Thursday, 31 March 2011

A US Debt Default!!!

Baltic Dry Index. 1545 -27

LIR Gold Target by 2019: $30,000. Revised due to QE.

"Gold was not selected arbitrarily by governments to be the monetary standard. Gold had developed for many centuries on the free market as the best money; as the commodity providing the most stable and desirable monetary medium."

Murray N. Rothbard

We open this morning with America’s top private sector banker worrying about a US debt default, assumed until now to be highly unlikely as US politicians play DC politics over extending the debt ceiling. What does JP Morgan’s Jamie Dimon know that the rest of us don’t? Stay long precious metals. Maybe he thinks the Republican leadership is daft enough to toss a machine jamming spanner into the already fragile global economy. My prediction. If the US defaults on its debt, even temporarily, the next Lehman(s) will come flying out of the woodwork the same day. The G-20 finance ministers meeting going on in Nanjing China looks irrelevant if a US debt default is only days away.

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

March 30, 2011, 4:09 p.m.

Dimon: U.S. debt default would be ‘catastrophic’

Top GOP lawmaker, consumer advocate Warren spar on new bureau

WASHINGTON (MarketWatch) — If the U.S. were to default on its debt, it would be catastrophic occurrence that would snowball, a top U.S. banker said Wednesday.

“If anybody wants to push that button, which would be catastrophic and unpredictable, I think they are crazy,” J.P. Morgan & Chase Co. Chief Executive Jamie Dimon told a U.S. Chamber of Commerce gathering.

Dimon’s comments come as the Treasury Department is warning that the government could hit its $14.3 trillion borrowing limit as early as April 15. The White House and both parties on Capitol Hill are under pressure to rein in the deficit and the U.S. debt. But lawmakers are far apart on where to trim spending or increase revenue. See related story about budget talks.

In addition to fielding questions about the U.S. borrowing limit, Dimon targeted aspects of the Dodd-Frank bank-reform statute that he felt were hurting the U.S.’s economic competitiveness.

----Dimon also took issue with some of the derivatives rules that are being adopted based on the Dodd-Frank Act, focusing his comments on concerns that commercial companies may be forced to hold collateral, or margin, when conducting hedging derivatives transactions with big banks.

Back in inscrutable China, the US and France try a tag team approach to forcing the Yuan higher by dangling a carrot before the Chinese Panda. China is unlikely to swallow the tainted carrot. Stay long gold and silver. If China is now accumulating precious metals, which they are, like Jamie Dimon China now sees a US default ahead at some point.

"As fewer and fewer people have confidence in paper as a store of value, the price of gold will continue to rise."

Jerome F. Smith

U.S., France Signal Openness to Greater Role for Yuan at G-20 China Talks

By Bloomberg News - Mar 31, 2011 6:49 AM

The U.S. and France signaled openness to a greater role for China’s currency while stressing the importance of exchange-rate flexibility as Group of 20 officials met to discuss the international monetary system.

French President Nicolas Sarkozy said the yuan should be in the International Monetary Fund’s Special Drawing Rights, a unit of account derived from the value of the dollar, yen, pound and euro. U.S. Treasury Secretary Timothy F. Geithner said world powers’ currencies should be included “over time” so long as they have flexible currencies and free capital flows.

Chinese officials said that the value of its currency wouldn’t be a topic at today’s seminar and Geithner didn’t refer to the yuan directly in remarks prepared for the event in Nanjing, China. At the same time, he said the mismatch between flexible currencies and the “tightly managed” exchange rates of some emerging economies is the most important problem to solve in the international monetary system.

China will continue to proceed with currency reform at its own pace” and regardless of Sarkozy and Geithner’s comments, said Shen Jianguang, a Hong Kong-based economist at Mizuho Securities Asia Ltd., who formerly worked for the International Monetary Fund and the European Central Bank.

----G-20 finance chiefs, central bankers and private economists are meeting for a seminar initiated by Sarkozy on altering the global monetary system to prevent future crises. The French president said today that the IMF should have a bigger role in supervising nations’ balance of payments and reserves to help limit risks.

The meeting, attended by economists including Nobel laureate Robert Mundell and Jim O’Neill, chairman of Global Sachs Asset Management, is intended to lay the groundwork for an agreement at the G-20 summit in Cannes, France, in November that would lead to a more “stable and resilient” monetary order, said the French leader, who is up for re-election next year.


We end for the day with Europe’s banks being lined up for an Irish haircut. Can Greece and Portugal be far behind? If it happens, Germany’s banks will likely need a Bundesbank bailout. Is casino “too big to fail” banksterism great or what? Poor Ireland has already invested a quarter of Irish GDP in propping up its banks. It simply wasn’t enough. Time to get serious and free the poor Irish population from German debt slavery. The only difference between Iceland and Ireland is a single letter. That and the fact that tiny Iceland was smart enough not to try to guarantee its banks to bailout Europe.

"When paper money systems begin to crack at the seams, the run to gold could be explosive."

Harry Browne

Thursday, March 31, 2011

Noonan to propose 'radical' bank sector restructuring

THE MINISTER for Finance will propose a ground-breaking restructuring of the banks today as the results of Central Bank stress tests will signal the virtual nationalisation of the Irish banking sector.

The results of the tests will lead Michael Noonan to undertake “a radical new approach” to fix the banks, a Government source said.

Mr Noonan will make a “watershed” argument for a EU-wide solution around passing bank losses on to bondholders in response to the tests on Bank of Ireland, AIB, Irish Life and Permanent and EBS building society. Government colleagues last night described it as the first radical policy departure from the previous Fianna Fail-led government.


"The history of paper money is an account of abuse, mismanagement, and financial disaster."

Richard M. Ebeling

At the Comex silver depositories Wednesday, final figures were: Registered 41.71 Moz, Eligible 62.72 Moz, Total 104.43 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

No crooks today, something far more important. What to do with contaminated radioactive ships coming to Europe from Japan. China already turns them away. An impending economic disaster if that becomes the rule everywhere. And now the problem seems to have taken a turn for the worse.

Consequences of Fukushima 03/30/2011

German Ports Unsure How to Deal with Contaminated Ships

In a matter of weeks, ships from Japan which may be carrying cargo contaminated by radiation will start arriving in Europe. But the authorities in ports such as Hamburg are unsure how they should deal with them.

German port operators are nervously awaiting the expected arrival of ships from Japan which may be carrying cargo contaminated with radioactivity following the Fukushima nuclear crisis.

Confusion reigns about what to do with the ships. The first such vessels are expected to arrive at German ports in mid-April, but may be turned back if they are deemed to be contaminated.

Erik van der Noordaa, the head of Germanischer Lloyd, a technical supervisory organization which conducts safety surveys on more than 7,000 ships, told the Wednesday edition of the Financial Times Deutschland that he expects European ports will "send away" ships from Japan. "In Hamburg, they will not be happy if a contaminated ship enters," he said.

But something must be done -- the ships are on their way. "This is going to be very complicated, and there is no solution yet," van der Noordaa said.

Shipowners have also been caught unawares. There is no set level, for example, above which a ship is deemed to be contaminated. "Up until now, there has been no plan," a spokesman for the German Shipowners' Association told the FTD.

----Around 300 ships come to Hamburg from Japan each year, out of a total of around 10,000 ship arrivals, but they usually stop in other European ports first, Schwertner explained. "The first ship that could actually be contaminated would not arrive before the middle of April because of the travel time."

The problem is further evidence of the consequences of the crisis in Japan, which shows no signs of abating. Attention has now turned to the seas around Fukushima, where radioactivity has been released from reactors damaged by the 9.0 magnitude earthquake and ensuing tsunami. Levels of radiation in the seawater around the power plant have reached levels 3,355 times the legal limit, according to Japan's nuclear safety agency.

Concerns about radiation have already had an impact on Japan's seaborne trade. The Japanese container ship MOL Presence, which had passed 120 kilometers (75 miles) away from Fukishima, was turned back from the Chinese port of Xiamen last week after elevated radiation levels were detected.,1518,754005,00.html#ref=nlint

Fukushima Workers Face Risk of Uncontrolled Reactions

By Jonathan Tirone, Sachiko Sakamaki and Yuriy Humber - Mar 31, 2011

Japan’s damaged nuclear plant may be in danger of emitting sudden bursts of heat and radiation, undermining efforts to cool the reactors and contain fallout.

The potential for limited, uncontrolled chain reactions, voiced yesterday by the International Atomic Energy Agency, is among the phenomena that might occur, Chief Cabinet Secretary Yukio Edano told reporters in Tokyo today. The IAEA "emphasized that the nuclear reactors won’t explode," he said.

Three workers at a separate Japanese plant received high doses of radiation in 1999 from a similar nuclear reaction, known as ‘criticality.’ Two of them died within seven months.

-----Nuclear experts call such reactions "localized criticality." They consist of a burst of heat, radiation and sometimes an "ethereal blue flash," according to the U.S. Energy Department’s Los Alamos National Laboratory website. Twenty-one workers worldwide have been killed by “criticality accidents” since 1945, the site said.

The IAEA acknowledged "they don’t have clear signs that show such a phenomenon is happening," Edano said.


"The first requisite of a sound monetary system is that it put the least possible power over the quantity or quality of money in the hands of the politicians."

Henry Hazlitt

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

Wednesday, 30 March 2011


Baltic Dry Index. 1572 -13

LIR Gold Target by 2019: $30,000. Revised due to QE.

