Reuters

Read about all the latest developments in the fiasco that keeps getting worse, more improvised, and more out of control by the day.

The situation at the Fukushima Daiichi nuclear complex is getting worse in many ways, but better in some ways. Here's a quick roundup ...

After prior reports that radiation in and around Fukushima had breached the dreaded barrier of 1 sievert/hour were attributed to some PR apparatchik not knowing how to carry the decimal comma, we once again get confirmation that previous attempts to refute what some saw merely as scaremongering, were in fact more lies. According to Reuters, the soon to be nationalized TEPCO said it had found a crack in the pit at its No.2 reactor in Fukushima, generating readings 1,000 millisieverts (1 sievert) of radiation per hour in the air inside the pit. "With radiation levels rising in the seawater near the plant, we have been trying to confirm the reason why, and in that context, this could be one source," said Hidehiko Nishiyama, deputy head of the Nuclear and Industrial Safety Agency (NISA), said on Saturday. He cautioned, however: "We can't really say for certain until we've studied the results." Since at this point nobody believes anything coming out of Japan and TEPCO, most are just expecting for the concrete to come: "TEPCO has begun pouring concrete into the pit to stop the leak, he said." Alas, as always happens when horrible plans go awry, this latest attempt to fix the problem with the nuclear (pardon the pan) "solution" is failing. "Public broadcaster NHK said late on Saturday that water was preventing the concrete from hardening and the pit was still leaking." In other words, recent horrendously planned attempts to cool the reactor by pumping water on it may well scuttle the Plan Z option of entombing the reactor. And if that doesn't work, then Japan is straight out of plans.

A federal board will soon propose that U.S. states disclose more about their pension funding as worries grow whether states and municipalities can pay for their employees' pensions...

Unprecedented strength in corn continues, with futures rising by 4.5% on Thursday, following strong demand for corn to make food and fuel. That demand has whittled down the corn supply, which was already at its lowest level in 15 years in the United States, the world's top exporter of the grain. Per Reuters: " Demand has been strong from the livestock and ethanol sectors, and from importing nations, including China which is believed to have purchased 1.25 million tonnes last week. This week's rally, triggered by the U.S. Agriculture Department's lower-than-anticipated quarterly U.S. corn stocks estimate on Thursday, rekindled worries about food price inflation. The near-term supply concerns have largely overshadowed USDA's forecast that U.S. farmers will plant the second-largest corn acreage since 1944." Yet whether due to fundamental reasons or pure momentum, Goldman has just added more fuel to the fire by raising its corn price forecast, after having lowered it a whopping 10 days ago, from $6.00/bu and $5.80/bu to $7.80/bu and $7.00/bu, for 6 and 12 months respectively. Of course, all those who followed Goldman's recent downgrade made some very inverse profits. So it may well be time to trade against the squid yet again.

The phrase “Black Swan” is really making the rounds these last few months. Uttering the term a year ago would have earned you a collection of confused looks and a general attitude of disinterest. Now, people behave as if they had learned about economic shockwave events and the global domino effect when they were in kindergarten. The problem is that when this kind of terminology hits the mainstream, in most cases it comes prepackaged with dumbed down and diluted definitions which promote an inadequate, cartoonish understanding of the circumstances. To be sure, most Americans are well aware that the world’s political and economic foundations are about as stable as fresh pudding under a heat lamp. The problem is that they are now being conditioned by the mainstream media to view the idea of collapse as “cinematic”; a kind of live action fantasy in which we all get to play the part of the audience, watching safely from the dark in our cushy theater seats with a bag of overpriced popcorn, Dolby surround sound, and a hot date to keep us company during the boring parts. Three years ago, even mentioning the idea of a breakdown in society or a financial catastrophe beyond a minor recession earned you the label of “doom monger”; a rather inept and naïve attempt on the part of the MSM to silence any economic analysis that stepped outside the establishment Keynesian framework. Today, I turn around to look at a magazine stand at the airport and right in front of me is Newsweek openly declaring “Apocalypse Now”!

Well, as we first supposed three weeks ago when the stock was 80% higher, the CDS was in double digits, and the "situation was contained", TEPCO is about to be nationalized. According to the Mainichi newspaper Japan's government plans to take control of Tokyo
Electric Power Co , the operator of a stricken nuclear power plant, by
injecting public funds. However, it appears that Japan has learned a thing or two from Tim Geithner and the concept of partially pregnant: " But the government is unlikely to take more than a 50 percent stake in the company, an unnamed government official was quoted by the daily as saying. "If the stake goes over 50 percent, it will be nationalised. But that's not what we are considering," the official was quoted by the paper as saying." To semi-quote Hans Gruber: you asked for miracles, I give you... the Japanese government. Nonetheless, how the government will deal with what is now an official groundwater spill of radiaction is beyond us.

Pimco's El-Erian is doing his latest daily media tour, this time holding a live chat with Reuters' Chrystia Freeland. The live interview can be watched live here.

Two rather unpleasant headlines for the Old World from Reuters:

• There has been disagreement in ECB governing council over new liquidity facility
  
• ECB will not announce plans for a new liquidity facility to help Irish banks on Thursday

EURUSD has now erased all of the CPI-beat gains. Bond selling picking up.

