Cracks Open and Close, Gush Water In Tokyo Park From Earthquake, Japan Coast Guard Heads Into Tsunami Wave (Videos)

Two more must see videos I found. The first one is courtesy of AGU (American Geophysical Union) Blogosphere, which shows cracks opening and closing, and gushing water, in Tokyo's Central Park from the Sendai earthquake (h/t @pkedrosky). The second video is of the Japanese Coast Guard heading into the initial tsunami wave via Russia Today. If you haven't noticed, DistressedVolatility.com covers market, science, geopolitical and social volatility.

President Obama's Statement On Libya (Video/Transcript) - 3/18/2011

President Obama addressed the nation today on the situation in Libya. I embedded the full transcript and video after the jump (via WhiteHouse.gov). Today 30 protesters were killed and 200 wounded in Yemen, there were protests in Syria and Saudi Arabia sent forces into Bahrain. If there are wars in the region, oil prices would rise and markets would see increased volatility. I'll throw up a bunch of articles to read in my next post. Here's a quote from the transcript:
"Now, once more, Moammar Qaddafi has a choice. The resolution that passed lays out very clear conditions that must be met. The United States, the United Kingdom, France, and Arab states agree that a cease-fire must be implemented immediately. That means all attacks against civilians must stop. Qaddafi must stop his troops from advancing on Benghazi, pull them back from Ajdabiya, Misrata, and Zawiya, and establish water, electricity and gas supplies to all areas. Humanitarian assistance must be allowed to reach the people of Libya. Let me be clear, these terms are not negotiable. These terms are not subject to negotiation. If Qaddafi does not comply with the resolution, the international community will impose consequences, and the resolution will be enforced through military action."

G7 Intervention Statement, BoJ Injects ¥3 Trillion, USD/JPY Spikes Back Above 1995 Low

USD/JPY 1995-2011 (FxStreet.com)
USD/JPY (US Dollar/Japanese Yen) fell through a level not seen since 1995 yesterday as banks-traders-portfolios made risk adjustments, unwound carry trades or demanded liquidity (what else), due to the earthquake/tsunami aftermath and nuclear fears. On Monday, USDJPY initially pierced through a symmetrical triangle to the downside, but quickly recovered once the Bank of Japan pumped 15 trillion yen into money markets. Japanese equities also got killed. Post tsunami, the Nikkei 225 Stock Average fell 6% and then crashed 10.55% (14% at the low), and Nikkei 225 futures on the Osaka exchange lost 16.2% at the low. Maybe some fund managers got spooked, via Reuters:
"The monthly global fund managers' survey from Bank of America-Merrill Lynch, conducted before Friday's earthquake, showed allocations to Japanese equities rose to a net 8 percent overweight in the month compared with 4 percent in February."

Federal Reserve FOMC Statement (3/15/2011), Still Easing

"Release Date: March 15, 2011

For immediate release

Information received since the Federal Open Market Committee met in January suggests that the economic recovery is on a firmer footing, and overall conditions in the labor market appear to be improving gradually. Household spending and business investment in equipment and software continue to expand. However, investment in nonresidential structures is still weak, and the housing sector continues to be depressed. Commodity prices have risen significantly since the summer, and concerns about global supplies of crude oil have contributed to a sharp run-up in oil prices in recent weeks. Nonetheless, longer-term inflation expectations have remained stable, and measures of underlying inflation have been subdued.

Raw Footage of Tsunami Hitting Kesennuma City, Aerial Video of Damaged Fukushima Daiichi Nuclear Plant

This is probably the closest a Japanese cameraman got to the tsunami. It was shot in Kesennuma City in Miyagi Prefecture (see street view on Google Maps h/t Telegraph). I added aerial video of the damaged Fukushima Daiichi nuclear plant that was just released.

