Category: zerohedge

Today’s AM fix was USD 1,232.25, EUR 906.53 and GBP 750.78 per ounce.
Yesterday’s AM fix was USD 1,226.00, EUR 900.61 and GBP 744.97 per ounce.

Gold climbed $3.50 or 0.29% yesterday, closing at $1,228.40/oz. Silver rose $0.01 or 0.05% closing at $19.57/oz. Platinum inched down $0.25 to $1,413.75/oz and palladium fell $0.25 to $733.25/oz.

Gold is slightly higher today in all major currencies and up nearly 1% in sterling after the UK’s industrial and manufacturing production number was much worse than expected.

There was more unusual trading at 10.00 GMT when in a matter of seconds, gold sold off by $5 from $1,233/oz to $1,227.75/oz which is fraction below the opening price today. Then almost instantaneously, gold spiked to $1,237.77/oz and then fell back to the $1,233/oz level once again.

Gold in U.S. Dollars, 5 Day – (Bloomberg)

This type of shenanigans will again make  momentum followers and the technical traders nervous and curtail ‘animal spirits’ and positive sentiment towards gold.

A positive U.S. jobs number today should see gold come under pressure, while a negative one should see gold bid and lead to a higher weekly close. A second higher weekly close today, above $1,237/oz, would be bullish for next week. Support is at $1,220/oz, $1,200/oz and of course what appears to be a double bottom at $1,180/oz.

Sentiment towards gold remains poor despite robust physical gold demand as seen in the data from government mints and Chinese demand.

“Price Of Gold Crashes” – Diversify And Buy Gold For Long Term
This negative sentiment towards gold has been seen in a large number of articles in recent days. Many have focused on gold’s poor price performance in 2013. Some have been balanced, others less so.

Gold in U.S. Dollars, 5 Years – (Bloomberg)

What is interesting is that the articles have focussed almost exclusively on price and the price in the short term – the year 2013 and the price fall since the nominal record high of $1,900/oz in August 2011. The real record high, adjusted for inflation, remains $2,400/oz – nearly 50% above today’s price.

It is also interesting that the articles have been full of subjective opinion – often by so called ‘experts’ such as those in the financial services industry.

The empirical evidence regarding gold being a long term hedging instrument and safe haven asset is ignored.

Most importantly, some of the media completely ignore the most important tenet of investment practice – diversification. Our clients and those who have taken our advice and allocated 5%-10% to gold bullion fared well again in 2013.

Gold acted perfectly as a hedge again in 2013 – while gold was down by 28%, stocks were up 20%-30%.

Investing, rather than speculation, is about the long term. Some of the media are focussing solely on the short term. This is a form of data mining looking solely at the performance of gold since August 2011 and last year, rather than over long term – 5, 10, 20, 40 years.

The long term outlook for gold remains positive due to a combination of macroeconomic, systemic, geo-political and monetary risks.

Banks and the banking system pose risks to investors and savers today and there is real risks with regard to bail-ins and deposit confiscation.

In the coming years, gold will protect investors from the possibility of further falls in stock and property markets and property and stock market crashes. Indeed, it will protect investors from falls in bond prices many of which are at all-time record highs. Finally, it will protect savers and those with cash deposits from the risk of bail-ins and deposit confiscation.

Gold has been subject to rigorous analysis by leading financial academics in recent years. In science, empirical evidence is required for a hypothesis to gain acceptance in the scientific community. Normally, acceptance and validation is achieved by the scientific method of hypothesis commitment, experimental design, peer review, adversarial review, reproduction of results, conference presentation and publication in a journal.

Unfortunately, in the investment community little empirical evidence is required for the hypothesis – gold is a speculation or a risky investment that has crashed – to gain acceptance. All it takes is a few vested interests and their subjective opinion and a lack of understanding and willingness to look at the facts, data and academic research.

As ever, we thought it best to consult an academic who has conducted much research on gold as an asset to get his opinions regarding gold’s recent price falls.

Dr Constantin Gurdgiev is the adjunct lecturer in finance in Trinity College, Dublin (TCD) and was previously a member of the Investment Committee of GoldCore. Dr Gurdgiev has engaged in much evidence based academic research on gold. He found that gold is a “hedging instrument and a safe haven” and presented his findings to the World Bank, ECB and BIS nearly three years ago.

Dr Gurdgiev On Gold As Important Long Term Diversification
“No investor should be advised to take a speculative position in gold, stocks or bonds unless they are made aware of and are willing to face the short-term price volatility that comes along with these assets.

Gold is a long-term risk management asset, not a speculative one. As such it should be analysed and treated predominantly in the context of its role as a part of a properly structured, risk-balanced and diversified portfolio spanning the full life-cycle of the investment and pension horizon for individual investors and those with pensions – whether they be SIPPs in the UK or IRAs in the USA.

Sadly, much of the media coverage concerning gold commonly fails to distinguish the risk management properties of this asset class. Instead, media commentary often focuses on single point-in-time price changes, usually based on timings selected with the hindsight ‘knowledge’.

Such analysis is fallacious, misinformed, if not outright financially misleading.
Furthermore, as exemplified by recent media coverage, majority of financial journalists fail to recognise the fact that unlike many other asset classes, such as stocks and bonds, gold does not suffer from survivorship risk.

As such, gold acts not only as a traditional hedge and safe haven with respect to ‘normal’ or ‘continuous’ risks present in the global financial markets, but also a hedge against large scale tail events.

There is virtually no other asset class, excluding sub-class of AAA-rated sovereign bonds (with some major caveats), that offers such hedging opportunities.

Tail risk events often witness significant destruction of commonly traded equities and fixed income instruments. The best exemplifications of this fallacy are wholly erroneous comparatives between gold price changes and individual stocks price movements involving stocks with high recent exposure to survivorship risk, such as banks equities.

Quoting individual stocks without adjusting for survivorship risk presents a misleading picture of risk-returns relationship that does serious disservice to the public. Quoting such differences immediately after a major tail risk event, such as the global financial crisis, is outright wrong, full stop.

Even more erroneous are comparatives between the short-term gold price movements effects on individual investors and the property price changes.

The two asset classes are vastly different in terms of (1) risks involved in investing in the underlying instruments, (2) availability of different instruments in different markets, (3) leveraging involved in purchasing of these assets, (4) pricing of these assets (commodity vs idiosyncratic non-homogenous assets), (5) liquidity risks, (6) transactions costs, (7) other risk hedging properties.

Such comparatives, as the result, offer a grossly oversimplified view of investment markets.
Well known and empirically confirmed idiosyncratic properties of gold, in my opinion, warrant careful consideration of this asset as a part of a well-diversified and structured long-term investment portfolia.

Speculative appraisals based on highly selective ex-post market timings and prices comparatives, or absurd comparatives across vastly different asset classes, whilst ignoring major risks underlying returns to specific asset classes and even individual equities, is over-simplifying and misleading at best.”
End

 

Gold in British Pounds, 5 Year – (Bloomberg)

It is very important to look at the facts, the figures and the academic research on gold. Dr Brian Lucey, also of Trinity College Dublin (TCD) has also frequently researched the gold market. Dr Lucey and Dr Gurdgiev had an excellent research paper on gold published in August 2013 which has been ignored by the financial services industry and much of the media.