"My view of nuclear energy has been changed by events in Japan, we simply cannot go back to business as usual."

Angela Merkel

The Fukushima crisis may be playing second fiddle in the media to the more media friendly new Libyan war, but the consequences for the global economy continue ratcheting up and will all too soon be with us as Germany moves to permanently close its oldest 7 nuclear reactors. But first this update from Japan. One reactor is believed to have melted like Three Mile Island, with the other 3 close to doing the same.

If a part can be installed incorrectly, it will be.

Murphy's Law

Japan may have lost race to save nuclear reactor

Fukushima meltdown fears rise after radioactive core melts through vessel – but 'no danger of Chernobyl-style catastrophe'

Ian Sample , science correspondent Tuesday 29 March 2011 16.53 BST

The radioactive core in a reactor at the crippled Fukushima nuclear power plant appears to have melted through the bottom of its containment vessel and on to a concrete floor, experts say, raising fears of a major release of radiation at the site.

The warning follows an analysis by a leading US expert of radiation levels at the plant. Readings from reactor two at the site have been made public by the Japanese authorities and Tepco, the utility that operates it.

Richard Lahey, who was head of safety research for boiling-water reactors at General Electric when the company installed the units at Fukushima, told the Guardian workers at the site appeared to have "lost the race" to save the reactor, but said there was no danger of a Chernobyl-style catastrophe.

Workers have been pumping water into three reactors at the stricken plant in a desperate bid to keep the fuel rods from melting down, but the fuel is at least partially exposed in all the reactors.

At least part of the molten core, which includes melted fuel rods and zirconium alloy cladding, seemed to have sunk through the steel "lower head" of the pressure vessel around reactor two, Lahey said.

"The indications we have, from the reactor to radiation readings and the materials they are seeing, suggest that the core has melted through the bottom of the pressure vessel in unit two, and at least some of it is down on the floor of the drywell," Lahey said. "I hope I am wrong, but that is certainly what the evidence is pointing towards."


30 March 2011 Last updated at 07:03

Japan nuclear: Fukushima seawater radioactivity rises

Seawater near Japan's quake-hit Fukushima Daiichi nuclear plant has a much higher level of radiation than previously reported, officials say.

In one section, radioactive iodine stood at 3,355 times the legal limit, said Japan's nuclear safety agency.

However, an official said the iodine would have deteriorated considerably by the time it reached people.

Meanwhile, the president of the Fukushima nuclear plant operator Tepco has been admitted to hospital.

Masataka Shimizu is being treated for high blood pressure and dizziness, a Tepco spokesperson said.

Mr Shimizu has barely been seen in public since the earthquake and tsunami on 11 March which damaged the Fukushima plant.

Tepco's Damaged Reactors May Take 30 Years, $12 Billion to Scrap

By Shigeru Sato, Yuji Okada and Tsuyoshi Inajima - Mar 30, 2011

Damaged reactors at the crippled Fukushima Dai-Ichi nuclear plant may take three decades to decommission and cost operator Tokyo Electric Power Co. more than 1 trillion yen ($12 billion), engineers and analysts said.

Four of the plant’s six reactors became useless when sea water was used to cool them after the March 11 earthquake and tsunami knocked out generators running its cooling systems. The entire station north of Tokyo will likely be decommissioned, Japanese Prime Minister Naoto Kan said yesterday.

The damaged reactors need to be demolished after they have cooled and radioactive materials are removed and stored, said Tomoko Murakami, a nuclear researcher at the Institute of Energy Economics, Japan. The process will take longer than the 12 years needed to decommission the Three Mile Island reactor in Pennsylvania following a partial meltdown, said Hironobu Unesaki, a nuclear engineering professor at Kyoto University.

“Lack of public support may force the decommissioning of all six reactors,” said Daniel Aldrich, a political science professor at Purdue University in Indiana. Tepco “will try to salvage two if it can find public support, which may be unlikely.”

Kan yesterday blamed inadequate tsunami defenses at the plant for the world’s worst nuclear accident since Chernobyl in 1986, saying that the safety standards set by the utility known as Tepco were too low. Efforts to cool fuel rods at the four reactors have been hindered by detection of radiation levels that can prove fatal for a person exposed for several hours.

----The Fukushima reactors may take about three decades to decommission, based on Japan’s sole attempt to dismantle a commercial reactor, said Murakami of the Institute of Energy Economics.

Japan Atomic Power Co. began decommissioning a 166-megawatt reactor at Tokai in Ibaraki Prefecture near Tokyo in 1998 after the unit had completed 32 years of operations, according to documents posted on the company’s website. The project will be completed by March 2021, or after 23 years of work, and cost 88.5 billion yen, the documents show.

Next, why does my new smart phone glow? Japan’s exports look likely to take a serious hit.

Consumer Fears Could Add to Japan's Economic Challenges

By Wieland Wagner 03/29/2011

With factories destroyed and ongoing power outages, Japan's economy is in dire straits. Japanese companies may also face the challenge of convincing customers that their products are not contaminated with radiation in the wake of dangerous radioactive releases.

----But then came Fukushima and the images that have shocked the world ever since. Suddenly Japan is no longer just the victim of random forces of nature like earthquakes and tsunamis. Now the once-admired high-tech nation is showing the world that it is unable to control a technology that has spun out of control.

Instead of the robots that carmakers Toyota and Honda proudly tout in their advertising, Japan is sending defenseless firemen and police officers armed with water canons into the irradiated ruins of Fukushima. Working under conditions that pose a danger to life and health, they are desperately trying to cool down the overheated reactors.

Fukushima -- this eerie word now hangs like a collective curse over Japanese industry, and no advertising campaign, no matter how clever, will make people forget it anytime soon. "This is a long-term challenge for our country," says Yasunari Ueno, chief economist at Mizuho Securities in Tokyo.

Will Radioactivity Make 'Made in Japan' a Tough Sell?

Japanese corporations from Sony to Toyota agree. Out of reverence for the victims of the earthquake and tsunami, they have cancelled commercials and print advertising campaigns. But they also know that it will be difficult to win over customers for products that are made in Japan. As if the natural disaster hadn't harmed these companies enough already, they may be forced to think of ways to calm consumers' fears of radiation -- even if those concerns may seem exaggerated to the Japanese.

Although quantities of Japanese exports of spinach, milk and bottled water to Europe are negligable, how do the Japanese intend to guarantee that their mobile phones, computers and cars do not contain parts that are contaminated with radiation?


Below, the UK’s deputy Prime Minister doubts that with all the extra regulation and costs coming to the nuclear power industry in the aftermath of the Fukushima disaster, that any of the UK’s planned 10 new nuclear power plants will get built. Nuclear simply isn’t going to be economic he thinks. Sounds like another massive public subsidy job to me, on top of all the other public subsidies that nuclear power already gets.

Nick Clegg: Britain's proposed nuclear plants may not be built

The next generation of nuclear power stations may never be built because they will be too expensive following the Japanese tsunami, Nick Clegg has suggested.

By Rosa Prince 10:46PM BST 29 Mar 2011

The Deputy Prime Minister cast doubt on the future for nuclear power by predicting that a review into existing plants – ordered after the explosion at the Fukushima power station — would recommend higher and more costly safety standards.

The Liberal Democrat leader insisted that no extra government money would be found to meet additional costs and suggested that energy firms would struggle to raise investment from the private sector as a result of the Japanese near-meltdown.

His remarks, made in a briefing to journalists on a visit to Mexico, throw into doubt the future of Britain’s energy supply.

The Government has given provisional approval to the building of at least 10 new nuclear reactors, costing around £50 billion each, at eight sites as part of the pledge to cut carbon emissions by 80 per cent in coming decades. Experts have cast doubt on the capacity of the oil, gas and coal sectors to fill the energy gap if the 19 existing reactors are not replaced as they age over the next decade.

The Lib Dems had long opposed nuclear power but agreed in Coalition negotiations last year that existing power stations could be renewed as long as no public funds were involved. They demanded that energy firms no longer benefit from generous public subsidies and be self-funding. Now Mr Clegg believes the extra costs of protecting the new plants could prove unsustainable.

In Germany, following Sunday’s election disaster for the ruling coalition, new nuclear power has become a dead issue. Existing nuclear power plants are now about to get closed down permanently, but who is going to get the gigantic bill? My guess is it’s the German taxpayers, and if it is, this will curtail German’s willingness to forever bailout the easy going, work shy lifestyle of Club Med.

Fighting the Nuclear Shutdown 03/29/2011

German Reactor Operators Weigh Legal Action

Following the center-right election debacle in state votes on Sunday, Chancellor Angela Merkel's government is moving to make the temporary shutdown of seven aging nuclear reactors permanent. But she may encounter stiff resistance from plant operators.

Chancellor Angela Merkel's announcement came quickly. Just days after the massive earthquake and resulting tsunami crippled several nuclear reactors at the Fukushima facility in northeastern Japan, she announced an immediate, three-month shutdown of Germany's oldest reactors pending strict safety checks.

"If in a highly developed country like Japan, a country with high safety standards and safety requirements, nuclear consequences from an earthquake and a tsunami can't be prevented," she said, "this has consequences for the whole world, it has consequences for Europe and it has consequences for us in Germany."

Increasingly, it looks as though the temporary shutdown may become permanent. Several center-right German politicians, including Merkel herself on Monday, have indicated a profound change of heart when it comes to nuclear power. And on Tuesday, her coalition partners in Berlin, the business-friendly (and formerly atomic energy-friendly) Free Democrats (FDP) said they hoped that eight German reactors would be permanently taken offline.

