Thursday, March 31, 2011

March 31 2011: Greatly Mismatched Expectations

Lewis Wickes Hine Many of These There November 1908
"Daniel Manufacturing. Co., Lincolnton, North Carolina. Girl beginning to spin. Many of these there."

Ilargi: As the US housing market continues its downward slope (do spend some time looking at the excellent graphs from Michael David White below), Fukushima is getting worse by the day, which has Tokyo pondering the sarcophagus (entombing) it should have opted for a long time ago (we will have a Stoneleigh update on the situation one of these days), Ashvin Pandurangi looks at wage arbitrage and workers fast-disappearing bargaining power through the lens of the NFL, the American Football league.

Surprise, surprise, there are many similarities with what is happening in Wisconsin and other states, where workers learn the harsh reality of bargaining for jobs and wages in times of financial crisis. There is no bargaining power left when there are ten people for every available job, many of whom are willing to do your work for much less than you have been paid to do it for years.

This in turn spells doom for the US real estate markets. At long last, we see experts and analysts say what we at The Automatic Earth have said from the very beginning: prices, which have come down over 30% to date, have much further to fall. 80-90% from the peak is in the cards. And not just in America. Stoneleigh and I just returned to Britain a few hours ago, after a great 5 days in Sweden, where we met great crowds and great people at the lectures we're doing. Here's a shout out to all the organizers and listeners who made the trip an unforgettable one. Jan, Oscar, David, Eric, Martin et al, thank you!

As Stoneleigh has been pointing out in England as well as in Sweden, both countries have huge housing bubbles, and they will soon see the sort of decline that is now happening stateside. And no, it's not different this time or this place. It’s in the cards. Be very careful, guys.

There are still tons of voices which claim that the US dollar is about to collapse. That is a shame, because it is not. Banks failing stress tests in Ireland, Portugal seeking a bail-out, and above all dozens of Spanish banks that won't be able to roll over their debt will make sure of that. We are about to witness the start of real capital flight away from Europe and into America and the US dollar.

There are a few possible different scenarios: The Irish people could wake up and refuse bank bailout number 5. Here's thinking they should, and demand back the money from the first 4. This would mean initial total chaos. The Portuguese could do something similar. But the big one this spring is Spain. Too big to fail, and possibly too big to save. We may well see very difficult and protracted negotiations, lasting well into the summer. And because what the Irish are basically asked to do, and may refuse, is to bail out foreign banks (Germany, Britain, Holland), these banks could immediately start to wobble if and when the Irish choose to do the only thing that's good for them.

I wouldn't be surprised if one or more countries vote to leave the Eurozone before Christmas. But I admit, I can't look into the under the table goings-on that may be used to prop up the various corpses. It won’t hold up, but it may push things further down the line for a while. The EU powers that be have deep pockets (supplied by their citizens); their pockets, though, are not deep enough, as they have yet to find out. However this may all be and develop, I'm sure the events in Europe over the next six months won't allow for a dollar collapse. There is no room left for it. The dollar may stink into all hell and high water, but there are worse options out there. So buying USD it will be for the nervous investors around the globe, not euro, not gold, not silver. Not when in panic mode!. Greatly Mismatched Expectations indeed, for many experts and analysts.

Here's Ashvin on offense and defense. For those not familiar with American Football: it is the sport of bookies, bettors and gamblers. If the NFL season is scratched, there’ll be many sour faces in Vegas and Atlantic City.

Ashvin Pandurangi:

Greatly Mismatched Expectations

A common criticism of the U.S. financial industry repeatedly dished out after 2008 was that the high-level executives preferred to pursue short-term gains, rather than the long-term stability and growth of their respective institutions. The claim is that their compensation packages incentivized them to take excessive risks with their loans and securitization practices. Yet, we only have to look to another bloated and unproductive American industry to see how this criticism completely misses the broader storyline. I am speaking of the entertainment industry, and, more specifically, the professional sports industry.

The National Football League (NFL) is currently in the process of attempting to solidify a "lockout" of the players for the 2011 season, which would also serve to lock out the numerous other workers associated with NFL teams and venues. After collective bargaining failed to make any progress, the NFL players' union decertified so that the players could launch a class action anti-trust lawsuit against the League and its owners. If this lawsuit fails, the lockout will continue and there will be no games scheduled for the 2011 season.

The team owners had reaffirmed a collective bargaining agreement ("CBA") in 2006, which gave the players 60% of NFL revenues and unrestricted free agency (no conditions on signing with another team after contract expiration). In 2008, they decided to "opt out" of that CBA and, since that time, have been attempting to completely renegotiate their existing contracts with employees (players), just as any exploitative cartel would during an economic depression. [1].

The NFL has seen its revenues plummet since 2008 as ticket, merchandise and concession sales have all dropped off. Now, the team owners and their corporate sponsors would like to keep a larger slice of the $9B revenue pie in the future. They are proposing to decrease the percentage share of revenue given to players, or perhaps even implement fixed salaries without revenue sharing, and extend the regular season by two games, among other things. [2].

The collective negotiations were obviously just a show, since the owners knew from the beginning that they had massive amounts of leverage over the players. Unlike their counterparts in professional basketball, many of these players do not have guaranteed contracts, are not paid exorbitant salaries (relative to their value for the team), are prone to significantly increased risk of injury as they get older and are also heavily in debt. While the owners believe they can afford to miss out on revenues for a season, the players, given their lifestyles and expectations, do not. One sports commentator described the owners' mentality as one that is willing to endure "short-term pain" for "long-term gain". That's why they are so confident in their ability to ultimately get what they want.

Major financial institutions and their executive decision-makers have, similarly, decided that they will pursue a strategy of short-term pain for long-term gain. They literally and figuratively hold unfathomable amounts of leverage over the global economy, and the lingering threat of debt deflation has, so far, only served to increase the strength of their stranglehold. The short-term pain comes in the form of a few financial institutions being sacrificed at the altar of greed, slightly reduced share values (relative to their peak) and a public relations nightmare for perhaps a year. That's really it. From the perspective of these financial executives, it will be smooth sailing from here on out, because global economic actors are still entirely dependent on their good will.

As the global financial situation remains unstable and continues to deteriorate, they expect to get concessions from the players (central/local governments and their taxpayers) all along the way. These concessions may come in the form of direct subsidies, backdoor monetary policy (quantitative easing), austerity and tax hikes (continued servicing of government debt) or cheap access to public assets (land, oil, etc.). It is not just the financial crisis which provides them with leverage, but every sociopolitical crisis that stems from it and even unrelated crises.

In fact, every single natural and/or man-made crisis in the last three years (see sub-prime housing meltdown, Haiti EQ, Pakistan floods, Russian drought, European sovereign debt crisis, MENA revolutions, Japanese EQ/flood/nuclear meltdown) has been used as justification for further taxpayer subsidies to the financial industry. Governments and private individuals simply do not have enough funds for relief efforts, so they must finance a large majority of them.

People are dying and something must be done, but, given the current monetary paradigm, governments can only take action through the issuance of more debt and the payment of more interest to private banking cartels. It is no wonder, then, that certain Wall Street executives are earning millions in salaries and bonuses while the rest of the world quickly crumbles into little bits and pieces.

The "plan" was not to blindly chase risky investments until everything crashes and everyone goes broke, but to make large sums of money while also gutting the productive economy and deliberately plunging the entire world into a state of hopeless dependency. Those of us in the developed world have all ended up like the NFL players, watching the wealth pie shrink as we hold greatly and grossly mismatched expectations, and no chips at the table to bargain with.

At the same time, however, those NFL players do see a slight glimmer of symbolic hope in front of them. It is true that the ongoing anti-trust lawsuit against team owners is essentially meaningless, yet another procedural display of injustice at work, and the players will never be able to meet their material expectations. However, the court of public opinion may offer them the next best thing - a form of revenge on the greedy owners and corporate sponsors. Justice, in our current society, can only be measured by how equally the losses are shared.

American sports fans do not want to go an entire season without professional football, partly because of our selfish need for mindless entertainment, but also because many of the fans view the teams as an extension of their immediate family. They follow every single detail of the team's performance, anticipate every single game with child-like enthusiasm and celebrate every victory like it was a validation of their own existence. They also mourn the losses like they would if a close relative had just passed away. The team owners figure that this level of extreme attachment will always serve to bring the fans back, no matter how disappointed they are in the short-term, as they always have in the past.

We are not living in the past, however, and average Americans, whether sports fans or not, have just about reached their breaking point. They can no longer afford to buy season tickets or even tickets to individual games, and now they are being told that that they can't even watch their favorite players on TV. We can no longer afford to buy homes, cars, boats, computers or even gas, and now we are being told that we must pay higher taxes and receive less public benefits.

If that is really a recipe for long-term gain, then I must take my hat off to the financial masters of our world. That would mean they have managed to subjugate billions of productive workers around the world and steal what little wealth these workers have left, without generating any real threats to their own wealth or power in the process. If they end up on the wrong side of a slim margin of error, however, then they have only managed to carry the weight of the world on their shoulders for a few short yards, right before the strain became too great and they collapsed in a heap on the field.

Spring 2011 Guide of 30 Key Charts to See Before You Buy or Sell Your Home
by Michael David White -

US House Prices Continue Dramatic Fall
by Jonny Diamond - BBC

US single-family home prices fell for the seventh month in a row in January, new statistics show.

Seasonally adjusted prices fell in 12 of the 20 metropolitan areas tracked by the S&P/Case-Shiller index. In four cities, prices were at their lowest in 11 years, with the overall index down 0.2% in January from the previous month. The average annual price fall across the 20 cities was 3.1%; only Washington DC saw a meaningful rise in prices.

House prices in the US capital city, which in general has fared better than the rest of the country during recent economic downturn, gained 3.6% over the year. San Diego was flat at 0.1% above January's price a year ago.

S&P's David Blitzer said worse declines could lie ahead. "The housing market recession is not yet over, and none of the statistics are indicating any form of sustained recovery," he said.
"Keeping with the trends set in late 2010, January brings us weakening home prices with no real hope in sight for the near future. "At most, we have seen all statistics bounce along their troughs; at worst, the feared double-dip recession may be materializing."

In Atlanta, Cleveland, Detroit and Las Vegas, average house prices remain below 2000 levels. House prices in Phoenix, in the US state of Arizona, showed the most drastic decline with a 9.1% fall from the previous year. The index tracks the prices of typical single-family homes in each of the metropolitan areas surveyed.

The declines come as other economic indicators show signs of recovery. Consumer spending has been rising and manufacturing activity is growing at the fastest rate in seven years.

3 Reasons Why The American Dream Isn't Coming Back Anytime Soon
by Joe Weisenthal - Business Insider

In a note today, BofA/ML analyst Michelle Meyer looks at the state of The American Dream, home-ownership, where it stands now, and where it's going.

Since the housing bust, Americans have begun a shift towards renting, and Meyer predicts a continuation of that trend for three big reasons.

First, there is still a large backlog of foreclosures – as of the end of 2010, there were 4.3 million homeowners in foreclosure or seriously delinquent – which will naturally become renters. And, this is not the end of the pipeline. There are about 3.5 million mortgages that have received a modification, of which at least half are likely to re-default and enter foreclosure. In addition, there are 1.3 million mortgages 60 days delinquent, and although the pace of new delinquencies has slowed, it is still elevated. We believe it is reasonable to expect nearly 8 million foreclosures to enter the market over the next three years. This means we can expect a steady shift into rentals from foreclosures through 2013.

Second, young adults forming new households are not good candidates for homeownership in this market of incredibly tight lending standards and high unemployment. Not only is in difficult to qualify for a mortgage but the down- payment requirement is higher, which means young adults will need to be liquid and willing to lock-up cash. In addition, purchasing a home reduces labor mobility,

Third, the recession has greatly impaired household net worth and lowered income, making it more difficult for current renters to transition to homeowners...

housing vs. rentals

Tax the Super Rich now or face a revolution
by Paul B. Farrell, MarketWatch

Yes, tax the Super Rich. Tax them now. Before the other 99% rise up, trigger a new American Revolution, a meltdown and the Great Depression 2.

Revolutions build over long periods — to critical mass, a flash point. Then they ignite suddenly, unpredictably. Like Egypt, started on a young Google executive’s Facebook page. Then it goes viral, raging uncontrollably. Can’t be stopped. Here in America the set-up is our nation’s pervasive “Super-Rich Delusion.”

We know the Super Rich don’t care. Not about you. Nor the American public. They can’t see. Can’t hear. Stay trapped in their Forbes-400 bubble. An echo chamber that isolates them. They see the public as faceless workers, customers, taxpayers. See GOP power on the ascent. Reaganomics is back. Unions on the run. Clueless masses are easily manipulated.
Even Obama is secretly working with the GOP, will never touch his Super Rich donors. Yes, the Super-Rich Delusion is that powerful, infecting all America.

Here’s how one savvy insider who knows described this Super-Rich Delusion: “The top 1% live privileged lives, aren’t worried about much. Families vacation at the best resorts. Their big concerns are finding the best Pilates teacher, best masseuse, best surgeons, best private schools. They aren’t concerned with the underlying deterioration of America or the world, except in the abstract, because they aren’t directly affected by it. That’s not to say they aren’t sympathetic, aware, or don’t talk about the issues you bring up. They are largely concerned with protecting and enhancing their socio-economic positions, ensuring their families live well. And nothing you write about will change things.”

Warning, in 2011 that attitude is delusional, deadly, yet pervasive in America.

Super Rich replaying “Great Gatsby” age, won’t learn till it’s too late
Our top 1% honestly believe they’re immune, protected from the unintended consequences of beating down average Americans for three decades with the free-market, trickle-down Reaganomics doctrines that made them Super Rich. They honestly believe those same doctrines will protect them in the next depression. Why? Because they have megabucks stashed away. Provisions for the long haul. Live in gated compounds with mercenaries guarding them.

They believe they’ll continue living just fine in a depression. But you won’t. Nor will your retirement. Neither will the rest of America. And still the Super Rich don’t care, “except in the abstract, because they aren’t directly affected.”

Warning: The Super-Rich Delusion has pushed us to the edge of a great precipice: Remember the Roaring Twenties? The Crash of 1929? Great Depression? Just days before the crash one leading economist, Irving Fisher, predicted that stocks had “reached what looks like a permanently high plateau.” Yes, he was trapped in the “Great Gatsby Syndrome,” an earlier version of today’s Super-Rich Delusion. It was so blinding in 1929 that the president, Wall Street, all America were sucked in … until the critical mass hit a mysterious flash point, triggering the crash.

Yes, we’re reliving that past — never learn, can’t hear. And oddly it’s not just the GOP’s overreach, the endlessly compromising Obama, too-greedy-to-fail Wall Street banksters, U.S. Chamber of Commerce billionaires and arrogant Forbes 400. America’s entire political, financial and economic psyche is infected, as if our DNA has been rewired. The Collective American Brain is trapped in this Super-Rich Delusion, replaying the run-up to the ’29 Crash.

Nobody predicted 2011 revolutions in the oil-rich Arab world either
Warning: Mubarak, Gaddafi, Ali, Assad, even the Saudis also lived in the Super-Rich Delusion. Have for a long time. Were vulnerable. Ripe for a revolution. They, too, honestly believed they were divinely protected, chosen for great earthly wealth, enjoyed great armies. Then, suddenly, out of the blue, a new “educated, unemployed and frustrated” generation turned on them, is now rebelling, demanding their share of economic benefits, opportunities, triggering revolutions, seeking retribution.