They researched the gold market and their paper ‘Hedges and safe havens: An examination of stocks, bonds, gold, oil and exchange rates’ concluded that gold is a hedge against U.S. dollar and British pound risk due to “its monetary asset role.”

Dr Lucey has consistently pointed out how physical gold is financial insurance or a hedge against political uncertainty. Both have advocated an allocation to physical gold in an investment and pension portfolio.

History
Besides academic research there is also the historical fact and real people and families and their experience of owning gold – both in recent years and in history.

Some of the many times when gold protected people’s wealth are – Germany in the 1920’s, much of the world in the 1930’s, China in 1949, the western world in the 1970’s, the USSR in 1990, Argentina in 1989 and 2001, Zimbabwe in 2008 and indeed much of the western world since 2007 and the financial crisis.

Last year, gold protected people in Cyprus from the deposit confiscation.

History clearly shows that individuals, families and companies that own gold have fared much better than those who do not.

Gold in Euros, 5 Year – (Bloomberg)

CONCLUSION
Simplistic, subjective and unbalanced anti-gold opinions tend to get media coverage. However, it is important to always focus on the empirical evidence as seen in the academic research, price performance over the long term and the historical record.

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via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/sBWmcQY_xfI/story01.htm GoldCore

So much for the recovery. Moments ago December nonfarms were revealed at just 74,000 a huge miss to expectations of 197,000 – the biggest miss Since December 2009. The drop from last month’s revised 226K was the largest since December 2010. Other notables: the change in private payrolls was a tiny 87K vs expectations of 200K. Mfg payrolls added just 9K vs 15K expected and down from 31K. Average hourly earnings for all employees rose 0.1% vs. Expected 0.2%. The good news: the unemployment rate plunged to 6.7% from 7.0%… For all the wrong reasons – the number of people not in the labor force rose to a record 91,808,000. As a reason for the plunge the BLS says there was a major weather effect seen on the forced part-time series, and notes the decline in healthcare which is rare and part of the sector slowing. Thank you Obamacare. And now bring on the Untaper.

Some of the highlights from the report:

The number of unemployed persons declined by 490,000 to 10.4 million  in December, and the unemployment rate declined by 0.3 percentage point  to 6.7 percent. Over the year, the number of unemployed persons and the  unemployment rate were down by 1.9 million and 1.2 percentage points,  respectively. (See table A-1.)

 

Among the major worker groups, the unemployment rates for adult men (6.3 percent) and whites (5.9 percent) declined in December. The rates for adult  women (6.0 percent), teenagers (20.2 percent), blacks (11.9 percent), and  Hispanics (8.3 percent) showed little change. The jobless rate for Asians  was 4.1 percent (not seasonally adjusted), down by 2.5 percentage points  over the year. (See tables A-1, A-2, and A-3.)

 

Among the unemployed, the number of job losers and persons who completed temporary jobs decreased by 365,000 in December to 5.4 million. The number of long-term unemployed (those jobless for 27 weeks or more), at 3.9 million, showed little change; these individuals accounted for 37.7 percent of the unemployed. The number of long-term unemployed has declined by 894,000 over the year. (See tables A-11 and A-12.)

 

The civilian labor force participation rate declined by 0.2 percentage point to 62.8 percent in December, offsetting a change of the same magnitude in November. In December, the employment-population ratio was unchanged at 58.6 percent. The labor force participation rate declined by 0.8 percentage point over the year, while the employment-population ratio was unchanged. (See table A-1.)

 

The number of persons employed part time for economic reasons (sometimes referred to as involuntary part-time workers) was essentially unchanged at 7.8 million in December. These individuals were working part time because their hours had been cut back or because they were unable to find full-time work. (See table A-8.)

 

In December, 2.4 million persons were marginally attached to the labor force, little changed from a year earlier. (The data are not seasonally adjusted.) These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. (See table A-16.)

 

Among the marginally attached, there were 917,000 discouraged workers in December, down by 151,000 from a year earlier. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. The remaining 1.5 million persons marginally attached to the labor force in December had not searched for work for reasons such as school attendance or family responsibilities. (See table A-16.)

And the funniest part when one considers the surge in construction workers in the ADP report:

Construction employment edged down in December (-16,000).  However, in 2013, the industry added an average of 10,000 jobs per month. Employment in nonresidential specialty trade contractors declined by 13,000 in December, possibly reflecting unusually cold weather in parts of the country.

So construction workers both surged and plunged due to the weather.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/vL08iuZBY6o/story01.htm Tyler Durden

Overnight China reported disappointing export data, missing expectations of +5%. The gvoernment explained this on the basis that they were losing their competitive edge since the Yuan has strengthened to 20 year highs but perhaps most telling is that fact that, as the FT reports, China became the world’s biggest trader in goods for the first time last year – overtaking the US for all of 2013. We suspect the powers that be are starting to get nervous as this comes soon after China’s surge to become the world’s largest oil importer marking a notable shift in the world’s most powerful nations – as trade with the rest of Asia and increasing flows with the Middle East represent a shift in power away from the US.

 

There is one exception.. of course – net imports with Japan continues its 3 year trend lower as tensions between the two nations sour further.

 

 

Via The FT,

…

 

The total value of China’s imports and exports in 2013 was $4.16tn, a 7.6 per cent increase from a year earlier on a renminbi-adjusted basis, according to figures released by the Chinese government on Friday.

 

The US will release its full-year figures in February but its total imports and exports of goods amounted to $3.57tn in the 11 months from January to November 2013, making it a virtual certainty that China is now the world’s biggest goods trading nation.

 

Some historians argue China was the world’s largest trading nation during the Qing dynasty – which lasted from 1644-1912 – despite the ambivalence of Chinese emperors toward foreign trade.

 

“This is a landmark milestone for our nation’s foreign trade development,” said Zheng Yuesheng, chief statistician of the customs administration.

 

Mr Zheng said he expected a stronger showing in 2014, thanks to an improving world economy, the impact of structural reforms in China and a lowered outlook for commodity prices, which would help offset rising costs of labour and financing for Chinese manufacturers.

 

One can only note that nothing lasts forver…

 

 

However, as always with China, there is a caveat…

The Chinese government itself has expressed some concern about Chinese trade data in late 2012 and early 2013. Statistics officials have acknowledged that during that period export numbers in particular were distorted by a huge amount of fake invoicing by companies and individuals evading China’s strict capital controls to move cash in and particularly out of the country.

 

That will probably lower growth figures for the first months of this year.

 

“We should be prepared for a period of low headline year-on-year export growth due largely to the faked exports data between December 2012 and April 2013,” said Lu Ting, China economist at Bank of America Merrill Lynch.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/vxxsi3_DKBA/story01.htm Tyler Durden

Overnight China reported disappointing export data, missing expectations of +5%. The gvoernment explained this on the basis that they were losing their competitive edge since the Yuan has strengthened to 20 year highs but perhaps most telling is that fact that, as the FT reports, China became the world’s biggest trader in goods for the first time last year – overtaking the US for all of 2013. We suspect the powers that be are starting to get nervous as this comes soon after China’s surge to become the world’s largest oil importer marking a notable shift in the world’s most powerful nations – as trade with the rest of Asia and increasing flows with the Middle East represent a shift in power away from the US.

 

There is one exception.. of course – net imports with Japan continues its 3 year trend lower as tensions between the two nations sour further.

