As a change of pace, today's news won't begin with something relating to radiation or Japan or even earthquakes. Instead, we'll start with news thousands of miles away in the Middle East.
Exactly as expected, yesterday's ~4% drop in oil was only but a glitch. It was inevitable that some sort of "issue" would arise somewhere and true to its form, we get news overnight out of Kuwait that a sandstorm is to blame for their decision to halt oil exports which was enough to pop oil back off its lows and towards $107 again. Apparently, sandstorms are uncommon in a desert nation. Apparently, peace is also uncommon in the Mideast.
Moving onto news a few thousand miles to the west, but still pertinent to the entire global markets is a great article from John Hussman about the Federal Reserve pulling the rug out from the markets sooner than anyone thinks with the ending of QE2. He does make some valid points as to why they will end, but since the Federal Reserve's unofficial mandate is to pump up the markets, we don't think QE will end, if for at least three reasons. 1) According to the good Dr. Deficit and Co., inflation remains "tame" and that's code word for "too low for us," 2) the economic recovery that you are supposed to see and feel everywhere has still not materialized as unemployment remains very high and 3) needless to say, any future disasters whether natural or man made will be met with more of the same Quantitative Easing. Read though the Fed Minutes from last week and you'll notice the two main points are: QE will not end and QE will not end. Therefore we conclude, despite the rumors, QE will not end - debt ceiling, real inflation be darned.
Interestingly, as reported here shortly after the March 11th catastrophe, the main concern for the media was the economic impact, and they repeated that this disaster would cost Japan up to $300 billion, "making it the world's worst natural disaster." What exactly makes it the "worst natural disaster?" Oh, yes - the amount of money this will cost. Not the human cost such as the Indian Ocean Tsunami in 2004 which killed upwards of 300,000 people or the 200,000 lives lost in Haiti. Ok. We got it.
Since economics is the name of the game, it is interesting to note two related stories out today, one from the Japanese Finance Minister who once again reiterated the point that Japan's economy would slow down significantly (from already slow) and the other from an unlikely source in Germany - Dieter Zetsche of Daimler - who said that the March 11th catastrophe was "unlikely to deal a long term blow to the recovery." Which raises two questions for the good doctor: What recovery is he talking about and do supply chains mean anything? It's always nice to see people still drinking the Kool Aid and wearing rose colored glasses with all the
Just as an example of how devastating the tsunami really was, a report from the Japan Times shows that more than 100 designated safe evacuation shelters were swept away or destroyed. The ironic part is, thousands of people fled to these safe shelters thinking they were safe and ended up losing their lives. To date, the total death toll stands at 27,000 is expect to rise.
Finally, two heartbreaking videos of the forgotten four legged animals of Fukushima. The first from CNN is a short video report on the dogs and cats roaming about and starving to death. The second is an amateur video showing hundreds of cattle still in their pens, many of them already dead from disease and starvation. We're sure this will be bullish for the global economy.
Update 10: RT is reporting news from environmental expert Christopher Busby says 400,000 people in a 200km radius will develop cancer. Words can not describe.
Update 9: Keep in mind, Treasury sold another $25B today at auction and is now $25B away from breaching the debt ceiling once again. Set your clocks.
Update 8: The cat is finally out of the bag. Japan's Prime Minister Kan, speaking to an adviser said "Evacuation zone will be uninhabitable" according to reports from Yomiuri. Now we know, there won't be too much economic growth from an area you can't use at all, a la Chernobyl. Amazing.
Update 7: ENE News Report a must see. Massive spike in radiation 100 miles from Fukushima after last weeks 7.4 massive
Update 6: Greece hanging by a toenail, uses everything they've got to avoid a default. Iceland on the other hand rejects plan to repay Britain and Netherlands. Should be interesting to watch.
Update 5: Keep you eye on Unit 1 reactor as pressure rises to 1 Megapascal. As a reference, should be near zero level. Is it getting ready to blow? Excellent link shows temps and other variables.
Update 4: Alert: Radioactive Strontium Detected More Than 30km Away From Fukushima.
Update 3: New video from Fairewinds Arnie Gundersen on RT, says "Japanese government has downplayed the extent of the disaster" and is three weeks too late. Worst case scenario - "Fuel pool catches fire."
Update 2: The surreal just got even more so. As the only news source that matters, ZeroHedge is reporting, the "banks are about to get away Scott-Free" with a mass fraudclosure settlement to be announced shortly with no penalties. Too Big To Fail also now means Too Big To Be Held Accountable.
Update 1: Pay no attention to the PIIGS' rising bond yields. As reported yesterday, China is going to save the whole EU from implosion by simply buying up every bad debt, bank and asset in Spain. Today, the situation just got exponentially worse. Seems direct liquidity injections are necessary to keep the banks open.