Breaking News: Radiation Levels Spark Panic, Evacuations In Tokyo; Accident Upgraded to Level 6 of 7; Airlines Cancel All Flights Into Tokyo; Fukushima Plant Now Abandoned; 10yr Bond Yield Crashes; US Treasury Runs Dry; Nikkei Crashes; Rule 48 Invoked

Update 4: No need to panic (yet), but CNN has reported nuclear fallout radiation could indeed reach Canadian and US coasts. Got potassium iodide? Price gougers on eBay are selling single packages which normally retail for $20, for the absurdly low price of just $1,625 + $50 for shipping. You can't make this up.

Update 3: Mass evacuations are taking place throughout northern Japan with scores of foreigners booking any last minute flights they can find. Some residents are not even sure if they will need to ever use the return flight ticket. You can be certain this will be spun into positive news for the markets.

Update 2: Officials have now just stated the Japanese Stock Exchange will operate as usual tomorrow. That being said, don't be surprised if there are "margin issues" that halt trading if stock prices drop another 5-10%. With the Fed stating today that they will continue endless money printing supporting the markets, expect to see surprise rallies in the wake of the most devastating disaster to hit the global markets since WWII.

Update 1: There is a rumor now circulating that the NIKKEI will remain closed for the remainder of the week on "Margin Issues," which should be translated as "we're afraid the stock market will continue to drop and we can't have that." As soon as this is confirmed, I will update this post. Until then, it's just more bread and circuses.

Just when you thought it couldn't get any worse, here are some of the latest developments coming mainly out of Japan. As I mentioned yesterday, with the Japanese nuclear/earthquake/tsunami crisis now the only headlines of the month, other very serious news like the US Treasury running dry on cash, or possible WWIII in the Middle East seem to take a back seat; as in, back of the bus back seat. Under normal circumstances, these headlines in themselves, would have been enough to do their own form of shaking. With Iran now becoming actively involved, the only question to ask is, at what temperature does sand turn to glass? Anything is a possibility in these extremely perilous times.

Now back to your regularly scheduled program -- With the International Nuclear Accident Emergency Level now upgraded to 6 out of a possible 7, with 7 being a Chernobyl-like disaster, most major airlines have decided to cancel flights to and from Tokyo. The president of the Nuclear Safety Authority (ASN), Andre-Claude Lacoste said "We are in a disaster quite obvious."

Shortly after midnight EST, mass panic began to grip Tokyo, as millions began to flee the densely packed city of 12+ million residents due to radiation levels increasing to ten times the normal levels. Officials urged people to stay clam and reported that radiation levels at the Fukushima plant were dropping. Nevertheless, many residents fled the city as a precaution since their faith in official reports have been greatly reduced. Interestingly, all personnel at the TEPCO operated Fukushima power plant have been told to abandon stations; with the recent tsunami, one can't help but take this as a last second "abandon ship" call from the captain as there is no hope in saving this sinking ship. 

Arnie Gundersen, a nuclear engineer at Fairewinds Associates and a member of the Public Oversight Panel for the Vermont Yankee nuclear plant said of the Fukushima spent fuel rod pools overheating, “That would be like Chernobyl on steroids,” Interestingly, the Vermont Yankee nuclear plant is identical to Fukushima Daiichi. AP via the BBC is reporting a "Japanese nuclear safety official has confirmed reports that the water inside the waste fuel storage pool for the number 4 Fukushima reactor may be boiling." This is the greatest fear of many nuclear experts now being realized.

Not an hour ago, two new quakes of 5.8 and 6.0 magnitude rocked Japan, shaking buildings in Tokyo once again and sparking fears that Mt. Fuji could erupt after the epicenter was directly under the mountain and only 10km in depth.

No doubt, these events have rocked the world stock markets, with the NIKKEI crashing 12%, even with Central Bank intervention. Which of course may be why in the US, the elusive and very telling RULE 48 was invoked to prevent panic selling; ironic since RULE 48, which is used during times of high pre-market volatility, means that the market makers are not required to display market information on the bid/ask. It's simply another game of hide and seek of the stock price. Doesn't that create panic? All of this finally leads nicely into an excellent article from the Mises Institute on the topic of Crony Capitalism and the end of sound money.

More updates later.