Critical Decisions Looming for Japan's Nuclear Industry - Guest Post

Guest post by GIR Analysts for OilPrice.com

Critical Decisions Looming for Japan's Nuclear Industry

SITUATION: Japan is advancing with plans to reprocess spent nuclear fuel and boost its external nuclear exports. These decisions will impact the conduct of Japan's global non-proliferation diplomacy.

ANALYSIS: Assessing the degree of salience to Tokyo of non-proliferation goals will be aided by monitoring its policy in two areas: its negotiating strategy in nuclear technology supply talks with other states, and especially India, and its management of its internal nuclear power program. Other aspects of its nuclear diplomacy, including pressure for North Korean disarmament and support for enhanced global nuclear security, are likely to remain robust.

James Altucher Sees S&P 500 At $1,600, Wants Apology From Bears At Bull Market Hors D'oeuvres Party

James Altucher has been right so far with his strong bullish views on the market and economy. For example, watch this CNBC video I posted in July 2010 featuring Roubini and Altucher. On Tech Ticker on Friday, James demanded some credit and an apology from all the bears who disagreed with him (or called him a wacko/douchebag lol) at a bull market hors d'oeuvres party. Hopefully for those long the recovery in size (with help from the Bernank), the S&P hits $1,600+ as he predicts but without hyperinflation attached. See the Tech Ticker video after the jump or go to the post.

Fed Schedule of First $105 Billion in Treasury Purchases (QE2)

From the New York Federal Reserve as part of the planned $600 Billion in Treasury purchases (QE2). Click the image.

"Tentative Outright Treasury Operation Schedule

Across all operations in the schedule listed below, the Desk plans to purchase approximately $105 billion. This represents $75 billion in purchases of the announced $600 billion purchase program and $30 billion in purchases associated with principal payments from agency debt and agency MBS expected to be received between mid-December and mid-January."

If you're still confused about what's going on, here are two articles analyzing QE2:

QE2 Will Either Fix the Economy or Destroy It - Minyanville
Thoughts on "An Open Letter to Ben Bernanke" - Pragmatic Capitalism

John Williams: Panic Selling of U.S. Dollar Will Trigger Hyperinflation

Alert (hat tip Zero Hedge): John Williams, economist at shadowstats.com, said on BNN today that the United States will experience a hyper-inflationary great depression "due to decades of extraordinary fiscal abuse" and actions used to keep the financial system from collapsing. "When you see panic selling of the U.S. Dollar that's when you have to be very careful", he said. To protect yourself, he said maintain your purchasing power. "You look to put your (U.S) Dollars in hard assets like physical gold and silver. Getting the Dollar in other currencies such as the Canadian Dollar, the Australian Dollar, Swiss Franc". He also said, "it's probably a good idea to store goods that you would normally consume for several months, just to protect yourself, your family and have goods for barter". Wow. To see the video click the link below.

http://watch.bnn.ca/squeezeplay/december-2010/squeezeplay-december-8-2010/#clip386602

Also see a video reenactment of what a Dollar collapse/hyperinflation would look like: The Day the Dollar Died (Video by NAI). We are already seeing inflation in commodities. Monitor the U.S. Dollar Index chart at stockcharts.comIt hasn't broken down yet. Stack up on beans!

Related: Gary Shilling vs. Peter Schiff (Deflation vs. Inflation), Charles Nenner sees a deflationary crisis and David Rosenberg predicts a period of price stability. Who will be right.