Updates:
Japan nuclear situation reasonably stable: IAEA - Reuters
"The situation remains very serious but there has been no significant worsening since yesterday."
Fukushima Crisis Worsens as U.S. Warns of a Large Radiation Release - NY Times
Fukushima Daiichi nuclear plant workers' fight to stop meltdown - NYDailyNews
Japan Noodle Shop Owner Who Lost Home In Tsunami Offers Free Food - CNN.com
Food, gas scarce in Tokyo - CNN.com (rice, bread, instant noodles, canned foods)
Japan nuclear crisis could last for weeks, U.S. nuclear official says - LA Times
Blizzards Follow Earthquake, Tsunami - CNN.com (they lack kerosene, petrol)

Japan Market Watch: USD/JPY, Nikkei 225 Future Charts, JGB Links

Tokyo Stock Exchange
Tokyo Stock Exchange (Wikimedia/Stéfan)
With volatility running wild in the Japanese markets after the earthquake/tsunami hit, keep an eye on the Nikkei 225 Index Future (via Singapore Exchange), USD/JPY and JGB rates (Japanese Government Bonds). Most of the time money breaks news faster than the media (watch NHK World in English with #fukushima tweet stream). If you're worried about the fate of Japan and the radiation threat from Fukushima, monitor these charts as another source.

Being a contrarian on Japan's lost, deflationary decades, has to work out at some point. On Yahoo's Breakout yesterday, Marc Faber called Japan "a lifetime buying opportunity" once the correction ends (10-15% downside and 100-200% upside). It will be hard to time, but a good guide will be to watch the long term structure of the Nikkei chart. Did the recent black swan event bring the lifetime buying opportunity closer to (or further from) reality? For example, "Analysis: Japan heading back into recession" (Susumu Kato, Credit Agricole via Reuters h/t StockJockey). Or will another external event, China for example, affect Japanese equities and credits. See Hugh Hendry's CDS betsKyle Bass, hedge fund manager at Hayman Capital, also has interesting views on JGBs, the Yen and Japanese stocks. The charts below are courtesy of ForexPros and FuturesPros.com. Links to JGB rates point to Bloomberg.com.

Osaka Nikkei 225 Future Falls 16% at Low, Nuclear Fears Dominate Trading

Nikkei 225 Future (source)
Yesterday, the Nikkei 225 Stock Average hit a low of 8,227 (-14.5%) before closing at 8,605 (-10.55%). In the first few hours of trading, the Nikkei 225 June Future on the Osaka Futures Exchange fell 16.2% to 7,300 (from 9,310) before recovering. Nikkei 225 on the Singapore exchange fell even further I think. Circuit breakers were triggered on that trade, according to Reuters. Watch for capitulation when volatility peaks out. Where's the NKY VIX?

Nikkei 225 Index (Bloomberg)
This morning looks like a classic flight to quality with Treasury bonds and the U.S. Dollar green and the E-mini S&P future down 2.4%. Traders are trying to price in multiple black swan events (earthquakes, tsunamis, radiation fears, an economic slowdown in Japan, Middle East and North Africa unrest, municipal and sovereign debt crises etc.). Update: King of Bahrain declares state of emergency (Telegraph).

The charts looked sick before the earthquake and tsunami hit Japan (3/14/2011, 3/11/2011 tsunami hit and 3/10/2011 pre tsunami) and Tom DeMark was right. Catalysts are sometimes evil. Hopefully Japan enters its recovering phase very soon. For real-time updates on Japan, watch NHK World in English live on this blog post with #fukushima tweets streaming in a widget.

Articles to read:

Officials told residents living within 20km of Fukushima No. 1 nuclear power plant to leave due to increased radiation levels. Those living 20km-30km from the plant were told to stay indoors. This was a graphic I snapped from NHK World.


BOJ: Earthquake Will Likely Decline Production, Sentiment Might Deteriorate

The Bank of Japan released its Monthly Report of Recent Economic and Financial Developments for March (hat tip Seeking Alpha). I'll write about the Nikkei 225 crash next with some must see charts. The report seemed quite calm after what just happened to the country.
"Japan's economy is emerging from the current deceleration phase. Exports and production are showing signs of resuming their uptrend. Business fixed investment is picking up. The employment and income situation has remained severe, but the degree of severity has eased somewhat. Private consumption is showing signs of picking up. Housing investment has started to pick up. On the other hand, public investment is declining.

