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Wave Of Eruptions Along Pacific ‘Ring Of Fire’ Leave 10,000s Displaced

Wave Of Eruptions Along Pacific ‘Ring Of Fire’ Leave 10,000s Displaced

The Pacific “Ring of Fire” is living up to its name.

The 450 or so volcanoes that make up the ring outline have been unusually active this year, sparking evacuations on the Indonesian island of Bali and on the tiny island nation of Vanuatu. Parts of southwestern Japan, meanwhile, have been shaken by a series of earthquakes, unsettling the local population, in an area where the massive Pacific Plate grinds against other plates that form the Earth’s crust, creating a 25,000-mile zone where earthquakes and volcanic eruptions are unusually common.

Three volcanos have either erupted, or are showing signs of an imminent eruption, across the region, according to a roundup published by the Associated Press.

Japan:

The Shinmoedake volcano in southwestern Japan started erupting Wednesday for the first time in about six years. An ash plume rose 1,700 meters (5,580 feet) from the crater Thursday and ash fell on cities and towns in Miyazaki prefecture. Japanese broadcaster TBS showed students wearing helmets and masks on their way to school at the foot of Shinmoedake. The Japan Meteorological Agency is warning that hot ash and gas clouds known as pyroclastic flows could reach 2 kilometers (1 mile) from the crater, and ash and volcanic rocks are a risk over a wider area depending on wind and elevation. It raised the volcanic alert level from 2 to 3 on a scale of 5. Level 3 warns people to not approach the volcano.

More than 140,000 people fled Mount Agung on the Indonesian resort island of Bali after its alert status was raised to the highest level on Sept. 22.

…click on the above link to read the rest of the article…

Just Because the Hedge Fund Wise Guys Have Forgotten

JUST BECAUSE THE HEDGE FUND WISE GUYS HAVE FORGOTTEN

Today’s post will be about Japanese yen vol, but I am sure to bore some readers with that topic, so I am starting with something a little more interesting. As many of you know, I am a little bit of a bitcoin skeptic. At the end of the day, I have trouble investing in the ledger in the sky.

Call me old-fashioned, call me a troglodyte, call me a bitter gold bug, call me whatever you want, I just can’t bring myself to get long bits in the cloud. And before you send me messages how I don’t understand it, don’t forget I was mining bitcoin before most of Wall Street had ever heard of it. So I am much more than just some trade-a-saurus that refuses to get with the times, I am the knob who passed on bitcoin at $5.

Yet I have the privilege of counting Tony Greer from TG Macro as one of my pals, and his enthusiasm about using crypto currencies for micro-payments has piqued my interest. From Tony’s great letter the other day:

For selfish reasons, this is the article that gets me most excited about bitcoin and the blockchain. The streamlining of media distribution is going to kick the door open for individuals to compete with publishing powerhouses and main stream periodicals.

Publishing content on Amazon, iTunes, even YouTube is extremely costly for the author/artist. Youtubers can’t earn money until they get 10,000 views. Apple and Amazon take between 30% and 75% for the right to their distribution networks. Since media consumption has gone digital, it’s been difficult to charge on a PER ARTICLE basis because of high transaction costs making it prohibitively expensive. All that’s about to change.

…click on the above link to read the rest of the article…

Stagnation Is Not Just the New Normal–It’s Official Policy

Stagnation Is Not Just the New Normal–It’s Official Policy

Japan is a global leader is how to gracefully manage stagnation.

Although our leadership is too polite to say it out loud, they’ve embraced stagnation as the new quasi-official policy. The reason is tragi-comically obvious: any real reform would threaten the income streams gushing into untouchably powerful self-serving elites and fiefdoms.

In our pay-to-play centralized form of governance, any reform that threatens the skims, privileges and perquisites of existing elites and fiefdoms is immediately squashed, co-opted or watered down.