 

 

Via The FT,

…

 

The total value of China’s imports and exports in 2013 was $4.16tn, a 7.6 per cent increase from a year earlier on a renminbi-adjusted basis, according to figures released by the Chinese government on Friday.

 

The US will release its full-year figures in February but its total imports and exports of goods amounted to $3.57tn in the 11 months from January to November 2013, making it a virtual certainty that China is now the world’s biggest goods trading nation.

 

Some historians argue China was the world’s largest trading nation during the Qing dynasty – which lasted from 1644-1912 – despite the ambivalence of Chinese emperors toward foreign trade.

 

“This is a landmark milestone for our nation’s foreign trade development,” said Zheng Yuesheng, chief statistician of the customs administration.

 

Mr Zheng said he expected a stronger showing in 2014, thanks to an improving world economy, the impact of structural reforms in China and a lowered outlook for commodity prices, which would help offset rising costs of labour and financing for Chinese manufacturers.

 

One can only note that nothing lasts forver…

 

 

However, as always with China, there is a caveat…

The Chinese government itself has expressed some concern about Chinese trade data in late 2012 and early 2013. Statistics officials have acknowledged that during that period export numbers in particular were distorted by a huge amount of fake invoicing by companies and individuals evading China’s strict capital controls to move cash in and particularly out of the country.

 

That will probably lower growth figures for the first months of this year.

 

“We should be prepared for a period of low headline year-on-year export growth due largely to the faked exports data between December 2012 and April 2013,” said Lu Ting, China economist at Bank of America Merrill Lynch.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/vxxsi3_DKBA/story01.htm Tyler Durden

From RanSquawk

US Change in Nonfarm Payroll (Dec) Exp. 197K (Low 100K, High 250K), vs. Prev. 203K, October 200K

US Unemployment Rate (Dec) Exp. 7.0% (Low 6.8%, High 7.5%), vs. Prev. 7.0%

• Citigroup 165K
• Barclays 175K
• UBS 185K
• HSBC 191K
• Goldman Sachs 200K
• JP Morgan 215K
• Bank of America 220K
• Deutsche Bank 250K
  

Today’s NFP and indication of labour market conditions will be the first key piece of data after the FOMC decided to begin tapering in December, and keenly followed as an indication of how the Fed may alter their bond-buying program at the next meeting at the end of January. The Non-Farm Payrolls six-month average now sits at 179.5K, however the past two readings have come in very near 200K, a mark noted by several on the FOMC as a consistent level needed to support the view of a “substantial improvement in the labour market” and hence justify another taper of the Federal Reserve’s current bond buying program. There were a few special factors that affected the previous reading, with the BLS noting that among the unemployed, the number who reported being on temporary layoff decreased by 377K, which largely reflected the return to work of federal employees who were furloughed in October due to the partial government shutdown. In terms of this month’s reading, the couriers and messengers industry could affect the reading due to online demand during the festival period, and notably this month’s report will include new seasonal adjustment factors for the household survey, which often leads to revisions to the unemployment rate over the past few years.

Recent employment data has been relatively well received, highlighted by Wednesday’s better than expected ADP which was the largest increase since November 2012 and led to several analysts upping their calls for today’s reading. Yesterday also saw initial jobless claims fall to 330K last week from a previous 345K, beating the median expectation for 335K. The unemployment rate is expected to remain unchanged at 7.0%, stabilising from the decline observed over the past few months and at its lowest level since November 2008 with an increase in the participation rate, a trend which could influence the reading seen today.

Market Reaction

Although a knee-jerk reaction is often seen across asset classes following a beat or miss on the NFP headline, a sustained reaction will likely be driven by whether this data is interpreted as supporting or pushing back the view of tapering by the FOMC once again this month. Markets are currently pricing in a taper of USD 10bln again at the end of January, and a reading in-line and near 200K is expected to support this view. Only a large miss on expectation is likely to push back the view of another tape to the next meeting in March, however a decent beat on 200K is seen as increasingly the likelihood of a taper greater than USD 10bln.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/j0e5rRPgBMg/story01.htm Tyler Durden

Nearly one year ago, I warned yet again of the trend starting to turn against Facebook. For those who don’t follow me, I was most bearish on Facebook – even before its IPO. This was not because I doubted the company, but because I doubted the Goldmans Sachs/Morgan Stanley snakeoil salesman valuation. To wit:

pre-IPO – Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!

at the IPO – The World’s First Phenomenally Forensic Facebook Analysis – This Is What You Need Before You Invest, Pt 1 as well as The Final Facebook Forensic IPO Analysis: the Good, the Bad & the Ugly

and post-IPO – On Top Of The 2x-10x Return Had Off Of BoomBustBlog Facebook Research, Our Models Show How Much More Is Available… as well as…

• Is Time For Facebook Investors To Literally Face the Book (Value)?
• Facebook Bubble Blowing Justification Exercises Commence Today
• Facebook Options Are Now Trading, Or At Least The PUTS Are!

These reports and articles saved my subscribers a ton of money and making those few braver souls another ton in shorts and puts. I cautioned about Facebook again, not so much on valuation but on future growth prospects as FB actually encountered negative subscriber growth likely caused by competitors stealing potential market share during a period where it was supposed to be experiencing rapid growth (see I Don’t Think Facebook Investors Will “Like” This …). Of course, nearly all sell side analysts and financial pundits in the media somehow overlooked this. 

Well, while on the topic, let’s peruse this infographic by Finance Degree Center. Please note this is a very large graphic, so click it to enlarge and see the whole thing (it is big!).

thumb finance center on facebook 

How the Facebook story got started…

Facebook started its institutional investment life as a very popular, very well known company. Goldman took this story (private) stock and went bananas with it, as meticulously illustrated in the following blog posts:

1. Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!
2. Facebook Becomes One Of The Most Highly Valued Media Companies In The World Thanks To Goldman, & Its Still Private!
3. Here’s A Look At What The Goldman FaceBook Fund Will Look Like As It Ignores The SEC & Peddles Private Shares To The Public Without Full Disclosure
4. The Anatomy Of The Record Bonus Pool As The Foregone Conclusion: We Plug The Numbers From Goldman’s Facebook Fund Marketing Brochure Into Our Models
5. Did Goldman Just Rip Its HNW and Institutional Clients Once Again? Facebook Growth Slows Pre-IPO, Just As We Warned!

I issued private research to my subscribers while publicly warning that Facebook at, or anywhere near, its IPO price was a blatant bald faced SCAM & RIPOFF!!!

1. The World’s First Phenomenally Forensic Facebook Analysis – This Is What You Need Before You Invest, Pt 1
2. The Final Facebook Forensic IPO Analysis: the Good, the Bad & the Ugly

As the actual IPO arrived, JP Morgan, Morgan Stanley, Goldman Sachs, etc. piled on the Bullshit, basically espousing how great an investment this was at $38, screaming that this was a once in a lifetime opportunity. Basically, they took the opposite stance of yours truly. And how did that worked out??? BoomBustBlog Challenges Face Ripping Facebook Share Peddlers That Left Muppets Faceless And Nearly 50% Poorer After IPO.

