Bill Cara's Blog for Mar 16, 2011 [See Post-Close report]

Submitted by Grym (3215 comments) on Wed, 03/16/2011 - 08:22 #81673 (in reply to #81658)

DR.
"Anyone get the feeling President Obama has stopped leading the country because he knows something very bad this way comes?"

My only disagreement with what you say is this:

Obama hasn't stopped leading — Obama has never been a leader. He has no leadership abilities or experience. His entire life has been one of learning to work the system to his own benefit.

Had he come on the scene before the 1964 Civil Rights Act, he would not have been another Martin Luther King, he would still be a total unknown.

He is saying placating sound bites while doing nothing. He was given the Nobel prize because Europeans knew he would not make waves. His talk on the Middle East revolutions without action of any kind is the equivalent of his time as my Illinois Senator (I use the "MY" reluctantly and with embarrassment — since I voted for him then.) While a US Senator he merely voted "Present" on any topic which could ever lose him a vote in the future. This is what he does in any controversy.

Obama's track record as president has been a "go with the flow" approach — TARP, bonuses, Guantanimo, Iraq & Iran, gays in the military... any issue is "carefully considered" until overshadowed by the next and forgotten by the media.

Obama is simply a book mark between the anti-Bush presidency reaction and the next one. We'd have done better to have simply dog-eared the page.

Grym

"Why is CEF holding up so well relative to other gold issues for the past year?"

Probably because of the silver content in the fund and to a lesser extent the premium it attracts at higher metal values. (I never looked up each value.)

I did a quick comparison on Stockcharts performance charts from July 28 to March 15 and found the following increases in value:
CEF: +50%
Gold: +20%
Silver: +95%

from Jesse's blogspot, dated 1st March

https://lh3.googleusercontent.com/-E8kQroy3EqA/TW1...

you can CEF has a lot of silver.

Freedom57, Lelik, Les,

Thanks for the quick and helpful info.

Grym

Grym -

I stand corrected!

Thank you Vad,
These interactive photos are nothing compared to your beautiful photo works but they tell the other side of the coin, not sure if you've seen these of Japan.

http://www.nytimes.com/interactive/2011/03/13/worl...

regards,
Earl

Natural-gas futures Wednesday continued to build on their recent moves higher as traders bet that futures have largely priced in the seasonal dip in U.S. demand and that increased Japanese gas needs would lift global prices for the heating fuel.

Natural gas for April delivery recently traded 3.6 cents, or 0.9% higher, at $3.977 per million British thermal units on the New York Mercantile Exchange.

Futures earlier Wednesday traded as high as $4.015/MMBtu. The benchmark contract hasn't ended above $4 since late February.

The U.S. natural-gas market has received some support from worries that outages at Japanese nuclear-power plants following Friday's earthquake and tsunami would boost the country's demand for other fuels.

While the U.S. is not a major liquefied-natural-gas importer and lacks effective export capacity, speculation that global supplies of the fuel would tighten spurred some buying this week in what had been a listless, range-bound market.

The boost may be fleeting, however, and traders will likely continue to focus on expectations for U.S. production, said Gene McGillian, a broker and analyst with Tradition Energy. Futures earlier this month sank to their lowest levels since November as traders bet that strong North American production would quickly replenish inventories with the arrival of spring's decline in gas demand.

Weather forecasts were little changed Wednesday. Meteorologists with private forecaster WSI Corp. see temperate weather across the eastern two-thirds of the country through the end of March, with higher-than-normal temperatures across much of the Southcentral and Eastern U.S. Lower-than-normal temperatures are expected for the West Coast during the period.

Meanwhile, physical natural gas for next-day delivery at the benchmark Henry Hub in Louisiana recently traded at $3.84/MMBtu, up four cents from Tuesday's average, according to IntercontinentalExchange. Gas for next-day delivery at Transcontinental Zone 6 in New York recently traded at $4.22/MMBtu, down 10 cents from Tuesday.