Still, you don’t believe there’s a depression ahead here in America? The third great market crash of the 21st century? A new economic revolution about to blow up in our faces? No, you don’t believe, can’t believe … you, me, we are all infected by the Super-Rich Delusion, just as Americans were in the Roaring Twenties.

Check the stats folks: The last time America’s wealth gap between the Super Rich and the other 99% was this big was just before the 1929 Crash and the Great Depression. You can’t remember? Or you won’t? America is trapped in “terminal denial,” a setup for failure. Too many still live in the false hope of this Super-Rich Delusion. Do you believe government stats hyping a recovery? Believe Wall Street’s nonsense about a new bull market ahead? Believe Exxon-Mobile’s misleading ads about energy stocks. Believe Bill Gross’ when he says dump Treasurys, and buy his emerging country bonds? Dream on.

Start preparing for the third meltdown of the 21st Century, and depression
Denial and lies. Remember, 93% of what you hear about markets, finance and the economy are guesses, wishful thinking and lies intended to manipulate you into making decisions that suck money from your pockets into Wall Street. They get rich telling lies about securities. They hate any SEC fiduciary rules forcing them to tell the truth. But the fact is, on an inflation-adjusted basis, Wall Street lost 20% of your retirement money in the decade from 2000 to 2010, over $10 trillion. And “Irrational Exuberance’s” Robert Shiller warns of a third meltdown coming. You better start preparing now.

Before you start betting any more at Wall Street’s rigged casinos, think long and hard about these six megatoxins lurking in America’s Super-Rich Delusion, a mind-altering pandemic infecting our nation’s leadership in Washington, Corporate America and Wall Street … but also “trickling down,” infecting many Americans. Listen:

1. Warning: Super Rich want tax cuts, creating youth unemployment
Bloomberg warns: “The Kids Are Not Alright.” Worldwide, youth unemployment is fueling the revolution. In a New York Times column, Matthew Klein, a 24-year-old Council on Foreign Relations researcher, draws a parallel between the 25% unemployment among Egypt’s young revolutionaries and the 21% for young American workers: “The young will bear the brunt of the pain” as governments rebalance budgets. Taxes on workers will be raised and spending on education will be cut while mortgage subsidies and entitlements for the elderly are untouchable,” as will tax cuts for the rich. Opportunities lost. “How much longer until the rest of the rich world” explodes like Egypt?

2. Warning: rich get richer on commodity prices, poor get angrier
USA Today’s John Waggoner warns: “Soaring food prices send millions into poverty, hunger: Corn up 52% in 12 months. Sugar 60%. Soybeans 41%. Wheat 24%. For 44 million the “rise in food prices means a descent into extreme poverty and hunger, warns the World Bank.” Many causes: Speculators. Soaring oil prices. Trade policies. Population explosion. But altogether they expose “the underlying inequalities and issues related to the standard of living that boil beneath the surface,” says a Pimco manager.

3. Warning: Global poor ticking time bomb targeting Super Rich
A Time special report, “Poor vs. Rich: A New Global Conflict” warned that a “conflict between two worlds — one rich, one poor — is developing, and the battlefield is the globe itself.” Just 25 developed nations of 750 million citizens consume most of the world’s resources, produce most of its manufactured goods and enjoy history’s highest standard of living.” But they’re now facing 100 underdeveloped poor nations with 2 billion people with hundreds of millions living in poverty all demanding “an ever larger share of that wealth.” Think Egypt. British leader calls this a “time bomb for the human race.”

4. Warning: Next revolution coming across ‘Third World America’
We are ripe for one: In “Third World America” Arianna Huffington warns: “Washington rushed to the rescue of Wall Street but forgot about Main Street … One in five Americans unemployed or underemployed. One in nine families unable to make the minimum payment on their credit cards. One in eight mortgages in default or foreclosure. One in eight Americans on food stamps. Upward mobility has always been at the center of the American Dream … that promise has been broken… The American Dream is becoming a nightmare.” Soon it will implode. a meltdown, revolution, depression.

5. Warning: Super Rich must be detoxed of their greed addiction
In “Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (And Stick You With the Bill),” David Cay Johnston, warns that the rich are like addicts, and to “the addicted, money is like cocaine, too much is never enough.” A few years ago an elite 300,000 Americans in “the top tenth of 1% of income had nearly as much income as all 150 million Americans who make up the economic lower half of our population.” The Super Rich Delusion is an addiction that requires a painful detox.

6. Warning: Politicians infected by Super-Rich Delusion, revolution
In “Washington’s Suicide Pact,” Newsweek’s Ezra Klein warns: “Congress is careening toward the worst of all worlds: massive job losses and an exploding deficit.” How bad? As many as 700,000 more jobs lost, says Moody’s chief economist, Mark Zandi. What a twist: Remember vice president Dick Cheney said “deficits don’t matter.” Today the GOP is so blinded by its obsession to destroy Obama’s presidency, deficits are now the only thing they say matters.

Wake up folks. The Super-Rich Delusion is destroying the American Dream for the rest of us. The Super Rich don’t care about you. They’re already stockpiling for the economic time bomb dead ahead. Don’t say you weren’t warned. Time for you to plan ahead for the coming revolution, for another depression.

Japan Considers Entombing Nuclear Plant as Workers Fight to Stop Radiation
by Go Onomitsu and Sachiko Sakamaki - Bloomberg

Japan will consider entombing its crippled atomic plant in concrete as workers grapple to reduce radiation and contain the worst nuclear disaster in 25 years. Chief Cabinet Secretary Yukio Edano today ruled out the possibility that two of the six reactors at the Fukushima Dai- Ichi plant would ever be salvaged.

“Given the whole situation, the objective circumstances, it is obvious,” Edano said when asked about reactors 5 and 6, which were offline at the time of the March 11 earthquake and tsunami and so weren’t rendered inoperable. “The public perception is fairly clear.”

About 600 workers, firefighters and soldiers have averted the threat of a total meltdown by injecting water into damaged reactors for the past two weeks. Engineers have connected the complex’s six units with the power grid and two are using temporary motor-driven pumps. While technicians are trying to repair monitoring and cooling systems, the work has been hampered by discoveries of hazardous radioactive water.

The government hasn’t ruled out pouring concrete over the whole facility as one way to shutting it down, Edano said. Dumping concrete on the plant would serve a second purpose: it would trap contaminated water, said Tony Roulstone, an atomic engineer who directs the University of Cambridge’s masters program in nuclear energy. “They need to immobilize this water and they need something to soak it up,” he said by phone today. “You don’t want to create another hazard, but you need to get it away from the reactors.”

Toxic Water
Record high readings of contaminated sea water were found near the plant. Radioactive iodine rose to 3,355 times the regulated safety limit yesterday afternoon from 2,572 times earlier in the day, said Hidehiko Nishiyama, a spokesman for Japan’s nuclear safety agency. No fishing is occurring nearby so there is no threat, he said.

The three reactors all lost their roofs following explosions and fires in the days following the magnitude-9 earthquake and tsunami, which knocked out power and backup systems used to cool nuclear fuel. Among proposals being considered to contain the disaster, Japan may use a special fabric to cover three reactors to curb the spread of toxic radiation in the air.

Crews are also considering pumping radioactive water in the reactor buildings to a tanker for safe storage. The U.S. has transported robots impervious to radiation and their operators to the plant at Japan’s request, Peter Lyons, acting assistant secretary of the U.S. Energy Department, told a congressional panel yesterday. Fukushima plant operator Tokyo Electric Power Co. said it can’t rule out the possibility that water may have flowed into the sea from underground trenches outside the reactor buildings.

Work to drain radioactive water from the basement of the No. 1 reactor turbine building was halted because a storage tank is full, Kazuyo Yamanaka, a manager at the power utility, said today. Tokyo Electric plans to move the contaminated water into a condenser within the same building. The level of contaminated water in the basement of the No. 1 reactor turbine building has been reduced by half to 20 centimeters (7.9 inches), Nishiyama said.

Water in a tunnel outside the No. 2 reactor emitted radiation exceeding 1 sievert an hour, a Tokyo Electric spokesman said. Exposure to that dose for 30 minutes would trigger nausea, and four hours’ exposure might lead to death within two months, according to the U.S. Environmental Protection Agency.

Intolerable Conditions
“Workers can’t work near water with radiation levels exceeding 1 sievert per hour, at least not within a few meters,” said Hironobu Unesaki, a professor at Kyoto University’s Research Reactor Institute. “They may need to remotely remove water or rotate workers for very short periods of time.”

Tokyo Electric Chairman Tsunehisa Katsumata apologized for the nuclear crisis today and said the power company will do all it can to prevent the catastrophe from worsening. Katsumata took charge of the utility after President Masataka Shimizu, 66, was admitted to a hospital for high blood pressure. Dai-Ichi reactors 1 to 4 will be decommissioned after they are stabilized, Katsumata said. Edano announced the closure of all six units at the same news conference.

5-Year Cleanup
Cleanup probably will take at least five years because of the time needed for radioactivity to diminish so experts can assess the damage, Akira Tokuhiro, a professor of mechanical and nuclear engineering at the University of Idaho, said in an interview. That assessment will determine whether the reactors should be entombed or dismantled to eliminate any further radiation risk, he said.

Smoke seen at the No. 1 reactor of the nearby Fukushima Dai-Ni nuclear power plant wasn’t caused by a fire but by a minor problem with equipment, a spokesperson for Tokyo Electric Power Co. said, citing the local fire department. The smoke was seen rising near the plant at 5.57 p.m. today and disappeared shortly after, Japan’s Nuclear and Industrial Safety Agency said at a news conference today. The number of dead and missing from the earthquake and tsunami had reached 27,652 as of 9 p.m., Japan’s National Police Agency said.

Groundwater at nuclear plant 'highly' radiation-contaminated: TEPCO
by Kyodo

More signs of serious radiation contamination in and near the Fukushima Daiichi nuclear power plant were detected Thursday, with the latest data finding groundwater containing radioactive iodine 10,000 times the legal threshold and the concentration of radioactive iodine-131 in nearby seawater rising to the highest level yet.

Radioactive material was confirmed from groundwater for the first time since the March 11 quake and tsunami hit the nuclear power plant on the Pacific coast, knocking out the reactors' key cooling functions. An official of the plant operator Tokyo Electric Power Co. said, ''We're aware this is an extremely high figure.''

The contaminated groundwater was found from around the No. 1 reactor's turbine building, although the radiation level of groundwater is usually so low that it cannot be measured. Japanese authorities were also urged to consider taking action over radioactive contamination outside the 20-kilometer evacuation zone around the plant, as the International Atomic Energy Agency said readings from soil samples collected in the village of Iitate, about 40 km from the plant, exceeded its criteria for evacuation.

The authorities denied that the seawater and soil contamination posed an immediate threat to human health, but the government said it plans to enhance radiation data monitoring around the plant on the Pacific coast, about 220 km northeast of Tokyo. According to the government's nuclear safety agency, the radioactive iodine-131 at a concentration of 4,385 times the maximum level permitted under law has been detected in a seawater sample collected Wednesday afternoon near the plant, exceeding the previous high recorded the day before.

In Tuesday's sample, the concentration level was 3,355 times the maximum legal limit. Hidehiko Nishiyama, a spokesman for the Nuclear and Industrial Safety Agency, acknowledged there is a possibility that radiation is continuing to leak into the sea, adding, ''We must check that (possibility) well.'' He reiterated that there are no immediate health concerns as fishing is not being conducted in the designated evacuation zone stretching 20 km from the plant and radioactive materials will be diluted by the time seafood is consumed by people.

Still, the nuclear regulatory body said it has decided to add another three areas located 15 km offshore for monitoring. Tokyo Electric said it is likely that the high level of contamination in seawater has been caused by water that has been in contact with nuclear fuel or reactors, but how it flowed to the sea remains unknown.

The No. 1, No. 2 and No. 3 reactors at the plant are believed to have suffered damage to their cores, possibly releasing radioactive substances, while the fuel rods of the No. 4 reactor kept in a spent fuel pool are also believed to have been exposed at one point, as the reactors lost cooling functions after the March 11 quake and tsunami.

In Vienna on Wednesday, Denis Flory, IAEA deputy director general and head of the agency's nuclear safety and security department, said readings from soil samples collected in Iitate between March 18 and March 26 ''indicate that one of the IAEA operational criteria for evacuation is exceeded (there).'' In response to the IAEA, Japan's Chief Cabinet Secretary Yukio Edano said Thursday the government may implement measures, if necessary, such as urging people living in the area to evacuate, if it is found that the contaminated soil will have a long-term effect on human health.

Nishiyama said at a press conference in the afternoon that the agency's rough estimates have shown there is no need for people in Iitate to evacuate immediately under criteria set by the Nuclear Safety Commission of Japan. ''The radiation dose of a person who was indoors for 16 hours and outdoors for eight hours (and continued such a lifestyle) would be about 25 millisieverts, which is about half the level which requires evacuation based on the commission's criteria,'' he said. The commission explained that domestic criteria are based on measurements at radiation in the air, and not the soil.

In another effort to prevent radioactive dust from being dispersed from the plant, where masses of debris are strewn as a result of explosions, Tokyo Electric initially planned to conduct a test spraying of a water-soluble resin on Thursday, but postponed the plan due to rain. An official said rain would have slowed down the work and made it difficult to gauge the effects of the resin spraying. The utility firm known as TEPCO is considering when to conduct the work, at the south and west sides of the No. 4 reactor. A total of 60,000 liters will be sprayed over a period of two weeks.

TEPCO also tried to remove contaminated water filling up some of the reactors' turbine buildings and tunnel-like trenches connected to them. But given the large amount of water, authorities are having difficulty finding places to store it. TEPCO has been pouring massive amounts of water into the reactors and spent nuclear fuel pools at the plant as a stopgap measure to cool them down, because serious damage to fuel rods from overheating could lead to the release of enormous amounts of radioactive materials into the environment.

However, the measure is believed to be linked to the possible leak of radiation-contaminated water from the reactors, where fuel rods have partially melted. Removal of the water at the turbine buildings is believed to be essential to restoring the vital functions to stably cool down the reactors and the spent nuclear fuel pools. On Thursday afternoon, a ship provided by U.S. forces carrying fresh water to cool down the reactors docked on the coast of the plant site to help the mission of water injection.

Japan Nuclear Crisis: Setbacks Mount In Leaking Plant
by Mari Yamaguchi  - AP

Setbacks mounted Wednesday in the crisis over Japan's tsunami-damaged nuclear facility, with nearby seawater testing at its highest radiation levels yet and the president of the plant operator checking into a hospital with hypertension. Nearly three weeks after a March 11 tsunami engulfed the Fukushima Dai-ichi plant, knocking out power to the cooling system that keeps nuclear fuel rods from overheating, Tokyo Electric Power Co. is still struggling to bring the facility in northeastern Japan under control.