Here is a full year of free blog posts and paid research material warning that ANYBODY following the lead of Goldman, Morgan Stanley and JP Morgan on the Facebook offering would get their Face(book)s RIPPED!!! Could you imagine me on a reality TV show based on this stuff??? Well, it’s coming…

1. Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!
2. Facebook Becomes One Of The Most Highly Valued Media Companies In The World Thanks To Goldman, & Its Still Private!
3. Here’s A Look At What The Goldman FaceBook Fund Will Look Like As It Ignores The SEC & Peddles Private Shares To The Public Without Full Disclosure
4. The Anatomy Of The Record Bonus Pool As The Foregone Conclusion: We Plug The Numbers From Goldman’s Facebook Fund Marketing Brochure Into Our Models
5. Did Goldman Just Rip Its HNW and Institutional Clients Once Again? Facebook Growth Slows Pre-IPO, Just As We Warned!
6. The World’s First Phenomenally Forensic Facebook Analysis – This Is What You Need Before You Invest, Pt 1
7. The Final Facebook Forensic IPO Analysis: the Good, the Bad & the Ugly
8. On Top Of The 2x-10x Return Had Off Of BoomBustBlog Facebook Research, Our Models Show How Much More Is Available…
9. Is Time For Facebook Investors To Literally Face the Book (Value)?
10. Facebook Bubble Blowing Justification Exercises Commence Today
11. Facebook Options Are Now Trading, Or At Least The PUTS Are!
12. Reggie Middleton breaks down “Muppetology,” Face Ripping IPO’s, and the Chinese Wall!
13. Facebooking The Chinese Wall: How A Blog Has Outperformed Wall Street For 5 Yrs
14. Why Shouldn’t Practitioners Of Muppetology Get Swallowed In A Facebook IPO Class Action Suit?
15. Shorting Federal Facebook Notes Are Not Allowed Today ?
16. As I Promised Last Year, Facebook Is Being Proven To Be Overhyped and Overpriced!

It would seem that Facebook Finally Faces The Fact Of BoomBustBlog Analysis. Professional and institutional BoomBustBlog subscribers have access to a simplified unlocked version of the valuation model used for this report, available for immediate download – Facebook Valuation Model 08Feb2012. I just nominally input some very generous numbers and the best case scenario chart (see the chart tab after your own individual inputs) is quite revealing, indeed! The full forensic opinion is available to all subscribers here FaceBook IPO & Valuation Note Update, and the latest iteration can be found here FB IPO Analysis & Valuation Note – update with per share valuation 05/21/2012. It is recommended that subscribers (click here to subscribe) also review the original analyses (FB note final 01/11/2011).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Jvf2rXVvumg/story01.htm Reggie Middleton

Nearly one year ago, I warned yet again of the trend starting to turn against Facebook. For those who don’t follow me, I was most bearish on Facebook – even before its IPO. This was not because I doubted the company, but because I doubted the Goldmans Sachs/Morgan Stanley snakeoil salesman valuation. To wit:

pre-IPO – Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!

at the IPO – The World’s First Phenomenally Forensic Facebook Analysis – This Is What You Need Before You Invest, Pt 1 as well as The Final Facebook Forensic IPO Analysis: the Good, the Bad & the Ugly

and post-IPO – On Top Of The 2x-10x Return Had Off Of BoomBustBlog Facebook Research, Our Models Show How Much More Is Available… as well as…

• Is Time For Facebook Investors To Literally Face the Book (Value)?
• Facebook Bubble Blowing Justification Exercises Commence Today
• Facebook Options Are Now Trading, Or At Least The PUTS Are!

These reports and articles saved my subscribers a ton of money and making those few braver souls another ton in shorts and puts. I cautioned about Facebook again, not so much on valuation but on future growth prospects as FB actually encountered negative subscriber growth likely caused by competitors stealing potential market share during a period where it was supposed to be experiencing rapid growth (see I Don’t Think Facebook Investors Will “Like” This …). Of course, nearly all sell side analysts and financial pundits in the media somehow overlooked this. 

Well, while on the topic, let’s peruse this infographic by Finance Degree Center. Please note this is a very large graphic, so click it to enlarge and see the whole thing (it is big!).

thum
b finance center on facebook 

How the Facebook story got started…

Facebook started its institutional investment life as a very popular, very well known company. Goldman took this story (private) stock and went bananas with it, as meticulously illustrated in the following blog posts:

1. Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time Last Week!
2. Facebook Becomes One Of The Most Highly Valued Media Companies In The World Thanks To Goldman, & Its Still Private!
3. Here’s A Look At What The Goldman FaceBook Fund Will Look Like As It Ignores The SEC & Peddles Private Shares To The Public Without Full Disclosure
4. The Anatomy Of The Record Bonus Pool As The Foregone Conclusion: We Plug The Numbers From Goldman’s Facebook Fund Marketing Brochure Into Our Models
5. Did Goldman Just Rip Its HNW and Institutional Clients Once Again? Facebook Growth Slows Pre-IPO, Just As We Warned!

I issued private research to my subscribers while publicly warning that Facebook at, or anywhere near, its IPO price was a blatant bald faced SCAM & RIPOFF!!!

1. The World’s First Phenomenally Forensic Facebook Analysis – This Is What You Need Before You Invest, Pt 1
2. The Final Facebook Forensic IPO Analysis: the Good, the Bad & the Ugly

As the actual IPO arrived, JP Morgan, Morgan Stanley, Goldman Sachs, etc. piled on the Bullshit, basically espousing how great an investment this was at $38, screaming that this was a once in a lifetime opportunity. Basically, they took the opposite stance of yours truly. And how did that worked out??? BoomBustBlog Challenges Face Ripping Facebook Share Peddlers That Left Muppets Faceless And Nearly 50% Poorer After IPO.

Here is a full year of free blog posts and paid research material warning that ANYBODY following the lead of Goldman, Morgan Stanley and JP Morgan on the Facebook offering would get their Face(book)s RIPPED!!! Could you imagine me on a reality TV show based on this stuff??? Well, it’s coming…

1. Facebook Registers The WHOLE WORLD! Or At Least They Would Have To In Order To Justify Goldman’s Pricing: Here’s What $2 Billion Or So Worth Of Goldman HNW Clients Probably Wish They Read This Time
   Last Week!
2. Facebook Becomes One Of The Most Highly Valued Media Companies In The World Thanks To Goldman, & Its Still Private!
3. Here’s A Look At What The Goldman FaceBook Fund Will Look Like As It Ignores The SEC & Peddles Private Shares To The Public Without Full Disclosure
4. The Anatomy Of The Record Bonus Pool As The Foregone Conclusion: We Plug The Numbers From Goldman’s Facebook Fund Marketing Brochure Into Our Models
5. Did Goldman Just Rip Its HNW and Institutional Clients Once Again? Facebook Growth Slows Pre-IPO, Just As We Warned!
6. The World’s First Phenomenally Forensic Facebook Analysis – This Is What You Need Before You Invest, Pt 1
7. The Final Facebook Forensic IPO Analysis: the Good, the Bad & the Ugly
8. On Top Of The 2x-10x Return Had Off Of BoomBustBlog Facebook Research, Our Models Show How Much More Is Available…
9. Is Time For Facebook Investors To Literally Face the Book (Value)?
10. Facebook Bubble Blowing Justification Exercises Commence Today
11. Facebook Options Are Now Trading, Or At Least The PUTS Are!
12. Reggie Middleton breaks down “Muppetology,” Face Ripping IPO’s, and the Chinese Wall!
13. Facebooking The Chinese Wall: How A Blog Has Outperformed Wall Street For 5 Yrs
14. Why Shouldn’t Practitioners Of Muppetology Get Swallowed In A Facebook IPO Class Action Suit?
15. Shorting Federal Facebook Notes Are Not Allowed Today ?
16. As I Promised Last Year, Facebook Is Being Proven To Be Overhyped and Overpriced!