Earl,

Click on these satellite photos at ZH to see how extensive the reactor damage really is. On what I presume to be reactor #1 it appears only the top part of the building was blown out which I believe is how it was designed to work, but this is not the case for the other two.

http://bit.ly/gOQzye

LOL - go for it. Mark 17.55, target 21.21 - just to bug 2nd...
have a great day 2nd
Earl

(JP) EU's Energy Chief: Sees potential catastrophic events in the next few hours as situation at Japan's nuclear plant is out of control

funny how I could see that coming, yet let myself be swept up by the fever of speculation in gas stocks today. Reading that choppers weren't allowed to drop water premarket was the red flag.

quickly dropped LNG. Bought one SLW April 40 call that was doing nicely until 10 minutes ago and still holding one USO 39 put that was reaching my stop trigger until 10 minutes ago...

Mega shakeout. They'll encase it in sand and cement to contain it. Final option.

EWJ 9.69 (-0.34)

Hi Mark,
Incredible photos. In 1981 our plant had a separation (deflagration) of the recycle gas loop oxygen mix nozzle – (we mix oxygen and ethylene to react and make EO). We responded with our fire gear (not enough at the time) and after 5 hours we had the place mostly secure; that was our worst event. I can’t imagine what those operators are going through in China and it breaks my heart just thinking about it.
Regards,
Earl

Pentagon says US forces not allowed within 50 miles of nuclear power plant.

That should put to the rest the industry claim that GE Mark 1 reactor is safe. People were saying since 1970's these reactors were not safe. Took some time to prove it. There many of those 1960's technology reactors used in USA.

http://www.newsmax.com/InsideCover/GEScientistQuit...

This link gives the locations of Fukushima sisters:
http://openchannel.msnbc.msn.com/_news/2011/03/13/...

The operators of those: EXC, XEL, ETR and being aggressively sold already. It's probably too late to jump in. I should have done my homework during weekend.

Hi Earl,

I am very grateful for the tremendous self sacrifice of all those involved in trying to avert complete disaster. I just glanced at those pictures and found it hard to believe that no damage to the primary containment system had been sustained. Not only that, but there are also cooling ponds which are housed in those same buildings. Seems very foolhardy in hindsight.

...

Events at Fukushima are eerily reminiscent of the Deepwater Horizon now. We're all sitting back and wondering (a) who's actually in control?; (b) can we believe anything we're being told about it?; and (c) is it really much worse than we're being led to believe?

These are lessons in man's hubris. You simply can't account for every contingency and forces of nature remain far beyond the control of mortal men.

Meanwhile, back at the trading desk, bonds and inflation protection instruments are being gobbled up. Fear and loathing are the only forces equal to nature at the moment.

Good point. But I just covered my shorts and sold VXX calls. Plan to reload later.

With my wee little brain I can think of a bunch of games that can be played. Imagine when the MIT guys start playing with it.

in worst case ( Japan ) still think ' osir ' will rocket past $ 18....

I dunno Vad, maybe the guy had a bunch of puts he wanted to see turn green.

Seems like radiation spikes whenever there's a fire. And there's a fire every time the spent rods aren't covered with water. And they don't seem to be able to keep water on all the areas that need water. Turns out fuel rods don't like air very much. Also turns out, radioactivity from one water-less reactor makes it difficult to apply water to a neighboring plant that isn't water-less at the moment, but loses water as soon as you neglect it.

It looks a little bit like a game of whack-a-mole. Except its with nuclear power plants, not moles. And the employees are getting successively more irradiated with each passing day - and I'm sure are extremely stressed and tired at this point.

When the big brainstorm is water cannons and helicopters (and you KNOW that isn't in the manual for this particular reactor model) you get an idea of where we really are today. Six of these plants, each containing 20 years of spent rods could catch fire and spew radiation if this goes sideways. That would really be bad. That's because the spent rods are not contained inside any sort of containment vessel - and with the explosions, they are now completely exposed to the outside air.

Are you talking about Prochymal currently in clincal trails?

right ballena, wanted to point out to Black Jack the alarm that just tripped on my FXY watch on massive volume. Looking for a stop tripping spike or rally - make take days or weeks - and then potential death.

I dunno Vad, maybe the guy had a bunch of puts he wanted to see turn green

Must be nice to have megaphone eh?