So the power structure of the status quo has embraced stagnation as a comfortable (except to those on the margins) and controllable descent that avoids the unpleasantness and uncertainty of crisis. We all know that humans quickly habituate to gradual changes in circumstances, and that if the changes are gradual enough, we have difficulty even noticing the erosion.

So wages/salaries stagnate, inflation eats away at the purchasing power of our net income, junk fees, tolls and taxes notch higher by increments too modest to trigger protest, fundamental civil liberties are chipped away one small piece at a time, healthcare costs rise every year like clockwork, and the gap between the bottom 95% and the top 5% widens, as does the gap between the top .1% and the bottom 99.9%, productivity stagnates, the growth rate of new businesses stagnates, but it’s all so gradual that we no longer notice except to sigh in resignation.

Japan is a global leader is how to gracefully manage stagnation. Here’s how Japan is managing to maintain a comfortable secular stagnation:

Japan’s central bank creates a ton of new currency every year, which it uses to buy Japan’s government debt/bonds. This keeps interest rates near-zero, so the cost of government borrowing is kept minimal.

 

…click on the above link to read the rest of the article…

Japan’s “Deflationary Mindset” Grows As Household Cash Hordes Reach Record High

Japan’s “Deflationary Mindset” Grows As Household Cash Hordes Reach Record High

After being force-fed more stimulus than John Belushi, and endless rounds of buying any and every asset that dares to expose any cracks in the potemkin village of fiat folly, Japan remains stuck firmly in what Abe feared so many years ago – a “deflationary mindset.”

As Bloomberg reports, cash and deposits held by Japanese households rose for 42nd straight quarter at the end of June as the nation’s consumers continued to favor saving over spending.

The “deflationary mindset” that the Bank of Japan is battling to overcome was also evident in the money laying idle in corporate coffers, which stayed near an all-time high, according to quarterly flow of funds data released by the BOJ on Wednesday.

Still, as Bloomberg optimistically notes, with the economy expanding much faster than its potential growth rate, greater inflationary pressures could be on the way, which may prompt a shift in behavior by consumers and companies… or not!

Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us

Top Financial Expert Warns Stocks Need To Drop ‘Between 30 And 40 Percent’ As Bankruptcy Looms For Toys R Us

Will there be a major stock market crash before the end of 2017?  To many of us, it seems like we have been waiting for this ridiculous stock market bubble to burst for a very long time.  The experts have been warning us over and over again that stocks cannot keep going up like this indefinitely, and yet this market has seemed absolutely determined to defy the laws of economics.  But most people don’t remember that we went through a similar thing before the financial crisis of 2008 as well.  I recently spoke to an investor that shorted the market three years ahead of that crash.  In the end his long-term analysis was right on the money, but his timing was just a bit off, and the same thing will be true with many of the experts this time around.

On Monday, I was quite stunned to learn what Brad McMillan had just said about the market.  He is considered to be one of the brightest minds in the financial world, and he told CNBC that stocks would need to fall “somewhere between 30 and 40 percent just to get to fair value”…

Brad McMillan — who counsels independent financial advisors representing $114 billion in assets under management — told CNBC on Monday that the stock market is way overvalued.

The market probably would have to drop somewhere between 30 and 40 percent to get to fair value, based on historical standards,” said McMillan, chief investment officer at Massachusetts-based Commonwealth Financial Network.

McMillan’s analysis is very similar to mine.  For a long time I have been warning that valuations would need to decline by at least 40 or 50 percent just to get back to the long-term averages.

…click on the above link to read the rest of the article…

North Korea Fires Ballistic Missile Which Passes Over Japan

North Korea Fires Ballistic Missile Which Passes Over Japan

Update 1:  According to Fox News, the U.S. has now confirmed the latest North Korean missile launch.

U.S. OFFICIAL CONFIRMS #NORTHKOREA FIRED BALLISTIC MISSILE: FOX NEWS

* * *

All the diplomatic posturing, the jawboning, the UN sanctions, and threats over the past three weeks has achieved absolutely nothing because as Yonhap and NHK report, North Korea has just launched an “unidentified” missile eastward from the capital Pyongyang.

