Meltdown Wednesday- Greece At Level 7 Meltdown As Protests Turn Violent; Greek Bond Yields Explode, Again, Set Another New Record; Markets Tumble, But Far From Enough; The U.S. May Have Its Own Fukushima as Ft. Calhoun Nuclear Power Plant Now Emergency Level 4, Situation Spiraling Out of Control; Postal Workers Set To Spy On Neighbors; The Untold Cost of War? $1.2 Trillion; Volcano In Chile, Goes Into High Gear; Fukushima Updates; Much More

Updates

Update 1: Markets are tanking as the rats flee the ship. Expect to see the circuit breakers kick in, followed by the PPT. 

Update 2: Keep an eye on the French and German banks. Their exposure to Greece is absurd.


Update 3: AIB (Allied Irish Bank) just defaulted(!) so that makes two canaries in the coal mine. 

Main Article

In order to understand global finance, we need to understand how a giant supertanker operates. Think of a developed nation's economy, like the U.S. or England, as the vessel itself, fully laden with oil. There is a captain, along with other important crew members who make important decisions on a daily basis. Fully loaded, this supertanker takes a very long time to reach maximum operating speed, and even longer to adjust course. Yes, a simple 90 degree turn to avoid a major storm, for example, usually is planned long in advance and hundreds of miles ahead of the obstacle.

So too, a large complex economy takes years to change its heading, if a storm is ahead. Why the "captains" of this supertanker vessel named, "The U.S. Economy" failed to see action was necessary back in 2003 is beyond anyone's comprehension. Even a change of command has failed to produce the correct results. Now, 8 years after that "point of no return," the consequences of their (in)actions are coming back home to roost - a global economic collapse is upon the entire world.

As we have been warning since, well... as long as this blog has been publishing, Greece is insolvent. Although one could make adjustments to their balance sheet to make it appear "solvent," the fact of the matter is, Greece's wallet has more holes than Lady Gaga's fishnet stockings. It is obvious to everyone with the ability to add and subtract single digits, that Greece can't function as they are. Yet, all of this was not obvious, or simply  ignored by the captains of the global supertankers. We're heading right into the storm - a category 5 hurricane with winds in excess of 250 MPH and ocean swells 900 feet high. Yeah, straight out of a Hollywood movie. Greek bonds have literally exploded (well, we did tell you months ago to keep your eyes on CDS spreads and Greek bond yields). Exactly as predicted two weeks ago, the massive protests would turn ugly. Oh, and keep your Irish eyes on Ireland. Just for fun.

Today, we see that Greece is on the brink of a full revolution; a situation that could indeed cause the entire European Union to disintegrate; the consequences of that occurring, would be the domino to collapse the global economy. Too Big To Fail Banks, meet your long lost brother, Too Big To Fail (But Already Have Failed) Monetary Unions. These could be the last days of the EU as we know it. Guess Hu who won't be so happy?

Greece is experiencing the largest protests to date, and they have turned very violent - fire bombs, tear gas and all. We're getting updates from "Occupied London" and the latest report shows "a lot of people are injured by the brutal attacks of the police." It's on like Donkey Kong. General strikes always are bullish for a nation's GDP, just like a magnitude 9 earthquake, followed by a tsunami and three nuclear reactors going into full meltdown are bullish for the global economy. Has Warren left for his bunker yet? Munich Re is calling.

Speaking of meltdowns, for those of you who have been following this site, you know that the Missouri River has reached critical level and last week we said to keep an eye on the little things like, St. Louis and Ft. Calhoun nuclear power plant. Little things that have no impact on the economy. Now, we get confirmation from several sources that we may have our own Fukushima disaster here in the U.S. Yes, Ft. Calhoun has been upgraded to a level 4 emergency (ironic, since Japan said Fukshima was a level 4 emergency for almost a month after the catastrophe). This should be an early warning to those living in and around Ft. Calhoun and every town on the Missouri River. Arnie Gundersen has said this could go to a Fukushima level disaster very soon. We suggest, if you watch one video today, make this the one.

In another sign that the U.S. is becoming a police state big brother is watching, Postal Service employees are being told to keep a close eye on you. The next time to see Mr. Postman making a delivery, he may also be scouting your home. All in the name of "national security," of course. After all, the Postal Service is already insolvent, might as well, "add that to the bar tab," to pay for over time spying. What's another $1 Billion or so?

Speaking of bar tabs, a new article in the AlterNet news says the real U.S security budget is $1.2 Trillion. Shhhhh! Don't tell anyone.

Another event we are keenly reporting and the main stream media is ignoring is the super volcano in Chile which continues to spew hot ash for thousands of miles. Over 80,000 square miles have been covered in ash, decimating the local economies there (remember, this is bullish for the global economy) and this new video shows ash so deep, you can swim in it - and that is 100 miles away from the volcano. Ok, so this is also another video you must watch. That makes two for the day.