Jon Stewart: The Fed Isn't Printing Money, It's Imagineering Money (Daily Show Clip), Morgan Stanley Explanation (BASE, M2, MZM)

After Fed Chairman Ben Bernanke told 60 Minutes on Sunday (12/5/2010) that the Fed wasn't printing money, Jon Stewart of The Daily Show wondered why Bernanke told 60 Minutes 21 months ago that the Federal Reserve was effectively printing money to lend to banks. Stewart described QE2 as "imagineering" money ha. It is confusing. David Greenlaw, Managing Director and Chief U.S. Fixed Income Economist at Morgan Stanley, explained how the Fed wasn't printing money. I added links to charts at the St. Louis Fed. From PragCap.com:
"In the US, the Fed pays for bond purchases by crediting the reserve account of the bank that sold it the securities. Assuming that the rest of the Fed's balance sheet doesn't change, this leads to an increase in bank reserves. So, the monetary base - which consists of currency plus bank reserves - goes up by the amount of the open market purchase. In every textbook written prior to 2009 that we have come across, the rise in the monetary base is assumed to be transmitted into a roughly equivalent rise in the money supply (M2, MZM). But, as we now know, this assumption is not always valid. In the first round of Fed balance sheet expansion, which began in late 2008 and continued into 2009, the monetary base more than doubled and the money supply barely budged. In textbook terminology, the so-called money multiplier - the ratio of the money supply to the monetary base - declined by about the amount that the monetary base rose. The Fed can create excess reserves, but it can't force the banks to turn these funds into loans or securities holdings. In this case, the excess reserves are being stockpiled in banks' cash accounts. " (read more at PragCap, Morgan Stanley)

Also of note, apparently U.S Dollars are committing suicide on the printing press. Watch The Daily Show video from 12/8/2010 after the jump.

Blackstone's Steve Schwarzman on Where the World is Headed (Link)

For Schwarzman, the Action Is Anywhere but Here (spoke at the Goldman Sachs U.S. Financial Services conference) - NYT DealBook

Hat tip Business Insider

Janet Tavakoli FHFA Presentation: Repairing the Damage of Fraud as a Business Model - 12/8/2010

Read Janet Tavakoli's presentation to the Federal Housing Finance Agency Supervision Summit. She runs Tavakoli Structured Finance and warned repeatedly about the financial crisis. Here it is: "Repairing the Damage of Fraud as a Business Model" (12/8/2010).

Click for PDF presentation

ht @rcwhalen

Gary Shilling vs. Peter Schiff (Inflation vs. Deflation), How About Hyperinflation in Commodities Causes Hyperdeflationary Collapse?

Gary Shilling (on the deflation side) vs. Peter Schiff (on the inflation side) on Tech Ticker. We at Distressed Volatility believe we see disinflation in the CPI, hyperinflation in commodities and then a hyperdeflationary collapse (a little exaggeration there, but a final reset in asset prices in real, unmanipulated terms). Thoughts? I also added the Todd Harrison vs. Michael Pento debate.

Put Activity In $FXY (March, June 2011), Japanese Yen ETF

FXY (Japanese Yen ETF) puts were active today (read this optionmonster.com article for more information). FXY closed at 118.43 today.

In January 2011 (not pictured), 2,000 $135 Calls traded with 186 open (closed -0.25 to 0.05) and 1,000 $125 Puts traded with 21 open (closed -0.65 to 7.05). In March 2011, 1,500 $119 Puts traded with 137 open (closed +0.35 to 3.05) and in June 2011, 5,000 $115 Puts traded with 106 open (closed +0.65 to 2.55).

Is this trade hedging (or betting on) a continued slide to $115? FXY just rallied to the 50 day moving average resistance level and sold off. I'm also watching the NIKKEI:SPX ratio (and USD/JPY). Optionmonster also mentioned FXY volatility. Charts and option chain snapshots after the jump.

Full Obama Press Conference Video on Tax Deal (12/7/2010), Agreement Overview From Fact Sheet

The first video is the full 32 minute press conference by President Obama on the tax cut agreement with a question and answer session (12/7/2010). The second video is the statement made by the President yesterday on tax cuts and unemployment benefits (12/6/2010). I also added the overview of the tax agreement from the fact sheet released today.