It would seem that Facebook Finally Faces The Fact Of BoomBustBlog Analysis. Professional and institutional BoomBustBlog subscribers have access to a simpli
fied unlocked version of the valuation model used for this report, available for immediate download – Facebook Valuation Model 08Feb2012. I just nominally input some very generous numbers and the best case scenario chart (see the chart tab after your own individual inputs) is quite revealing, indeed! The full forensic opinion is available to all subscribers here FaceBook IPO & Valuation Note Update, and the latest iteration can be found here FB IPO Analysis & Valuation Note – update with per share valuation 05/21/2012. It is recommended that subscribers (click here to subscribe) also review the original analyses (FB note final 01/11/2011).

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/Jvf2rXVvumg/story01.htm Reggie Middleton

• From the guy who said the market is not overvalued: Q&A with Fed’s Williams on Upbeat 2014 Outlook and What Keeps Him up at Night (Hilsenrath)
• Obama Readies Revamp of NSA (WSJ)
• Indian envoy leaves U.S. in deal to calm diplomatic row (Reuters)
• China overtakes US as largest goods trader (FT)
• Wall Street Predicts $50 Billion Bill to Settle U.S. Mortgage Suits (NYT)
• Low-End Retailers Had a Rough Holiday: Family Dollar, Sears Struggle as Lower-Income Customers Remain Under Pressure (WSJ)
• ECB charts familiar course as Japan, US and UK begin to diverge (FT)
• Housing experts warn of hiccups as new U.S. mortgage rules go live (Reuters)
• People’s Bank of China keeps pressure on money markets (FT)
• It’s a HFT eat HFT world: Infinium ex-employees sue over $4.1m loss (FT)
• Google linking of social network contacts to email raises concerns (Reuters)
• Slowing China crude imports to challenge exporters (FT)
• Beijing moves to bolster claim in South China Sea (WSJ)
• Fiery Oil-Train Accidents Raise Railroad Insurance Worries (WSJ)
• UK Factory Output Flat; Construction Falls (WSJ)
• Congress push on fast-track authority boosts trade deal hopes (FT)

 

Overnight Media Digest

WSJ

* President Obama is leaning toward extending broad privacy protections to non-U.S. citizens and is seriously considering restructuring the National Security Agency program that collects phone-call data of nearly all Americans.

* The Justice Department has put Wall Street on notice that it plans additional enforcement actions against banks that haven’t done enough to stem the flow of illicit funds into the U.S. financial system.

* Well-off students at private schools have long subsidized poorer classmates. But as states grapple with the rising cost of higher education, middle-income students at public colleges in a dozen states now pay a growing share of their tuition to aid those lower on the economic ladder.

* A sharp slowdown in mortgage refinancing is forcing banks to cut jobs, fight harder for a smaller pool of home-purchase loans and employ new tactics to drum up business.

* European Central Bank chief Mario Draghi pledged “decisive action” if needed to safeguard the euro-zone recovery, as it kept its key lending rate at a record low 0.25 percent.

* Fund manager Bill Gross said Thursday that he expects bond investments to bounce back in 2014, following a tumultuous year in which the Pimco Total Return Fund he manages suffered an industry-record $41.1 billion of investor redemptions.

* Mathew Martoma, a former SAC Capital Advisors LP portfolio manager fighting insider trading charges was expelled from Harvard Law School in 1999 for falsifying grade transcripts, according to a person familiar with the matter.

* World-wide PC shipments fell 10 percent last year, research firms Gartner Inc and IDC said Thursday, the worst-ever sales slump for the industry. Both companies have been tracking personal computer sales since the 1980s.

* As technology shifts from personal computers to smartphones and tablets, Apple Inc is expanding its reach into a lucrative customer base: companies.

 

FT

Alcoa World Alumina, a joint venture controlled by U.S. aluminium group Alcoa Inc agreed to pay $384 million to resolve charges of paying millions of dollars in bribes to Bahraini officials, including members of the secretive Gulf state’s royal family.

Shares in Ford Motor Co rose 1.9 percent as the U.S. automaker raised its quarterly dividend 25 percent on Thursday, responding to pressure to return more capital to shareholders.

Hedge fund Elliott said on Thursday it would sell part of its 25 percent stake in Celesio to McKesson Corp after the U.S. drugs wholesaler raised its offer for its German peer to $8.6 billion.

RSA Insurance Group Plc acknowledged there were “lessons to be learnt” from accounting irregularities at its Irish division, that prompted the British insurer to issue a series of profit warnings and cost the head of the Irish business and the group CEO their jobs.

Standard Chartered Plc said on Thursday its highly regarded finance director, Richard Meddings, will step down, amid a massive reshuffle launched by the Asia-focused lender as it battles to reverse falling profits.

Santander Consumer USA Holdings Inc, the U.S. consumer-finance arm of Spain’s Banco Santander SA, is planning to raise as much as $1.56 billion in an initial public offering on the New York stock market as its private equity stakeholders cash out.

 

NYT

* Wall Street could pay nearly $50 billion to federal authorities who are taking aim at the banks over their role in the mortgage crisis, according to interviews and a confidential analysis of the industry’s potential legal exposure. JPMorgan Chase’s record $13 billion mortgage settlement in November has stepped up the pressure on other banks to strike their own separate deals in the coming months, some top bank executives say.

* New York State Attorney General Eric Schneiderman said he planned to investigate brokerage firms that might have provided early market-moving information to preferred clients. The remarks came a day after his office reached an agreement with BlackRock, the world’s largest asset manager, to end the company’s practice of surveying Wall Street analysts for early clues on their opinions before those opinions became public.

* Disagreements over a program to help dairy producers when milk prices drop have emerged as a major sticking point in negotiations on a new farm bill, which had been expected to be wrapped up this week. But lawmakers appear to have reached a deal to cut about $9 billion over 10 years from the food stamp program, which is part of the farm bill and had been the most contentious issue in the efforts to pass the legislation.

* Apollo Global Management LLC said it raised $17.5 billion from outside investors for its eighth private equity fund. It is the largest such fund the firm has ever raised, and includes $880 million from Apollo and affiliated investors, including employees of the firm, bringing the total to about $18.4 billion.

* Google will soon allow people to send anyone an email, even if they do not have the person’s email address, as long as both people have a Gmail and Google Plus account.

* Ford announced a new Fiesta compact car tailored for global drivers, complete with advanced anti-collision technology, a fuel-saving engine and its lowest price tag yet for a car it will sell in Japan – 2.29 million yen, or $21,800. With the Fiesta, Ford hopes to finally pry open a market that has flummoxed many foreign automakers, one that it all but abandoned as it fought off bankruptcy during the global economic crisis.

* Mathew Martoma, the former hedge fund manager accused of insider trading at SAC Capital Advisors, was expelled from Harvard in 1999 for creating a false transcript when he applied for a clerkship with a federal judge. Martoma used a computer program to change several grades from B’s to A’s, including one in criminal law, and then sent the forged transcript to 23 judges as part of the application process, court papers unsealed on Thursday showed.