Radiation leaking from the plant has seeped into the soil and seawater nearby and made its way into produce, raw milk and even tap water as far as Tokyo, 140 miles (220 kilometers) to the south. The stress of reining in Japan's worst crisis since World War II has taken its toll on TEPCO President Masataka Shimizu, who was sent to a hospital late Tuesday. Shimizu, 66, has not been seen in public since a March 13 news conference in Tokyo, raising speculation that he had suffered a breakdown. For days, officials deflected questions about Shimizu's whereabouts, saying he was "resting" at company headquarters. Spokesman Naoki Tsunoda said Wednesday that Shimizu had been admitted to a Tokyo hospital after suffering dizziness and high blood pressure.

The leadership vacuum follows growing criticism of TEPCO for its failure to halt the radiation leaks. Bowing deeply, arms at his side, Chairman Tsunehisa Katsumata announced at a news conference that he would step in and apologized for the delay. "We must do everything we can to end this situation as soon as possible for the sake of everyone who has been affected," said Yuhei Sato, governor of Fukushima prefecture. "I am extremely disappointed and saddened by the suggestion that this might drag out longer."

TEPCO acknowledged publicly for the first time that at least four of the plant's six reactors will have to be decommissioned once the crisis subsides, citing the corrosive seawater used to cool reactors and spent fuel pools. "After pouring seawater on them ... I believe we cannot use them anymore," Katsumata said. Japan's government has been saying since March 20 that the entire plant must be scrapped.

On Wednesday, nuclear safety officials said seawater 300 yards (meters) outside the plant contained 3,355 times the legal limit for the amount of radioactive iodine – the highest rate yet and a sign that more contaminated water was making its way into the ocean. The amount of iodine-131 found south of the plant does not pose an immediate threat to human health but was a "concern," said Hidehiko Nishiyama, a Nuclear and Industrial Safety Agency official. He said there was no fishing in the area.

Radioactive iodine is short-lived, with a half-life of just eight days, and in any case was expected to dissipate quickly in the ocean. It does not tend to accumulate in shellfish. "We will nail down the cause, and will do our utmost to prevent it from rising further," he said.

Highly toxic plutonium also has been detected in the soil outside the plant, TEPCO said. Safety officials said the amounts did not pose a risk to humans, but the finding supports suspicions that dangerously radioactive water is leaking from damaged nuclear fuel rods. There have been no reports of plutonium being found in seawater.

The latest findings on radioactive iodine highlighted the urgent need to power up the power plant's cooling system. Workers succeeded last week in reconnecting some parts of the plant to the power grid. But as they pumped in water to cool the reactors and nuclear fuel, they found pools of radioactive water in the basements of several buildings and in trenches outside.

The contaminated water has been emitting many times the amount of radiation that the government considers safe for workers, making it a priority to pump the water out before electricity can be restored.
TEPCO plans to spray resin on the ground around the plant to keep radioactive particles from spreading or seeping into the ocean. The company will test the method Thursday in one section of the plant before using it elsewhere, Nishiyama said. "The idea is to glue them to the ground," he said. But it would be too sticky to use inside buildings or on sensitive equipment.

The government also is considering covering some reactors with cloth tenting, TEPCO said. If successful, that could allow workers to spend longer periods of time in other areas of the plant. The spread of radiation has raised concerns about the safety of Japan's seafood, even though experts say the low levels suggest radiation won't accumulate in fish at unsafe levels. Trace amounts of radioactive cesium-137 have been found in anchovies as far afield as Chiba, near Tokyo, but at less than 1 percent of acceptable levels.

Experts say the Pacific is so vast that any radiation will be quickly diluted before it becomes problematic. Citing dilution, the U.S. Food and Drug Administration has played down the risks of seafood contamination. As officials seek to bring an end to the nuclear crisis, hundreds of thousands in the northeast are trying to put their lives back together. The official death toll stood at 11,257 on Wednesday, with the final toll likely surpassing 18,000.

The government said damage is expected to cost $310 billion, making it the most costly natural disaster on record. In the town of Rizukentakata, one 24-year-old said she's been searching every day for a missing friend but will have to return to her job at a nursing home because she has run out of cash. Life is far from back to normal, she said. "Our family posted a sign in our house: Stay positive," Eri Ishikawa said. But she said it's a struggle.

High radiation levels found in seawater near Fukushima plant
by CNN Wire Staff

Radioactive iodine at more than 3,000 times the normal level has been found in ocean water near the crippled Fukushima Daiichi nuclear plant, where workers are struggling to keep reactors cool and prevent radioactive water from entering the Pacific. Monitoring data collected Tuesday afternoon detected the I-131 isotope at 3,355 times the normal level, according to Japan's Nuclear and Industrial Safety Agency. The sample was taken 330 meters (1,080 feet) away from one of the plant's discharge points, the agency said.

"I do not believe there's an immediate threat to fishery products, as no fishing is being conducted within 20 kilometers of the nuclear power plant," said Hidehiko Nishiyama of the agency.
Officials did not pinpoint a particular cause for the higher readings, and it was unclear whether a leak had already occurred or if the elevated levels resulted from airborne radiation.

Tuesday's levels are the highest seen since a massive earthquake and subsequent tsunami knocked out cooling systems at the plant March 11. Readings from seawater outside the plant have fluctuated since. They spiked Sunday, then dropped a day later. The impact on marine life is unknown.

Water has been a key weapon in the battle to stave off a meltdown at the facility. Workers have pumped and sprayed tons of water to keep the plant's radioactive fuel from overheating, and the plant is running out of room to store the now-contaminated liquid. "They have a problem where the more they try to cool it down, the greater the radiation hazard as that water leaks out from the plant," said Jim Walsh, an international security expert at the Massachusetts Institute of Technology.

A French nuclear group, Areva, is providing five experts -- one of whom is an expert in treating contaminated water -- to Japan to assist, plant owner Tokyo Electric Power Co. said. As a result of the crisis, the Japanese government Wednesday ordered immediate safety upgrades at all nuclear power plants in the country, according to the Nuclear and Industrial Safety Agency.

Meanwhile, Tokyo Electric said Wednesday its president had been hospitalized due to "fatigue and stress." Masataka Shimizu was hospitalized Tuesday and was expected to remain in treatment for several days, company Chairman Tsunehisa Katsumata told reporters. Shimizu was last spotted in public at a news conference March 13, two days after the quake and tsunami.

The company chairman said Wednesday that he would temporarily take over crisis management at the plant while Shimizu was away. He also apologized for the damage caused by the situation at the six-reactor facility in northeastern Japan, and said Tokyo Electric was doing its best to contain it. The company's stock has plunged as it comes under fire for its handling of the crisis, which has taken a significant toll beyond the plant complex.

That was one issue that drew about 80 demonstrators Wednesday to Tokyo Electric's headquarters. The protesters were also against the use of nuclear power. Authorities have banned the sale and transport of some vegetables grown in the area after tests detected radiation. Signs of contaminated tap water prompted officials to tell residents in some areas to stop giving it to infants. And the government has advised residents within a 20-kilometer (12-mile) radius of the plant to evacuate.

Meanwhile, new concerns surfaced Wednesday after smoke was spotted at the nearby Fukushima Daini plant, Tokyo Electric said. The company owns both plants. Smoke was detected in the turbine building of reactor No. 1 at Daini about 6 p.m. (5 a.m. ET), but could not be seen an hour later, the company said. After the earthquake and tsunami, Japanese authorities also found cooling-system problems at Daini, and those living with a 10-kilometer (6-mile) radius were ordered to evacuate as a precaution. But since then, officials have not expressed any concerns about a possible meltdown there.

The growing damages could have a steep price for Tokyo Electric as farmers and others impacted by the disaster ask for compensation. Reporters peppered company officials with questions about the president's whereabouts Sunday. A spokesman told them Shimizu had been staying inside the company's Tokyo headquarters, and that the president's physical condition had been in decline from overwork.

Amid news of Shimizu's hospitalization, Katsumata said the company was improving conditions for workers at the plant and had created a resting place for hundreds of employees in a gym at the Daini plant, about 10 kilometers away. An inspector for Japan's nuclear safety agency described austere conditions at the Fukushima Daiichi plant Tuesday. Workers were sleeping in conference rooms, corridors, and stairwells on leaded mats intended to keep radiation at bay, safety inspector Kazuma Yokota said Tuesday.

He said they were also eating only two meals each day -- including a carefully rationed breakfast of 30 crackers and vegetable juice -- while facing risks of high radiation and intense personal pressure. "My parents were washed away by the tsunami, and I still don't know where they are," one worker wrote in an e-mail that was verified as authentic by a spokesman for Tokyo Electric. "Crying is useless," said another e-mail. "If we're in hell now, all we can do is crawl up towards heaven."

In a statement released March 18, Shimizu said the company was taking the situation seriously. "We sincerely apologize to all the people living in the surrounding area of the power station and people in Fukushima Prefecture, as well as to the people of society for causing such great concern and nuisance," he said.

Fresh concerns emerged Wednesday about whether the government was doing enough to enforce an evacuation area around the plant -- and whether that area should expand. Chief Cabinet Secretary Yukio Edano said the federal government was weighing a proposal from officials in Fukushima Prefecture, who asked authorities to tighten their restrictions in the evacuation zone. Proposed rules would stop residents from returning to their homes and force any who remain to leave. So far, residents have been advised -- but not forced -- to evacuate.

Meanwhile, the Greenpeace environmental advocacy organization said the government's evacuation zone was not large enough, claiming it had detected high radiation in Iatate, a town 40 kilometers (25 miles) from the plant. Levels detected "would give someone living there ... the maximum annual dose in about 100 hours," if they're outside, according to Greenpeace. "We see no contradiction between our data and the official data from the local government, however we see a contradiction between those figures and the lack of action by authorities to protect the people," said Jan Van de Putte, a radiation safety specialist for Greenpeace.

Kobayashi Takashi, Iatate's manager for general affairs, said radiation levels of soil and water there were decreasing. Residents temporarily evacuated, but later returned to take care of livestock, he said.

Fears over N-plant close to Tokyo
by Rick Wallace - The Australian

As Japan struggles to contain the crisis at the Fukushima power plant, attention is switching to other nuclear plants that could pose an even greater risk. A government review of safety at nuclear plants is likely to look long and hard at the Hamaoka plant, built on the coast near the intersection of four tectonic plates just 200km southwest of Tokyo.

Seismic experts predict there is an 87 per cent chance that another major quake (of at least magnitude 8) will strike the area in the next 30 years. The area has endured a major quake about every 150 years, with the most recent striking the region in 1854. There are fears that, given the population density in this area, the toll in a seismic disaster could be higher even than that of the current crisis, where official figures released yesterday showed 11,232 people had been killed and 16,361 remained missing.

The Hamaoka plant has made a string of safety breaches in recent years, and although it weathered the latest quake without shutting down, it has become the subject of increasingly strong protests from citizens' groups keen to shut it down.

The crisis at Fukushima, where authorities were yesterday pondering draping the stricken plant in fabric to reduce radiation, has stung Hamaoka operator Chubu Electric Power into action. The company also announced plans for a 12m breakwater or seawall to protect the plant from a tsunami. It says the plant, which shut down without incident in the March 11 quake, is built to withstand a magnitude-8.5 quake.

Local residents insist this claim is false. Yoshika Shiratori, who heads a group that has filed a lawsuit aimed at shutting down the plant, said such a big quake would almost certainly trigger a nuclear disaster at Hamaoka. "It will be impossible to stop. If the cooling system breaks down, the reactor will collapse and won't be able to retain the radioactivity," he told The Australian.

Former Kobe University academic Katsuhiko Ishibashi has warned that a crisis at Hamaoka could be a "fatal blow" to Japan that would affect generations. Earthquake scientist Yasuhiro Suzuki, who has studied the perils of locating nuclear power plants in quake-prone Japan, told The Australian the Hamaoka plant was vulnerable to both a quake and a tsunami. He said the site was unsuitable for a nuclear power plant and planners had failed to recognise, at the time the plant was approved for construction in 1970, that the nearby faults were active.

While workers at the Fukushima plant were making some progress yesterday, the elderly president of plant operator TEPCO, who has been a virtual recluse since the crisis began, was hospitalised suffering high blood pressure and dizziness. Masataka Shimizu is expected to be replaced temporarily at the helm by chairman Tsunehisa Katsumata.

Pumping efforts at the plant managed to halve the level of radioactive water in the basement of the No 1 reactor building yesterday, although workers were running out of space to store the water in the reactor's condenser. Cooling systems at all six reactors were also operating yesterday, according to Chief Cabinet Secretary Yukio Edano. However, radiation levels in the Pacific Ocean beside the plant hit their highest level yet with a reading of 3355 times the legal limit for radioactive iodine.

Tsunami-triggered toilet paper crisis hits Tokyo
by AFP

An acute shortage of toilet paper has hit Tokyo, as Japan's people react to the earthquake and tsunami by stocking up on essentials.
In a posh supermarket in the centre of the capital, a lone sign stands where prior to the disaster there were mountains of toilet paper, tissues and paper towels. "Due to the vast earthquake in the northeast, we are currently out of stock. We apologise for the inconvenience," the sign reads.

A 7-Eleven shop nearby is similarly stripped, while an outlet of rival chain FamilyMart is down to just four packs of tissue paper. "Sorry, but it's one pack per customer. You can't have two," says the shop assistant with a sheepish smile.

Within hours of the 9.0-magnitude earthquake striking on March 11, sending a massive tsunami across Japan's northeastern seaboard, hordes of anxious consumers had rushed to the supermarkets. They bought products they would need if they were to find themselves holed up at home for a lengthy period of time, including instant noodles, water, canned food, batteries -- and toilet paper.

As supermarket shelves were gradually emptied, people started turning elsewhere to meet their demands, reflected in appeals by companies for their employees to refrain from stealing toilet paper from the lavatories. Acting almost as if by reflex, people prepared for any contingency, including a sharp increase in the price of daily necessities brought about by production halts, transport breakdowns -- and hoarding.

Japan has seen similar situations before. Many still remember 1973, when the great oil crisis spilled over into a great toilet paper crisis, with families accumulating huge stocks at home. The current shortage in Tokyo is the result of damage to large paper mills in prefectures that were severely affected by the tsunami, including Miyagi, Fukushima and Ibaraki.

Industry data show that the day after the disaster, the residents of Tokyo also bought five times more instant noodles than normal and up to eight times more mineral water, causing prices to spike. Production and delivery have been slow to pick up since then, because of damaged plants, impassable roads, fuel rationing and an inadequate supply of electricity.

However, early indications are that the situation is gradually improving, thanks to increased production at paper mills in western Japan, an area largely untouched by the disaster and its consequences. Production should also pick up in the northeastern disaster zone, although some paper mills near the Fukushima nuclear plant face an uncertain future as workers struggle to contain an unfolding crisis there. "The situation is still very far from perfect," said a saleswoman at a Tokyo FamilyMart.

Records Show 56 Safety Violations at U.S. Nuclear Power Plants in Past 4 Years
by Pierre Thomas, Jack Cloherty And Andrew Dubbinss - ABC News

Mishandled Radioactive Material and Failing Backup Generators Among the Violations

Among the litany of violations at U.S. nuclear power plants are missing or mishandled nuclear material, inadequate emergency plans, faulty backup power generators, corroded cooling pipes and even marijuana use inside a nuclear plant, according to an ABC News review of four years of Nuclear Regulatory Commission safety records. And perhaps most troubling of all, critics say, the commission has failed to correct the violations in a timely fashion.

