Major stock market indices are getting clobbered late Monday evening (Tuesday afternoon in Tokyo) in the wake of more reactor fears in Japan.
"It's way past Three Mile Island already," said Frank von Hippel, a physicist and professor at Princeton. "The biggest risk now is that the core really melts down and you have a steam explosion."
Japan's nuclear crisis verged toward catastrophe on Tuesday, after an explosion at one crippled reactor damaged its crucial steel containment structure and a fire at another reactor spewed large amounts of radioactive material into the air, according to official statements and industry executives informed about the developments.
After an emergency cabinet meeting, the Japanese government told people living within 30 kilometers, about 18 miles, of the Fukushima Daiichi Nuclear Power Station to stay indoors, keep their windows closed and stop using air-conditioning.
Officials said emergency efforts to pump seawater into three stricken reactors at the plant were continuing, but that most of the 800 workers at the Daiichi facility had been told to leave to avoid exposure to unhealthy levels of radiation at the plant. They said 50 workers would remain at the plant to pump seawater into three reactors and fight the fire at the fourth reactor.
Prime Minister Naoto Kan briefly addressed the nation on television at 11 a.m., pleading for calm as engineers struggled to bring the damaged reactors under control.
Mr. Kan said that radiation had spread from the crippled reactors and there was "a very high risk" of further leakages.
Some outside industry executives were skeptical of official Japanese accounts of what was happening at Daiichi. One executive with extensive contacts among Japanese nuclear industry and government officials said the situation had in fact spiraled out of control and that all plant workers would almost certainly need to leave the plant to avoid excessive exposure to radioactive leaks.
If all workers do in fact leave the plant, the nuclear fuel in all three reactors is likely to meltdown, which would lead to wholesale releases of radioactive material — by far the largest accident of its kind since the Chernobyl disaster 25 years ago.
Even if a full meltdown is averted, Japanese officials have been facing unpalatable options. One was to continue flooding the reactors and venting the resulting steam, while hoping that the prevailing winds, which have headed across the Pacific, did not turn south toward Tokyo or west, across northern Japan to the Korean Peninsula. The other was to hope that the worst of the overheating was over, and that with the passage of a few more days the nuclear cores would cool enough to essentially entomb the radioactivity inside the plants, which clearly will never be used again. Both approaches carried huge risks.
"It's way past Three Mile Island already," said Frank von Hippel, a physicist and professor at Princeton. "The biggest risk now is that the core really melts down and you have a steam explosion."
Adding to the complexity of the situation was that reactor No. 3 reactor uses a special mix of nuclear fuel known as MOX fuel. MOX is considered contentious because it is made with reprocessed plutonium and uranium oxides. Any radioactive plume from that fuel would be more dangerous than ordinary nuclear fuel, experts say, because inhaling plutonium even in very small quantities is considered lethal.
Major World Indices an Ocean of Red
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An explosion early Tuesday morning damaged the No. 2 reactor at Japan's Fukushima Daiichi Nuclear Power Station, the third in a series of blasts that have now hit each of the three crippled reactors at the plant, plant officials said.
It was not immediately clear if the blast was caused by the buildup of hydrogen, as occurred at the two other reactors at Daiichi — one on Saturday and the most recent one on Monday, when there was also a large explosion at the No. 3 reactor. Some early reports in the Japanese press suggested the latest explosion amounted to a different and more critical problem than the previous two.
This explosion, reported to have occurred at 6:14 a.m., happened in the "pressure suppression room" in the cooling area of the reactor and inflicted some degree of damage on the pool of water used to cool the reactor, officials of Tokyo Electric Power said. But they did not say whether or not the incident had impacted the integrity of the steel containment structure that shields the nuclear fuel.
Any damage to the steel containment vessel of a nuclear reactor is considered critical because it raises the prospect of an uncontrolled release of radioactive material and full meltdown of the nuclear fuel inside. To date, even during the four-day crisis in Japan that amounts to the worst nuclear accident since Chernobyl, workers had managed to avoid a breach of a containment vessel and had limited releases of radioactive steam to relatively low levels.
Details of what happened remain unclear, with executives of Tokyo Electric Power, the plant's operator, giving only preliminary reports and declining to answer questions from reporters pressing for more information, while repeatedly apologizing "for causing concern and inconvenience."
