look Like In An Emergency, at the onset of a far-from-equilibrium event, the essentials go first. In Japan, food and especially water have become scarce. The panic is spreading, and residents in the US, fearing a fallout cloud crossing the pacific and affecting Western states, are stocking up as well. The supply crunch and high demand has forced buyers to turn to the secondary market for acquiring the FDA recommended potassium iodide supplements, driving prices to upwards of $200 for a 14 dose packet. The suggested retail price offered by the supplier at NukePills.com is $10 per pack, indicating that demand has forced prices up as much as 1900% in just a few days.

Update: Britain follows US in recommending all nationals in Tokyo and north of Tokyo evacuate

More on the earlier news that Steven Chu "thought" a partial meltdown may have occurred, the just released news escalates the verbiage, which is now a definitive: "US Energy Chief says 'partial meltdown' occurred at the Fukushima Plant." The next step is his urgent recommendation for all US citizens who live within 80 kilometers of Fukushima to evacuate or take shelter indoors. Oddly enough, for the Japanese the evacuation radius is a fraction of this, but it is probably due to the government's recent arbitrary decision to pick a number of 250 millisieverts as the maximum safe threshold for NPP workers. Somehow we assume this means Japanese DNA is about 2.5 times more resilient to damaging alpha, beta and gamma radiation, than that extracted from the US and all other countries. We urge Japanese readers who have not already done so, to follow Chu's advice and to get the hell away from Dodge, and evacuate to a minimum 50 mile safe distance.

She thumps the bankers on the way out.

Another day, another alleged Chinese fraud emerges. Considering the track record of the Zero Hedge predicted cottage industry at exposing frauds such as RINO, CCME and CAGC, all of which are likely now halted in perpetuity, (much to the chagrin of their corrupt, idiot sellside analysts) here is the latest candidate for very careful diligence: China Integrated Energy (NASDAQ:CBEH), previously mentioned here when we discussed the clients of potentially compromised auditor Sherb. From the Sinclair Upton Research thesis: "In this report, we present irrefutable evidence that China Integrated Energy (NASDAQ: CBEH) is 1) transferring company funds to management insiders through fraudulent sham acquisitions and 2) fabricating its SEC financial statements. CBEH has transferred at least $35 million dollars of company cash by making acquisitions of shell companies owned by Gao Bo, who is the firstborn son of the CBEH’s CEO, Gao Xincheng. Given that the company has made over $134 million dollars in acquisitions and lease “prepayments”, our research has uncovered only a small fraction of the total amount being stolen from shareholders. There is also strong evidence that the financial results of all three segments of the company, refined products distribution, biodiesel, and gas stations, are overstated or even fictitious. The true value of CBEH is likely to be no more than $0.76/share, equal to the $37 million raised in recent secondary offerings, if the cash has not already been funneled out to related parties under the guise of even more acquisitions, gas station leases, and capital expenditures."

No, this is not a joke. From Bloomberg:

ZIMBABWE ANNUAL INFLATION SLOWS TO ANNUAL 3% IN FEBUARY

And this is without hedonics and seasonal adjustments. As a reminder the most recent UK inflation print was 4%. It is now obvious that the Central Banking cartel is doing all it can to destroy the pre-money valuation of TheOnion.com

It's about that time!

Just out from Reuters with some very overdue damage control.

• EU Energy Commissioner did not say a catastrophe was going to happen, he just expressed his fear - spokesman

The question is whether it is too late to backtrack now? The genie is fully out of the bottle...

The USDJPY just took out the 80.00 level, hitting an intraday 79.98. BOJ intervention expected. As a reminder, the 4/21/1995 low was 79.75