But the schedule for such a shutdown may be up to the courts to decide. According to information obtained by SPIEGEL, German energy giants RWE and E.on are looking into legal measures to block any permanent order.

RWE lawyers say stock ownership laws leave them little option but to file for damages, according to SPIEGEL's information. The deadline for complaints is approaching; they must be filed with authorities by the second week in April.

----While concern over the nuclear catastrophe in Fukushima fueled Merkel's shutdown order two weeks ago, this week's political flight from atomic energy is the direct result of Sunday elections in Baden-Württemberg and Rhineland-Palatinate. In both states, the environmentalist -- and anti-nuclear -- Green Party made large gains. By contrast, the CDU and FDP, which pushed through an extension of reactor lifespans last autumn, did poorly.

"That was a vote over the future of atomic energy," said FDP leader Guido Westerwelle, who is also Germany's foreign minister, in a standard interpretation of the election results. "We have understood.",1518,753903,00.html#ref=nlint

John Allen Paulos has observed, "people generally worry only about what happens one or two steps ahead and anticipate being able to get out before a collapse... In countless situations people prepare exclusively for near-term outcomes and don't look very far ahead. They myopically discount the future at an absurdly steep rate."

At the Comex silver depositories Tuesday, final figures were: Registered 41.78 Moz, Eligible 62.73 Moz, Total 104.51 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

No crooks today, as the LIR does its bit for the UK’s wannabe posers. Today we try to help the UK’s get the right man (or woman???) Note: the applicant must be able to dress right for the car and the bus.

Straights are for fast cars. Turns are for fast drivers.


Wanted: supercar driver (boy racers need not apply)

The glamour, the speed, the envious glances, the thrill of driving a supercar... and the ignominy of getting the bus home.

By David Williams 2:41PM BST 29 Mar 2011

It's the motoring job of the century – the chance to become a supercar collection and delivery driver, with licence to handle some of the hottest cars ever built.

The downside? Each two-way journey means either a bus ride to the client's address before picking up the keys to motoring nirvana... or riding back to base from a customer's home on the train.

Applicants for the position will be expected to have a full, clean licence and at least 10 years' experience of handing high-performance vehicles. The successful candidate will be based at's offices in Staffordshire but will have to be prepared to travel throughout the UK and Europe when collecting and delivering vehicles to customers.

"They will also be expected to make their own way back to base from any corner of the UK and Europe – using public transport," said a company spokesman.

"This is a highly specialised role which requires a very special talent," said a spokesman for "We are seeking a driver who understands and has direct experience of driving some of the world's highest performing motor cars.

"Driving something like a Bugatti Veyron is a very different experience from driving a Ford Focus. The driver has to understand what's under the bonnet and how the car responds to its controls. Many of these vehicles are worth hundreds of thousands of pounds so it goes without saying that we are looking for a safe pair of hands here. This isn't a job for a boy racer.

Cars maintained through the website in the past year have included Aston Martins, Pagani Zondas, Ferrari 599s and Bugatti Veyrons. The job comes with a salary in the region of £30,000 as well as expenses including reimbursed bus and train tickets.

Drive carefully! Remember, it's not only a car that can be recalled by its maker.


The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

Tuesday, 29 March 2011

Japan’s Fallout.

Baltic Dry Index. 1585 Unch.

LIR Gold Target by 2019: $30,000. Revised due to QE.

The continuing nuclear crisis at Fukushima seems no closer to ending than when it began. In the swirl of rumours arising from the lack of transparency and information from TEPCO, operator of the disastrous site, Japan had to deny it was going to nationalise TEPCO. TEPCO itself yesterday initiated rolling blackouts again. Japan’s GDP will dip this quarter and next, before rising again as the reconstruction effort gets underway. If GDP figures had to write off all the destruction and death instead of merely counting the reconstruction, wooly headed Keynesians wouldn’t keep going on about creative destruction.

Below, Der Spiegel covers the subject for a very skeptical Germany.

How Dangerous Is Japan's Creeping Nuclear Disaster?


The destroyed reactors at Fukushima have been releasing radiation for weeks. According to model calculations, the stricken nuclear plant could already have released one-tenth of the amount of radiation unleashed in the Chernobyl disaster. How serious a risk does the disaster pose to humans?

The workers are now under observation at the National Institute of Radiological Sciences. The water at Fukushima was so contaminated that radioactive beta radiation burned their skin. In less than an hour, they were exposed to about 180 millisievert of radiation, or nine times as much as one nuclear power plant employee is exposed to in an entire year. "These kinds of burns will be causing problems for the men for a long time to come," says Peter Jacob, director of the Institute for Radiation Protection at the Helmholtz Center in Munich, Germany. Commenting on the exposure, a coworker of the three men said laconically: "We do pay attention. But now we have to be even more careful as we work."

The incident revealed, once again, how little experts know about the dangers that still lurk on the grounds of the ill-fated plant. No one had expected the radiation level in the water in the basement to be as high as it was. The levels of radiation in water in the basement of reactors No. 1, No. 2 and No. 3 reached record highs, with water at No. 2 measuring 1,000 millisieverts per hour. This was due to a partial core melt. Also, the containment vessel for the third reactor was apparently damaged, representatives of the Japanese nuclear regulatory agency concluded. Could this mean that there is a crack in the barrier between the highly radioactive core and the surrounding environment?

----Meanwhile, however, the engineers have been forced to realize that they have made almost no headway in restoring the cooling system. By Friday night, pumps were still not working in any of the damaged reactors. Up to 45 tons of sea salt have apparently accumulated in the containment vessels, complicating the cooling effort. The salt is crystallizing in warm spots and creating an unwanted layer of insulation. The engineers planned to start flushing fresh water into the reactors on Friday afternoon. But the reactors are only one problem. There's also the issue of the 3,450 spent fuel rods, which are red-hot, presumably severely damaged and exposed to the air in half-empty pools.

"We are experiencing an ongoing, massive release of radioactivity," says Wolfram König, head of Germany's Federal Office for Radiation Protection. "And everyone should know by now that this isn't over by a long shot." Nuclear expert Helmut Hirsch says: "All I hear is that people are wondering whether this will turn into a meltdown. But the thing is, it already is a partial meltdown." The difference, in this case, is that Fukushima is a creeping disaster.

To make matters worse, the wind changed on Friday. Radioactive particles over the Pacific were now drifting westward across Japan. High levels of radiation were detected in vegetables, water and soil near the Fukushima plant.

The Japanese authorities have so far only evacuated a zone within 20 kilometers (12.4 miles) of Fukushima. But the risks posed by radiation are also growing for people outside this zone. "It is high time Japanese authorities extend the 20- kilometer (12.4-mile) evacuation zone around the crippled nuclear-power plant at Fukushima ... Pregnant women and small children should immediately be evacuated from a progressively increasing area," writes nuclear critic Mycle Schneider, lead author of the World Nuclear Industry Status Reports. Embryos, fetuses and infants are at the highest risk, because radiation targets cells that divide quickly.


Fukushima’s fallout seems to have greatly changed Europe. Germany took a big step to the left. In Germany, nuclear power took a Three Mile Island style hit. Nor is nuclear likely to fare better elsewhere in the EU outside France. The greatly weakened Merkel coalition, is fading fast as a key member of the EU. Abstaining on the UN Libyan vote didn’t help either. Outside of Germany’s bailout cash, German influence will wane until after the next German Federal election. Who speaks for Europe now? President Van Rompuy, and Baroness Whatsit?

“Who do I call if I want to call Europe?”


Greens Score Big in Key German State


It is being hailed as the start of a new political era in Germany. The Green Party looks set to appoint its first state governor after Sunday's election in the state of Baden-Württemberg. The result is a huge setback for Chancellor Angela Merkel.

The Fukushima disaster has had, and will have, many consequences around the world. One of the more unlikely, however, appears to be the results of Sunday's election in the southwestern German state of Baden-Württemberg, where skepticism about nuclear power helped propel the Green Party to a historic victory over Angela Merkel's conservative Christian Democratic Union (CDU).

The Greens doubled their share of the vote to 24.2 percent, according to preliminary results released by the state electoral commission. They are now likely to govern the state in a coalition with the center-left Social Democratic Party (SPD), which secured 23.1 percent of the vote, down 2 percent from the last election in 2006. In what would be a first for Germany, the Greens, as the senior partner in the coalition, will likely appoint the state governor.

----The conservatives had already been suffering in the polls, but the Fukushima disaster effectively turned the state election into a referendum on nuclear power, dealing a blow to the CDU and boosting the fortunes of the anti-nuclear Greens. The debate damaged incumbent CDU Governor Stefan Mappus, who had in the past been a vocal supporter of nuclear power. Merkel's political U-turn on atomic energy in the wake of the catastrophe in Japan also appears to have backfired. Voters apparently saw her sudden decision to temporarily take a number of older reactors off the grid as blatant electioneering.


At the Comex silver depositories Monday, final figures were: Registered 41.80 Moz, Eligible 61.82 Moz, Total 103.63 Moz.

Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Little by little the fog that hid Greenspan’s casino capitalism is lifting. Today, Cassino in Italy claims JP Morgan’s confidentiality clause prevents it releasing information on how a swap arrangement with Bear Stearns essentially made the city go bust. JP Morgan took over BS in the St Patrick’s Day massacre of BS’s shareholders back in 2008. I wonder what JPM needs to be kept hidden?