A live feed from NHK in English is available after clicking on the image below:

Following the launch Japan has issued a missile alert to mobile phones and on national television, with the government advising people outside to take shelter immediately.

Worse, it appears that the missile has once again flown over Japan:

  • NORTH KOREA MISSILE PASSES OVER JAPAN, GOVT SAYS
  • N.KOREA MISSILE PASSES OVER JAPAN’S HOKKAIDO, GOVT SAYS

As NHK further adds, the missile which was launched at 6:57am local time, passed over Hokkaido at 7:06am local time, and came down in the Pacific Ocean, some 2,000 KM east of Japan’s Erimo Misaki.

The missile flew a total of 3,700 kilometers and reached an altitude of 770km, according to Yonhap.

Japan’s cabinet minister Suga said that the missile situation is similar to that on August 29, NHK adds, and that Japan will take appropriate response in contact with the US and South Korea.

NHK adds that Japan did not attempt to shoot down the missile though the South Korean military has confirmed it fired a test missile into the sea as part of training drill.

The South Korean presidential office has noted that the country’s national security council will meet at 8am local time.

Separately, according to South Korea military, North Korea fired unidentified missile in eastern direction. South Korea’s president Moon will chair a national security meeting shortly.

And now we await whether the US will finally escalate militarily or once again use even harsher, and more powerless, language.

North Korea Preparing For ICBM Launch: Japan Press

North Korea Preparing For ICBM Launch: Japan Press

Gold spiked and USDJPY tumbled as headlines from Japan’s Nikkei newspaper confirmed US military officials’ observations last night that North Korea is said to show signs of missile launch preparation.

As the Nikkei adds, citing an unidentified Japanese government official, the missile is being prepared for launch has engine for liquid fuel, suggesting missile is an ICBM. It adds that the missile is said to be fueled already, ready for launch. As Japan’s Asahi further notes, the North Korean missile prep may be for a Hwason 14 ICBM and adds that missile prep is said to have started on Wednesday.

The immediate reaction was a risk-off spike in the Yen and dollar.

This Nikkei report comes after North Korea’s threats overnight that it will “sink” Japan and reduce America to “ashes.”

North Korea Threatens To “Sink” Japan With Nuclear Weapons, “Reduce The US To Ashes”

North Korea Threatens To “Sink” Japan With Nuclear Weapons, “Reduce The US To Ashes”

Less than a day after US officials observed North Korea moving mobile missile launchers and engaging in preparations for what appears to be another missile test, a North Korean state committee has stepped up its belligerent rhetoric, threatening to use nuclear weapons to “sink” Japan and reduce the US to “ashes and darkness” after the UN Security Council passed new sanctions against the isolated country earlier this week, Reuters reported. The North also accused the US of “cooking up” the latest restrictive measures against it and demanded that the US be beaten “to death as a stick is fit for a rabid dog.

These latest threats follow reports from last night that US satellites had spotted the North’s military moving mobile missile launchers and preparing hard sites for what’s expected to be the country’s fourteenth missile test of 2017. The revelations followed reports of new commercial satellite imagery confirming an earlier analysis identifying numerous landslides throughout the Punggye-ri Nuclear Test Site on the slopes of Mt. Mantap (and beyond) resulting from North Korea’s sixth nuclear test. The data suggest that the hydrogen bomb test was up to three times more powerful than previously believed.

According to Reuters, North Korea’s Asia-Pacific Peace Committee, which handles the North’s external ties and propaganda, called for the breakup of the security council, which it accused of being “a tool of evil” made up of “money-bribed” countries that move at the order of the US. Then it turned its attention to Japan…

“The four islands of the archipelago should be sunken into the sea by the nuclear bomb of Juche. Japan is no longer needed to exist near us,” the committee said in a statement carried by the North’s official KCNA news agency.”