"The Nuclear Regulatory Commission has very good safety regulations but they have very bad enforcement of those regulations," said David Lochbaum, a nuclear scientist with the nonprofit Union of Concerned Scientists.

There are 104 U.S. nuclear power plants.

Lochbaum and the Union of Concerned Scientists found 14 "near misses" at nuclear plants in 2010. And there were 56 serious violations at nuclear power plants from 2007 to 2011, according the ABC News review of NRC records.

At the Dresden Nuclear Power Plant in Illinois, for instance, which is located within 50 miles of the 7 million people who live in and around Chicago, nuclear material went missing in 2007. The Nuclear Regulatory Commission fined the operator -- Exelon Corp. -- after discovering the facility had failed to "keep complete records showing the inventory [and] disposal of all special nuclear material in its possession."

As a result, two fuel pellets and equipment with nuclear material could not be accounted for. Exelon did not contest the violation and paid the fine, a company spokesman said. "We took the learnings from that violation with respect to ways we can improve our spent-fuel practices," Marshall Murphy said.

Two years later, federal regulators cited Dresden for allowing unlicensed operators to work with radioactive control rods. The workers allowed three control rods to be moved out of the core. When alarms went off, workers initially ignored them. Murphy said the company concurred with the NRC's determination. "

We have also taken a number of steps to ensure a similar event would not occur at any of our sites and shared the lessons from that with the industry," he said. "In both violations, neither employees or the public were ever jeopardized, but we take them seriously, we always look to learn from them, and we do that going forward.

Still, Lochbaum of the Union of Concerned Scientists said, "This event is disturbing. In August 1997, the NRC issued information about a reactivity mismanagement problem at Exelon's Zion nuclear plant," which was retired the following year.

"It was an epoch event in the industry in that other plants owners noted it and took steps to address [the issue]. Yet, a decade later, Exelon's Dresden plant experiences an eerily similar repetition of the control-room operator problems."

What Happens To The Social Safety Net If The Government Shuts Down?
by Arthur Delaney - Huffington Post

What happens to the social safety net if the government shuts down on April 8?

The Obama administration won’t say whether beneficiaries of programs like Social Security, unemployment insurance, or food stamps will continue to receive checks in the event of a shutdown. Moira Mack, a spokeswoman for the Office of Management and Budget, said all agencies have had contingency plans since 1980 and noted that members of Congress and the president want to avoid a shutdown. But Mack declined to discuss what would happen if the government does close for business. “We're not getting into hypotheticals," she said.

In a recent memo to federal agency directors, OMB advised: "During an absence of appropriations, agency heads must limit obligations to those needed to maintain the minimum level of essential activities necessary to protect life and property." Agencies queried by HuffPost declined to specify what their "essential activities" would include. Retirement and disability benefits? The Social Security Administration did not respond to requests for comment. Unemployment insurance? The Department of Labor declined to say what might happen. Food Stamps? A USDA official said it would be premature to speculate.

Ron Haskins, a former White House and congressional adviser on welfare issues and current co-director of the Brookings Institution's Center on Children and Families, speculated that wide swaths of the safety net would remain intact. "I would think the agencies would determine many of these programs, especially safety net programs, are essential," Haskins said. Many experts agree with Haskins, citing what happened during the most recent government shutdown.

The federal government closed for 21 days from December 1995 to January 1996. Monthly Social Security checks continued for existing beneficiaries even though Social Security Administration initially furloughed most of its workers. But the agency discovered it needed to bring most of them back to deal with issues like "telephone calls from customers needing a Social Security card to work or who needed to change the address where their check should be mailed for the following month," according to a Congressional Research Service report.

Social Security recipients will still see receive their benefits even if the federal government switches off next month, said Cristina Martin Firvida, a lobbyist for the AARP. "We are confident that for current beneficiaries, Social Security checks will continue to be paid, both in terms of being directly deposited, and also for those who receive paper checks, the post will continue to mail them," Firvida said. "We are equally certain that depending on the length of the shutdown, should one happen, there could be some delays for new applicants.” Firvida said. “That is a bigger area of concern for us, and that concern would grow exponentially if the length of the shutdown becomes prolonged. If there is a short shutdown, the impact on applicants would be relatively minor."

Current Medicare beneficiaries also should not be affected by a short shutdown, said AARP's Mary Liz Burns. "Unless the shutdown continues for weeks, the effects on beneficiaries should be minimal," Burns said. But Burns warned reimbursements "for doctors and hospitals could slow down if the contractors who process the claims are deemed nonessential."

A similar situation would likely occur with unemployment insurance benefits. Judy Conti of the National Employment Law Project said federally-funded extended unemployment benefits, which are distributed to the long-term unemployed by state agencies, should continue even if the lights go out in Washington. "State agencies feel confident that they can continue to deliver federal UI benfits even if there's a shutdown," Conti said. But first-time applicants for federal jobless aid, which kicks in after six months of state aid, could face delays, Conti said, and so could people transferring from one "tier" of federal jobless aid to another.

Elizabeth Lower-Basch, a senior analyst with the Center for Law and Social Policy, said other programs administered at the state level, including Temporary Assistance for Needy Families (formerly known as welfare) and the Supplemental Nutrition Assistance Program (food stamps), should continue as well. "We expect them to continue providing people with these benefits," Lower-Basch said. "I don't think we need to panic people about these programs." A shutdown could crimp the Earned Income Tax Credit, the government's largest anti-poverty program, which sent checks to some 26 million households last year.

Measuring Jobless Families
by Casey B. Mulligan - New York TImes

New data from the Census Bureau show that the frequency of families without employment was sharply higher during the recession — but still fairly rare.

Many indicators of economic activity, like the poverty rate and consumer spending, are measured at the family level, but widely cited labor market statistics like the unemployment rate are measured at the level of individuals.

The unemployment rate, for example, is the fraction of people who are actively seeking work (or on layoff) and are not employed. It is the fraction of people working — not the fraction of families working — that is one of the primary indicators used by the National Bureau of Economic Research to declare a recession.

These standard personal labor market indicators are incomplete and potentially misleading, because they do not put labor market activity in a family context. Among other things, a majority of working-age adults live with a spouse and apparently share their income. More than 85 percent of people live in families.

Presumably, it’s less traumatic for a family to have one of its two employed members out of a job than to have all its employed members out of a job.

For these reasons, it would be interesting to know what percentage of families have somebody working, as opposed to the percentage of people who have a job. The two measures could be more or less the same if each family had at most one worker but could be quite different when many families have two or more people who could potentially work.

In a study that Yona Rubinstein of the London School of Economics and I conducted in 2004, we calculated such measures for the years 1965 to 2000. We focused on prime-age families -– that is, families headed by an adult (or adults) 25 to 54 and therefore not expected to be in school or retired (two activities that interfere with working).

On average, all but 5 percent of people lived in a family with at least one person working (this includes one-person families). By comparison, almost 20 percent of prime-age adults were not employed.

In other words, it is much more common for a person to be without a job than for a family to be without a job.

As Catherine Rampell wrote in a post on Economix on Monday, the Census Bureau has released family employment statistics through 2010. The Census statistics are a bit different from those I cite above, because they include households headed by retirees and exclude people who live by themselves.

Not surprisingly, Professor Rubinstein and I found that the family nonemployment rate increased during recessions, like those of the early 1980s and of the early 1990s. The nonemployment rate increased by almost a third during those recessions, although even at their peak nonemployment was rare for families.

The latest Census Bureau release includes the most recent recession but needs some adjustment for its inclusion of retirement-age people. As a rough adjustment, I estimated the number of elderly people who live in families of more than one and the number of elderly people who live in families (of more than one) and have jobs.

The results are shown in the chart below (the Census Bureau technical notes and my paper explain why a more precise adjustment requires a lot more work).

The severity of this recession is obvious in the data, with the series reaching new highs in 2010. Still, it is relatively uncommon for a family to have nobody who is either working or retired.

The Economic Truth That Nobody Will Admit: We're Heading Back Toward a Double-Dip
by Robert Reich

Why aren't Americans being told the truth about the economy? We're heading in the direction of a double dip -- but you'd never know it if you listened to the upbeat messages coming out of Wall Street and Washington. Consumers are 70 percent of the American economy, and consumer confidence is plummeting. It's weaker today on average than at the lowest point of the Great Recession.

The Reuters/University of Michigan survey shows a 10 point decline in March -- the tenth largest drop on record. Part of that drop is attributable to rising fuel and food prices. A separate Conference Board's index of consumer confidence, just released, shows consumer confidence at a five-month low -- and a large part is due to expectations of fewer jobs and lower wages in the months ahead. Pessimistic consumers buy less. And fewer sales spells economic trouble ahead.

What about the 192,000 jobs added in February? (We'll know more Friday about how many jobs were added in March.) It's peanuts compared to what's needed. Remember, 125,000 new jobs are necessary just to keep up with a growing number of Americans eligible for employment. And the nation has lost so many jobs over the last three years that even at a rate of 200,000 a month we wouldn't get back to 6 percent unemployment until 2016.

But isn't the economy growing again -- by an estimated 2.5 to 2.9 percent this year? Yes, but that's even less than peanuts. The deeper the economic hole, the faster the growth needed to get back on track. By this point in the so-called recovery we'd expect growth of 4 to 6 percent.

Consider that back in 1934, when it was emerging from the deepest hole of the Great Depression, the economy grew 7.7 percent. The next year it grew over 8 percent. In 1936 it grew a whopping 14.1 percent. Add two other ominous signs: Real hourly wages continue to fall, and housing prices continue to drop. Hourly wages are falling because with unemployment so high, most people have no bargaining power and will take whatever they can get. Housing is dropping because of the ever-larger number of homes people have walked away from because they can't pay their mortgages. But because homes the biggest asset most Americans own, as home prices drop most Americans feel even poorer.

There's no possibility government will make up for the coming shortfall in consumer spending. To the contrary, government is worsening the situation. State and local governments are slashing their budgets by roughly $110 billion this year. The federal stimulus is ending, and the federal government will end up cutting some $30 billion from this year's budget. In other words: Watch out. We may avoid a double dip but the economy is slowing ominously, and the booster rockets are disappearing.

So why aren't we getting the truth about the economy? For one thing, Wall Street is buoyant -- and most financial news you hear comes from the Street. Wall Street profits soared to $426.5 billion last quarter, according to the Commerce Department. (That gain more than offset a drop in the profits of non-financial domestic companies.) Anyone who believes the Dodd-Frank financial reform bill put a stop to the Street's creativity hasn't been watching.

To the extent non-financial companies are doing well, they're making most of their money abroad. Since 1992, for example, G.E.'s offshore profits have risen $92 billion, from $15 billion (which is one reason it pays no U.S. taxes). In fact, the only group that's optimistic about the future are CEOs of big American companies. The Business Roundtable's economic outlook index, which surveys 142 CEOs, is now at its highest point since it began in 2002.

Washington, meanwhile, doesn't want to sound the economic alarm. The White House and most Democrats want Americans to believe the economy is on an upswing. Republicans, for their part, worry that if they tell it like it is Americans will want government to do more rather than less. They'd rather not talk about jobs and wages, and put the focus instead on deficit reduction (or spread the lie that by reducing the deficit we'll get more jobs and higher wages). I'm sorry to have to deliver the bad news, but it's better you know.

Portugal hit by further S&P credit downgrade
by David Oakley, Peter Wise and Kerin Hope - Financial Times

Standard & Poor’s has cut Portugal’s credit rating to one level above junk status on concern that commercial investors would suffer under the terms of a Europe-led financial rescue. Tuesday’s downgrade, the second in a week, comes after the fall of the Socialist government plunged the country into a political crisis. It sent Portugal’s borrowing costs soaring.

Shares in Portuguese banks also fell sharply as S&P said it would assess the impact on lenders of its cut in the country’s sovereign rating. The agency cut the ratings of five Portuguese banks on Monday.
S&P cut Portugal’s rating to the lowest investment grade of triple B minus. Another downgrade to junk would have big implications for Lisbon as many investors can only buy investment grade bonds.
Greece also saw its ratings cut two grades to double B minus, three levels below investment grade.

S&P said the downgrades reflected the likelihood that the countries would have to seek financial assistance from European Union rescue funds under terms that would be detrimental to commercial investors. Portuguese 10-year bond yields, which have an inverse relationship with prices, leapt above 8 per cent for the first time to a euro-era high before easing back to 7.99 per cent. Greek 10-year yields jumped to 12.70 per cent. Irish yields also rose to 10.12 per cent.

Spanish bond yields were untroubled due to a belief that Madrid can turn round its economy without external help. EU policymakers agreed to create a more orderly process for sovereign defaults by introducing collective action clauses into all eurozone bonds that make clear private creditors will share the burden of defaults from July 2013. They also agreed to plans to create a permanent rescue fund, the European Stability Mechanism, from that date.

That has prompted some fund managers to warn they will not buy Greek, Irish or Portuguese bonds because of the greater default risks, although volumes were extremely low already with other investors refusing to buy this debt. The Portuguese cut followed S&P’s two-notch downgrade of Portugal’s long-term rating from A minus to triple B on Friday after a government austerity plan was defeated in parliament, triggering the resignation of José Sócrates, prime minister.

The triple B minus rating is the lowest rating attributed to Portugal by any agency – three notches below Fitch’s A minus and Moody’s A3 ratings for the country’s long-term debt. The agency said the terms for borrowing from the ESM proposed by EU leaders in Brussels last week would give the rescue fund preferred creditor status over commercial investors in the event of a default by a eurozone member. It said sovereign debt restructuring could also be made a pre-condition for borrowing from the ESM. It was these two factors that made the proposals “detrimental to the commercial creditors”.

Portugal’s central bank also warned on Tuesday that further significant austerity measures could be needed to ensure that the country met its deficit-reduction targets. The Greek finance ministry criticised S&P, calling the downgrade “unbalanced and unjust”.

Spain's unemployed: one in five under 30 still looking for that first job
by Gary Younge - Guardian

With the 16-19-year-old jobless rate at 43%, the young think they face emigration or harder lives than their parents

Tomorrow Jesus, 34, is off to Shanghai. His career in international development ran aground after the Spanish government slashed its budgets. The job, for which he was overqualified, became too irritating. So he's heading to China, where he has Spanish friends, with a return ticket that he hopes he'll not have to use for a few years. "China is like a very optimistic film. It seems like a place where there are a lot of opportunities," he says.

Very few people of Jesus' age are saying that about Spain. At 43%, Spain's youth unemployment is the highest in the EU by far, and more than double the average. For those aged 16 to 19 the rate is 64% – an 11% increase on the previous year. One in five of those under the age of 30 are still looking for their first job, and almost half (46%) are on short-term contracts of less than 6 months.

Youth unemployment here is higher than in Tunisia and Egypt. It's so high that many young people have to look long and hard to see past it. When I asked a class at an unemployed training centre who would be prepared to leave the country to find a job they all raised their hands. All said that the majority of their friends were also unemployed.

Outside the unemployment office in the shadow of the Real Madrid stadium, where a queue snakes for 70 metres outside before the venue opens, Victoria, 26, waits patiently in line. It's been half a year since she worked as a receptionist. Since then she's been getting by with the help of her parents. "I want to work in audio-visual communications. But I will take anything. Things are very difficult right now. I hope things are going to get better. But I don't really know how."