David Rosenberg: Equities In Secular Bear Market, Canadian Corporate Bonds Are A Good Investment (Video)

David Rosenberg, former Chief North American Economist at Merrill Lynch who is now Chief Economist and Strategist at Gluskin Sheff, was featured on Consuelo Mack's WealthTrack show on 11/26/2010. Rosenberg believes we are entering a period of price stability (zero inflation) as ongoing debt de-leveraging, excess capacity and high unemployment converge with strong reflationary policies by the Fed. However, there is still a chance we could experience outright deflation, he said. Rosenberg thinks equities are in a structural bear market.
"The story is that in the secular primary uptrend in the stock market, sell-offs are opportunities to get in the better price. Now, we’re in a secular bear market where it’s different, and it means you are going to get rallies, but these are rallies that you rent. You don’t own them." (source)
He didn't completely write off equities though. He said he'd still be 20% allocated toward equities but only in safe sectors like utilities, staples, health care and stable industries that "spin off an income stream". He is taking the other side of the bond bubble trade! He favors high quality corporate bonds backed by strong balance sheets. During the interview he recommended high quality Canadian corporate bonds which would benefit from a lower U.S. Dollar (USD/CAD). He was also bullish on gold for a variety of reasons. Watch the video after the jump.

Governor Schwarzenegger Declares Fiscal Emergency, 12/6/2010 Press Release, Expenditure Reduction Proposal #California

Read the $7.4 billion expenditure reduction proposal in the report below from the Department of Finance. For more information on California's fiscal crisis ($20 billion annual operating shortfall through 2015/2016) read this post from 11/17/2010.

"Governor Schwarzenegger Presents Special Session Budget Plan

Declares Fiscal Emergency, Calls Legislature into Special Session to Address Deficit

Governor Arnold Schwarzenegger today declared a fiscal emergency and called the legislature into a special session to address California’s budget deficit and presented a package of solutions to help solve it.

“Our state is again facing a budget deficit that will force difficult decisions by California’s elected officials. If there is one thing we have learned over these past few years, it is that the longer we wait to tackle the problem, the larger and more difficult it is to solve,” said Governor Schwarzenegger. “That is why I have called a special session today, so the legislature can get a head start on the problem. California taxpayers cannot afford another lengthy delay. I look forward to working with Republicans and Democrats to get this done.”

Market in Process of Forming Top, Deflation Coming (Charles Nenner Video)

Charles Nenner, technical analyst and founder of the Charles Nenner Research Center, is confident the U.S. will experience a deflationary crisis even with strong reflationary policies in place by the Federal Reserve. From Bernanke's speech in Jackson Hole a few months ago: "the FOMC will strongly resist deviations from price stability in the downward direction". Also don't forget the trillions in Fed loan programs, TARP bailouts and securities purchases that helped reflate the economy and asset markets. Watch Bernanke on 60 Minutes last night. He's leaving the option open for additional Treasury purchases.

Nenner believes additional Treasury purchases won't make a difference. So, add Nenner to the deflation camp with Robert Prechter, Gary Shilling, and David Rosenberg. He didn't mention commodities but he sees a stronger Dollar. So I assume commodities would fall with the market. If that's the case, it will be interesting to see how commodities and the Dollar react during a deflationary crisis and forceful policy response.

Nenner mentioned on CNBC last week that the NASA sunspot cycle forecast was predicting another major crisis in 2013. On Tech Ticker, Nenner gave a more detailed outlook on Gold, the U.S. Dollar, Dow, S&P, semiconductors, 10-year Treasury bonds, deflation and geopolitical conflict down the road. Below are important points he made and the embedded videos from 11/30/2010.

Video: Ben Bernanke on 60 Minutes (12/5/2010)

Full video after the jump courtesy of CBS/60 Minutes.

Video: Facebook's Mark Zuckerberg on 60 Minutes (12/5/2010)

Parts 1 and 2 are after the jump featuring Mark Zuckerberg, Kara Swisher of All Things D, the Winklevoss twins on the lawsuit and a tour of the new Facebook redesign.

Hugh Hendry's December 2010 Report (Eclectica Fund)

The Eclectica Fund, Manager Commentary - December 2010 at Zero Hedge