Fukushima: Ok. Here it is. You wanted proof that high levels of radiation are leaking into the sea and that Fukushima is a possible ELE? Radioactive whales found 650 Kilometers from Japan. No commentary necessary.

Once again, Energy News never disappoints with news as this headline supports - "Japanese media blackout of words: MOX, plutonium, and meltdown." The term "coverup" does not describe it.  

Finally, to update you on another scam internet IPO, Pandora shares soared today after the retail suckers investors bit the bait, only to collapse as market makers, banks and other scum ran away with literally hundreds of millions of dollars in instant profit the rats ran for the doors. All in a day's work.  

Thinking Thursday- CNN Poll Shows 48% of Americans Believe Great Depression Is Coming Soon; Wealthy, Get Wealthier; 200,000 Citi Bank Accounts Get Hacked, Citi Admits 1 Month Later; Max Keiser Bank Updates, Show French Bank Cuts ATM Access; Gold Never Gets Old; Nokia Is Crumbling; Japanese Economy In Meltdown; Thousands Flee High Radiation; TEPCO Shares Plummet Another 20%, Worth Toilet Paper; Japan Faces Nuclear Power Shortages as Only 17 of 54 Reactors Operational; IMF Urges Japan To Triple Tax; Much More

Updates
Update 1: Corn is getting popped on the CBOT. Fresh high not seen since 2008. And you thought the food riots in 2008 were bad? 

Main Article
Let's be blunt: all things being constant, the world is descending into chaos. Besides the degenerating and continually expanding threats from Fukushima spewing radioactive particles into the environment (more on that later), the world has been on the financial brink since 2008 and nearly three years later, it's coming unglued. As a recent CNN poll shows, 48% of Americans believe a Great Depression is coming within a year. We're not sure who constitute the other 52%, but the top 5% of the population in terms of wealth, have never been happier. The world's Billionaires list not only increased by an incredible 20%, but those in the Billionaire ranks saw their net worth increase by an astounding $1 Trillion - not to mention, the tens of thousands of banksters who received record bonuses last year and are on track for another booty. From my personal observations, I have never in my life seen more banks than at any other time; Starbucks ain't got nuthin' on banks. 

Max Keiser ran an excellent story two days ago about France's biggest bank cutting ATM card cash access in half (American banks already did this way back in early March) for the week and people are flipping out. Which raises yet another question concerning the necessity of banks: what is the purpose of having money in your bank account if you can't access any amount that you need? Worse still, that money may not be as safe as you think. Citibank (a Too Big To Fail, Too Big To Save tax payer funded bank) is admitting to a serious hacking of 200,000 accounts. Here's the clincher - that incident occurred one month ago, yet they are just  admitting it now. Time for another "personal observation," so follow this line of thought: 1) Many bank checking accounts are now costing you upwards of $20 per month to keep your money stashed in an account 2) that you may or may not have full access to. 3) Typical checking accounts pay 0.00114% interest, which is not even enough to cover the cost of inflation for a single hour, given a very conservative MIT Billion Price Project estimated 10% annual inflation rate. With some savvy mathematicians placing the real inflation rate at 17%+, you can see how keeping money in the bank is a losing proposition. Remember, gold never gets old.

Speaking of old, Nokia is going out of business is looking like Greece's economy, as they reported crumbling sales to Texas Instruments, who in turn warned that next quarter will be a mess. Other than that, everything is radioactive rosy.

Speaking of radioactive rosy, Japan's economy is in a meltdown of nuclear proportions. Of course, readers of this blog knew by March 11th that Japan's economy would go into cold shutdown and that supply chain disruptions were not going to be bullish for anyone. It remains mind boggling that to this day, we haven't seen Mr. Buffet retract any of his bull... bullish statements about Japan's catastrophes being bullish for the global economy, just like we wonder when Ms. Coulter will retract her statements that radiation is healthy. We won't hold our breath like everyone on the West Coast of the U.S. should do to avoid breathing in radioactive particles from Fukushima. By the looks of things, as we predicted, this situation is about to really go full retard. First, we get word that thousands of people are trying to flee the areas in Japan that were declared "safe" by officials but are now detecting high levels of radiation. Then we learn that an incinerator has been spewing radioactive sludge for weeks and that 230,000 becquerels per square meter of radioactive cesium have been detected in school fields(!) All of this explains why TEPCO shares have dropped another 20% from the previous low the day before, to a lower low of $1.85. On Monday we said after TEPCO shares made a new low, that they have at least another 100% to go and after today's drop, they still have another 100% to drop. This is basic math folks. [insert smiley face]

We're sure that some overpaid talking head on CNBS will come out to spin that Japan's nuclear power shortages, which are spreading, are bullish for the economy. An interesting noteworthy comment from this article: "only 17 of Japan's 54 reactors now are operating—merely a third of the country's total nuclear-generating capacity." And Toyota/Honda/Nissan/Sony/Hitachi et al are supposed to operate their factories on what? At the same time, the IMF is urging Japan to raise its sales tax from 5% to 15% in order to pay for this disaster. Uh, what? As we posted back in early March about Greece's financial death spiral, there's no better way to stimulate your economy than taxing the hell out of your people while implementing austerity measures during the worst global financial crisis the world has even seen. And be sure to include skyrocketing energy prices for good measure. That works well.

