Daily Investment Interpretations
March 16, 2011
(Wednesday Night): The
markets have fallen deeper today than they did yesterday. The NASDAQ Composite closed
down another 50.51
to 2,616.82. The Dow dipped 242.12
to 11,613.30, while the S&P 500 dropped 24.99
to close at: 1,256.88. Oil ended the day a little higher, at $98.28 a
barrel, while Gold fell to $1,4397. The VIX rose 5.08
points to close at 29.40 after spiking above 31.
The market began climbing until 11 a. m. Eastern time. Then a remark that had been made several hours earlier and ignored, suddenly caught the attention Wall Street's "headline-o-phagic" trading computers and triggered a massive stock sale. The remark was a statement by the European Union's energy chief, Guenther Oettinger, that the situation is out of control. He warned that there could be dire happenings within hours.
It should be noted that the worst thing that could happen would be a meltdown of one or more of the reactor cores, releasing a relatively small, highly radioactive plume into the atmosphere. Right now, the wind is blowing from the east, transporting colloidal radioactive solids away from the Japanese islands over the Pacific. As long as the continues to blow from the east, the results should be harmless (unless you're a fish swimming east of Japan). My guess is that these particles will settle out of the atmosphere fairly quickly, and that they will be washed out of the air by rainfall. Also, they'll be hugely diluted as the cloud expands into the vast expanse of the atmosphere. This Japanese catastrophe is being described as a debacle falling between Three-Mile Island and Chernobyl (which, I'm reading, was worse than Three-Mile Island by a factor of a thousand). Chernobyl caused no problems for the Americas, and we're being told that the same would be true for Fukushima reactors.
Thursday (which is right now in Japan), a power line is being installed that will, hopefully, power the pumps that cool the reactor cores and spent-fuel pools: Japan Nuclear Update: New Power Line Could 'Solve Crisis', Hopes high of getting electricity to crippled Japan nuclear plant.
Meanwhile, there's other ominous news: Saudi Shi'ites protest, support Bahrain brethren, and the fact that Inflation could stall recovery: Swonk (audio) and Producer prices up 1.6% on food-price jump. Also,there's Housing's deep freeze. In Libya, Qaddafi is closing in on the last of the rebel strongholds amid finger-pointing and posturing by Western governments (all talk and no action). I could imagine that Western governments are disposed to turn a blind eye toward dictatorial suppression of democratic protests. The alternatives could open Pandora's Box (although, to be even-handed about it, so could Western intervention).
Mark Hulbert writes: Gold: Sell first — and then ask questions.
Brett Arends presents Contrarian’s trouble with new bubble.
Market futures are neutral tonight.
As the chart below shows, we're well past last November's decline.