Nikkei Drops 6% in First Hour on Tuesday, 12% in 2 Days
Japanese stocks continued to plummet Tuesday, falling nearly 6% in the first hour of trading, as the nation continues to cope with the aftermath of last week's earthquake.
The Nikkei-225 index, the most prominent measure of Tokyo market stocks, dropped 566 points, or 5.9%, within the first 60 minutes of the session. That was on top of a 6.2% drop Monday, the first full trading day after the quake.
The Tokyo market opened shortly after the owner of the Fukushima Daiichi nuclear power plant in northeastern Japan reported an "explosive impact" at the plant's No. 2 reactor, a day after a hydrogen explosion rocked another reactor.
Anxiety in Japan grows as rescue workers find more bodies
Saudi Arabia is upset at the US for abandoning Egyptian president Hosni Mubarak and also for Obama's embracing "peaceful protests". The New York Times discusses the strained ties in U.S.-Saudi Tensions Intensify With Mideast Turmoil
Even before Saudi Arabia sent troops into Bahrain on Monday to quell an uprising it fears might spill across its own borders, American officials were increasingly concerned that the kingdom's stability could ultimately be threatened by regional unrest, succession politics and its resistance to reform.
So far, oil-rich Saudi Arabia has successfully stifled public protests with a combination of billions of dollars in new jobs programs and an overwhelming police presence, backed by warnings last week from the foreign minister to "cut any finger that crosses into the kingdom."
Monday's action, in which more than 2,000 Saudi-led troops from gulf states crossed the narrow causeway into Bahrain, demonstrated that the Saudis were willing to back their threats with firepower.
The move created another quandary for the Obama administration, which obliquely criticized the Saudi action without explicitly condemning the kingdom, its most important Arab ally. The criticism was another sign of strains in the historically close relationship with Riyadh, as the United States pushes the country to make greater reforms to avert unrest.
Other symptoms of stress seem to be cropping up everywhere.
Saudi officials have made no secret of their deep displeasure with how President Obama handled the ouster of the Egyptian president, Hosni Mubarak, charging Washington with abandoning a longtime ally. They show little patience with American messages about embracing what Mr. Obama calls "universal values," including peaceful protests.
When Secretary of Defense Robert M. Gates and Secretary of State Hillary Rodham Clinton were forced to cancel visits to the kingdom in recent days, American officials were left wondering whether the cause was King Abdullah's frail health — or his pique at the United States.
"They're not in a mode for listening," said one senior administration official, referring to the American exchanges with Saudi officials over the past two months about the need to get ahead of the protests that have engulfed other Arab states, including two of Saudi Arabia's neighbors, Bahrain and Yemen.
In the view of White House officials, any weakness or chaos inside Saudi Arabia would be exploited by Iran.
For that reason, several current and former senior American intelligence and regional experts warned that in the months ahead, the administration must proceed delicately when confronting the Saudis about social and political reforms.
"Over the years, the U.S.-Saudi relationship has been fraught with periods of tension over the strategic partnership," said Ellen Laipson, president of the Stimson Center, a public policy organization. "Post-September 11 was one period, and the departure of Mubarak may be another, when they question whether we are fair-weather friends."
Saudi Troops Enter Bahrain to Help Put Down Unrest
Troops from Saudi Arabia and police officers from the United Arab Emirates crossed into Bahrain on Monday under the aegis of the Gulf Cooperation Council to help quell unrest there, a move Bahraini opposition groups denounced in a statement as an "occupation."
Witnesses said a convoy of 150 armored troop carriers and about 50 other lightly armed vehicles carried about 1,000 troops across the bridge linking Saudi Arabia to the tiny island kingdom, and a Saudi security official told The Associated Press that the troops were there to protect critical buildings and installations like oil facilities. However, witnesses later said that the convoy seemed to be heading for Riffa, a Sunni area that is home to the royal family and a military hospital that is closed to the public, Reuters reported.
The opposition statement said it considered the arrival of any soldier or military vehicle "an overt occupation of the kingdom of Bahrain and a conspiracy against the unarmed people of Bahrain."
A senior administration official said the United States was "definitely concerned" by the deployment of troops, saying the protests in Bahrain needed "a political solution, not military." The State Department dispatched Jeffrey D. Feltman, the assistant secretary of state for Near Eastern Affairs, to Bahrain on Monday. He had been scheduled to join Secretary of State Hillary Rodham Clinton on her travels to Egypt and Tunisia this week.