 

Canada

THE GLOBE AND MAIL

* The federal transport minister asked for a review of the decision to shut down incoming North American flights at Pearson International Airport this week, and expressed concern about the reliability of air transportation.

* The City of Toronto will need tens of millions of dollars in aid from the provincial and federal governments to help with the cleanup of December’s ice storm, even after it drains its emergency funds.

Reports in the business section:

* Clarke Inc, a major Sherritt International Corp shareholder, said the company rejected its request to overhaul the board, setting the Canadian miner up for a nasty proxy fight.

* Nissan’s Canada unit said it will bring the subcompact Micra back to the Canadian market and not sell it in the United States, in what is an unusual move for auto makers selling vehicles in North America.

NATIONAL POST

* Mayor Rob Ford said Ottawa should consider decriminalizing marijuana and make “revenue” from it but said it wouldn’t happen with the Conservatives in charge.

FINANCIAL POST

* A weak Canadian dollar, which slid to a more than four-year low against the U.S. dollar on Thursday, will be the new normal for most of 2014, analysts said.

* Starbucks Canada and Twitter Canada announced a new e-gifting program known as “Tweet-a-Coffee” which will enable Canadian Twitter users to send Starbucks gift cards to their friends over the social networking service.

 

China

SHANGHAI SECURITIES NEWS

Anhui Jianghuai Automobile Co Ltd may aim for a group listing that could see the company acquire the remaining assets of its parents.

CHINA BUSINESS NEWS

– U.S. drugmaker Johnson & Johnson will appeal a ruling to restore the exclusive rights to its OneTouch trademark of diabetes monitoring products, the company said in a statement.

PEOPLE’S DAILY

– Chinese media should uphold professional ethics, said a commentary in the paper that acts as the Party’s mouthpiece. Media should not let down the trust of the people, it said.

 

Britain

The Telegraph

SHOPPERS SPENT LESS IN DECEMBER THAN NOVEMBER, SAYS BRC

British retail sales growth slowed in December despite signs of strong consumer confidence, industry data showed, raising questions about the durability of the recovery. Capping a mixed holiday season for major British retailers, the British Retail Consortium said shoppers spent 1.8 percent more in December than a year earlier, slackening from annual growth of 2.3 percent in November.

KATE SWANN SET FOR CITY RETURN WITH SSP

The former boss of WH Smith, Kate Swann, looks set for a return to the City as SSP, the food brand company she joined last year, is eyeing a London flotation.

The Guardian

EURO PLUMMETS AFTER ECB WARNS CURRENCY ZONE MAY NEED MORE SUPPORT

The European Central Bank sent the euro tumbling on world markets after it warned that the 18-member currency zone may need further support to prevent a Japanese-style period of stagnation.

GREGGS RETURNS TO SALES GROWTH – AND CUTS MORE THAN 400 JOBS

Greggs emerged as a winner from Christmas trading but it will not be a happy new year for more than 400 of its employees who face losing their jobs. In a trading update, the bakery chain said underlying sales for the five weeks ending Jan. 4 rose 3.1 percent in a return to growth after a difficult start to the year.

The Times

STRONGER TRADE ‘NOT ENOUGH’ TO FUEL RECOVERY

Britain’s trade position strengthened slightly in November but is still too weak to support the recovery, economists have warned, dealing another blow to coalition hopes for an economic rebalancing.

MEDDINGS GOES AS STANDARD CHARTERED SHUFFLES ITS PACK

Standard Chartered’s finance director is to leave the bank amid a wide-ranging restructuring. The resignation of Richard Meddings, who has until recently been one of the best-regarded finance chiefs in the banking sector, further unsettled investors after a profit warning last month.

The Independent

BANK OF ENGLAND KEEPS RATES UNCHANGED AT 0.5 PCT

The Bank of England has kept interest rates on hold at a record low of 0.5 percent. The Bank pledged last year not to consider a rise until the unemployment rate falls to 7 percent as part of efforts to support the UK’s recovery.

RSA BLAMES 200 MLN STG HOLE ON ‘INAPPROPRIATE COLLABORATION’ BETWEEN BOSSES IN IRISH BUSINESS

Insurer RSA has indicated that there would be more pain ahead on the dividend as it looks to shore up its finances after “completely unacceptable” losses in Ireland. A review of the Irish business by accountants PwC and KPMG found that “inappropriate collaboration” between the subsidiary’s top bosses undermined accounting controls, but said the problems were confined to Ireland.

 

Fly On The Wall 7:00 AM Market Snapshot

ANALYST RESEARCH

Upgrades

Abercrombie & Fitch (ANF) upgraded to Buy from Neutral at Janney Capital
Artisan Partners (APAM) upgraded to Buy from Neutral at Goldman
BlackBerry (BBRY) upgraded to Sector Perform from Underperform at RBC Capital
Bristol-Myers (BMY) upgraded to Overweight from Equal Weight at Barclays
Cheniere Energy Partners LP (CQP) upgraded to Buy from Neutral at Citigroup
Con-way (CNW) upgraded to Outperform from Market Perform at Wells Fargo
Hartford Financial (HIG) upgraded to Outperform from Market Perform at Wells Fargo
Incyte (INCY) upgraded to Overweight from Equal Weight at Barclays
Ironwood (IRWD) upgraded to Outperform from Market Perform at BMO Capital
Janus Capital (JNS) upgraded to Neutral from Sell at Goldman
Liberty Property (LRY) upgraded to Buy from Neutral at UBS
Macy’s (M) upgraded to Buy from Neutral at Goldman
Microsoft (MSFT) upgraded to Overweight from Equal Weight at Barclays
Qlik Technologies (QLIK) upgraded to Buy from Hold at Jefferies
SunTrust (STI) upgraded to Conviction Buy from Buy at Goldman
Target (TGT) upgraded to Buy from Neutral at Goldman
Triangle Capital (TCAP) upgraded to Outperform from Market Perform at Keefe Bruyette
Ventas (VTR) upgraded to Buy from Neutral at UBS
Washington Federal (WAFD) upgraded to Buy from Neutral at Sterne Agee
William Lyon Homes (WLH) upgraded to Overweight from Neutral at JPMorgan