…click on the above link to read the rest of the article…

Japan Prepares For Mass Evacuation Of 60,000 Citizens From South Korea

Japan Prepares For Mass Evacuation Of 60,000 Citizens From South Korea

It won’t be the first time that a near-panicked Japan has came close to the edge when it comes to North Korea, and in preparation for an “emergency” was planning to evacuate its citizens located in South Korea. The last such notable spike in escalations took place in April, when as the Yomiuri Shimbun reported at the time, the Japanese government had asked the U.S. to provide advance consultation if it is about to launch military action against North Korea, and “ramped up preparations for emergency situations”, including the potential evacuation of some 57,000 Japanese citizens currently in South Korea.

Fast forward to today, when moments ago Japan’s Nikkei reported that as tensions on the Korean Peninsula reach new heights following Pyongyang’s first (allegedly) hydrogen bomb test, Japan is planning a possible mass evacuation of the nearly 60,000 Japanese citizens currently living in or visiting South Korea.

“There is a possibility of further provocations,” Japanese Prime Minister Shinzo Abe said at a Monday meeting with ruling coalition lawmakers. “We need to remain extremely vigilant and do everything we can to ensure the safety of our people.”

In response to North Korea’s sixth nuclear test, Japan and the U.S. are seeking a peaceful resolution by ratcheting up economic pressure on the rogue state through an oil embargo and other measures, while South Korea’s president has also called for a currency/FX blockade of the Kim regime. And yet, what has spooked Tokyo is that on Sunday, Defense Secretary James Mattis also said any threat to the U.S. or its allies “will be met with a massive military response – a response both effective and overwhelming.” Which means thousands of Japanese may soon be in harm’s way.

…click on the above link to read the rest of the article…

Trump Commits To Using “Nuclear Capabilities” To Defend US Terroritory, Allies

Trump Commits To Using “Nuclear Capabilities” To Defend US Terroritory, Allies

In what we believe is a significant escalation and potentially a hint as to the president’s thinking, President Trump said during a phone call with Japanese Prime Minister Shinzo Abe that the US remains committed to defending its territories and allies using all “diplomatic, conventional and – here’s the big one – nuclear – capabilities at our disposal.” This is the first time Trump has explicitly referenced possible involvement of nuclear weapons in a US response to its isolated antagonist, and also means that the two world leaders discussed the possibility of a nuclear response.

  • TRUMP REAFFIRMS U.S. COMMITMENT TO DEFEND THE U.S. & ALLIES USING FULL RANGE OF DIPLOMATIC, CONVENTIONAL AND NUCLEAR CAPABILITIES: STATEMENT

The White House released a statement about what the two leaders discussed on the call. It’s available in full below:

The call was held to discuss how the two countries should respond to North Korea’s sixth nuclear test – and possibly its first successful test of a hydrogen bomb. The test came after multiple provocations from the North over the past week, including two missile tests. Earlier, Defense Secretary James Mattis, using the couched language of international diplomacy, said any threat to the US or its territories would be met with a “massive military response.”

The full White House statement on the 6th North Korean nuclear test, as delivered by Mattis shortly after 3pm ET, is below:

…click on the above link to read the rest of the article…

Peak US Asset Prices? Japanese Acquisitions Hit Record

Peak US Asset Prices? Japanese Acquisitions Hit Record

Their buying binge in the US goes into the “Contrarian Indicators” category.

After eight phenomenal years of surging stock prices in the US, buyers are getting cold feet: Acquisitions targeting US companies dropped 15% so far this year, to $789 billion, according to Dealogic. In Japan, it’s worse: Acquisitions targeting Japanese companies have plunged 41% to $33.6 billion.

But despite the M&A downturn in both countries, there is one peculiar element that is booming: Japanese companies are acquiring US firms at record pace. This year’s 141 deals exceed the prior record for this time of the year by 18%.