The latest protests occurred a day after Defense Secretary Robert M. Gates stopped in Bahrain and warned the Khalifa family, which has ruled Bahrain for two centuries, that it must go beyond the "baby steps" of reform to meet the economic and political demands sweeping much of the Arab world.
The White House issued a statement on Sunday that said the United States strongly condemned violence that had occurred in Bahrain and Yemen, and added, "We urge the government of Bahrain to pursue a peaceful and meaningful dialogue with the opposition rather than resorting to the use of force."
Bahrain, a kingdom on the Persian Gulf, is home to the United States Navy's Fifth Fleet and is a crucial American ally. The Obama administration has supported the Khalifa family through the unrest, in contrast to its efforts to remove the leaders of Libya, Tunisia and Egypt. But the White House has tried to push Bahrain's government to meet many of the protesters' demands, worried that Iran, which is overwhelmingly Shiite, could exploit the unhappiness of Shiites in Bahrain.
Bahrain's crown prince, Sheik Salman bin Hamad al-Khalifa, meanwhile, renewed a call for national dialogue on Sunday, promising that the talks would address proposals to increase the power of Parliament, Reuters reported.
"We have worked actively to establish contacts to learn the views of various sides," he said in a statement that was read on Bahrain TV, "which shows our commitment to a comprehensive and inclusive national dialogue."
Mr. Gates said on Saturday that he told the king and crown prince that change "could be led or it could be imposed."
He added, "Obviously, leading reform and being responsive is the way we'd like to see this move forward."
A Yemeni provincial governor was stabbed in a melee with antigovernment protesters on Monday, the official news agency Saba reported. Local reports said the stabbing occurred after the governor's bodyguards opened fire on the protesters, injuring dozens.
The clash was the most violent of several reported around Yemen in the widening uprising against President Ali Abdullah Saleh.
In a sign that the government was ratcheting up its efforts to control news coverage of the unrest, four Western journalists said they were seized in an armed raid on their apartment in the Yemeni capital early Monday and expelled from the country.
The injured governor, Naji al-Zaidi of tribal-dominated Marib Province, was taken to the capital, Sana, and hospitalized.
In Al Jawf, a desperately poor northern province also dominated by tribes, local reports said that security forces open fire, injuring about 15 protesters.
Global Growth Will Slow
Recent news has not been favorable in Japan, in Yemen, in Saudi Arabia, or in Libya. Meanwhile, Europe is bracing for a series of rate hikes by the ECB. In the US, the effects of state cutbacks have yet to be felt, and China has done little to reduce overheating.
In light of the above highly doubt GDP estimates will be met in Europe, in the US, or in Asia.
Water levels dropped precipitously Monday inside a stricken Japanese nuclear reactor, twice leaving the uranium fuel rods completely exposed and raising the threat of a meltdown, hours after a hydrogen explosion tore through the building housing a different reactor.
Water levels were restored after the first decrease but the rods remained exposed late Monday night after the second episode, increasing the risk of the spread of radiation and the potential for an eventual meltdown.
The cascading troubles in the Fukushima Dai-ichi plant compounded the immense challenges faced by the Tokyo government, already struggling to send relief to hundreds of thousands of people along the country's quake- and tsunami-ravaged coast where at least 10,000 people are believed to have died.
Later, a top Japanese official said the fuel rods in all three of the most troubled nuclear reactors appeared to be melting.
Of all these troubles, the drop in water levels at Unit 2 had officials the most worried.
"Units 1 and 3 are at least somewhat stabilized for the time being," said Nuclear and Industrial Agency official Ryohei Shiomi "Unit 2 now requires all our effort and attention."
Late Monday, the chief government spokesman said there were signs that the fuel rods were melting in all three reactors, all of which had lost their cooling systems in the wake of Friday's massive earthquake and tsunami
Prime Minister Naoto Kan appealed for international help and workers battled to prevent a nuclear meltdown after a second blast rocked an atomic plant north of Tokyo. Millions remained without electricity or water following Japan's strongest earthquake, which may have killed 10,000.
Japan's government asked the United Nations atomic agency to provide "expert missions" to help stabilize the nuclear reactors, International Atomic Energy Agency Director General Yukiya Amano said in a statement from Vienna.