In the first economic metric since the Japanese earthquake struck, Japanese manufacturing activity slumped to a two-year low in March and posted its steepest monthly decline on record, confirming all the worst fears about supply chain disruptions and production operations, according to the Japanese PMI released on Thursday. From Need to Know News: "The 6.5-point drop in March was the largest on record, surpassing the falls seen after the collapse of Lehman Brothers in September 2008 and the U.S. terror attacks in September 2001, MarkIt Economics said, adding that the March PMI index was the lowest since 41.4 marked in April 2009. Kohei Okazaki, economist at Nomura Securities, said March industrial output due out on Apr. 28 is expected to show a m/m fall of at least 10%. The PMI index is closely correlated to industrial output released by the Ministry of Economy, Trade and Industry. Markit, a UK-based research firm, conducted the latest survey between March 11 and March 25, and only 67% of those polled responded. It releases manufactures PMIs for 25 areas in the world every month." And in addition to all the collapse in all output metrics, adding insult to injury is the confirmation that inflation is now ravaging the land: the input price index increased to 65.2, the highest since September 2008, due to higher costs of raw materials such as crude oil and naphtha. It now appears that Japan is about to have the worst stagflationary episode in its history ever.

Libyan foreign minister Moussa Koussa arrived in Britain on Wednesday to seek refuge after quitting the government in protest against leader Muammar Gaddafi's forces attacks on civilians, a friend told Reuters. "He has defected from the regime," said Noman Benotman, a friend and senior analyst at Britain's Quilliam think tank. "He wasn't happy at all. He doesn't support the government attacks on civilians," he said. "He's seeking refuge in Britain and hopes he will be treated well," Benotman said.

While we expect the imminent attempt at refutation from Hillary Clinton, we can't help but admire the symmetry between the handling of this campaign and that of Afghanistan where Al Qaeda also ended up on the receiving end of US generosity.

The IAEA which is quickly outstaying its Japanese welcome by disclosing actual facts about the radioactive fallout around the power plant, has just announced that it has found excessive radioactivity in a village 40 km from Fukushima. While the news will not be a surprise to anyone watching the grand lie unfold over the past three weeks, it may hopefully force the Japanese government to finally relent and extend the evacuation perimeter from the existing 20 km, thereby actually preventing the needless loss of life in the long run. From Reuters: "Radiation measured at a village 40 km from Japan's crippled nuclear plant exceeded a criterion for evacuation, the U.N. nuclear watchdog said on Wednesday, the latest sign of widening consequences from the crisis. Criticized for weak leadership during Japan's worst crisis since World War Two, Prime Minister Naoto Kan has said he is considering enlarging the evacuation area to force 130,000 people to move, in addition to 70,000 already displaced."The first assessment indicates that one of the IAEA operational criteria for evacuation is exceeded in Iitate village," Denis Flory, a deputy director general of the International Atomic Energy Agency (IAEA), said.  "We have advised (Japan) to carefully assess the situation and they have indicated that it is already under assessment," he told a news conference." Hopefully our Japanese readers who have been following our coverage of this tragedy, which many have at times called "hysteric" even if always based on facts, have already evacuated long ago. Ultimately, it is one thing for the government to lie with just the Russell 2000's closing level being at stake. It is something totally different when people's mutagenic skills and/or life expectancy is at stake. When this is all said and done, Kan will likely be forced into exile for his tragic botching of an operationg whose only downside to disclosing the truth would have been a few hundred points in the Nikkei/S&P. Well, those losses will still come eventually, but at least thousands of lives would not have been put needlessly at risk in the meantime.

Let's hope that the SECOND complex is under control.

Earlier today Japan Geiger counters had a brief scare following news that a second radioactive powerplant - Fukushima Daini briefly emitted smoke. Reuters reported: "smoke was reported to be coming from a second
damaged nuclear plant nearby on Wednesday, with the authorities saying
an electric distribution board powering a water pump was the problem. The Daini plant several miles from the stricken Daiichi facility has been put into cold shutdown." And while the incident was subsequently said to be under control, a bigger issue for Japan's export market is the attempt to overturn the food export embargo which many countries have imposed on the island nation out of radiation concerns. That this is a major issue for Japan becomes apparent following disclosure that the country is already pushing hard to overturn this ban: "Japan called on the world not to impose "unjustifiable" import curbs on its goods as French President Nicolas Sarkozy was due to arrive on Thursday, the first leader to visit since an earthquake and tsunami damaged a nuclear plant, sparking the worst nuclear crisis since Chernobyl in 1986. In a briefing to the World Trade Organisation (WTO), Japan said it was monitoring radioactive contamination to prevent potential food safety risks and would provide the WTO with quick and precise information." Alas, with Japanese credibility non-existent following the abysmal treatment of the catastrophe over the past three weeks, one can see why the world may be a little skeptical. Add to this earlier news that according to the IAEA there "might" be recriticality in the reactor, and we can't wait to see Japan's March trade balance when it is released in just over a month.