Luckily, we shorted LVS at 38.50 literally 1 min before this remark of his:

[10:56] {Threei} Short Setup: LVS .50 break
[10:57] {nemo} half lot Vad?
[10:57] {Threei} no, full
[10:57] {Threei} (JP) EU's Energy Chief: Sees potential catastrophic events in the next few hours as situation at Japan's nuclear plant is out of control

Have a look at the LVS chart to see what happened next... 4 min trade, 50 cents reward

There are NO approved rad. treatements in US... You can thank certain lobbies for that... and arrogance. Fast Track>http://www.osiristx.com/therapeutics.php

For what it's worth, I think UXG goes to 6.50 (Nov Spike)and I get interested between 6.0 and 6.50

17.39 The Government's Chief Scientific Officer Professor John Beddington has commented on the developments at Fukushima nuclear plant. He says:
The problems with Chernobyl were people were continuing to drink the water, continuing to eat vegetables and so on and that was where the problems came from. That’s not going to be the case here."

http://www.telegraph.co.uk/news/worldnews/asia/jap...

Japan is now a Chernobyl, despite claims of it being impossible yesterday.

Dang

And I believe below where it started the year. Where's the Plunge Protection Team when you need them? LOL

duplicate

Remember my warning at the beginning of the day that market is extremely sensitive to news items coming in? Look at this market reversal just now and this headline, however vague it is:

(JP) Reactor power line that may resolve reactor crisis nearly in place - US Financial Press citing Japan electric company
- Emergency workers returning to the plant.

"Japan is now a Chernobyl, despite claims of it being impossible yesterday."

Chernobyl = cat 7 (=highest)
3 Mile = cat 5
Fukushima = cat 4 (could change...)

Chernobyl was something else than a nuclear power plant. Not even comparable to dirty-old Fukushima.

After just one week everybody has turned into a nuclear scientist. And the media? Is still just speculating trying to sell newspapers by every means. Nobody really knows anything. The only thing I have an issue with is that they did ask for help too late. Shame on you! Harakiri!

->
18.40 The operator of Japan's tsunami-crippled nuclear plant says it has almost completed a new power line that could restore electricity to the complex and solve the crisis that has threatened a meltdown.

Funny. Interesting. Fascinating.

+++Vadym

"After just one week everybody has turned into a nuclear scientist"

ha if only. Chernobyl = cover your backside.

"Fukushima = cat 4 (could change...)"

yeh, possibly while we're sleeping. I'm not referring to the science or the disaster management.

Again, if you've got any open long positions, cover your backside.

I've got a minimum of exposure to precious metals now if power is restored and the crisis is neutralised, with lots of stink bids at support to take advantage of the CNBC induced panic should the worst happen.

I put my faith in gold, not nuclear energy.

Germany is about to shut down its seven oldest reactors for three months to start with.

Angela Merkel is truly desperate. Game over.

Hi Jack,
It's possable you could be right... I had to exit my EDZ/SDS position about 30 minutes ago - not bad though with 7% gain. All I have are some miners, some oil drillers, a few bios and I think I'm going to let the dust settle.
Best luck,
Earl

Tokyo Electric Power Co Inc (JP) Timing for completion of power line to restore waterpump coolng of reactors unclear - US Financial Press

and the market responds with immediate downturn. BTW, as if it all were not enough:

Ontario Nuclear Plant Reports Water Leak

Thanks for your rephrase. :)

Regarding the media - I've seen articles that go both ways. Some scream "meltdown" (without even saying what a meltdown really is) while others are incredibly detailed with supporting pictures and really quite educational.

I feel the lack of realtime information in this crisis is a fundamental issue here. The power companies should have a swath of radiation sensors scattered around each of these complexes feeding data offsite in real time. If we're going to have to live with nuke plants, I think we have the right to know how much radiation is coming out of the plants.

And if a tsunami wipes out some of the sensors, then they should have a bunch of backups they must drop into place to help manage a crisis if one appears.

And if sensors like this exist, but the values obtained by them are being concealed by the operator, well that needs to change too.

Right now we get to wait for a bureaucrat to summon the courage to go on national TV and let us know what the radiation reading was 10 hours ago. That just doesn't seem right to me.

We need a whole lot more transparency in many areas. Here's another one.

And the latest is...

3:38 PM Admitting his information is limited, NRC Chair Jaczko nevertheless tells Congress high radiation levels around the Fukushima reactors make it difficult for workers to get near them without quickly being exposed to a lethal dose.