Cassino Refusal to Disclose Swap With JPMorgan Results in Suit

By Elisa Martinuzzi and Lorenzo Totaro - Mar 28, 2011 11:24 PM GMT+0100

Cassino, the central Italian city that cost taxpayers 2 million euros ($2.8 million) because of an interest-rate swap with JPMorgan Chase & Co. (JPM), was taken to court earlier this month over its unwillingness to disclose how it lost the money.

The lawsuit, brought by Bloomberg News, asks an administrative court to enforce a ruling by a regional ombudsman that Italian law requires the city to release documents on a swap agreement between Cassino and a unit of Bear Stearns Cos., which JPMorgan bought in 2008. The New York-based bank and Cassino agreed in 2009 to terminate the contract, without disclosing financial terms.

The city of 33,000 people, a site of fighting in World War II, withheld the documents because of the potential damages it would incur if it breached a confidentiality clause with JPMorgan, the second-biggest U.S. lender by assets, the city said in a letter to Bloomberg last month. The news service has a “direct, concrete” interest and should be granted access to the swap file, the regional ombudsman of Lazio said in its final ruling on the case in December, citing a 1990 Italian freedom of information law.

----JPMorgan is separately on trial in Italy in the first European criminal case involving swaps. The bank, together with Deutsche Bank AG (DBK), Depfa Bank Plc and UBS AG, faces charges in Milan for fraud for tricking the municipal government into buying the contracts. Meanwhile, JPMorgan is among banks that are suing Italian municipalities in London to enforce the swaps. The cases are pending.

Deutsche Bank, Germany’s biggest bank, lost a case over interest-rate swaps last week, the first ruling by the country’s highest court on derivative sales. The court said the Frankfurt- based lender didn’t adequately disclose risks and ordered it to pay 541,074 euros in damages to its customer, Ille Papier Service GmbH.

‘Extremely Risky’ Bet

Faced with shrinking income and growing expenses, Italian cities bought swaps that would typically offer lower interest expenses in the near-term, while exposing the buyers to the risk of increased interest costs in later years. Italian cities faced losses of at least 1.2 billion euros from the transactions as of June, data compiled by the central bank show.

Cassino entered a seven-year swap with Bear Stearns in 2003 to adjust payments on about 22 million euros of debt. The swap switched the city’s 4.7 percent fixed interest rate payment for a variable rate, according to a June 2009 report by Italy’s financial police.

The city paid a floating rate based on the U.S.-dollar London interbank offered rate, an “extremely risky” bet given that Libor was at a record low, the police said in testimony to the Italian Senate in 2009.

Three-month U.S. dollar Libor was at a 1 percent in June 2003 and by January 2006 had surpassed 4.7 percent, according to data compiled by the British Bankers’ Association. The measure climbed as high as 5.7 percent in September 2007 as credit markets began to seize up, before declining to a record low of 0.25 percent by December 2009 after policy makers cut rates.

----Bloomberg News sued the European Central Bank in December to make it release documents showing how Greece used derivatives to hide its fiscal deficit and helped trigger the region’s sovereign debt crisis. The case is pending.

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.


Monday, 28 March 2011

Moving Left

Baltic Dry Index. 1583 +18 (Thursday)

LIR Gold Target by 2019: $30,000. Revised due to QE.

"The history of fiat money is little more than a register of monetary follies and inflations. Our present age merely affords another entry in this dismal register."

Hans F. Sennholz

From London this morning, the world has rarely looked bleaker. The Keystone Kops seem to be trying to fix Fukushima. German voters seem to have had their fill of a dithering, pro-nuclear, center-right government in Berlin. Portugal may have left it too late for a bailout by Berlin. Italy’s economy is tied to Gaddafi’s side winning in Libya. The UK seems headed for a summer of discontent and rioting. A flaky coalition seems to be living on borrowed time. In the USA, Greenspan’s great real estate bubble seems to be in collapse again. Thanks to rampant Wall Street securitisation fraud, title to up to 15 million US properties are now clouded or unknown. The USA seems wedded to QE programs and trillion and a half yearly deficits forever.

Up first, Stuttgart goes Green. Baden-Wuerttemberg looks likely to lead the fight against nuclear power.

Merkel Loses Key German State on Nuclear Fears

By JUDY DEMPSEY Published: March 27, 2011

BERLIN — Chancellor Angela Merkel’s conservative Christian Democrats on Sunday suffered a major defeat in a historic stronghold in southwestern Germany, where the Green Party appeared poised to head a state government for the first time, according to official preliminary results.

The nuclear calamity in Japan and Mrs. Merkel’s subsequent reversal on nuclear power played a key role in the elections in the southwest state of Baden-Württemberg, where the Christian Democrats have governed since 1953, before Mrs. Merkel, 56, was born.

Most Germans have a deep-seated aversion to nuclear power, and the damage at the Fukushima Daiichi plant in Japan has galvanized opposition. On Saturday, more than 200,000 people took to the streets of four big German cities to protest nuclear power. The news from Japan of soaring radiation levels led the major radio and television newscasts on Sunday.

After the catastrophe in Japan, Mrs. Merkel reversed a pro-nuclear policy that she adopted just last year and temporarily shut down seven of Germany’s 17 nuclear plants. She apparently did not convince voters that her change of policy was sincere.

----If the polls are confirmed, the Greens are in a comfortable position to head a coalition with the Social Democrats in Baden-Württemberg, which has some 11 million residents and is among the most prosperous and successful of Germany’s 16 states.

The Greens were projected to win 24.2 percent of the vote, compared with 11.7 percent in 2006. The Social Democrats were forecast to take 23.5 percent of the votes, little changed from 2006.

----In neighboring Rhineland-Palatinate, where the Social Democrat premier Kurt Beck has governed with an absolute majority since 2006, the Social Democrats suffered sizable losses. Their share of the vote fell to 38 percent on Sunday, from 45.6 percent in 2006.

The Green Party, which failed to get elected to the regional parliament in 2006, won 16.8 percent of the vote. Mr. Beck is expected to ask the Greens to join a coalition with the Social Democrats.


In US news, nuclear power is in deep trouble with even the Republicans making fast u-turns ahead of next year’s key elections. After yesterday’s muddle and mix-up at Fukushima, public support for new nuclear power plants will probably decline again.

"I must follow the people. Am I not their leader?"

Benjamin Disraeli, 19th century British Prime Minister.

Opposition to Nuclear Power Rises Amid Japanese Crisis

According to the  PEW Reesearch Center Not surprisingly, public support for the increased use of nuclear power has declined amid the ongoing nuclear emergency in Japan. Currently, 39% say they favor promoting the increased use of nuclear power while 52% are opposed. Last October, 47% favored promoting the increased use of nuclear power and the same percentage (47%) was opposed.

Opinion about expanding the use of nuclear power has fluctuated in recent years. However, the current measure matches a previous low in support for increased nuclear power recorded in September 2005 (39% favor, 53% oppose).

The latest national survey by the Pew Research Center for the People & the Press, conducted March 17-20 among 1,004 adults, finds little recent change in opinions about other energy policies – with one notable exception. With the recent surge in gas prices, support for increased offshore oil and gas drilling continues to rebound.

Japan nuclear crisis: Japanese fear blunder over rising levels of radiation

Nuclear officials in Japan caused confusion and worry on Sunday by admitting that radiation readings at the stricken Fukishima power plant were inaccurate

By Danielle Demetriou in Tokyo 3:21PM BST 27 Mar 2011

Initially, levels of radiation in the water at the plant were said to be 10 million times above normal. But officials later retracted that calculation and said the level was 100,000 times normal. The embarrassing admission is the latest in a series of missteps that has undermined the credibility of authorities’ attempts to deal with the plant.

But there is no doubt that there has been a huge leap in radiation within the Fukushima Daiichi power plant in the turbine building of No 2 reactor, where a reading of more than 1,000 millisieverts per hour was reported, the highest since the plant was damaged in the March 11 earthquake and tsunami. Exposure to 100 millisieverts per year is believed to be the lowest level at which cancer risks are evident. A dose of 1,000 millisieverts can cause temporary radiation sickness, including nausea and vomiting.

The Tokyo Electric Power Company (Tepco), the operator of the plant, evacuated workers from the building following the discovery of the rising radiation levels amid speculation that the cause may be damage to the nuclear fuel rods.

“There is a suspicion that the reading for iodine 134 [a radioactive substance] is too high, so we are redoing our tests,” said a spokesman, Takeo Iwamoto. He said that the utility would re-administer tests for all substances detected in the water and update readings “as soon as possible”.

Mr Iwamoto said he could not provide any details on what could have gone wrong with the tests. “We are very sorry for the inconvenience,” he said. He could not say by how much readings were thought to be in error

In UK news, no party having run on a platform of honesty about the economy in last year’s general election, the coalition government is in deep trouble trying to impose its austerity program on a disbelieving public. Luckily for them, anarchists, communists, and the Socialist Worker’s Party thugs hi-jacked the Union’s anti-austerity day of protest. Some backlash effect may help the coalition for a little while. For now the unions still haven’t twigged that on a fiat currency all decisions are purely political. If we can print up £250 billion to bailout the gambling banksters and are rich enough to engage in 3 discretionary wars at the same time, why can’t we print up an extra £100 million and not cut disablement benefits to those unfortunate enough to rely on them? Why do we need to impose austerity on the poorest 10% of the country at all, they never got anything out of the bankster casino. Stay long precious metals held outside of HMG’s reach. I suspect that all to soon we will hear the populist and partially correct argument. I suspect that with the better weather, the coalition will soon be facing much more anarchy and social protest. A fine time for H. M.’s coalition to be cutting back on the police and the army.