Almost every young person I spoke to believed their lives would be harder than their parents. "This is the least hopeful and 'best education' generation in Spain," says Ignacio Escolar, 35, author of the country's most popular political blog and former editor of the newspaper Publico. "And it's like a national defeat that they have to travel abroad to find work."

Unlike the Spanish emigration patterns of the 1960s and 70s, when low-skilled workers left in search of work, most of those leaving this time are well-educated. A series on the subject in the autumn by the daily newspaper El País prompted hundreds of letters.

One wrote: "When I was a kid, my parents used to tell me, 'we weren't able to study because we had no money, so you must study to avoid ending up like us'. I did what they said, and today, in my 20s, with a university degree, a masters, and several other qualifications, along with too many grants from big companies, I am unemployed." Another wrote: "I have a university degree. I have a good job, a good salary. I live in a house with a garden. How can this be? I left Spain when I was 23."

Ignacio Prada, 25, who has two masters degrees, left for London a few months ago to work as a barman. He earns more doing that than he would do in an entry-level job, which would in any case be very difficult to come by. "I live like a rat there so I can save money and learn English," he says. "To be honest I never tried to get a job here. There are jobs, but the quality is not very high. I have friends who have economics degrees who are working at a cash register. I definitely feel part of this lost generation."

As dramatic as the statistics sound, there is little evidence of a sense of urgency or outrage. Two weeks ago in Portugal a Facebook group called Desolate Generation staged a 150,0000-strong demonstration in Lisbon with tens of thousands turning out elsewhere in the country. In Greece, Italy and Britain, students have been out on the streets. But Spain's young remain relatively quiet. "When I took part in the general strike last year most of the people involved were quite old," says former student leader, Iñigo Errejón, who is 27.

It is not just the youth that appear docile. A demonstration against the austerity measures while I was in town could not fill the Puerta del Sol, Madrid's central square. Jesus, leaving for a final dinner with his family, and Ignacio, admitting he's homesick, still both say they are optimistic about Spain. So do all but one of the unemployed at the training centre.

Electorally, most expect an increase in voter abstention among young people at the next elections. While British youth invented punk, and black America created hip hop as popular cultural responses to economic crises in previous decades, there seems to be little evidence that resistance is being expressed in other ways beyond trying to forget all about it.

Spain has one of the highest rates of cannabis and cocaine usage among its young in western Europe. The botellón, the social activity for younger people of drinking alcohol in public areas such as the streets, also increased in popularity until recent police clampdowns. Some on the political left struggle to explain the indifference. "We're very worried about this," admits Cristina Bermejo, a representative of the youth wing of the CCOO union. "People look like they're asleep and the disaffection is also directed at us in the unions."

At the student union 20-year-old Carmen Aldama thinks people are "apathetic". Errejón, 27,  believes the young are de-motivated by the consensus in the political culture at a time when the governing Socialist party is implementing cuts. "There is anger, but it's not political anger. In fact it's anger directed against the political class because all the politicians look the same. So it becomes cynicism."

Errejón also thinks that his generation bears the burden of failing to live up to the achievements of its parents' political past. "They say, we are the generation that brought about transition from fascism to liberal democracy. What have you done? What are you doing? We had mass movements. What are you going to be able to teach me if I can fight and defeat a dictatorship?"

But others say that the reason Spanish youth seem so relaxed is because the severity of the situation has been overstated. "There are two explanations," says Juan Díez-Nicolás, a sociology professor and pollster. "First, there isn't 43% youth unemployment – 20% of the Spanish economy is underground and a large proportion of young people work in it. Second, the family, which, in Spain has been the cushion that has softened the blow of the impact of the economic crisis."

The second point is particularly striking. The notion of a comedy film like the American movie Failure To Launch where the joke hinges on the fact that the central, thirtysomething, character has not moved out of the family home, makes little sense in Spain  where 54% of those between the ages of 18 and 34 do still live with their parents. But with a 10% increase in those living at home, the crisis has clearly had an impact.

In many respects the source of Spanish youth's plight is much the same as elsewhere in Europe where the unemployment is twice the general rate, and the crisis has pushed each measurement higher. "The difference in Spain is related to the productive sector," said Santos Ruesga, economics professor at Madrid's Autonoma University. "Our boom was fuelled by very high levels of construction and tourism. Both are very low-skilled and labour-intensive. When the crisis hit we had a lot of low-skilled people lose their jobs and many of them were young."

Gayle Allard, an economics professor at the IE international business school, says the problem is rigid Spanish labour laws that make it difficult to fire permanent workers. "You have this privileged majority of people on permanent contracts who are very expensive to fire and so have no incentive to be more productive," she said. "The problem with the youth is that they are coming in from the outside and they can only get temporary contracts, which makes them more vulnerable."

Ruesga disagrees. "Labour laws in Spain aren't very different to anywhere else," he says. Either way, Spanish unemployment has always been stubbornly high. At the height of the boom it was higher than that in Britain at the depth of the economic crisis.

Education makes a big difference. The ni/ni (neither/nor) group – those neither in full-time education nor employment – are suffering. Among those aged 24 to 29, those with a doctorate are four times less likely to be unemployed than those who left school without qualifications. But with three in every 10 graduates working in a job for which they feel overqualified, even the most fortunate are frustrated. "It's like there is oil on the streets," says blogger Escolar. "All it needs is a small spark and it could blow."

Tests Show Irish Banks Still Ailing
by Landon Thomas Jr. - New York Times

Once again, Ireland’s banking mess seems to be sending a message that Europe does not want to hear: only by dealing with stricken banks can the Continent expect to end its debt crisis soon.

Just months after a banking collapse forced an 85 billion euro ($120 billion) rescue package for the country, the Irish central bank is expected to announce on Thursday that the latest round of stress testing shows that the nation’s banks may need 13 billion euros to cover bad real estate debt. On top of the 10 billion euros already granted by Europe and the International Monetary Fund for the banks, that would bring the total bill for Ireland’s banking bust to about 70 billion euros, or more than $98 billion.

Some specialists say the final tally could be closer to $140 billion, an extraordinary amount for a country whose annual output is $241 billion. Trading in shares of Irish Life and Permanent, the only domestic bank to have avoided a state bailout, was suspended Wednesday after reports that it might have to seek government aid as well.

Dermot O’Leary, chief economist for Goodbody Stockbrokers in Dublin, says that Ireland can no longer afford to shoulder the still-growing burden of its banks. The nation’s interest payments are set to rise to 13 percent of government revenue by 2012 — a figure that trails only Greece’s 18 percent, Mr. O’Leary wrote in perhaps the most definitive report to date on Ireland’s financial ills. “The Irish stress tests will be an important call to arms that shows that it cannot keep putting up the cost for recapitalizing its banks,” he said. “You need burden-sharing with the bondholders. Without that, the debt becomes unsustainable.”

Many proposals have been put forward to deal with the issue, including requiring bondholders to share in losses, as Mr. O’Leary and the new Irish government suggest, and a United States-style stress test with teeth, which would name and shame front-line banks and require them to raise capital. But European governments have stuck to their position that such measures would further fuel investor fears, rather than calm them.

The second stress test of European banks now under way is beginning to be regarded as too weak, much as the first one was. In the meantime, the condition of the banks is worsening. In Spain, which is having a brutal housing bust like Ireland’s, fresh data shows that problem loans are growing at their fastest level in a year.

And Portuguese and Greek banks, with their Irish counterparts, have become dependent on short-term financing from the European Central Bank for their survival as their economies deteriorate and doubts increase about their ability to repay their debts. “Europe hesitates to deal with the banking problem for two reasons,” said Daniel Gros, the director for the Center for European Policy Studies in Brussels. “Our policy makers saw Lehman and want to avoid a repeat of the experience at any cost,” he said, referring to the collapse of Lehman Brothers in September 2008. “And the weak banks in Germany and elsewhere are too politically connected to fail.”

Irish taxpayers have been left responsible since the government guaranteed all the liabilities of its banks two years ago. The European Central Bank and the International Monetary Fund have refused to accept the notion that investors who bought the bonds of Irish banks, in effect financing their reckless lending, should share the pain with some loss on their holdings.

But a newly elected government has become more vocal in arguing that $29 billion in unsecured senior debt — which is not tied to an asset and as a result is deemed riskier from the start — is ripe for restructuring because the banks that issued it, like Anglo Irish, have essentially failed and been taken over by the government.

So the government should not be obligated to keep paying interest. It is not clear who owns the senior Irish debt; analysts guess it is a mix of European banks and bargain-hunting hedge funds.

What is clear is Europe’s opposition to imposing reductions in the value of these bonds, often called haircuts. That view was reaffirmed this week when a central bank board member, Jürgen Stark of Germany, described such a move as populist and one that could feed a wider investor panic.

Should investors respond by driving down the value of government bonds from the weaker euro zone economies, the pain would most likely be felt by all. The Continent’s big banks in particular would suffer because many have large piles of sovereign debt, which has yet to be marked down to its market value.

According to Goldman Sachs, European banks hold $270 billion in Greek, Irish and Portuguese bonds. Greek banks are the most exposed, with $87 billion, mostly in Greek debt, but German banks hold $62 billion in total and French banks $26 billion. Hypo Real Estate, a commercial lender now wholly owned by the German government, is the largest holder of Irish sovereign debt, with $14.5 billion.

With bank lending growth negligible and capital levels thin, especially in the weaker euro zone economies, a fresh round of write-offs is the last thing governments want. The problem is compounded because banks account for a much larger share of national economies in Europe than they do in the United States. In Ireland, bank assets are 2.5 times the size of its economy. A recent review of the European banking sector by Morgan Stanley shows that the rest of Europe is also heavily reliant on the health of its banks.

The five largest banks in Britain are 3.5 times the size of the country’s economy, 4.4 times in the Netherlands, 3.25 times in France and two times in Spain. In Germany, the figure is 1.5 times gross domestic product, but that excludes the biggest, Deutsche Bank, which is mainly an investment bank. (The comparable figure for the United States is 60 percent of economic output.)

Spain has managed to separate itself from the malaise surrounding Portugal and others this year by undertaking some aggressive deficit cuts. But, according to a report this week by Marcello Zanardo, an analyst in London for Sanford C. Bernstein & Company, Spain’s problem loans rose 3.3 percent in January from December, the biggest increase in a year. That brought its bad loans to a 17-year high of 6.06 percent of its portfolio. Nonperforming loans jumped 48 percent in 2009 and 15 percent last year, Mr. Zanardo’s data show, driven by the continuing weakness in Spanish home prices.

While Spanish banks are not in as bad shape as their Irish peers, the government has not yet convinced investors that it has addressed the problem despite steps to force local savings banks to raise capital. Veterans of the three-and-a-half-year bank crisis in Ireland say that the hardest part is accepting how bad things really are, then taking definitive action.

“We need to accept once and for all that Ireland has 100 billion euros in irrecoverable bank loans,” said Peter Matthews, a financial consultant and recently elected member of Parliament who has long argued that Ireland and Europe are underestimating the scope of the country’s debt problem. “People do not relish a write-down but it is the right way to deal with this.”

Anglo Irish Bank posts €17.7 billion loss ahead of stress tests
by Telegraph

Anglo Irish Bank reported a record €17.7bn (£15.5bn) loss on Thursday ahead of stress tests which will uncover the full extent of the black hole in the Irish banking system.

The nationalised lender's massive shortfall last year includes impairment charges of €7.8bn and a loss of €11.5bn on loans taken over by Nama, the state's toxic assets agency, the bank said in a statement. The losses are the worst on record in Irish corporate history, and slightly higher than predicted last month.

The bank has so far cost the Irish taxpayer almost €30bn in recapitalisation. The losses were announced ahead of the Central Bank's publication of forensic stress tests which will expose losses across other Irish banks, including Allied Irish Banks (AIB), Bank of Ireland, Irish Life and Permanent (IL&P) and the EBS building society. It is expected they will need about another €30bn to remain in business.

Most of the loan losses caused by reckless lending to now-broke property developers have been identified, but the skeleton in the closet is mortgage arrears. More than 44,000, or 5.7pc of homeowners, are at least three months behind with their mortgages - valued at a colossal €8.6bn. Trading in Bank of Ireland and AIB shares has been suspended for the day by the Irish Stock Exchange amid fears speculation on the stress test results could create disorder in the markets.


lautturi said...

Good to hear you enjoyed it in Sweden, too bad I couldn't make it there (>_<)

Spirit is strong but the body and circumstances...

Gravity said...

Potato eaters?

Franny said...

It seems to me that China's desire for gold and silver and dislike of the Fed's attempted dollar devaluation make it likely that any drop in the prices of gold and silver will be brief. Definitely makes sense to hold dollars for near term expenses, and to take advantage of any dip, but I am leaving long term savings in gold and silver.

Phil said...

Channel 4's Faisal Islam:

Missing elements of Irish bank deal suggest Eurozone itself is under severe stress test

It’s not just the Irish banks facing the stress test. right now it’s the whole political economy of the eurozone.

p01 said...

Notable addition to the list of biorobots.


maxximus said...

"If the NFL season is scratched, there’ll be many sour faces in Vegas and Atlantic City."

Sorry, Ilargi, no legal sports betting in Atlantic City. Just Vegas.

Jerry McManus said...

Now the disaster in Japan is all about a shortage of toilet paper? Are you freaking kidding me?

I try not to be too judgmental about the intelligence of other people (no, honestly), but I just have to ask:

Are people REALLY that stupid?

A damp washcloth serves just as well, and if your taps aren't dry it can be easily rinsed out.

And yes, I know, for all you crybabies wailing "EWWWWWW" right now, get over it. What have humans done for the thousands of years BEFORE toilet paper? Ever wondered about that?

Unknown said...

Threw away the TV 5 years ago.

Professional Sports could disappear completely and I wouldn't notice until some blogger mentioned it.

As for AE's deflation theme... same 'ol same 'ol.
Inflationists & Deflationists adamant they've called it right. Both can offer convincing arguments, in fact with passing time each camp hones their skill.

Who knows. Still, being resilient, having reserves and a plan b and c seem appropriate these days.

Forget trying to gain wealth, better instead to seek preserving the amount you've already accrued.

Unknown said...

Sports betting is not just Las Vegas. All of Nevada is legal. Odds are ~15% for the house. About the same as slot machines but not as good as craps or roulette. Better all round than Keno. Card counting is very slightly to the counter's favor but is low key as the pit supervisor will ask you not to play 21 in that casino any more.

"I just feel like a slave to the owners there are so many strings attached to my six million dollars for this year."

Nassim said...

Now the disaster in Japan is all about a shortage of toilet paper? Are you freaking kidding me?


I expect it is a subtle way of downplaying the seriousness of this matter. People study PR/propaganda for years before reaching this peak of cynicism.

FWIW, in the Middle East few people use toilet paper - water from a jug is the preferred medium with the help of the left hand. However, if you are in a desert, you may have to use sand. :)

The South Asians have a similar approach - lota

Of course, similar things were used before Thomas Crapper introduced the flushing toilet. Nowadays, these things are often antiques and change hands for a lot of money - some buyers don't know what they originally were.

