Wednesday, August 03, 2011

I'll take one round trip ticket please...

Well, that was one wild ride today. The markets took it on the chin after another weak data reading (ISM service). Stocks quickly sold off to within about 1/4% of their key technical support levels.

Rumors (more likely wishful thinking) then entered the market that the Fed would begin another round of easing in order to save the markets. However, I think the Fed is still painted in a corner with gas at $4 and food inflation running rampant in the grocery stores.

Tonight Japan has decided to stem the rise of the Yen by intervening in the currency markets. This will have broad implications for global markets if a "currency war" of sorts breaks out but so far this is just one move by the Japanese.

Italy will face a critical test tomorrow when they attempt a bond sale that may find few buyers. Italy and Spain will probably be the stories of the day until we start to focus on the US jobs number on Friday.


Some interesting news on unemployment benefits that I was unaware of until today:

1)NELP’s new analysis shows that in 2011, six states cut the maximum number of weeks that jobless workers can receive unemployment insurance to less than 26 weeks—a threshold that had served as a standard for all 50 states for more than half a century, until this year. Michigan, Missouri, and South Carolina cut their available weeks down to 20; Arkansas and Illinois cut down to 25; and Florida cut to between 12 and 23 weeks.

2)Throughout the recession, states with inadequate unemployment insurance trust fund reserves have relied on loans from the federal government to pay state unemployment insurance benefits. This September, states will begin paying interest on these loans, and starting in 2012, the federal government will raise taxes on employers in borrowing states until loans are paid in full, as required by the law.

I hate to keep harping on the Fukushima issue but the news coming out Japan just doesn't seem to be getting any better but we never hear a peep about it.

•Tepco Says Highest Radiation Yet Is Detected at Fukushima Dai-Ichi

•10+ sieverts per hour means there is direct exposure to fuel rods or spent fuel ponds: Australia’s former top radiation official

•Tepco: Ultra-high radiation levels may be from melted fuel that leaked out of containment vessel

•Paper: TEPCO needs to check if high radiation doses are “spreading elsewhere” — Two more spots appear to be above 10 sieverts per hour, but no plans to actually take measurements

•New indoor radiation dose record at Fukushima … May be higher as it exceeded capacity of measuring device

•New York Times: Fatal Radiation Level Found at Fukushima — “Exceeded” 10 sieverts per hour, measuring device was maxed out

•Experts: Melt-through scenario means even higher radiation readings to come — Likely many more reports of deadly radiation in future

courtesy Naked Capitalism

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