"When paper money systems begin to crack at the seams, the run to gold could be explosive."

Harry Browne

Recriminations fly after anti-cuts protests descend into violence

Ministers attack Miliband's backing for marches – as retailers denounce police for not stopping violence

By Jonathan Brown Monday, 28 March 2011

The violent scenes that emerged after Britain's largest demonstration for eight years have sparked a political and practical post-mortem, as businesses and politicians measure up the damage caused.

Critics such as former Metropolitan Police deputy assistant commissioner and Lib Dem mayoral candidate Brian Paddick said there were not enough officers "in the right place at the right time" and that intelligence warning of trouble had been ignored allowing trouble to erupt on Saturday.

Many retailers felt the same yesterday as they removed graffiti from shop fronts and started replacing the smashed windows in the main shopping areas of Piccadilly and Oxford Street. As cleaners removed scrawled slogans – including "fightback" and "Tory scum" – from one of Trafalgar Square's bronze lions, Westminster Council revealed the cost of the clean-up was already "tens of thousands of pounds".

However, Commander Bob Broadhurst defended police presence and planning which put 4,500 officers on the streets and ultimately saw 201 arrested. "I wouldn't call them protesters. They are engaging in criminal activities for their own ends," he said. "We have minimised the damage caused. We'll never have enough officers to protect every building in central London. It cannot be done."

He added that video evidence would be used in an attempt to make arrests in the coming days. Two people have already been charged. 84 people, including 31 police officers, were injured in the violence that replaced the good natured scenes of the earlier TUC-organised march with images of confrontation and damage.

-----Many of those taking part in the worst of the violence employed so-called "black bloc" tactics – wearing black clothing and hiding their faces with scarves and hoods – while others sported anarchist flags. Militants also attacked luxury targets including Fortnum & Mason and the Ritz hotel.

London's deputy mayor, Kit Malthouse, hit out at such groups as "fascist agitators". "They were a nasty bunch of black-shirted thugs and it was pretty obvious they were intent on rampaging around and would be difficult to control," he said yesterday.

The GMB union's leader, Paul Kenny, said the local elections on 5 May should be a referendum on the Government's economic and social policies. "The Government's strategy is wrong, unfair and will not get the country working," he said. "The next step is for the alternative voice to be counted in the ballot box in May. GMB will urge voters to reject unemployment, poverty and cuts in public services."


After a few years swinging right, Europe seems to be swinging to the left again under the pressures of austerity and a growing awareness that the current fiat money system is thoroughly corrupt. Anarchy and revolution is fast recipe for wealth destruction. Voting in socialism a recipe for the return of high taxes and high inflation. Europe, as usual, is starting to return to type. Fiat Pounds of Euros anyone?

"Gold would have value if for no other reason than that it enables a citizen to fashion his financial escape from the state."

William F. Rickenbacker

At the Comex silver depositories Friday, final figures were: Registered 41.69 Moz, Eligible 62.35 Moz, Total 104.04 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

Today, more on the one size doesn’t fit all, dodgy fiat Euro. After the German election results, any EU nation needing a German bailout better get its bailout request in fast. German voters are slamming shut the doors to bailout cash and the nuclear industry at the same time. A Club Med restructuring looks highly likely now. Does Italy sink with Gaddafi? Does Italy sink the EU?

"Gold bears the confidence of the world's millions, who value it far above the promises of politicians, far above the unbacked paper issued by governments as money substitutes. It has been that way through all recorded history. There is no reason to believe it will lose the confidence of people in the future."

Oakley R. Bramble

Crisis-hit Portugal encouraged to accept eurozone’s bail-out package

The Portuguese government has come under renewed pressure to accept a European bail-out at the start of another crucial week for the eurozone.

8:37PM BST 27 Mar 2011

Ewald Nowotny, a governing council member of the European Central Bank, said Portugal should seek help from Europe after the resignation of the prime minister over austerity measures .

He told reporters: “From a purely economic point of view one could probably recommend it. The domestic political situation in Portugal has clearly worsened ... the head of the government has stepped down.”

Jose Socrates was re-elected leader of Portugal's Socialist party on Sunday, four days after resigning as prime minister, and vowed to run in a parliamentary election on a platform opposing a financial bail-out.

Mr Socrates, who won 93pc of the leadership votes despite the country's political crisis, spared no criticism of the opposition whose rejection of his minority government's austerity measures last week led to his resignation.

----Meanwhile, Ireland is trying to secure an extra €60bn (£52bn) of medium-term funding from the ECB to replace emergency temporary help given to the banking sector by Ireland’s central bank.

The Irish government is determined to secure the funding before the results of “stress tests” on its banks are known. Experts say the tests may show that Ireland’s biggest banks need as much as €15bn to €20bn of extra capital.

Spain’s banks are also being scrutinised by wary investors.

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

Saturday, 26 March 2011

Weekend Update March 26, 2010

Baltic Dry Index. 1533 (Thursday)

LIR Gold Target by 2019: $30,000. Revised due to QE.

We open this weekend with yet more doubt on what exactly is going on at Fukushima. The radioactive power complex is now polluting both the land and sea for miles around the complex, and ruining one of Japan’s prime agricultural areas in the process. With four out of six power plants still out of control two weeks after the tsunami hit, and another with a semi drained spent fuel rod pool, the Fukushima incident seems likely to continue for months. What possible gain to mankind warrants this sort of open ended risk for so many ordinary Japanese? Below that, Japan’s earthquake is about to hit the global economy.

MARCH 26, 2011

Setback for Japan at Rogue Reactors

TOKYO—In a further sign of distress at the troubled Fukushima Daiichi nuclear complex, the plant's regulator announced Saturday a sharp elevation in radioactive contamination detected in nearby seawater.

A spokesman said the spike in radioactive iodine—to 1,250 times the legal limit—didn't pose an immediate threat to human health or the area environment, since the material quickly dissipates in the tides and would become diluted before reaching fish and seaweed. "Because nobody is engaged in fishery in the evacuation area within a radius of 20 kilometers [from the plant], there will be no immediate impact on people in the area," added Hidehiko Nishiyama, spokesman for Japan's Nuclear and Industrial Safety Agency told reporters at a news conference Saturday morning.

But the news underscores that fact that, for all the progress claimed by officials over the past week, they have a long way to go in bringing Tokyo Electric Power Co.'s reactors under control, or to understanding exactly what's happening inside the compound.

Mr. Nishiyama said officials weren't sure what caused the latest surge in nuclear pollution. "Radioactive substances may have been transmitted through the air, or contaminated water could have drained from the plant somehow," he said. "I don't have further ideas."

The precise cause of the radioactive leak—by air or by water—could yield clues about whether there is new, unanticipated damage in the complex.

The reading announced Saturday compared with an earlier report that showed iodine at 126 times the legal limit. A person drinking half a liter of water with the latest level of contamination would be consuming 1 millisievert, the equivalent of a full year's acceptable consumption.

Saturday's report came after officials Friday has suggested that a breach involving one reactor at the damaged Fukushima Daiichi nuclear power complex was responsible for a dangerous radiation leak, further complicating the protracted and perilous efforts to bring the plant under control.


Automakers May Lose 600,000 Vehicles as Japan's Quake Halts Assembly Lines

By David Welch - Mar 26, 2011 4:44 AM GMT

Global automakers may lose production of 600,000 vehicles by the end of the month as the earthquake in Japan halts assembly lines and work at suppliers including the maker of a paint pigment.

About 320,000 vehicles may have been lost worldwide as of March 24, and manufacturing at plants in North America may be affected when parts supplies start running out as soon as early April, said Michael Robinet, vice president of Lexington, Massachusetts-based IHS Automotive.

“The next surge of shutdowns comes when the pipeline of parts that were already built dries up,” Robinet said yesterday in a telephone interview. “The rate of lost production will accelerate once North American plants join in.”

Toyota Motor Corp., the world’s largest automaker, said it has lost output of 140,000 vehicles, and Honda Motor Co. has lost 46,600 cars and trucks and 5,000 motorcycles. Mitsubishi Motors Corp.’s was lowered by 15,000. Ford Motor Co. hasn’t lost any output, said Todd Nissen, a spokesman.

Honda, Japan’s third-largest automaker, said its production in North America may be disrupted after April 1 because quake damage is restricting parts supplies, Natsuno Asanuma, a spokeswoman for the company, said today by phone. Plants in Ohio, Alabama, Indiana, Canada and Mexico may be affected, she said.


Meanwhile, in the world’s biggest economy, despite QE2 and trillion and a half dollar deficits forever, the US real estate sector is joining Fukushima in meltdown. As goes US real estate so goes the US economy, which is why old failed fraudster Greenspan set off the USA real estate bubble in the first place after his dot con and stock market bubbles had burst. With the world’s number one and three national economies deep in trouble and the EU economy, the world’s largest trade grouping economy, reeling from the collapse and soon default of the Union’s PIIGS, our global economy looks likely to revisit 2008.