If the NRC chair's info is limited...

"Even the US FED cannot overrun market force even with billions of dollars in their arsenal."

Absolutely correct.

Eventually reality returns triumphant. Reversion to the mean. ETC!

I had rather frustrating discussion this weekend with a friend who has personally not been hurt by off-shoring of jobs, the RE crash, and is a true believer that TARP was necessary and is working.

His daughter and son-in-law are Wisconsin teachers and we are 180 degrees apart on the union vs state situation.

All I could finally say to avoid ending a forty year friendship was reality will decide the issue. It took 70 years for the Soviet top-down economy to fold, but I think we are quite near to a painful resolution.

BTW; I have mentioned this before, but in 1984 when my son's class visited Moscow the dollar was preferred over Russian money, but Levis and Elvis records were like gold. I wonder how much trading of goods and services is going on here these days. Barter may be smarter.

I got some EWY calls before close. I feel Korea is a direct competitor to Japan.

Volume of EWY exceeded that of flash crash of 2010.

http://www.reuters.com/article/2011/03/16/germany-...

If the seven reactors were to be shut down for good anytime soon, the utilities could have a little laugh ("give Angela the finger") in 2012 when they would have to pay less uranium fuel tax due to less nuclear power produced. Taxation on U3O8 is about to rise dramatically in Germany. Not because of the crisis though.

The nuclear debate in Germany is running hotter than some Japanese troubled reactors. I wonder what their base-load power will consist of once they finally have made up their mind. Coal died in 2009, Uranium in 2011(?). Seems GasPutin is the only one left. Congratulations Gazprom, building the off-shore pipeline from Russia to Germany through the Baltic Sea might turn out to be an ingenious move.

did same with BRK/B, CWGIX and OAKBX at close. Sold these back at S&P 1330 roughly. Negative sentiment is very strong.

http://www.madhedgefundtrader.com/february-16-2011...

I'll use YCS to play the reversal when it signals its readiness to roll over. I will hold YCS as a small core component of my portfolio for a number of years.

Yen 15 year double top, getting stretched out by the repatriation of currency occurring here, but in this race to the bottom that is happening now the Yen will likely drop as convincingly as Uncle Buck. Why would Japan let Washington get a leg up in competitive devaluation?

On Japanese equities that is. He was bullish before the disaster as well.

Speaking of the yen. Do you remember it doing a 7-8% intraday move the day the markets had their so called flash crash last year? What a performance it was!

Up 3% this week to a new ATH. Not playing myself.

who downplayed the situation, saying how over-negative the reaction to Gulf oil spill reaction was, linking this one to that...http://www.marketwatch.com/video/asset/pm-report-can-japan-nuclear-disaster-be-avoided-2011-03-16/F0FFB1E8-F06A-4307-861E-377CD8051073?dist=afterbell#!F0FFB1E8-F06A-4307-861E-377CD8051073

In the commentary at the top of the page.

as Fleck said today, could be derivative-related problems for Japan Financials when Yen broke 80....

http://tinyurl.com/4cdsy99

Slaughter house is killing hogs
Twisted children are killing frogs
Poor dumb red-necks rolling logs
Tired old lady, kissing dogs
I hate watching CNBC that stinking smut!
I can't use it!
Trying to make it real, compared to what!

I'll be very, very surprised if we don't rally tomorrow. Even if it's nothing more than twisted traders killing shorts.

I love the trading game.

after-hours. We do have fear now. I think this is a reaction to the news on exposed spent fuel rods overheating and spewing a great deal of radiation. Like I said before, the GE mark 1 reactor is one bad design. Better than the infamous soviet graphite reactor, but still poor by modern standards. They should be all closed.

Here is a write up from 1996: http://www.nirs.org/factsheets/bwrfact.htm

"An NRC analysis of the potential failure of the Mark I under accident conditions concluded in a 1985 report that Mark I failure within the first few hours following core melt would appear rather likely."

"A report by NRC published in 1993 confirmed that age-related degradation in BWRs will damage or destroy many vital safety-related components inside the reactor vessel before the forty year license expires."

Fukushima events showed that NRC was so right and the industry was so wrong.