Downgrades

Allegheny Technologies (ATI) downgraded to Hold from Buy at Deutsche Bank
Ambarella (AMBA) downgraded to Hold from Buy at Deutsche Bank
Applied Micro Circuits (AMCC) downgraded to Neutral from Buy at Sterne Agee
BP (BP) downgraded to Neutral from Outperform at Exane BNP Paribas
Barracuda Networks (CUDA) downgraded to Neutral from Buy at BofA/Merrill
BioMarin (BMRN) downgraded to Equal Weight from Overweight at Barclays
BlackRock (BLK) downgraded to Neutral from Buy at Goldman
Camden Property (CPT) downgraded to Neutral from Buy at UBS
Cheniere Energy (LNG) downgraded to Neutral from Buy at Citigroup
Eli Lilly (LLY) downgraded to Underweight from Equal Weight at Barclays
Fifth & Pacific (FNP) downgraded to Hold from Buy at Brean Capital
Johnson & Johnson (JNJ) downgraded to Equal Weight from Overweight at Barclays
KiOR (KIOR) downgraded to Market Perform from Outperform at Raymond James
Kimco Realty (KIM) downgraded to Sell from Neutral at UBS
Las Vegas Sands (LVS) downgraded to Market Perform from Outperform at FBR Capital
Maxim Integrated (MXIM) downgraded to Perform from Outperform at Oppenheimer
Medical Properties Trust (MPW) downgraded to Neutral from Buy at Goldman
Omega Healthcare (OHI) downgraded to Sell from Neutral at UBS
Pacific Sunwear (PSUN) downgraded to Neutral from Buy at Janney Capital
Paychex (PAYX) downgraded to Underperform from Sector Perform at RBC Capital
Pfizer (PFE) downgraded to Market Perform from Outperform at Cowen
PulteGroup (PHM) downgraded to Underweight from Neutral at JPMorgan
Sequenom (SQNM) downgraded to Neutral from Overweight at Piper Jaffray
Siemens (SI) downgraded to Neutral from Buy at BofA/Merrill
Splunk (SPLK) downgraded to Equal Weight from Overweight at Barclays
UDR, Inc. (UDR) downgraded to Neutral from Buy at UBS
Weingarten Realty (WRI) downgraded to Sell from Neutral at UBS
Wisdom Tree (WETF) downgraded to Neutral from Buy at Goldman

Initiations

Andersons (ANDE) initiated with a Hold at Stifel
BioAmber (BIOA) initiated with an Overweight at Barclays
Cheniere Energy Partners (CQH) initiated with a Buy at Citigroup
Corporate Executive Board (CEB) initiated with an Outperform at RBC Capital
Gartner (IT) initiated with a Sector Perform at RBC Capital
Healthcare Services (HCSG) initiated with an Outperform at RBC Capital
IHS Inc. (IHS) initiated with an Outperform at RBC Capital
MEI Pharma (MEIP) initiated with a Buy at Brean Capital
Orexigen (OREX) initiated with a Buy at WallachBeth
Roundy’s (RNDY) initiated with a Hold at Jefferies
Stericycle (SRCL) initiated with a Sector Perform at RBC Capital
The Bancorp (TBBK) initiated with an Outperform at Raymond James
Vale (VALE) initiated with a Hold at Jefferies
West Corp. (WSTC) initiated with an Outperform at RBC Capital

HOT STOCKS

Sears (SHLD) said market value of Sears Canada interest is $670M, seeking strategic alternatives for Sears Auto Center business
Aegerion (AEGR) received DOJ subpoena requesting documents regarding the company’s marketing and sale of Justapid in the U.S.
Alcoa (AA) sees 2014 global aluminum demand growth of 7%
Gartner (IT) said worldwide PC shipments down 6.9% in Q4
Teamsters rejected YRC Worldwide (YRCW) proposal, YRC exploring options
Rolls-Royce (RYCEY) said discussions with Wartsila board are over
PharMerica (PMC) acquired BGS Pharmacy Partners, terms not disclosed
Overstock.com (OSTK) accepting Bitcoin

EARNINGS

Companies that beat consensus earnings expectations last night and today include:
Infosys (INFY), Barracuda Networks (CUDA), Progress Software (PRGS), E2open (EOPN), Helen of Troy (HELE), SYNNEX (SNX), AngioDynamics (ANGO)

Companies that missed consensus earnings expectations include:
Park Electrochemical (PKE), Ceres (CERE), Alcoa (AA), PriceSmart (PSMT)

NEWSPAPERS/WEBSITES

• Banks may have to pay nearly $50B to settle mortgage allegations, NY Times reports
• Skagen: Ignore Wall Street banks, buy emerging markets, Bloomberg reports
• Mercedes closes gap with Audi on compact cars, Bloomberg reports
• U.S. Senator Warren: Yellen will be tougher regulator, Bloomberg reports
• Goldman Sachs (GS) unit denies dumping Singapore client’s stock, Bloomberg reports
• NY AG investigating brokerages to analysts after BlackRock (BLK) deal, Bloomberg reports
• Netflix (NFLX) app to stream 4K on new televisions right away, AP reports
• Video game makers challenged by China pirating, Reuters reports
• EU clears Publicis (PUBGY), Omnicom $35B merger, Reuters reports
• Ford’s (F) Mulally ended flirtation with Microsoft weeks ago, WSJ reports
• Banks make cuts as mortgage refinancing slows, WSJ reports
• Apple (AAPL)s’s new, lucrative customer base: companies, WSJ reports
• Low-end retailers struggle as customers remain pressured, WSJ reports
• DOJ plans additional action against banks over laundering, WSJ reports

SYNDICATE

Acceleron Pharma (XLRN) files to sell $100M of common stock
Biota Pharmaceuticals (BOTA) files automatic common stock shelf
GlycoMimetics (GLYC) 7M share IPO priced at $8.00
Meritage Homes (MTH) files to sell 2.2M shares of common stock
NCI Building Systems (NCS) 8.5M share Secondary priced at $18.00
Retrophin (RTRX) 7M share Secondary priced at $8.00
WidePoint (WYY) files mixed securities shelf for up to $25M

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/TFdwJiKkD04/story01.htm Tyler Durden

In the past two weeks there was significant speculation that the Fukushima catastrophe was once again rapidly escalating after plumes of mysterious smoke were detected above the destroyed Reactor 3 – the one with a mixed MOX and uranium fuel core. RT described it as follows:

Fresh plumes of most probably radioactive steam have been detected rising from the reactor 3 building at the crippled Fukushima nuclear plant, said the facility’s operator company.

 

The steam has been detected by surveillance cameras and appeared to be coming from the fifth floor of the mostly-destroyed building housing crippled reactor 3, according to Tokyo Electric Power Co (TEPCO), the plant’s operator.

 

The steam was first spotted on December 19 for a short period of time, then again on December 24, 25, 27, according to a report TEPCO published on its website.

 

The company, responsible for the cleanup of the worst nuclear disaster since Chernobyl, has not explained the source of the steam or the reason it is rising from the reactor building. High levels of radiation have complicated entry into the building and further inspection of the situation.

Naturally, fears arose that more uncontrolled meltdowns were in process at the exploded reactor.

This morning, probably in order to assuage fears that it has lost control more than usual, TEPCO released the following statement “Regarding Certain Overseas Reports on Fukushima Daiichi Nuclear Power Station.” TEPCO’s soothing words – “We found no abnormalities in the measured values (indicating the temperature and condition of the Reactor Building), or in the value of the monitoring post (monitoring the amount of radiation), even when the steam-like gas was being generated, therefore we are certain that there has been no influence on the outside. In addition, we measured the amount of radiation at the point from which steam-like gas was generated, and found that its amount was almost the same as for the other neighboring points.”

And as everyone knows by now, TEPCO would never lie. Finally, the question of why TEPCO would issue a press release to respond to “media rumors” is an open one.

Full statement from the semi-nationalized company:

Regarding Certain Overseas Reports on Fukushima Daiichi Nuclear Power Station

Some overseas press outlets are reporting that steam is being generated from Unit 3 at Fukushima Daiichi NPS and its condition is dangerous, releasing radioactive material, and that there were two underground nuclear explosions at the site. However, such information is incorrect, and we have found no change in the status of the plant.

Steam generation on the operating floor at Unit 3, and the detection of highly concentrated radioactive material at groundwater observation holes etc., have been pointed out as the basis for the overseas reports. We respond to these as follows.