March 24, 2011

'Worst Report' on Housing Renews Fears of Recession

By Patrice Hill, The Washington Times

March 24--Within the space of a week, the nation has witnessed worst performances on record of new home sales, home prices and building -- evidence that the housing market has sunk into a double-dip recession that poses a significant drag on the overall economy.

Never before has the U.S. economy staged a recovery while the housing market was in such a deep slump, although analysts are expecting it to defy the historical odds and maintain growth this year. But the news on housing in recent days is giving even the biggest optimists some pause.

The Commerce Department reported Wednesday that sales of new homes plummeted a breathtaking 16.9 percent last month to a record low annual rate of 250,000. On Monday, the National Association of Realtors found that prices of existing homes plunged again in every region of the country and are down by more than a third on average since the recession began.

Perhaps in the most dismal housing news to date, new starts and permits for residential housing construction nose-dived to the lowest levels in more than half a century of record-keeping, Commerce reported last week, in what one economist described as the "worst report" he has ever seen on housing.

"The new and existing housing markets are in a very precarious situation," said Chris G. Christopher, an economist at IHS Global Insight. "The bottom line is extremely simple to interpret. The housing market is still very depressed and a major drag on the economy."

----The housing slump poses a major obstacle for consumers and homeowners because the biggest home-price drops since the Great Depression have cut into their main source of wealth and made it difficult or impossible to refinance, sell homes or even move from one place to another.

Huge price drops ranging up to 60 percent in some distressed areas of the country also increase the likelihood that more people will end up defaulting on mortgages that are worth far more than the homes they finance and that homeowners can no longer afford to pay, economists say.


Pressure grows on Portugal to seek eurozone bailout

Portugal took a step closer to what markets see as its inevitable bailout, as the country's borrowing costs hit a new record in the wake of its government's collapse.

By Emma Rowley, and Harry Wilson 7:39PM GMT 25 Mar 2011

Investors dumping Portuguese bonds pushed the yield on the country’s 10-year debt above 8pc, the highest in the euro’s lifetime. Having to borrow at this rate would effectively block Portugal out of the markets when it next needs to raise money, said analysts.

Meanwhile ratings agency Standard & Poor’s joined rival Fitch in downgrading Portugal’s debt by two notches, closer to junk status. Portuguese prime minister José Socrates was forced out on Wednesday evening, after failing to win parliamentary support for his austerity package intended to shrink the country’s debt burden and reassure markets in the hope of averting a bail-out.

Portugal’s government has been resisting following Greece and Ireland in accepting international aid, as a rescue package would come with strings attached.

Ireland, which wants better terms on its €85bn (£74bn) bail-out loans from the EU and International Monetary Fund, on Friday also sought to persuade the European Central Bank to scrap plans to withdraw the assistance is has given to the country’s troubled banking sector.

At a meeting of EU leaders in Brussels, Enda Kenny, Ireland’s prime minister, said that he reminded ECB President Jean-Claude Trichet of the need to provide long-term support to its banks. The pressure on the country’s banks is mounting ahead of next week’s release of the latest round of EU stress tests.

----However, S&P warned it could soon downgrade Portugal’s rating again, depending on the shape of the eurozone bail-out system. EU leaders failed to deliver the promised comprehensive package to resolve Europe’s debt crisis at their two-day Brussels summit.


Friday, 25 March 2011

Fukushima Update

Wednesday, 23 March 2011

Fukushima Cover-up.

Baltic Dry Index. 1543 +12

LIR Gold Target by 2019: $30,000. Revised due to QE.

Note: There will be no LIR tomorrow or Friday due to the return of my mother from hospital and the start of her home care therapy. With God’s help, she can spend the rest of her days among the family in the family home she has known since 1954, and in the better weather, enjoy the garden that gave her so much pleasure.

Today, we open with Bloomberg and a scandal in Japan’s very flawed nuclear power industry. Neighbouring countries must now be very alarmed about the safety of all of Japan’s nuclear plants. Sadly this will damage the credibility of the nuclear industry everywhere.

"I doubt if any of them would even intentionally double-park."

President Richard Nixon.

Fukushima Engineer Says He Helped Cover Up Flaw at Dai-Ichi Reactor No. 4

By Jason Clenfield - Mar 23, 2011 12:54 AM GMT

One of the reactors in the crippled Fukushima nuclear plant may have been relying on flawed steel to hold the radiation in its core, according to an engineer who helped build its containment vessel four decades ago.

Mitsuhiko Tanaka says he helped conceal a manufacturing defect in the $250 million steel vessel installed at the Fukushima Dai-Ichi No. 4 reactor while working for a unit of Hitachi Ltd. (6501) in 1974. The reactor, which Tanaka has called a “time bomb,” was shut for maintenance when the March 11 earthquake triggered a 7-meter (23-foot) tsunami that disabled cooling systems at the plant, leading to explosions and radiation leaks.

“Who knows what would have happened if that reactor had been running?” Tanaka, who turned his back on the nuclear industry after the Chernobyl disaster, said in an interview last week. “I have no idea if it could withstand an earthquake like this. It’s got a faulty reactor inside.”

Tanaka’s allegations, which he says he brought to the attention of Japan’s Trade Ministry in 1988 and chronicled in a book two years later called “Why Nuclear Power is Dangerous,” have resurfaced after Japan’s worst nuclear accident on record. The No. 4 reactor was hit by explosions and a fire that spread from adjacent units as the crisis deepened.

Hitachi spokesman Yuichi Izumisawa said the company met with Tanaka in 1988 to discuss the work he did to fix a dent in the vessel and concluded there was no safety problem. “We have not revised our view since then,” Izumisawa said.

Kenta Takahashi, an official at the Trade Ministry’s Nuclear and Industrial Safety Agency, said he couldn’t confirm whether the agency’s predecessor, the Agency for Natural Resources and Energy, had conducted an investigation into Tanaka’s claims. Naoki Tsunoda, a spokesman at Tokyo Electric Power Co., which owns the plant, said he couldn’t immediately comment.

Much more.

In other Japan news, now Tokyo’s water has been polluted with radioactive iodine. “Don’t worry, it’s still safe for adults to drink”, say the experts, but in light of the above article would you trust the Tokyo officials? Even if true, for how much longer? Meanwhile estimates of the cost of the earthquake and tsunami continue to mount.

Tokyo Issues Tap Water Warning for Infants

By DAVID JOLLY and KEVIN DREW Published: March 23, 2011

TOKYO — Infants in Tokyo and surrounding areas should not drink tap water, a Tokyo official said Wednesday, after radioactive iodine from a crippled nuclear power plant was detected in the capital’s water supply.

Ei Yoshida, head of water purification for the Tokyo water department, made the announcement at a televised news conference. He said iodine-131 had been detected in water samples at a level of 210 becquerels. The recommended limit for infants is 100 becquerels.

For adults, the recommended limit is 300 becquerels.

The Health Ministry said in a statement that it was unlikely that there would be negative consequences to infants who did drink the water, but said it should be avoided if possible and that it should not be used to make infant formula.

The warning applies to the 23 wards of Tokyo, as well as the towns of Mitaka, Tama, Musashino, Machida and Inagi to the west of the city.


Japan's Quake Damage May Swell to $309 Billion, Four Katrinas

By Keiko Ujikane - Mar 23, 2011 7:51 AM GMT

Japan’s government estimated the damage from this month’s record earthquake and tsunami at as much as 25 trillion yen ($309 billion), an amount almost four times the hit imposed by Hurricane Katrina on the U.S.

The destruction will push down gross domestic product by as much as 2.75 trillion yen for the year starting April 1, today’s report showed. The figure, about 0.5 percent of the 530 trillion yen economy, reflects a decline in production from supply disruptions and damage to corporate facilities without taking into account the effects of possible power outages.

The figures are the first gauge of the scale of rebuilding Prime Minister Naoto Kan’s government will face after the quake killed more than 9,000 people. Japan may set up a reconstruction agency to oversee the rebuilding effort and the central bank has injected record cash to stabilize financial markets.

Damages will probably amount to between 16 trillion yen and 25 trillion yen, today’s report said. It covers destruction to infrastructure in seven prefectures affected by the disaster, including damages to nuclear power facilities north of Tokyo. Wider implications on the economy, including how radiation will affect food and water supply, are not included in the estimate.

---- Today’s report didn’t include specific forecasts for how the damage would affect GDP, which economists at Morgan Stanley MUFG Securities Co. forecast may contract as much as an annualized 12 percent in the second quarter. GDP expanded at a 3.2 percent rate in the second quarter after the 1995 Kobe quake.

”We need to bear in mind that the risk that stagnation in production will linger due to the effect of the earthquakes,” Economic and Fiscal Policy Minister Kaoru Yosano said at a press conference in Tokyo today. “We could see the biggest impact come from the power-supply issues that are affecting production.”


In other news, the world’s latest war is going well, isn’t making much difference, is splitting NATO and the world into competing factions, according to one’s preference. It isn’t often Germany gets to align its foreign policy alongside Brazil and China rather than America, NATO, and the rest of the EU. Perhaps the reason Germany abstained at the UN was the memory of what happened last time the “Desert Fox” took on Britain’s 8th Army in Cyrenaica. Below, yesterday’s developments on “our side” in Benghazi.

Libyan Rebel Council Forms Oil Company to Replace Qaddafi’s

By Bill Varner - Mar 22, 2011 9:17 AM GMT

Libyan rebels in Benghazi said they have created a new national oil company to replace the corporation controlled by leader Muammar Qaddafi whose assets were frozen by the United Nations Security Council.