BTW, many of these infamous GE mark 1 reactors at Fukushima and their USA sisters are at the 40 years age mark.

Who knew that a nuclear power plant needs grid power itself to run properly? And who knew that a power failure at a nuclear power plant results in an eventual boiling off of water covering the spent fuel rods (stored conveniently next to the reactor), leading to spontaneous combustion (spent rods don't like air at all), leading to an immense and continuous release of radioactivity, because the spent rods are not stored inside any protective containment vessel?

Who knew?

I think the term "poor design" doesn't quite begin to cover it. I can imagine the "release notes" to this reactor model: "If your GE Mark 1 reactor loses grid power for any length of time, your spent rod pool will boil off eventually exposing the spent rods to the air. This will cause them to produce hydrogen, which will eventually ignite causing an explosion, and then burn continuously releasing radiation into the atmosphere. So make sure you don't lose power."

EDIT: now jack that's amazing. you knew. but you weren't telling!

Like I said, I didn't believe it would happen as described. I thought (like the commenters on that blog) that it was a far fetched and highly unlikely worst case scenario. Live and learn.

BTW, weren't we also told by Hilary Clinton that US air force delivered missing "coolant" to the powerplant in question?

http://lexicondaily.blogspot.com/2011/03/mysteriou...

Well Ross I always enjoy your posts, but maybe cut down on the scotch before posting. Typos per line might drop that way. :)

If a huge earthquake much larger than anticipated splits the containment vessel and crap spews out, that I get. If a terrorist bomb blows up a plant and breaks containment, I get that too. As you say, things happen, and you take risks just waking up in the morning.

But for me, this was one of those failure modes that was designed in, but that I didn't know about - for me, an unknown unknown. I did not know that a shut-down nuclear plant, with spent rods lying around, needs constant care AND grid power or else the contents melt down, explode, and spew chernobyl-level nuclear contamination in the nearby area. I bet I'm not the only one. That's a really bad failure mode from a *shut down* plant.

I'm used to systems that, when shut down, behave nicely. Sure if your computer is running, bad things can happen, but once you shut it down, the number of possible bad things that can happen spontaneously go to zero. It won't spontaneously wipe its own hard drive, or explode, or do anything unpleasant like that. It just sits there. But nuclear plants (especially like this type) apparently aren't like that. At all times - active or not - they are live hand grenades that demand proper care and feeding or else they blow up. One might argue that a nuke plant like this is always in the process of blowing up or melting down, with only constant human intervention stopping that from happening.

Any system design that - BY DESIGN - requires a constant supply of electricity and human attentiveness for 100% of the lifespan of the product, or else a catastrophic failure with global health consequences ensues after a few days, well that's just an accident waiting to happen.

LOL let Yen tell you when Yen is ready to die Earl. Dammit man it could go to the moon from here :)

In response to JB's concerns let's use YCS to play the immediate parabolic reversal that MAY occur at some point in FXY. FXY could also just plateau, do a double top, triple top or any other technical topping signal. But let's say that it does a parabolic reversal.

Parabolic reversals are characterised by price volume activity like yesterday. There are many variations on the move and I certainly don't know them all. But a stock that gaps higher at opening and then proceeds to drop below the prior day's high and close is a stock that has likely lost support. Attendant drop in volume is also necessary.

At this point a short entry can be taken with defined stop at the highs of the day. The short trade can be held in a multi-day time frame until a cover signal is given. The cover signal is when the daily close is higher than the previous day.

That's the basis of a pure technical reversal play. At this point you can drop YCS on a technical basis and be prepared to wait for a lower high indicating trend change. Then you can sit on YCS on a more fundamental basis.

Like I said, how is Toyata et al. supposed to compete with the Renaults, BMV's and Fords of this world with a historically overvalued Yen? The BOJ will have something to say about that.

Hi Ross - Spot on my man. Once the media frenzy cycle has run its course the left leaners may have co opted the nuclear debate with the same nonsense seen 32 years ago. The technologies are growing up now ....., just have to keep the generators & fuel farms protected. Happy Trading

You missed the humor? The typos were plan-ed. Sorry for the head fake. I like some 19th centuriations people that wrote semi jibberish to make a point. Obviously I won't never do it against.