– Steam-like gas generated on the operating floor at Unit 3 in Fukushima Daiichi NPS

Since July 2013, steam-like gas has been intermittently observed on the operating floor at Unit 3. The steam-like gas is estimated to emerge via the following sequence.
1) Accumulated hygroscopic moisture, such as rainwater, exists below the shield plug (a lid made of concrete).
2) The hygroscopic moisture is heated by the heat radiated from the top of the Primary Containment Vessel (PCV).
3) The heated hygroscopic moisture is released onto the operating floor via the gap of the shield plug.
4) The released moisture is cooled down by the cool atmosphere, giving it the appearance of a steam-like gas.

We found no abnormalities in the measured values (indicating the temperature and condition of the Reactor Building), or in the value of the monitoring post (monitoring the amount of radiation), even when the steam-like gas was being generated, therefore we are certain that there has been no influence on the outside.
In addition, we measured the amount of radiation at the point from which steam-like gas was generated, and found that its amount was almost the same as for the other neighboring points.

 

– Highly-concentrated radioactive material found at the observation holes

We have been monitoring the groundwater sampled at the observation holes established to investigate the contamination status of groundwater, for the purpose of investigating the effects of the leak of contaminated water from the contaminated water storage tanks in August 2013. At the end of 2013, the measurement value for Tritium, one of the radioactive materials in the water sampled at the observation hole near the tank that suffered leakage, increased from 34,000Bq/L (on December 28) to 450,000Bq/L (on January 1). This increase in the value could be attributed to 1) the contaminated water that previously leaked from the tank soaking into the nearby ground, or 2) the effects of the water pumping^* (^*we have been pumping up the contaminated groundwater at the nearby observation holes, however the amount being pumped up was temporarily decreased at the end of 2013). The value decreased to 17,000Bq/L on January 8. Highly concentrated tritium (almost equivalent concentration level) was found in this observation hole in the past, and the highest concentrated tritium 790,000Bq/L was also found here on October 17, 2013.

– Earthquake on December 31, 2013

Some overseas press outlets reported that underground nuclear explosions caused several quakes with magnitudes of 5.1 and 3.6.
According to the Japanese Meteorological Agency, 13 earthquakes (with a maximum magnitude of 5.4) occurred and originated in the north part of Ibaraki Prefecture on December 31 2013. None of these earthquakes was caused by Fukushima Daiichi NPS. We also found no accidents or trouble etc. in Fukushima Daiichi NPS.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ws-__um2Cf0/story01.htm Tyler Durden

In the past two weeks there was significant speculation that the Fukushima catastrophe was once again rapidly escalating after plumes of mysterious smoke were detected above the destroyed Reactor 3 – the one with a mixed MOX and uranium fuel core. RT described it as follows:

Fresh plumes of most probably radioactive steam have been detected rising from the reactor 3 building at the crippled Fukushima nuclear plant, said the facility’s operator company.

 

The steam has been detected by surveillance cameras and appeared to be coming from the fifth floor of the mostly-destroyed building housing crippled reactor 3, according to Tokyo Electric Power Co (TEPCO), the plant’s operator.

 

The steam was first spotted on December 19 for a short period of time, then again on December 24, 25, 27, according to a report TEPCO published on its website.

 

The company, responsible for the cleanup of the worst nuclear disaster since Chernobyl, has not explained the source of the steam or the reason it is rising from the reactor building. High levels of radiation have complicated entry into the building and further inspection of the situation.

Naturally, fears arose that more uncontrolled meltdowns were in process at the exploded reactor.

This morning, probably in order to assuage fears that it has lost control more than usual, TEPCO released the following statement “Regarding Certain Overseas Reports on Fukushima Daiichi Nuclear Power Station.” TEPCO’s soothing words – “We found no abnormalities in the measured values (indicating the temperature and condition of the Reactor Building), or in the value of the monitoring post (monitoring the amount of radiation), even when the steam-like gas was being generated, therefore we are certain that there has been no influence on the outside. In addition, we measured the amount of radiation at the point from which steam-like gas was generated, and found that its amount was almost the same as for the other neighboring points.”

And as everyone knows by now, TEPCO would never lie. Finally, the question of why TEPCO would issue a press release to respond to “media rumors” is an open one.

Full statement from the semi-nationalized company:

Regarding Certain Overseas Reports on Fukushima Daiichi Nuclear Power Station

Some overseas press outlets are reporting that steam is being generated from Unit 3 at Fukushima Daiichi NPS and its condition is dangerous, releasing radioactive material, and that there were two underground nuclear explosions at the site. However, such information is incorrect, and we have found no change in the status of the plant.

Steam generation on the operating floor at Unit 3, and the detection of highly concentrated radioactive material at groundwater observation holes etc., have been pointed out as the basis for the overseas reports. We respond to these as follows.

– Steam-like gas generated on the operating floor at Unit 3 in Fukushima Daiichi NPS

Since July 2013, steam-like gas has been intermittently observed on the operating floor at Unit 3. The steam-like gas is estimated to emerge via the following sequence.
1) Accumulated hygroscopic moisture, such as rainwater, exists below the shield plug (a lid made of concrete).
2) The hygroscopic moisture is heated by the heat radiated from the top of the Primary Containment Vessel (PCV).
3) The heated hygroscopic moisture is released onto the operating floor via the gap of the shield plug.
4) The released moisture is cooled down by the cool atmosphere, giving it the appearance of a steam-like gas.

We found no abnormalities in the measured values (indicating the temperature and condition of the Reactor Building), or in the value of the monitoring post (monitoring the amount of radiation), even when the steam-like gas was being generated, therefore we are certain that there has been no influence on the outside.
In addition, we measured the amount of radiation at the point from which steam-like gas was generated, and found that its amount was almost the same as for the other neighboring points.

 

– Highly-concentrated radioactive material found at the observation holes

We have been monitoring the groundwater sampled at the observation holes established to investigate the contamination status of groundwater, for the purpose of investigating the effects of the leak of contaminated water from the contaminated water storage tanks in August 2013. At the end of 2013, the measurement value for Tritium, one of the radioactive materials in the water sampled at the observation hole near the tank that suffered leakage, increased from 34,000Bq/L (on December 28) to 450,000Bq/L (on January 1). This increase in the value could be attributed to 1) the contaminated water that previously leaked from the tank soaking into the nearby ground, or 2) the effects of the water pumping^* (^*we have been pumping up the contaminated groundwater at the nearby observation holes, however the amount being pumped up was temporarily decreased at the end of 2013). The value decreased to 17,000Bq/L on January 8. Highly concentrated tritium (almost equivalent concentration level) was found in this observation hole in the past, and the highest concentrated tritium 790,000Bq/L was also found here on October 17, 2013.

– Earthquake on December 31, 2013

Some overseas press outlets reported that underground nuclear explosions caused several quakes with magnitudes of 5.1 and 3.6.
According to the Japanese Meteorological Agency, 13 earthquakes (with a maximum magnitude of 5.4) occurred and originated in the north part of Ibaraki Prefecture on December 31 2013. None of these earthquakes was caused by Fukushima Daiichi NPS. We also found no accidents or trouble etc. in Fukushima Daiichi NPS.

via Zero Hedge http://feedproxy.google.com/~r/zerohedge/feed/~3/ws-__um2Cf0/story01.htm Tyler Durden