In a deal announced on August 24, SoftBank, a Japanese multinational telecommunications and Internet conglomerate that already owns some US jewels such as Sprint and has $135 billion in interest-bearing debt, invested $4.4 billion in US startup WeWork. The deal is rumored to value WeWork at $20 billion.

The deal, done via SoftBank’s Vision Fund, has two parts: $1.4 billion in funding to help WeWork expand in Asia (which includes the previously announced $500 million investment in WeWork China), and $3 billion in funding for WeWork’s parent company.

US commercial real estate – the sector WeWork is in – boomed for seven years straight and prices reached such highs that even the Fed is now consistently mentioning it as one of the big reasons for removing “accommodation” and unwinding QE. It’s worried about $4 trillion in debt that is collateralized by this inflated commercial real estate.

So just in the nick of time. According to Dealogic, SoftBank’s $4.4 billion deal is Japan’s largest outbound real estate deal on record.

SoftBank is all over the place. In June, it announced that it would take two robotics firms – Boston Dynamics and Schaft – off Alphabet’s hands, after Alphabet tried to unload them for a year. Terms of the deal were not disclosed.

…click on the above link to read the rest of the article…

North Korea Threatens “Merciless Strike” As US-South Korea Wargames Begin

North Korea Threatens “Merciless Strike” As US-South Korea Wargames Begin

Residents of Japanese coastal towns are holding evacuation drills as North Korea warned Sunday that the upcoming US-South Korea military exercises are “reckless behavior driving the situation into the uncontrollable phase of a nuclear war.”

Nearly 130 people took part in the drill in Kotoura, which has a population of 18,000, a town official said. Reuters reports that for 10 minutes, people ducked down covering their heads with their arms. Many of those taking part said they were worried. North Korea has in the past threatened to attack Japan, a staunch U.S. ally and host to U.S. military bases.

As sirens blared from speakers in the town of Kotoura, children playing soccer outside ran to take shelter in a school, along with their parents and their team coach.

“I’ve been concerned every day that something might fall or a missile could fall in an unexpected place due to North Korea’s missile capabilities,” said the coach, Akira Hamakawa, 38.

As a reminder, Japan is the only country in the world to be attacked with nuclear weapons, and so perhaps the threats from North Korea today are a little closer to heart than for many around the world.

Following North Korean leader Kim Jong Un’s statement last week that he would “watch a little more the foolish and stupid conduct of the Yankees,” as US-South Korean military exercises begin, CNN reports that Pyongyang also declared that its army can target the United States anytime, and neither Guam, Hawaii nor the US mainland can “dodge the merciless strike.”

The messages in Rodong Sinmun, the official government newspaper, come a day before the US starts the Ulchi Freedom Guardian military exercises with South Korea.

…click on the above link to read the rest of the article…

Signs Of Distress

The need to change is becoming more obvious than ever
The world is edging closer to the final moments after which everything will be forever changed. Grand delusions, perpetuated over decades, will finally hit the limits of reality and collapse in on themselves.

We’re over-budget and have eaten deeply into the principal balances of all of our main trust accounts. We are ecologically overdrawn, financially insolvent, monetarily out past the Twilight Zone, consuming fossil fuels (as in literally eating them), and adding 80,000,000 net souls to the planet’s surface — each year! — without regard to the consequences.

Someday there will be hell to pay financially, economically, and ecologically as there simply isn’t any way to maintain these overdrafts forever. Reality does not renegotiate. Its deal terms aren’t compromisable.

For those who have the neural plasticity to actually see what’s happening around us, the changes are already here, blatant and frightening. Younger folks, with their fresher eyes and fewer ties to the past, can see them a lot easier than their elders.

The prosperity enjoyed by the past few generations — especially the Baby Boomers — was stolen from future generations. All the while, they pretended as if their borrowing-heavy standards of living were the result of sheer genius and intelligence; like trust fund babies who mistake being born on third base for hitting a triple.