The Transitional National Council released a statement announcing the decision made at a March 19 meeting to establish the “Libyan Oil Company as supervisory authority on oil production and policies in the country, based temporarily in Benghazi, and the appointment of an interim director general” of the company.

The Council also said it “designated the Central Bank of Benghazi as a monetary authority competent in monetary policies in Libya and the appointment of a governor to the Central Bank of Libya, with a temporary headquarters in Benghazi.”

The Security Council adopted a resolution on March 17 that froze the foreign assets of the Libyan National Oil Corp. and the Central Bank of Libya, both described in the text as “a potential source of funding” for Qaddafi’s regime.

Libya holds Africa’s largest oil reserve. Output has fallen to fewer than 400,000 barrels a day, Shokri Ghanem, chairman of the National Oil Corp., said on March 19. The country produced 1.59 million barrels a day in January, according to estimates compiled by Bloomberg. Exports may be halted for “many months” because of sanctions and unrest, the International Energy Agency said.


Below, the view from the other side, and a lineup on the coalition’s military assets aligned against Gaddafi. Includes a picture of the French nuclear carrier Charles de Gaulle, under tow on its way to the region????

22 March 2011 Last updated at 16:13

Defiant Gaddafi pledges victory


We end with the return of the EU’s Club Med crisis. Today it’s tiny Portugal objecting to being hammered with German imposed austerity. Next month it will likely be Italy’s turn, as the sink with the increasingly bombed out Gaddafi government.

Portugal Braces for Govt Collapse Over Debt Vote

Portugal braces for minority government's collapse as lawmakers ready for key debt vote

By BARRY HATTON Associated Press LISBON, Portugal March 22, 2011

Portugal's government is on the verge of collapse after opposition parties withdrew their support for another round of austerity policies aimed at averting a financial bailout.

The expected defeat of the minority government's latest spending plans in a parliamentary vote Wednesday will likely force its resignation and could stall national and European efforts to deal with the continent's protracted debt crisis.

The vote comes on the eve of a two-day European Union summit where policymakers are hoping to take new steps to restore investor faith in the fiscal soundness of the 17-nation eurozone, including Portugal.

"The leaders of the French Revolution excited the poor against the rich; this made the rich poor, but it never made the poor rich."

Fisher Ames, 1758-1808.

At the Comex silver depositories Tuesday, final figures were: Registered 41.11 Moz, Eligible 63.23 Moz, Total 104.34 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

No crooks again today just “moon man” in New Zealand.

"Nothing contributes so much to the prosperity and happiness of a country as high profits."

David Ricardo, 19th century economist.

Christchurch begins to believe 'Moon Man' who predicted quakes

By Tim Hume in Auckland Wednesday, 23 March 2011

A maverick "lunar forecaster" who claims to have predicted both New Zealand's major recent earthquakes provoked fear and outrage when he warned that another devastating jolt would strike Christchurch last Sunday. Scientists made a public bet that it wouldn't – and were then left exasperated as the city was shaken by the biggest aftershock since the February catastrophe.

Ken Ring, a grey-bearded, hitherto obscure fishing commentator, has become the subject of heated public debate in recent months over his earthquake predictions, based on the pseudoscientific belief that quakes are caused by the gravitational pull of the Moon on tectonic plates.

Although rubbished by seismologists, the theory gained traction as word spread that the "Moon Man" appeared to have predicted both the initial September quake, and the February disaster which killed about 182 people.

Gaining support from Christchurch residents frustrated that science had been unable to usefully predict the killer aftershock, Mr Ring used his new platform to warn of another impending giant quake – one that "could be another for the history books" – on the morning of 20 March, as the Moon passed close to the Earth. "The killer is still loose on the streets, the one that strikes on full moons," he wrote.

His warnings to stay away last weekend prompted some traumatised residents to flee their homes, and played on the nerves of many who remained. "Even people who would normally discard it or say it's only superstition are becoming extremely fearful," said Lynette Hutson, co-ordinator of the Salvation Army's counselling service.

In response, scientists, politicians and sections of the media moved to calm the hysteria. Current affairs broadcaster John Campbell savaged Mr Ring in a primetime interview which was roundly criticised as unfairly hostile, and seemed only to create sympathy for the "Moon man".

On Sunday, a group of geologists, engineers, and a cabinet minister with a PhD in geotechnical engineering gathered at a publicity-courting "non-event", holding a lunch in one of Christchurch's oldest, tallest buildings, at the time the "7 plus" doomsday quake was supposed to strike.

The lunch passed without incident. The sceptics were satisfied. But that night, at 9.47pm, the city was shaken by a 5.1-magnitude aftershock. It was about a thousand times less powerful than the killer that Mr Ring had prophesied, and it came 10 hours late. But it was the biggest aftershock since the February disaster and, for many of Mr Ring's supporters, it came as the most public of vindications.

---- Mr Ring has gone to ground over critical media coverage, including revelations he previously worked as a party clown and magician, and once wrote a book about palmistry for cats. He did not reply to questions.

"There is no way of keeping profits up but by keeping wages down."

David Ricardo, 19th century economist.

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

Tuesday, 22 March 2011

Buy Japan.

Baltic Dry Index. 1533 unch.

LIR Gold Target by 2019: $30,000. Revised due to QE.

"Thank God For Bank Bailouts"

Proper Charlie Munger.

Towns wiped off the map? Buy stocks. Infrastructure collapsed, no heat, fuel, and little food? Buy stocks! A continuing nuclear disaster involving 4 wrecked nuclear power plants polluting food supplies and seawater for miles and miles around? Buy more!! That’s the view of the “weasel of Omaha”, a fully signed up member of Lord Keynes’ “wreckage and disaster is good for the economy” nonsense on the dubious premise that everything has to be rebuilt eventually. Perhaps “the great bull of Omaha” should ask the USAF to bomb Omaha, so the pitiful survivors can have the joy of rebuilding it while the rest of us get on with buying stocks.

Below, today’s update on the continuing tragedy of Japan.

“There’s danger in just shoveling out money to people who say, ‘My life is a little harder than it used to be, at a certain place you’ve got to say to the people, ‘Suck it in and cope, buddy. Suck it in and cope.’”

Proper Charlie Munger.

Warren Buffett backs Japan to rebuild, sees 'buying opportunity'

Warren Buffett, the influential billionaire investor, has said that the earthquake and tsunami in Japan may have created a "buying opportunity."

By Louise Armitstead 7:09PM GMT 21 Mar 2011

The 80-year-old American, who is dubbed the "Sage of Omaha", said that the devastation had not changed the "economic prospect" of Japan.

He argued that the markets normally over-react in the wake of big disasters. Speaking in Daegu, South Korea, Mr Buffett said that the terrorists attacks on New York in 2001 "didn't change the future of the US or the economic prospect of the US." He said: "I feel exactly the same way after what's happened in Japan. People in Japan have the same energy, they have the same desire to move on and the same resources to rebuild."

He added: "I don't look at them differently from 10 days ago...Frequently, extraordinary events really create a buying opportunity."

His comments came as Japan's biggest companies started a second week of disruption caused by a shortage of power and supplies. Car manufacturers including Toyota, Honda and Nissan indicated that most of their operations in Japan would remain closed this week.


MARCH 21, 2011, 10:52 A.M. ET

Worries Rise on Japan Impact

HONG KONG—Even as Japan appeared to turn a corner in its battle to contain damage to nuclear facilities, concerns are mounting about the economic fallout.

Asian markets reacted positively Monday to news that power had been restored over the weekend to some of the Fukushima Daiichi power plant. Trading in Japan was closed for a holiday, but Hong Kong's Hang Seng Index rose 1.7% and benchmark indexes in South Korea and Singapore gained more than 1%. Markets were also up across Europe in early trading.

The burden of a too-strong yen on Japan's export-dependent manufacturers—already battered by earthquake and tsunami—is lifting as well, after a rare group intervention by the Group of Seven leading economies last week to weaken the currency. The dollar was up against the yen in a thin holiday market Monday, at ¥81.20 in morning European trading from ¥80.60 late Friday in New York.

"We're less worried today than we were a week ago," said Frederic Neumann, co-head of Asian economics research at HSBC Holdings PLC. "Last week there was fear of a much more severe nuclear fallout. With the reconnecting of partial power supply that fear has receded."

But supply-chain problems continued to hit manufacturers that source parts from Japan. General Motors Co.'s South Korean unit said Monday that it will reduce production to prepare for a possible shortage of key components, following a similar decision by Renault SA's Korean subsidiary.

"The supply-capacity issue from Japan is more serious than we'd early thought," said Johanna Chua, Citigroup Inc.'s Asia economist, in a research note. That could slow the auto, technology and ship-building industries world-wide, she said.

Swiss Re, one of the world's biggest reinsurance companies, forecast claims of approximately $1.2 billion from the earthquake and tsunami—and warned in a statement that this estimate "is subject to a higher than usual degree of uncertainty" because it could take months to process claims, and because of the high proportion of commercial and industrial claims.


March 22, 2011, 12:29 a.m. EDT

Japan demand hopes spur refining shares

HONG KONG (MarketWatch) — Shares of Asian petrochemical and refining firms jumped Tuesday on hopes the supply gap created by capacity outages in the wake of Japan’s earthquake and tsunami would boost their utilization levels and profit margins.