Nassim said...

Kan, Sarkozy agree to set new int'l nuclear safety rules

Good to know that the politicians have matters under control. X;{

NZSanctuary said...

Fukushima - radiation in US

"industry bigwigs have turned to their friends at the EPA to loosen regulations so that the radioactive material that's presently showering-down on the US falls within EPA safety standards."

Stoneleigh said...

Lautturi and Tero,

It seems that I'll be back in Sweden in September. Perhaps I can make it to Finland then too, as I'll probably have more time then. This time things were really tight (5 talks in 4 days and then straight back to England for more talks all over the place).

p01 said...

@Jerry McManus
That's a tough one for the yuppies who never used anything but a toilet. Hell, that's a tough one for me, even though I was not raised with toilet paper and running water. Don't downplay the social and pshychological impact of missing toilet paper for people who have always used it. I'm not kidding, unfortunately. They might eventually get used to it but it's going to be painful.


p01 said...

More about TP
Not to mention the japanese have a cultural thing for this.


cjinvt said...


Could you critique Karl's latest missive about Thorium reactors?

I've listened to Pickens carry on about natural gas & was glad to read Karl's critique of it (ripping it to shreds).

ogardener said...

Energy too cheap to meter.

What a whopper!

p01 said...

The pictures on this post have brought my little "20W- possible to run on solar if I still get a g-darn sunny day in Montreal instead of this now perpetual gloom!!!" laptop to its knees.
If one encounters the same problem, try to block the pictures in Firefox with Adblock Plus. HTH someone.


Alexander Ac said...


regarding the Fukushima and diverging opinions on nuclear power. Monbiot: for. Leggett: against. Leggett reacts in Guardian to Monbiot arguing Monbiot is wrong. He argues that renewables can grow out our way out of energy hole.

I am afraid both of them are wrong - nor nuclear, neither "renewable" energy will help us too much, since none of them are truly sustainable. People unfortunately confuse renewable and sustainable, and that is shame...


scandia said...

@ Ash, liked your essay about what I view as who has " staying power "as well as leverage.
I can hang in for a bit longer but my assets are in decline.
The " dip " to me means dipping into savings to get by:)

Sort of connected to your article is an anecdote from my own family. A niece came to visit with her 2 young daughters. They were all glowing with the thrill of a visit to Stratford,Ontario- famous home to Shakespearean Theatre. I was beyond depressed to learn that the reason for spending very scant resources to visit Stratford was not Shakespeare but a pilgrimage to the birthplace of Justin Beiber!

For those watching war in Libya I recommend a piece by Pepe Escobar on Asian Times.
"Exposed: The US-Saudi Libya deal"

Frank said...

@cjinvt Unfortunately, Karl is not playing straight. He's using proven Natgas reserves, vs estimated Coal. It's the only way he can get the answer he wants. Even then he still needs the thorium fairy to apply pixie dust.

Granting that thorium reactors won't melt down, they have all other drawbacks. Further, India has been working on them for several years, and if it was as easy as Karl claims, there would be one online by now.

Tom Therramus said...

@Ash from March 31 2011

"Still, complex dynamic systems tend to generate the conditions of their own instability over time. In terms of the financial system, Hyman Minksy argues that a stable financial system endogenously breeds instability over time, regardless of any external causes."

Because mechanism can not be deduced, it does not mean that mechanism does not exist. We have learned that chaotic systems, show deep patterns of organization.

One of my favorite examples is the teetering balance between predator and prey numbers in the wild. Jeff Vail has pointed out that this relationship has the potential for interesting parallels to anticipated production/price volatility at Peak oil.

"We have seen these credit bubbles throughout history, even before the discovery of fossil fuels, and of course the largest implosion before 2007 occurred at the onset of the Great Depression."

This is one of the few comforting thoughts many of my fellow stoics afford themselves-

"There is nothing new under the sun."

"We've seen it alll before."

"They always say that this time its different" ....and so on.

My personal view is that this position is a delusional comfort.

The Dutch tulip mania is to the Financial crisis of 2008 as Old Faithful Geyser is to Krakatoa. And crisis of 08 is the modest beginnings of yet more serious unpleasantness.

Think about it for just a moment . In just the last 100 years our technology has released nearly half the plant-captured energy stored as oil from more than 100 million years of sunshine.

Squandering the bounty of 100 million years of sunshine in 100 years has to be the root of the problem. It is also just a matter of common sense that no other profligate folly in human history is on a scale that even gets fractionally close to matching this.

To put just the time scale into perspective, another familiar, and somewhat more stable, complex system, the entire mammalian radiation, was powered into existence (also by sunshine) over the same period.

The literal flood of oil that we are now pumping explains the apparent complexity we see about us - including debt leveraged against this deluge of energy- not vice versa. But now the pipes are beginning to splutter. Non-uniformities in the flow of energy in the system that this excess has enabled, is what, IMO is causing the trouble.

The system is dependent on a predictable flow of energy. Even in stable times, unexpected shocks have big effects. One example I have pointed to repeatably in my essays Link to essay is the proximity of the OPEC price shock of 1986 to the Black Monday stock market crash of 1987.

The only intepretation that I see as being consistent with the data is that the energy source (i.e., oil) is the horse and all the rest are in the cart being dragged along it.

Biologique Earl said...

Hi Scandia, interesting link.

Kind of what I was saying late yesterday on blog. Even down to this "A curious development is already visible. NATO is deliberately allowing Gaddafi forces to advance along the Mediterranean coast and repel the "rebels". There have been no surgical air strikes for quite a while. "

Btw your link did not open. Try:

Best regards,


cjinvt said...

Have you tried Readability?
I set the background dark & change the type. It's also less distracting.

It makes a marked difference in my laptop consumption. I'm off grid & you know, it takes a while to slog thru some of the posts.

el gallinazo said...

I regard TP as an infernal invention in many respects including doing an ineffective job, wasting resources, and making sewage treatment much more difficult. In many countries in L.A., it is a capital offense to put the TP in the toilet. There is always a closed little trash can next to it. In St. John, a septic tank pump-out was $800, and putting the TP in the waste bucket would increase the longevity by a factor of four. But you couldn't even suggest it for rentals. Usakistanis would be outraged by the idea.

I had a girl friend in my 30's who had spent a year in an ashram in India, and she taught me that there was not substitute for soap and water. In Argentina, all full bathrooms must have bidets as in France, and they are quite useful for this purpose. But even with bidets, when I toured France in the 60's, they did not use toilet paper - they used the opposition party's newspaper. However, in Tokyo right now, if one used a bidet, one's butt might glow in the dark.

el gallinazo said...

Heads up for a Dmitri Orlov interview with Mad Max on his RT program. OK but not one of Dmitri's best.

Started to read my Kindle download of Joe Bageant's Rainbow Pie. Totally wonderful.

Scholastica said...

I expect it is a subtle way of downplaying the seriousness of this matter.


When I was a little girl and I asked my father what he did in Vietnam, he always said, "Oh, we just flew toilet paper in for the soldiers." It was a true, if incomplete, statement.

I guesss the old toilet paper ploy is more powerful than I realized.

Ashvin said...


The Dutch tulip mania is to the Financial crisis of 2008 as Old Faithful Geyser is to Krakatoa. And crisis of 08 is the modest beginnings of yet more serious unpleasantness.

Think about it for just a moment . In just the last 100 years our technology has released nearly half the plant-captured energy stored as oil from more than 100 million years of sunshine.

But you see, we are talking about different systems here. Our present time is rife with many different crises; different in the sense that they affect distinct spheres of systemic influence. I like to think about it in terms of absorption.

The smaller (and typically more complex) systems can be absorbed by the larger systems. A financial collapse can potentially be absorbed by the industrial economy, but an industrial collapse (peak oil) cannot be absorbed by the financial system.

The systems feed off of each other, but operate at different scales of influence. You are completely right about this point in time being entirely unique from any other financial crisis in the past, which was really one of the main points of that article in the first place. But that doesn't change the fact that significant credit bubbles can and have occurred without the net energy derived from oil to support them.

It is true that available energy sets the absolute maximum "size" for every complex system, but is also true that financial systems are self-limiting, regardless of whether net energy production has peaked. This is because they end up being increasingly devoted to speculation, rather than investment in productive activity (which relies on net energy).

Here's an analogy: On a Roulette table, the number of bets that can be processed by the casino in a given time is strictly limited by physical constraints (employees, how fast the ball spins, available space, etc.). The amount of money that can be won is limited by two separate things - 1) physical constraints (how many people play during that time and how much total money they have) and 2) the internal dynamics of the game (how quickly customers lose their money based on the established odds and variance, get scared and cash out). The latter limit will almost always be reached before the first one.

Peak oil does, however, most likely represent the end of the global financial system for good.
Ultimately, this debate is very academic, because it doesn't really matter who is right. Peak oil and peak finance are both imminent and extremely intertwined realities that we must now face.

Biologique Earl said...

El G. Love your comment about opposition party's newspapers. I would hold that now most North American Newspapers are only worthy of that use too.

OTOH, I must disagree with you about TP and septic systems. Most of my life, houses I lived in were hooked up to septic systems. We never had any problems with the beasts. There is tonnes of nitrogen in human excrement and cellulose digesting bacteria go right through the TP and are happy as pigs in S*** . This is because they have all the nitrogen they need to grow and digest the TP.

Many cleaning products will kill the bacteria in the tank and should be avoided as much as possible. You can buy re-activating packets of bacteria that when flushed down the toiled can re-activate the bio system - provided it is no longer poisned by the added cleaning chemicals.

Also, what is bad, very bad, is grease. We do everything we can to avoid getting grease down our drains because as a rule the grease forms a thick layer on top of the digestion tank water that is difficult to degrade.

We wipe plates and silver and frying pans to remove as much grease as possible before washing them.

Where we are now almost all septic systems have a grease trap that kitchen and laundry water go through first before entering the digestion tank. Because of our care, the grease traps rarely need cleaning and the digesting tank works cleanly and appears liquid all the time.

Other bad actors are feminine sanitary napkins (Tampax) and cigarette filters and, god forbid, modern diapers. These materials are made of synthetic fibers and simply do not digest. We forewarn all visitors coming from the city about the do's and don't s with waste.

We once had a rare opportunity and stayed with a Quechua family deep in the Ecuadorian jungle next to a tributary of the Amazon and near the Peruvian border.

A flood had Taken out their privy near the river and almost took out their house on stilts. We helped them dig a new pit on the old privy site and build a new S***house. The jungle ants remove the excrement almost before it cools off. What we did find were old diapers, unchanged, left several years before when a daughter visited them with a small baby. When buried these kind of materials just do not degrade well.

In travels through Latin and Central America many guest houses have a waste basket that used TP is placed in. This is mainly because the evacuation pipes and/or siphons are narrower than North American standard and readily plug up and over flow if you attempt to flush down TP.

With that cheery note, good night all.


p01 said...

This thread will become a bonanza for TAE Summary; can hardly wait :)


p01 said...

Thanks! :)


Tom Therramus said...

You write with unusual clarity. I like the roulette analogy.

I'm trying to reconcile -

But you see, we are talking about different systems here.


Peak oil and peak finance are both imminent and extremely intertwined realities that we must now face.

Do you think Peak oil and Peak finance are independent or intertwined ?

And IMO the debate is not just academic... understanding what is/has happened is key to any hopeful version of the future.

Brunswickian said...

It has long been a premise here that QE cannot go on indefinitely without the bond market forcing interest rates up.

When are we going to see this, I wonder?

Ashvin said...

Do you think Peak oil and Peak finance are independent or intertwined?

I mean intertwined in the same way as when I said they feed off of each other. No system is really independent of the others. You could technically say that the financial system is contained within the industrial economic system, which like everything else here, is supported by Earth's energy/resource systems.

Greenpa said...

" If you're like me, it seems that people are just shoveling shit into fans all over the world, these days. And avidly looking for more fans to shovel into, and bigger shovels. Faster and faster."

That was how I opened a post on my blog a couple days ago; followed by a story to cheer folks up a bit.

I'm greatly afraid that the slaughter of 7, or 12, utterly innocent UN workers in Afghanistan; as revenge for an idiot Christian bigot in Florida burning a Koran - is going to turn out much much uglier than it already is.

The potential for escalation of hatred really scares me.

Though I guess it doesn't take much to scare me, these days.

Phlogiston Água de Beber said...

@ Greenpa

The idiots of religiosity may well doom us all. If they do not doom us, as the sainted Stoneleigh has often averred, they almost certainly will be among of the most potent threats to peace and tranquility. If nothing else, this incident stands as a stark reminder of just how unbearably stupid overlords have to be to not understand how crazy it is to mess with the Afghans. They were for centuries fairly content to mind their own business and everyone should have figured out by now to let them continue doing that.

With that off my chest, I'd just like to say that there is now so much to be afraid of that fear seems to have lost its useful potential. Tom Therramus can seek hopefulness if he likes, but I say we geezers should go with what we've seen and what we know. The future is undoubtedly ugly, which has to be gut wrenching when you look at Smidgen. If that's the way it is, maybe we geezers should paint our faces and show the future some ugly in return.

More whiskey!

gamedog said...

Help! I keep getting this in response to peak energy discussions.

"nuclear power appears to be the only viable hope for the future."

My books are all in storage, and trawl TOD etc. as I might, I can't find a well referenced article debunking this nonsense, links to such would be gratefully received, thanks all.

Glennjeff said...

Dance on Vaseline - David Byrne

jal said...

"I am a health oriented buzzard and do not view cadavers that glow in the dark as a reliable food source. I would leave them for my fellow compadres that watch Fox News."


When all that is left to eat ... Just remember not to eat buzzards that glow in the dark.

bluebird said...

Good post by Dmitry Orlov
Financial Totalitarianism

Orlov says...A particularly annoying question I am often asked and have come to hate is: “How do I invest my money for it to survive financial, political and commercial collapse?” The short answer is: “Nohow. Money will not survive collapse; not yours, not anyone else's.”

p01 said...

@el gallinazo
Elderly Man Spends Quiet Afternoon In National Park Feeding Trout To Eagles. Geiger your seafood before eating.

Geiger; soon to become a verb, just like google.
e.g: "Honey, can you please geiger the eggs and bacon, I'm busy scraping the pus from my third eye.


el gallinazo said...

My first hands on experience with a geiger counter was in 12 grade chemistry. The teacher asked for watches with hands that glowed in the dark. He wanted to test them for fluorescence versus radium painted dials. One small blond, quiet kid walked to the front of the class and pulled his watch out of his front pants pocket, not off his wrist. When he put it near the counter, it pretty much exploded. The class groaned and made jokes for a couple of days that he might father the next Incredible Hulk.

Tom Therramus said...

...the financial system is contained within the industrial economic system, which like everything else here, is supported by Earth's energy/resource systems .

It seems then that we may be more or less in agreement.

Ilargi has commented in the past words to the effect that.. Peak oil matters, but not yet. In this view, intertwining/ inter-dependence between "Peak oil and Peak finance" should have been negligible over the last decade. I do not know whether you subscribe to Ilargi's POV.

The gist of my analysis is that Peak Oil-driven volatility in price/production has mattered for at least the last 7-10 years.