The Daily Five - Five Headlines You Need To Know Now

Too Big To Fail Means Too Big To Save 

CNN Money is reporting that JP Morgan Chase, along with several other "Too Big To Fail Banks," are proposing a cap on your debit card purchases of just $50 or $100 per transaction. This proposal comes on the heels of new Wall Street legislation passed last year meant to protect consumers. The reason for this? Needless to say, it all comes down to money. Currently, each time you use your debit card to make a purchase, the bank charges the retailer $0.44 per transaction, but new legislation has cut that down to a limit of $0.12 and the banks are out to make up the difference. Finding loopholes in the system is why those CEOs get paid the big bucks. 

Saudi Arabia's "Day of Rage" Comes Early; Camels Seen Fueling Up For $150 Oil.

It seems Saudi Arabia's "Day of Rage" is starting early. Protests in the city of Qatif turned violent when the Police began to open fire on the protesters. Officials said they will "take all measures necessary" to prevent an uprising and they "will not tolerate protests." Nevertheless, several hundred people marched in the streets demanding change a full day before scheduled protests. Caravans of camels were seen fueling up in advance.

Gas At $3.52 Is "No Problem" But Gas At $4.00 Is.

Exxon's CEO Rex Tillerson said "oil prices are not yet hurting US economy, but $4 gas would hit families." This stroke of pure genius of course comes as the national average for regular gas touches $3.52, with some parts of the country already over $4.00. One only needs to scroll down to the bottom of the news page and read the angry comments to know it won't take $4.00 gasoline in the US to start a day of rage here, nor that most overpaid CEOs are entirely out of touch with reality when it comes to the middle class. 

Lock Up The Cheese, Use "Emergency Powers"

Protests in the Cheese State are once again heating up to boiling temperatures. Soon after 12PM EST today, the Wisconsin Capitol building was placed on lockdown when protesters and lawmakers tried to make their way in and several protesters were arrested. Tensions built further after Governor Walker said he'll sign a bill to strip nearly all collective bargaining rights "as quickly as I can." Which is why I suppose Governor Snyder of Michigan is seeking to establish "Emergency Powers" now, before things turn ugly there as well. 

During A Global Economic Depression, It's Good To Be A Billionaire.

Feeling poorer lately and wondering where all the money is? Then ask the world's Billionaires. Forbes is reporting that its Billionaire list grew to 1,210 members, up 199 members from last year, and the best part -- the world' wealthiest individuals got even wealthier by an incredible $1Trillion. That's Trillion with a capital "T" just so you know. Isn't "trickle down economics" delightful? The only question the middle class wants to know is when they will begin to feel that trickle.

Bernanke says, 'What inflation? There's no stinking inflation!'

As WTI crude hits $107pb and the national average price per gallon of gas hits $3.51, I present you with this:

It's interesting to note that just last week Fed Chairman, Ben Bernanke (a.k.a Dr. Deficit) gave testimony regarding the state of the economy and the results of "quantitative easing" to the House Financial Services Committee stating basically that inflation is low, too low in fact.


I'm not quite sure what his definition of inflation is exactly, but I doubt he does his own food shopping, let alone, gas up the limo. I won't go into how flawed the CPI (the Fed's inflation measure) is, but The United Nations FAO (Food and Agriculture Organization) published a report last week stating global food prices have hit an all time high in February, after setting two previous records in December and January. See a trend? 

So when Dr. Deficit says to the Financial Committee,

I recognize that the increases in gas prices are very troubling for a lot of people and very difficult, but they are not inflation per se. Inflation is an increase in the overall price level, which is very low...

I start to get worried. 


Dr. Deficit's automated, pre-programmed Harvard grad response of course is roughly that gas and food prices are very volatile and thus omitted from the inflation metric. Unfortunately, someone forgot to educate the good Doctor on the impact of sustained high gas prices on the working middle class in an oil dependent global economy. Did I mention the last time oil was at $107pb in 2008, the economy imploded? I doubt this time around, the "economy" or whatever remains of it, will be able to survive sustained oil above $90, let alone $107. To make things worse, I doubt their calculations took into account the impact on oil prices in the event of an all out war in the Middle East or a major natural disaster, for example.


So while the politicians, experts and economists continue to tout "trickle down economics" (a.k.a "quantitative easing, a.k.a ZIRP, a.k.a too big to fail, a.k.a TARP, et al) as the answer to this depression, I present to you the unintended consequence and alter ego of "trickle down economics" called "trickle up poverty" (a.k.a inflation). Welcome to the new normal.


With that said, as things heat up in the Middle East, it's obvious to expect oil prices to rise, right along with silver and gold despite a last ditch effort of tapping into the nation's Strategic Oil Reserve. How fast can you spell "social unrest?"