Update 1: More seismic activity as the Popocatepetl volcano in Mexico City is spewing ash and is ready to blow. We expect the Mexican Central Bank to tear a page from Dr. Deficit's book and print a few trillion Pesos for this event.
Update 2: Mazda set to cut ties with Ford and a few thousand US manufacturing jobs with it. Should be worth a few hundred points on the DJIA.
Update 3: Think Fukushima radiation has no impact on the US thousands of miles away? Better think again. Radiation 62 times normal background from rain. Amazing.
It's time for Fukushima Fry-Day again, and today's updates don't disappoint. While you were all nice and cozy, tucked in bed sleeping, another magnitude 6.3 earthquake struck off the coast off Fukushima. Several people, who do nothing all day but stare at live Fukushima webcams thanks to Dr. Deficit's Mad Hatter Economics (more on that later) reported that the webcams were shaking a good bit during that quake. "So what," you say. Shortly after that quake occurred, a large "green glowing" fire in the leaning building of Spent Fuel Pool 4 (SFP) was seen burning for several hours. "Ok. I'll panic now," you say. "Good," we say. Since then, the fire seems to have burned out, but an eerie smoke continues to linger.
The reason everyone watching this event closely is worried is because more earthquakes are expected and it only will take one to finish off building 4. More than one month ago, engineers discovered that reactor 4 was leaning a bit more than usual (it was obvious to all of those armed with a live webcam of Fuksuhima) and began to take emergency measures to sure up the building before it collapsed entirely, and their worst fear was another big earthquake or series of smaller ones at a shallow depth.
In the meantime, the whole Pacific ring has been heating up, quite literally. Two volcanoes have since erupted in Japan and have been sending ash plumes high in the sky as well as rattle more than a few windows. Geologists are warning that a full eruption is imminent. Needless to say, this will be considered bullish for the stock markets as more destruction will require more QE.
Scott Portzline, a nuclear engineer who worked on Three Mile Island, said in a recent radio interview that experts are urging the IAEA to create another level for the INES scale just because Fukushima is so bad. That is correct - Fukushima is way beyond Chernobyl in terms of an international emergency - it needs an entirely new level. It took Japanese officials over one month to raise the emergency from a level 4 to a 6 and finally after international pressure, to a level 7, so we doubt Japan will agree to this. After all, we were all just invited over for Fukushima fruit salad. Listen to the whole interview from 19 minutes onward.
A week before the global catastrophe of March 11th, we wrote about unforeseen natural catastrophes leading to more economic problems which can't be solved simply by throwing money at catastrophes. And as the earth fights back against humans who are ruining the plant for selfish gain, we should expect to see more news like this. Further, despite what you hear on TV, natural disasters are not bullish for the economy and Fukushima is proving that. We're still waiting for the quarterly results to come out but the shock to the global economy will be swift and devastating once reality sets in. Record weekly insider sales are telling everything you need to know about stock prices.
All things being constant, the economy was not, and is not recovering. QE has failed. Period. Although it may have staved off a global great depression for a short time, it has only postponed the inevitable and "judgement day" for the financial markets is fast approaching. Over the next few months and weeks, we will see the results. Non-Farm Payrolls are out today and no comment is necessary. As always, ZeroHedge does a most excellent job at summarizing reality- here and here. Again, no further comment is necessary.
Finally, the Greek tragedy doesn't seem to end - the Prime Minister of Greece, George Papandreou and other high ranking officials are being accused of treason. This of course comes on the heels of another downgrade, as Greece descends into the abyss. As we pointed out long ago, one bailout always precedes another bailout, and another, and so on. The end result will be the disintegration of the EU.