During this time period there have been some 9 spikes in oil price variance. Each time one of these oil jolts occurs thereafter follows corresponding spikes in volatility in economic, financial and political polling data.

Based on these data the logical inference is that instabilities in the oil market must be upstream in time of volatility of the other indices. Yes, there is intertwining - but discontinuities in the flow of energy must be driving the downstream manifestations of economic and political instability.

I won't bore you with the details of the axioms, but in brief, volatility is a feature of the top and down-slope of a resource depletion (i.e., Hubbert) curve. Global oil production hit a plateau in 2005....ergo the volatility in oil price I am detecting is an assumed likely by-product of Peak Oil.

I to am a geezer. When I say "hopeful version of the future" the assumption is that this future does not include me.

But you know what... life goes on.

el gallinazo said...


I wanted to give you a less sardonic response. There are two aspects to why fission power plants are not a viable response to peak fossil fuels.

1) It is incredibly dangerous and as we can see from Fukushima, we would eventually poison ourselves, if not to extinction, then to common freakdom, ill health, and birth defects for thousands of years. When the nuclear apologists state that radioactive isotopes released from burning coal are greater in total quantity than from nuclear plants, they are not factoring accidents. Most accidents are hidden from the public (hear G&B interview). As we go into "austerity," accidents will increase as current inadequate safety measures will be virtually eliminated. Stoneleigh does a nice survey of this in her recent Mad Max interview. The Guns and Butter interview from two weeks ago goes into greater depth.

2) The second point is that fission reactors cannot possibly replace fossil fuels to keep the current level of economic waste sustainable. Stoneleigh has dealt with this in past years as has the part time commenter, Weaseldog, who is quite the expert in this regard.

I checked Stoneleigh's Primers, which I haven't done for quite a while, but could find no primer dealing with the numerical analysis why fission reactors cannot possible replace fossil fuels. Perhaps Weaseldog might do something in this area. (I was flattered to find one of my articles from last year in the primers :-)

Barring a breakthrough in fusion or zero point energy technologies (or the perhaps the already discovered breakthroughs being released to the public), peak oil is not a problem but a predicament. The only "solution" is radical conservation back to economies run on yearly solar energy reception. However, this is "unacceptable" to people such as Dick Cheney, Jim Paplova, or Karl Denniger. I mean, this would not even permit the fertilization of golf greens.

el gallinazo said...


Good post on TP. I knew that cellulose digesting bacteria would eventually digest most of the paper. I assumed the problem was the high ash content in the paper, adding to the sludge. But you may very well be correct that the TP does not increase pump out frequency as much as I thought. Agree with you that the killer of septic systems is grease. Still believe that my other two objections to TP are valid. Viva la bidet!

Re Gamedog

The human race must use less energy in the future. I personally believe that nuclear energy is a viable road to this, as what could facilitate demand destruction faster than wiping out or incapacitating most of the human race through radiation poisoning? Nuclear energy is also an excellent method of birth control. A little cesium 137 in the boxers does wonders.

On the downside, I am a health oriented buzzard and do not view cadavers that glow in the dark as a reliable food source. I would leave them for my fellow compadres that watch Fox News.

Phlogiston Água de Beber said...
This comment has been removed by the author.
el gallinazo said...


"I learned just yesterday from watching Arnie Gunderson's videos at that geiger counters only detect gamma rays."

This is basically incorrect. Rather than get into a long winded explanation, better to simply study the Wikipedia entry for Geiger counter.

el gallinazo said...

Matt Taibbi must read:

Why is the Fed Bailing Out Qaddafi?

jal said...

re.: Radiation leak still unknown

Since I believe that the human evolutionary steps were "falling out of the trees" due to DNA mistakes, then I expect that Japan could produce the next evolutionary "advance".

(I'd still like to have a new and improved version of that old fur coat that we all use to groom.)

schizo321437 said...

There`s a toilet paper shortage is Japan?

What happened to all the US treasuries they bought?

Ho ho ho.

agtefc said...

@ Tom & Ash...

Good day. Regarding your exchange:

What is unprecedented about the current predicament is the scale. Scale dependence can result in emergent system properties and alter system mechanics via threshold response and run-away positive feedback.

We are witnessing bubbles of virtually every type converge in a a manner that is antagonistic to human well being. What is unprecedented in the the large scale cumulative (liner) or multiplying (exponential) effect of human population (#'s & densities), carrying capacity overshoot,peak oil, economic collapse, political collapse, unprecedented ecosystem destruction, failure of non-substitutable ecosystem services, species extinction, climate change, desertification, global militarization, food crises, water crises, etc... (list goes onward)

This said, Human population is the "Single Limiting and commensurate Factor/variable" of virtually all of the antagonistic forces directed against humanity. Therefore, by the law of limits it will be the key variable of "adjustment" as the highly perturbed system trends towards homeostasis.

To say peak oil or economic bubbles are unto themselves the root casual factor is IMHO misguided because the REAL ROOT CAUSAL factor of the human predicament that is commensurate across the broadest spectrum of relevant phenomena and limiting at all scales (local, regional, national, continental, & Global) is the unconscious breeding of the humanimal.

Any Shortage can be viewed as a Longage of People. We cannot solve the shortages but we can solve the longage. How it is solved we will only be able to say in retrospect. I DO NOT advocate human depopulation, but only consider it an inevitability because it is the single limiting and most commensurate system variable.

Garrett Hardin eloquently comments:

Phlogiston Água de Beber said...

El G,

You just can't trust nobody anymore. I deleted that geiger counter comment to avoid misleading anyone.


agtefc said...

@ Ash & Tom...


Solutions to shortages are sabotaged over time by declining marginal return to socioeconomic complexity.


agtefc said...

@ Tom & Ash..

Hardin also has has a robust argument as to why solutions to the longage of people are cast aside and "solutions" to the shortage of carrying capacity are pursued.


Biologique Earl said...

el G., I think Arni Gundersen said that they would not detect alpha particles because they do not penetrate into the Geiger tube or at least have a very short path. That would still leave detection of beta and gamma radiation which have long paths and will easily penetrate into the tube.

He also indicated the gamma background radiation was so intense it would be hard to notice the alpha even if it did penetrate.

Checking the Wikipedia entry it does say that some special counters will detect alpha.

Best regards,


Ashvin said...

Ilargi has commented in the past words to the effect that.. Peak oil matters, but not yet. In this view, intertwining/ inter-dependence between "Peak oil and Peak finance" should have been negligible over the last decade. I do not know whether you subscribe to Ilargi's POV.

The gist of my analysis is that Peak Oil-driven volatility in price/production has mattered for at least the last 7-10 years.

I don't want to speak for him, but I believe he means that a peak in global oil production is not driving the global financial crisis, and I would agree with that. That doesn't mean the financial system and credit bubble have not affected our energy systems over the years.

It would be pretty foolish to say that speculative financial activity does not influence industrial activity, such as the production and consumption of oil. I know Stoneleigh has said a few times that debt deflation will set up a more drastic energy supply collapse in the future, as increasingly less capital is allocated towards maintaining and developing energy infrastructure.

It is really impossible to determine when global oil production peaked, even though it most likely has by now. So while price volatility may be a characteristic of resource production peaks and declines, it is also a distinct characteristic of unhealthy financial markets, and there is plenty of evidence to suggest that those markets endogenously breed their own instability.

Greenpa said...

worth a look;

This is another CNN video - if you see something other than a video on anger in Japan against Tepco - then CNN has started loading more viids. Hit "reload", and it should go back to the one we want.

Greenpa said...

finally, a tiny release of actual information on the meltdowns; not, of course, from Japan.

All these foreign scientists are being very careful not to publicly contradict the Japanese bullshit/spin/ignorance. I wonder how that jibes with any concept of ethics.

no, I don't. wonder.

ogardener said...

Blogger Greenpa said...

finally, a tiny release of actual information on the meltdowns; not, of course, from Japan.

All these foreign scientists are being very careful not to publicly contradict the Japanese bullshit/spin/ignorance. I wonder how that jibes with any concept of ethics.

When the almighty dollar is involved ethics fly out the window.

p01 said...

About all that grease and pipes.

One simple solution: Eat it, don't throw it! I remember when grandma used to treat each drop of lard as a gold coin.


p01 said...

The video is no longer available there, can be found here. And a presentation of other pipe-clogging stuff.


Biologique Earl said...

For the non-old geezers in the audience here is a reference to early nuclear storage accidents in the then USSR:

Water evaporated out of large storage tank of nuclear waste. The residue went critical and/or into criticality )

resulting in the 1957 Kystym Explosion with an estimated force of 75 tons of TNT.

This incident and several others in the same Ural Mountains area resulted in vast areas of land with high levels of radiation and exposure of 10's of thousands of people to dangerous levels of radiation.
Highly contaminated water was carried all the way north in to the Arctic Ocean.

The CIA knew about the severe accidents but keep information secret until Ralph Nader managed to get get information released in 1977 using the freedom of information act.

Lack of transparency continues unabated as evidenced by the disaster in Japan 3 weeks ago.

It is the continuing lack of truthfulness about nuclear power- its true costs and true dangers - that has keep me on the antinuclear side of the argument for years.

I have no doubts that the world will go more and more for nuclear power when the energy crunches increase. But this will be done at great peril unless truthfulness and strict controls are put in place and enforced, strictly.

As of yet, no nation has developed "fail safe" methods for storage of high level radioactive waste. As far as I know they are all doing about the same as what Japan has been doing in terms of storage.



Frank said...

@Robert The French are doing slightly less badly. They do reprocess some fuel. Their version of Yucca Mountain is taking some waste. And the rest, stored at the reprocessing plants, is at least in storage designed for years rather than months.

D said...

Here's what Areva (French) says

NB, the file format is a PDF within a zip

There are some reports that Areva's name has been removed from public versions of this doc. If this is true, don't forget to pass on the unexpurgated version to others.

Greenpa said...

Robert; re spent fuel- take a look here:

It's not an option I like much; but strike me as better than other options.

Water circulation from the deep abyss to the surface is minimal, and properly contained (vitrified, perhaps) there's a fair expectation that escape would be very slight.

gamedog said...

Cheers el gallinazo

I managed to find NUCLEAR POWER GENERATION COST BENEFIT ANALYSIS done for the UK gov, which basically says that without a high Gas price, a high Carbon price to offset costs, and a taxpayer covered unlimited liability for future waste costs, it's not viable. (nuclear industry lobbied for taxpayer waste liability and got it)

this helped also

Seems it's not commercially viable without subsidy. I don't know weather I won the argument, but I sure made them think a bit ;^)

Tom Therramus said...

Tx for your thoughtful post.

"Scale dependence can result in emergent system properties and alter system mechanics via threshold response and run-away positive feedback."

Agreed. This point touched upon earlier in the thread in "the Old faithful vs Krakatoa" analogy.

Interesting thing is that oil volatility cycles of the last decade show signs of being an emergent system.

Indeed, the past I have drawn parallels between volatility spikes and the manner in which they propagate downstream effects on the economy etc to action potentials such as those seen during the heart beat or a nerve impulses. Action potential is one of the more well known emergent self-organizing phenomena in biology.

-see last few paragraphs... Oil Caused Recession, Not Wall Street-

"Human population is the "Single Limiting and commensurate Factor/variable" of virtually all of the antagonistic forces directed against humanity."

Who can disagree that population growth is close to the ultimate cause of our woes. But such an expansion in human numbers is unlikely to have been sustained without the energy subsidy (apols to Stoneleigh) provided by fossil fuels over the last 300 years.

This being said my focus is on system instabilities (e.g., the ongoing cycle of volatility spikes in oil price/production) that emerge when this energy input is maximal or begins its decline.


It is a pleasure to discuss ideas with you...

"It is really impossible to determine when global oil production peaked, even though it most likely has by now.

Agreed. The US Dept of Energy has reported that global oil production hit a plateau in 2005 that may be the peak, but who knows.

"So while price volatility may be a characteristic of resource production peaks and declines, it is also a distinct characteristic of unhealthy financial markets, and there is plenty of evidence to suggest that those markets endogenously breed their own instability."

This comment is similar to a point raised in an exchange I had with Chris Cook, the former Director of the Director of the International Petroleum Exchange - summarized in the link to the article cited above in this post.

In a nutshell, Chris expressed the view that the volatility that we're seeing is a product of deregulation and "financialization" of the oil markets - i.e., as opposed to resulting from Peak oil.

Chris has 25 years in the business and was/is the European editor of the Oil Drum website. He is thus authorative. Still, as you can read in the article i.e., Oil caused rececession etc) I pointed out data and counter arguments that are difficult reconcile with financialization and/or speculators being the root cause of volatility in oil price over the last 10 years or so.

ben said...

socionomic decorating?

"Will future generations look at snapshots of these "undecorated" rooms and recognize this post- recession moment? Perhaps not. Unlike modernism, which looks frozen in amber, the rough-edged amateur aesthetic of the moment acknowledges that real life is in flux. The only guiding principle is that there is no guiding principle."

the author is unintentionally right: recessions are so yesterday.

the coffee shop I go to has several tables dedicated to motorcycle repair at the moment, and the mood is decidedly dark. don't go in there asking if you can post a lost cat flyer if you don't patronize the place.

Alexander Ac said...

Hello TAE'rs,

regarding (not only) the mortgage politics, I have new motto: "Short-term freedom, long-term prison",

do you like it? :-)


Biologique Earl said...

The latest from Arnie Gundersen:

Evidence is mounting that Fukushima no. 1 reactor may be periodically reaching criticality and producing bursts of neutrons. That is primary nuclear fission (of Uranium and/or Plutonium) may be taking place instead of just decay of radioactive decay products.



NZSanctuary said...

My latest Time magazine (free subscription) turned up again yesterday. On the cover is a picture of a piece of shale rock, with the headline in bold: This rock could power the world.

I nearly spat my mouthful of breakfast! I have yet to read the article, but I have little hope of finding anything other than false hope pandering and profit motives.

NZSanctuary said...

Risk assessment for populations near Fukushima

This is a short paper by Chris Busby. Given "current" readings out to 200km from Fukushima, he estimates at least 200,000 deaths within the next 10 years (another 200,000+ in following decades) if people are not evacuated soon.

Note, he is only analyzing the area within 200km of the plant.

Nassim said...


I have never been able to see the videos on the Fairewinds website - perhaps because I am in Australia.

However, I get them all at without any difficulties.

NZSanctuary said...

Nassim said...
I have never been able to see the videos on the Fairewinds website - perhaps because I am in Australia.

I can view them from NZ. Region is probably not the issue.

Jim R said...

Zerohedge has an article on the topic..

Greenpa, I've been thinking the same thing for quite a long time now. Vitrify the crud, (using high-borax content glass), cast the glass pebbles into big slabs of concrete, barge them out over the Marianas Trench, and aim for the bottom of it.

And I've also been thinking, for a couple of weeks now, that it is a major mistake to spray water on the ruined reactor buildings. It won't be able to cool the corium very long, it might contribute to criticality, and it's just eluting the soluble fission products to make a bigger mess.

Stoneleigh said...


For the non-old geezers in the audience here is a reference to early nuclear storage accidents in the then USSR

I mentioned that in my nuclear safety monograph. The most interesting full length reference on it is a book called Nuclear Disaster in the Urals by Z Medvedev from 1979. I have a copy buried in my library somewhere. It might well be out of print now. It contained some very eye-opening material about the Soviet accident record and the means of covering up major events (like summarily disposing of a large number of heavily exposed people).