The cooling system failed at Fukushima Dai-Ichi station's No. 1 and No. 3 reactors after the earthquake, and it stopped working yesterday at the No. 2 reactor. Operator Tokyo Electric Power Co. said it cannot rule out that fuel rods are melting at the No. 2 reactor after they became exposed for a second time by a drop in water levels.
About 1.3 million households were without power this morning, and 1.4 million had no running water, according to a government report. Rescue teams were having trouble reaching about 24,000 people stranded in northeastern Japan, NHK Television said.
Economic and Fiscal Policy Minister Kaoru Yosano said "the economic impact will exceed the 20 trillion yen in damage sustained during the Kobe earthquake" of 1995. The government still has 1.3 trillion yen ($15.8 billion) in discretionary funds from this year's budget that can be allocated for quake relief, he said at a press conference.
Amid various conflicting reports it is difficult to discern fact from hype regarding the risk of nuclear meltdown. Moreover, it seems the officials cannot do so either because gauges and other measurement devices are not working.
No one really seems to know what precisely is going on in those reactors or the likelihood of a major breach.
Moreover, Radioactive Releases in Japan Could Last Months, even if a major meltdown is avoided. Thus, even in the optimistic scenario that further reactor damage is contained, both the economic damage and the death tolls are both likely way understated.
Note that the official death count is around 2,000, but the police estimate in a single district swept away by the Tsunami is 10,000. If so, the overall total could easily be 15,000 if not more.
In Japan, a second blast rocked another nuclear reactor as officials struggle to prevent more serious meltdowns. Cooling remains the critical issue.
A buildup of pressure makes it difficult to inject water into the reactors to cool them down. Gauges are not working because of power outages so it's impossible to tell how successful those efforts have been.
This prompted one American official to liken the process to "trying to pour water into an inflated balloon," adding it was "not clear how much water they are getting in, or whether they are covering the cores."
As the scale of Japan's nuclear crisis begins to come to light, experts in Japan and the United States say the country is now facing a cascade of accumulating problems that suggest that radioactive releases of steam from the crippled plants could go on for weeks or even months.
The emergency flooding of two stricken reactors with seawater and the resulting steam releases are a desperate step intended to avoid a much bigger problem: a full meltdown of the nuclear cores in two reactors at the Fukushima Daiichi Nuclear Power Station.
So far, Japanese officials have said the melting of the nuclear cores in the two plants is assumed to be "partial," and the amount of radioactivity measured outside the plants, though twice the level Japan considers safe, has been relatively modest.
But on Monday, Japanese officials reported an explosion at the No. 3 reactor at Fukushima Daiichi, which appeared to be similar to a blast on Saturday at the No. 1 reactor. Television images showed gray smoke rising from the facility. NHK reported that the blast occurred when a combination of hydrogen and oxygen ignited. The wall of the building collapsed, and nearby residents were ordered to stay indoors.
Japanese reactor operators now have little choice but to periodically release radioactive steam as part of an emergency cooling process for the fuel of the stricken reactors that may continue for a year or more even after fission has stopped.
That suggests that the tens of thousands of people who have been evacuated may not be able to return to their homes for a considerable period, and that shifts in the wind could blow radioactive materials toward Japanese cities rather than out to sea.
And as one senior official put it, "under the best scenarios, this isn't going to end anytime soon."
Nikkei Sharply Lower
In the equity markets, the Nikkei opened lower then quickly plunged before recovering a bit to finish the morning session down 4.53%. In the afternoon session, the Nikkei slipped again to -6.2%.
Nikkei Intraday
Yen Sells Off After Spike Higher
In a huge intraday reversal, the yen initially spiked higher then collapsed giving all the gains back and then some.
click on chart for sharper image
Explaining the Yen's Movements
What follows is a repeat from an earlier post a few hours ago:
I received several emails from people wondering why the Yen might rise given the Japanese government pledge to create "massive liquidity" as well as increase the deficit with "stimulus" money to repair the damage.
The answer in general terms is events of this type increase the demand for money. In this case, businesses and individuals affected by the earthquake need Yen, not whatever carry trade they may have been in.
There will be a repatriation of Yen for sure, although the magnitude is unknown.
Fundamentally, there is little reason to like the Yen, although significant short-term forces are in play. If the Yen does not rally in the face of increased demand, it could be a very telling signal.
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