Japan's economy is expected to return to a moderate recovery path. However, the damage of the earthquake has been geographically widespread, and thus, for the time being, production is likely to decline and there is also concern that the sentiment of firms and households might deteriorate." (continue reading at Bank of Japan)

Speaking of monetary policy.
"The Bank of Japan added 8 trillion yen ($98 billion) to the banking system today in Tokyo. Governor Masaaki Shirakawa pledged yesterday at a news conference in Tokyo to keep pumping cash as needed after adding a record 15 trillion yen to the economy. The central bank yesterday also doubled its asset- purchase program to 10 trillion yen." (continue reading at Bloomberg)

E-Mini S&P Future -0.73% at 1,291.75 Pre-Open 3/14/2011 (Chart)

After the earthquake and tsunami destroyed Japan, the E-mini S&P June Future is down 0.73% at 1,291.75 pre-open on Monday. Read my posts linked below for more information on the charts. The market could test lower levels if it can't hold this shelf. It already took out the uptrend line. Also check out the MACD, Moving Average Convergence-Divergence (chart school). It measures momentum using moving averages. It could bust through the centerline. I also chart out futures at barchart.com and cmegroup.com.

Interesting news: Stifel cuts Toll Brothers to sell from hold (TOL) (MarketWatch).


E-mini S&P June Future - ESM11 9-months
(courtesy OptionsXpress)

E-mini S&P, Nikkei, Oil Down After Tsunami Hits Japan, ZB Tipped Off ES Earlier (Treasuries/S&P) - 3/11/2011

E-Mini Nasdaq 100 Future Broke Its 50 Day Moving Average (Charts) - 3/10/2011

Post Tsunami, Nikkei Falls 6% to 9,620, USD/JPY Moves on BoJ Injection (In Symmetrical Triangle)

USD/JPY (freestockcharts)
After an earthquake and tsunami destroyed parts of Japan on Friday and killed thousands of people, I think the markets still need to digest the situation and acknowledge new risks. Experts say there's a 70% chance a major aftershock could strike by Wednesday (WiredNews). Is there any possible way to hedge land masses against seismic wave volatility? The answer is in the Adams–Williamson equation somewhere.

The Fukushima nuclear power plant was damaged by the earthquake and reactors keep exploding (hydrogen), so there are fears the plant could meltdown or spread radiation. Lastly, there is the aftermath. You have infrastructure and houses destroyed, production halts (oil refining, power, steel production, Honda and Toyota) and a million people without water. Read this Reuters article.

Nikkei 225 (marketwatch)
So now Japan has to either tax or borrow from their citizens, or tap the "external" markets to foot the bill. However, Japan is already fiscally constrained or JGB investors could ask for higher rates. See videos featuring hedge fund managers Kyle Bass and Vitaliy Katsenelson for their views. This is why I want to see how everything reacts, including the Nikkei 225 Index (stocks), Japanese Yen and JGB rates (Japanese Government Bonds).

To stabilize the financial system, the Bank of Japan (BoJ) "pumped 15 trillion yen or $183 billion into money markets" and doubled asset purchases (read more at Bloomberg). Last night the Nikkei 225 Index closed at 9620, -6.18%, USD/JPY was volatile around BoJ statements (81.83) and JGBs saw safe haven buying. Click the charts for a larger view.

More News:
Japan quake feared to fuel S. Korean inflation (Yonhap News)
Moody's: Japan fiscal crisis not imminent (MarketWatch)
Quake impact on Japan non-life insurers seen limited: analysts (Reuters)
Analysis: Japan quake risks severe near-term economic damage (Reuters)
Japanese Quake Causing a Temporary `Panic' in Iron Ore Market, Trader Says (Bloomberg)
Sendai's homeless are fearful (SifyNews)
*Watch NHK World Live in English (#Fukushima Information #Japan) - (DistressedVolatility)

Uzumaki Whirlpool From Japan Tsunami, Shinmoedake Volcano Erupts (Videos)

One more video, then back to regular scheduled financial programming. "Uzumaki whirlpool Japan tsunami" via TheHifromjapan on Youtube. Previous videos: Ground video of tsunami and helicopter footage from NHK World. There has to be a way to protect land masses from tsunamis and earthquakes. Here is a good survivor story: Japanese man found floating out to sea on his house - CTV News). Donate at Red Cross. UPDATE: The Shinmoedake volcano erupted in southwestern Japan. I found video. WTF is going on?

Watch This Tsunami Video (Iwaki City, Japan - 3/11/2011)

Watch ground video of the tsunami that hit Japan. The Earth is going insane. I'm using Twitter (#Japan hashtag search) to monitor live news feeds and conversations on Japan. Also see before and after photos at ABC News (Japan Earthquake: before and after). Devastating.