A Norwegian study of Mayak near Chelyabinsk (the most radioactive place on Earth) is also very interesting. The Soviets dealt with high level nuclear wast there by throwing it in the nearest river and letting it flow north to the arctic. I can't remember the name of the research group off the top of my head. The report is probably about 15 years old. The same group put a lot of effort into dealing with the radioactive waste very unsafely stored at Murmansk (a nuclear submarine base) on a ship called the Lepse (if memory serves).

George Monbiot should read more about nuclear power in the Soviet Union and what happens when a nuclear bureaucracy is completely unaccountable. Ghastly doesn't even begin to cover it.

Biologique Earl said...

Greenpa said...

Robert; re spent fuel- take a look here:

there can be only one Greenpa, lol.

I am really interested in that link for reasons I will mention now.

While working at a western university in the states, I became close friends with some of the faculty in the geology, geophysics department. I sat in on a bunch of geology and geophysics courses, while there, as it was a side interest of mine (hobby).

At that time the plate tectonic theory was just appearing and was soon to be one of the most important unifying theories of geology and geophysics. It offered for the first time explanations of why fossils of certain early species and rock formations were found on parts of oceanic boundaries of different continents. Continents now widely separated but on a map having appearance of separated parts of a jigsaw puzzle. For example South Americas's east coast and the west coast of Africa.

Briefly, studies showed that the rocks parallel to seafloor spreading lines - for example the mid Atlantic Ridge - showed different geomagnetic orientations. It was postulated that this could occur if new molten or very hot rock was pushed up along these lines. The hot rock would have a random magnetic orientation but would take on the orientation of the earths magnetic field while cooling and solidifying. As it was known that the Earth's magnetic field periodically reverses one would expect to see alternating bands of reversing geomagnetism in the solidified rock corresponding to the reversing magnetism of the Earth. As mentioned above, that is what was observed in the geomagnetic mapping of the seafloor. see:

The theory also talked about subductions zones where various plates were diving below other plates. For example, Nazca oceanic plate is diving below South America, which in turn is sitting on another plate..

When one prof talked about this brand new theory to his students, I said wow that may be the answer to the nuclear waste disposal problem. I proposed exactly what he (you?) talked about in the NY Times Green blog. I always thought it a neat idea.

The subduction of one plate under another, by reference "stable", plate often results in a series of volcanoes above the subduction zone. This poses an interesting question. As an oceanic plate dives under a continental plate could it carry the radioactive material under the volcanoes and result in radio active magma issuing from these volcanoes? Well yes, I suppose it could. However the rate of plate movement of 10 to 20 cm a year would mean it would take a long time for the radioactivity to move to an area below an active volcano.

Since most volcanoes are at least 100 to 200 km away from where subduction starts, it would take (say for 100 km distance) a minimum of one million years to move that distance. By then the radioactivity of the bulk of the "bad" radioactive isotopes (ie short half lives and dangerously radioactive) would be extremely low.

I always thought that if this method of disposal was used that nations would secretly take it to remote trenches not under their own continent. Just in case it would result in radioactive volcanoes further inland. Hehe

Of course there are other issues. Containers of vitrified radioactive waste would certainly be crushed and pulverized early in its journey. If too many containers were close together a chain reaction might start. Hmmm.

Anyway, I think it is an idea worth exploring. It is very likely that the human species will not exist before the containers have moved very much and burst open.



scandia said...

@ Stoneleigh, As my rent is inclusive of utilities they are hidden from view so to speak. Consequencely the letter to the editor from a rural SW Ontario Hydro users was a wake up call.
" Shocking Hydro Bill "...I just received my Hydro One bill dated Feb.15th totalling $256.81-that's for one month.
This nonens about we only pay "6.4 to 7.4 cents a kilowatt " doesn't make sense when you loof at the bottom line. My total cost for electricity at the above rates adds up to $127.49.
Add on all the little extras like delivery($100.02),regulatory charges($13.02),debt retirement($11.98) and the hated HST($32.83) and the actual cost per kilowatt becomes 13.8 cents.
Oh I forgot to mention that my original bill ( $285.34) was reduced by $28.53 courtesy of the Ontario Clean Eneregy Benefits...electrity actually costs double what we are led to believe.

I have a few questions, Stoneleigh, that I hope you can answer. Firstly what are delivery services? Do they include repair and development of the grid? What in hell are regulatory charges? Is that for security and legal advisors? Boy oh boy, I'll bet most Hydro users don't even know they borrowed money and now service debt!
And I won't even go into the rebate function of the Clean Energy bureaucracy.
And I'm thinking if your house is heated by electricity a refit would be prudent.If you're stuck in a condo with electric heat go find a " greater fool " quick.

Greenpa said...

Robert - yes, there's only one of me, so far as I know. I do comment on the NYT frequently (enough so, that to my surprise, they gave me a "complimentary" subscription, now that they're charging.)

Interestingly- the first serious term paper I ever wrote for a science course was on continental drift, otherwise known as plate tectonics- and it was still highly controversial at the time. I found the paleomagnetic data really quite conclusive.

I first heard of the concept of abyss disposal decades ago. If you actually originated it (easily possible); it's escaped now into the general information cloud. Wikipedia lists it, somewhere.

The other factor regarding when and if it comes back, besides time, is dilution. If you think the ocean is big, look at calculations for the volume of the mantle. And materials circulate in the mantle in very complex fashion.

Yep, it would be a long time before it actually is subsumed; but it would be very effectively out of all reach during that time, and in a place where it would be highly unlikely to cause trouble to the surface.

Stoneleigh- I'd be very interested in your thoughts on abyss disposal (which I'm quite sure you've thought long and hard about).

Greenpa said...

oh, yeah, and abyss disposal would be ideal for Tepco execs, too. Then maybe we could get it expanded to JP Goldman Stanley execs too.

Biologique Earl said...

Blogger Greenpa said...

oh, yeah, and abyss disposal would be ideal for Tepco execs, too



I certainly do not try to claim as being the first to think the concept. It just happened that light bulbs glowed bright when I heard the prof talk about the subduction zones. I immediately had an image of a great escalator carrying everything with it into the flaming bowels of the Earth. It kind of blows the mind away doesn't it. The natural world is so amazing.

I doubt if any of the geology, geophysics department people passed it on.

As I pointed out geology one of my hobbies not a profession.

Although I try to keep up with science, for some reason I never ran across the idea in popular literature like New Scientist.

Best regards,


Biologique Earl said...

Just did a bit of homework. Googling the issue of burying nuclear waste in subduction zones brings up plenty of discussion including an article in New Scientist in 2005. Never saw it. But that was a particularly busy time of our life and I probably did not read every issue.

Apparently, many think it would not work or would pose a serious hazard. And there seems to be an International agreement not allowing it to take place.

So that is where it stands for now.



Brunswickian said...

this is by Chris Martenson and doesn't appear to be consistent with TAE's view (QE supporting low interest rates).

What we need to consider is what will happen when an average of $4.4 billion dollars per business day are no longer flooding into the markets. Will asset prices be at risk of falling without these massive daily infusions of liquidity? You bet.

And add to this an unexpected threat that's just entered the picture: Japan.

A Disturbance In The Force
The biggest risk here, aside from parts shortages and supply chain difficulties, is what happens when the flood of liquidity that has emanated from Japan over the past two decades reverses course and flows in the other direction. This is a major transition (which I expounded upon more deeply in a recent post for my enrolled members) for which both Japan and the world economy at large are wholly unprepared.

If we add the idea of the Fed terminating QE, which has been enormously supportive of Treasury prices (and therefore low interest rates) to the idea of Japan suddenly becoming a net importer of funds instead of an exporter, we can quickly arrive at the risk of a rather unpleasant period for US Treasuries -- and, by extension, many other government bonds.

Already the governments of Portugal, Greece, and Ireland are paying rates on their sovereign bonds that are way above their nominal rates of GDP growth, which is a certain recipe for financial disaster. It's as if to survive, you need to borrow by using your credit card, even though your rate of interest on the card is several times larger than your yearly salary increases. Eventually that ends badly, and everyone knows it.

Along with that, we have to consider the idea that rapidly rising interest rates in the US Treasury market are destabilizing in other ways, but especially to the $600 trillion dollar derivative market - a significant portion of which is tied to US Treasury interest rates. Who knows what sorts of accidents await in a market that is too complicated to grasp in its entirety?

Of course, the US housing market, still struggling from poor sales, a massive shadow inventory, falling prices, and far too much negative equity, will perform especially poorly if interest rates rise.

If the Fed terminates QE on schedule, then I think a tsunami metaphor is apt. First, all of the liquidity will drain out of the bay, leaving countries, governments, and institutions to flop about in the mud. Then the Fed will panic and resume the liquidity flood, feeding the wave that will rush back in to destroy the lives and portfolios of those who positioned their wealth in harm's way.

The biggest problem with the current situation is that there's practically nowhere to hide. To an unprecedented degree, all of the world's markets and all assets classes are now trading in synchrony. If all of the assets in all the world's markets are moving up and down together, where does one go to sidestep the policy foibles of the Fed?

In Part II of this report, Finding Shelter From the Storm, we delve into specific strategies to consider for preserving wealth during these very turbulent times - as well as offer trading guidance for those willing to put risk capital into play. We explore what is likely to happen to the major asset classes (stocks, bonds, precious metals, housing, commodities) as the Fed attempts to tighten, and what is then likely to transpire if it later throws in the towel and begins printing again.

There are treacherous waters ahead. Liquidity will leave of the system and then come crashing back in. The unwary will lose nearly everything in the process, and so will some of the wary. Beating this current period of financial disruption by preserving your wealth will not be an easy task. Those looking to do so should consider reading Part II of this report (free executive summary; paid enrollment required to access).

el gallinazo said...

Robert and Greenpa

My knowledge of plate tectonics comes from a Rocks for Jocks course I took about 15 years ago. I don't know if abyssal disposal is the best term, as my understanding is that the subducting plates are in the continental shelf. My worry would be that Mother Earth would regard this stuff as some dogshit stuck on her shoe and scrape it off, eventually winding up on your living room rug.

el gallinazo said...


Your last brief comment got me thinking. I started to compose a reply which morphed into an article. But it really sucked, so I deepsixed it without submitting it, and decided to start over. So far it's gestating in the ruins of my cerebrum, probably to a stillbirth.

As you may recall, I think the most probable future, as I surmised in my last article, is for the Fed to shut down QE, perhaps even prematurely, and then starting it up when TSHTF and by popular demand. The entire economy including the equities, commodity, and derivatives markets are obviously on the Fed's criminal life support Ponzi system, so when and if they unplug it, instant brain death. Actually, before they unplug it, when word hits the street. Since the Fed may be surreptitiously currently buying as much as 70% of T issues, the big question is, how is the Fed going to shut down QE with the giant deficit? I can't see it happening for more than a couple of months. As we have learned, the Fed is sneaky, evil, and has no respect for the rule of law. Perhaps people with more expertise than I regarding the nuts and bolts of Fed obfuscation (doesn't take much to have more), might see a way that they could cover the deficit without flooding liquidity for speculation to the primary dealers and hedgies.

As an aside, with the Japanese being forced back into yen for reconstruction, the dollar will be the last remaining carry trade currency until TSHTF. Thus the breakdown of a huge USD carry trade will skyrocket the forex value as Stoneleigh has predicted. Even more so with the yen out of the business.

As to the future bond dislocation where nominal bond yields shoot up, and real bond yields shoot up even higher, I guess the big question is now with the dog is eating its own vomit, do the bond vigilantes still have the power to do this? Or the resource rich countries refusing to give away their resources in exchange for our cotton TP? We can always make their day. Stoneleigh eventually sees very low nominal yields during the long deleveraging, thought due to deflation, the real yields will be positive and much higher. The transition from the high nominal yield dislocation to the low nominal yield that Stoneleigh predicts is a bit of a mystery to me.

I could see the following scenario as a possibility:

If the Fed really pulls the plug on life support, then all assets will crash (except, of course, shorts in which the Big Boys will be situated because the Fed will tip them off). But when commercial bonds start to default under the pressure, the Big Boys who, like AIG, wrote those CDS won't fare so well. But the ones who get to the fire exits first will have all this cash which they will have to put somewhere. Some will be smart enough not to trust the FDIC, and will decide, as has Stoneleigh, that short term T-bills (90 days and less) are the cutest chicks in the leper colony. The flood into these will lower their rates to maybe negative. (They did go slightly negative in the secondary market briefly a couple of years ago. This amounts to paying the gubmint to hold your money). Longer notes and bonds will still be quite high. Thus a total reversal in the yield curve, probably more severe than has ever been witnessed before.

Nassim said...

It’s 1989, but we are the Russians

For the western world, the “Arab spring” threatens to be a classic case of good news and bad news. The good news is that this is the Arab 1989. The bad news is that we are the Soviet Union.

This is a remarkably insightful article. I don't care much for its author but he does seem to have had a mental breakthrough here. I have his book "Zero-Sum World" propping up my monitor - it is brand-new but I never opened it.

Anonymous said...

Been pruning fruit trees and staying clear of the Net and All information about anything, needed a break.

Saw Mr Condor's FED QE disconnect scenario.

With all the hand wringing on what happens when the pooch gets it's barf bag banquet taken away and the treasury has no more market for it's bond offerings when the The Bernanke says 'no mas', may I suggest I & S's prediction of the 'flight to safety' into dollars as a lot of national currencies go belly up.

Maybe that is 'the plan'.

Kill the world financial system with one last push (false flag) event in the currency wars now raging to scare the chickens into the corner of the Dollar as the last refuge = who's your Daddy Now?

Look, Max Keiser think's when TSHTF in the currency wars, big investors and nations will run to gold, not U.S. treasuries like I & S say.

They can't both be right.

Even if you split the difference and half the assets head for gold and half for Daddy Dollar Warbucks, that's still ashitloadofwealth begging for treasuries.

Who cares if the FED isn't buying the asswipe treasuries, everyone in the world will be running for what they perceive is the only safe place left.

Max believes people/investors/other=countries will be rational in their flight to safety decision and see Gold as the right historical choice. Only scaredshitless phucktard rabbits would take U.S. paper notes over glittering mellow yellow metal.

Panicked people don't think rationally.

I remember Richard Pryor waxing poetically about the quailty of one's decision making when they are on fire.

It's not very high.

The remaining wealth holders in the world will panic shortly when the currency wars set their hair on fire.

U.S. treasuries will be the new tulip bulb for awhile, at least until someone wakes up and realizes, "holy crap, my hair's not on fire but my pockets are full of phucking flower bulbs!!!"

The one's who panicked into gold will say, "holy crap, my hair's not on fire but my pockets are full of really phucking heavy yellow metal, I can't stand up, where's the food, what's for dinner!"

"Tulip bulbs au gratin"

Ilargi said...

New post up.

Credit Bubbles Always End The Same Way


Phlogiston Água de Beber said...

A Walk in the Woods,

Good point about what happens when your hair is on fire. As shown by this video of the Greek Policeman who caught one of Comrade Molotov's cocktails on his helmet. Petrol Bomb on policeman's head.