Some — but not all — of the refining and petrochemical capacity that was shut down after Japan’s 9.0-magnitude earthquake on March 11 could come back on stream within days, in effect lifting demand for the remaining functional facilities within and outside the country, said analysts.

“Japan’s disrupted refining capacity could push Asian utilization rates above 90%. In addition, Japan’s extra demand for power generation and rebuilding efforts should add to oil consumption,” Macquarie analysts led by Linda Huang wrote in a note to clients.

----Refining and petrochemical facilities in northeastern parts of Japan affected by the earthquake and tsunami this month. In particular, Cosmo Oil Co.’s Chiba refining complex and JX Holdings Inc.’s refineries at Sendai and Kashima, are among those facilities that remain shut after suffering extensive damage from the disaster.

Cosmo was only able to put out a fire at its Chiba facility on Monday, though the site had been burning since the earthquake on March 11. While the company said it will take every action to resume normal operations “as soon as possible,” a company official speculated that it could be a year before gasoline and other petroleum products flow out of the refinery again, according to a Dow Jones Newswires report.

Morgan Stanley analysts led by Vinay Jaising wrote to clients Tuesday that about 1.4 million barrels per day out of Japan’s 4.3 million barrels per day of refining capacity remains shut at present, but nearly 55% of that capacity is expected to come back on stream within the next five days.

However, it could take between six and 12 months to resume operations, they said, requiring that local and overseas refiners step up their utilization levels to meet that gap in the interim.

The analysts also said that about 10.7 gigawatts of oil-fired power-generation capacity and 26.6 gigawatts of gas-fired capacity in Japan is currently operating at low capacity utilizations of 26% and 57%, respectively.


Japan Extended Reactor’s Life, Despite Warning


TOKYO — Just a month before a powerful earthquake and tsunami crippled the Fukushima Daiichi plant at the center of Japan’s nuclear crisis, government regulators approved a 10-year extension for the oldest of the six reactors at the power station despite warnings about its safety.

The regulatory committee reviewing extensions pointed to stress cracks in the backup diesel-powered generators at Reactor No. 1 at the Daiichi plant, according to a summary of its deliberations that was posted on the Web site of Japan’s nuclear regulatory agency after each meeting. The cracks made the engines vulnerable to corrosion from seawater and rainwater. The generators are thought to have been knocked out by the tsunami, shutting down the reactor’s vital cooling system.

The Tokyo Electric Power Company, which runs the plant, has since struggled to keep the reactor and spent fuel pool from overheating and emitting radioactive materials.

Several weeks after the extension was granted, the company admitted that it had failed to inspect 33 pieces of equipment related to the cooling systems, including water pumps and diesel generators, at the power station’s six reactors, according to findings published on the agency’s Web site shortly before the earthquake.

Regulators said that “maintenance management was inadequate” and that the “quality of inspection was insufficient.”

Less than two weeks later, the earthquake and tsunami set off the crisis at the power station.

The decision to extend the reactor’s life, and the inspection failures at all six reactors, highlight what critics describe as unhealthy ties between power plant operators and the Japanese regulators that oversee them. Expert panels like the one that recommended the extension are drawn mostly from academia to backstop bureaucratic decision-making and rarely challenge the agencies that hire them.

Because public opposition to nuclear power makes it hard to build new power plants, nuclear operators are lobbying to extend their reactors’ use beyond the 40-year statutory limit, despite uneven safety records and a history of cover-ups. The government, eager to expand the use of nuclear energy and reduce the reliance on imported fossil fuels, has been largely sympathetic. Such extensions are also part of a global trend in which aging plants have been granted longer lives.


Japan nuclear crisis: Fears mount over radioactive waste in food

Fears are mounting among Japanese health authorities that food and milk from areas surrounding the Fukushima nuclear plant could be contaminated with radioactive waste.

By Nick Allen, Tokyo 4:30PM GMT 21 Mar 2011

Yukio Edano, Japan's Chief Cabinet Secretary, said shipments of spinach from four provinces surrounding the plant had been halted. Milk shipments from Fukushima province have also been banned.

Mr Edano, the increasingly haggard face of the Japanese government's response to the crisis, sought to quell fears by saying radiation levels in food were not harmful to human health, and that he was prepared to eat contaminated produce himself.

He said: "Even if you eat and drink them several times it will not be a health hazard. So I would like you to act calmly without reacting." Asked if he would be happy to give spinach and milk to his family, he said: "Of course."

----The World Health Organisation appeared to disagree with Mr Edano, announcing that radiation seeping into food and water was "a lot more serious" than previously thought.

Peter Cordingley, the organisation's Western Pacific spokesman, said: "Quite clearly, it is not what we thought in the early stages. It is more serious.

"We have seen Japanese people in grocery stores paying close attention to where their produce is coming from, and we think this is a wise practice." In a Tokyo supermarket shoppers noticeably avoided spinach marked from northern Japan. Shopper Yukihiro Sato, 75, said: "I won't buy vegetables from that area."


In other news, can the US economy really recover without the real estate sector participating or leading? Can the Fed ever abandon QE programs given the collapse in real estate prices? Once on QE can a central bank ever abandon it without generating the depression the policy was brought in to prevent?

US house prices tumble to lowest in almost a decade

US house prices have tumbled to their lowest in almost a decade, raising the prospect that even a recovery in the labour market may not be enough to pull prices from their slump.

By Richard Blackden, US Business Editor 6:52PM GMT 21 Mar 2011

The median price of a previously owned home in the US fell to $156,100 (£96,800) in February, the lowest level since 2002, the National Association of Realtors (NAR) said on Monday. The overall volume of purchases declined 9.6pc during the month, weaker than was expected on Wall Street.

The collapse in house prices helped precipitate America's worst recession since the Great Depression, and a recovery is proving elusive.

Despite the construction of new homes falling to a record low level, the market remains burdened by an excess of supply generated during the boom. "If the house price declines persist, even with the job market recovery, that could hamper recovery in the housing market," said Lawrence Yau, the chief economist at the NAR.

February saw prices fall across the country, with declines reaching double-digits in the midwest and the south.

Distressed sales - or those in which a lender has repossessed the house or the owner has agreed to a price below the value of the outstanding mortgage - accounted for 39pc of all sales. While distressed sales should eventually help the market find a bottom, it is likely to mean further declines on the way.


“I believe Costco does more for civilization than the Rockefeller Foundation”

Proper Charlie Munger.

At the Comex silver depositories Monday, final figures were: Registered 41.55 Moz, Eligible 62.57 Moz, Total 104.12 Moz.


Crooks and Scoundrels Corner.

The bent, the seriously bent, and the totally doubled over.

No crooks again today, just a warning from an American Libya expert that all may not be quite what it seems in Libya. In the good guys versus the bad guys, there are no good guys suggests this expert. Be careful of what you wish for. After Gaddafi may come the deluge, he suggests.

Après moi, le deluge

Moamar Gaddafi. With apologies to King Louis XV.

A Libyan Fight for Democracy, or a Civil War?

By DAVID D. KIRKPATRICK Published: March 21, 2011

TRIPOLI — The question has hovered over the Libyan uprising from the moment the first tank commander defected to join his cousins protesting in the streets of Benghazi: Is the battle for Libya the clash of a brutal dictator against a democratic opposition, or is it fundamentally a tribal civil war?

The answer could determine the course of both the Libyan uprising and the results of the Western intervention. In the West’s preferred chain of events, airstrikes enable the rebels to unite with the currently passive residents of the western region around Tripoli, under the banner of an essentially democratic revolution that topples Col. Muammar el-Qaddafi.

He, however, has predicted the opposite: that the revolt is a tribal war of eastern Libya against the west that ends in either his triumph or a prolonged period of chaos.

“It is a very important question that is terribly near impossible to answer,” said Paul Sullivan, a political scientist at Georgetown University who has studied Libya. “It could be a very big surprise when Qaddafi leaves and we find out who we are really dealing with.”

The behavior of the fledgling rebel government in Benghazi so far offers few clues to the rebels’ true nature. Their governing council is composed of secular-minded professionals — lawyers, academics, businesspeople — who talk about democracy, transparency, human rights and the rule of law. But their commitment to those principles is just now being tested as they confront the specter of potential Qaddafi spies in their midst, either with rough tribal justice or a more measured legal process.

Like the Qaddafi government, the operation around the rebel council is rife with family ties. And like the chiefs of the Libyan state news media, the rebels feel no loyalty to the truth in shaping their propaganda, claiming nonexistent battlefield victories, asserting they were still fighting in a key city days after it fell to Qaddafi forces, and making vastly inflated claims of his barbaric behavior.


“You get a bunch of very intelligent people sitting around trying to do good, I immediately get kind of suspicious and squirm in my seat.”

Proper Charlie Munger.

The monthly Coppock Indicators finished February:

DJIA: +156 Down 05. NASDAQ: +217 Down 11. SP500: +157 Down 4.

What’s next for our disaster prone world?  Trouble from the sun?

Sunspot Alert.

A big sunspot is emerging over the sun's southeastern limb, and it is crackling with activity. NASA's Solar Dynamics Observatory recorded a surge of extreme ultraviolet radiation from the sunspot's magnetic canopy on March 21st.

This appears to be the return of old sunspot 1165, last seen in early March when it formed on the sun's southwestern limb. Since then it has been transiting the far side of the sun, apparently growing in size and restlessness. The potential for trouble will become more clear in the hours ahead as the active region emerges in full.