Young people have sussed this out; and are now pulling back from many of the principal occupations of their forebears — like marriage, babies and buying homes and cars. This perplexes older folks, who are beginning to find themselves increasingly at odds with the generations following after them.

Humans can be very very smart, but the flip-side of our ingenuity is our capacity for self-delusion. We’ve very consistently preferred to look past our faults. That can work for a while, but eventually an incomplete view will lead to a complete disaster.

…click on the above link to read the rest of the article…

China Warns Japan: “Get Used To Our Warplanes”, Sends Spy Ship Near Alaska

China Warns Japan: “Get Used To Our Warplanes”, Sends Spy Ship Near Alaska 

In an unexpectedly brazen rattling of sabers, just days after China deployed troops to its first foreign base in Djibouti, a move which the Global Times clarified is “about protecting its own security, not about seeking to control the world, Beijing made a less than subtle reversal, when it told Japan on Friday to “get used to it” after it flew six warplanes over the Miyako Strait between two southern Japanese islands in a military exercise.

It all started late on Thursday night, when Japan’s defense ministry issued a token statement describing the flyover by the formation of Xian H-6 bombers, also known as China’s B-52, earlier that day as “unusual”, while noting that there had been no violation of Japanese airspace.

The flyover was hardly surprising: the Chinese navy and air force have been carrying out a series of exercises in the Western Pacific in recent month, both as they hone their ability to operate far from their home shores, as well as a trial balloon to gauge the reactions of their increasingly more nervous neighbors.

What made this flyover different, is that usually following a formal protest by the “offended” country, Beijing would take note and issue a token statement of its own, “neither admitting nor denying” guilt, but certainly without assurances of further transgressions. But not this time. On Friday the Chinese defense ministry said it was “legal and proper” for its military aircraft to operate in the airspace and that it would continue to organize regular training exercises according to “mission requirements.”

 

 

…click on the above link to read the rest of the article…

Locals Furious At Plan To Dump Radioactive Water From Fukushima Into Pacific Ocean

Locals Furious At Plan To Dump Radioactive Water From Fukushima Into Pacific Ocean

In the latest sign that the area surrounding the destroyed Fukushima power plant is far from ready for the return of human inhabitants, locals and fishing groups are criticizing a plan to release water containing radioactive tritium from the ruined Fukushima power plant into the ocean, according to the Telegraph. Officials of Tokyo Electric Power Co., the operator of the plant, say tritium poses little risk to human health and is quickly diluted by the ocean. But for some, the plan undoubtedly dredges up uncomfortable memories from 2013, when it was revealed that 300 tonnes of radioactive material had been leaking into the Pacific Ocean from the devastated plant every day. It was also revealed that TEPCO had known about the leaks, but had tried to cover them up.

TEPCO has been tasked with decommissioning the plant, and has been using robots to find and clean the melted nuclear fuel debris that is believed to be creating exorbitant levels of radiation in the area surrounding the plant. Though the company had to pull some of its robots out in February after radiation reached such high levels that not even machinery could function correctly, according to the International Business Times.

In March 2011, a magnitude 9 undersea megaquake triggered a massive tsunami that battered coastal North Eastern Japan, and triggered the level seven meltdowns of three nuclear reactors at the Fukushima Daiichi power plant, and the evacuation of 160,000 residents and the implementation of a 310 square mile uninhabitable zone. The quake was the worst to ever hit Japan, and it caused the worst nuclear disaster the world had seen since Ukraine’s Chernobyl meltdown in 1986. The three reactors at the Fukushima Daiichi power plant melted down when the tsunami caused a blackout at the plant that shut off its cooling systems.

…click on the above link to read the rest of the article…

Olduvai II: Exodus
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Olduvai
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Olduvai II: Exodus
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Olduvai III: Cataclysm
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