Bottom just fell out of japan?

[smo001]

http://www.newyorker.com/talk/financial/2011/03/28/110328ta_talk_surowiecki

[rijk]

the average (1965-2011) japanese PE/10 seems to be in the 30-40 range, compared to an average (1880-2011) US PE/10 of around 16

 

the japanes PE/10 hardly ever trades below 20, it is trading around 18 (16 + 10%?) right now....

 

what would justify a valuation on average at least twice as high for the japanese market compared with the US market??? it's definitely not the returns on capital!!!!

 

 

http://blog.iii.co.uk/buying-japan/

 

http://www.multpl.com/

[S2S]

Japanese government's first forecast of the disaster cost: ¥16 trillion ($198 billion) to ¥25 trillion ($309 billion) over the next 3 years

http://si.wsj.net/public/resources/images/WO-AE935_JECON_NS_20110323181804.jpg

http://online.wsj.com/article/SB10001424052748704050204576217852022676740.html

 

http://www.newyorker.com/talk/financial/2011/03/28/110328ta_talk_surowiecki

 

Great article, thanks!

[beerbaron]

Supply problems from Japan are starting to be felt. Yesterday we received an E-Mail from our IC producer that they could not make our custom IC anymore before of shortage of Wafer. It seems Samsung's wafer raw material fab has no electricity and it has no idea when it will be back into operation. Apparently 70% of the raw materials for IC come from Japan.

 

There might be a smart way to play this tough... I'm just not smart enough.

 

BeerBaron

[hyten1]

beerborn agree, i am looking for that smart way, haven't found it yet.

 

but i have talk to some friends in japn, things don't look good there. then again these are just few individuals

[Guest broxburnboy]

Rational commentary on Japan from Jim Sinclair  (jsmineset.com)"

 

"Japan: Opportunity Follows Radiation Panic and Supply Chain Problems

 

Japan has suffered many devastating earthquakes and tidal waves in its history.  According to experts, however, previous known earthquakes appear to have been small fry — less than 1/4 the magnitude — in comparison to the March 11th event.  They say it was the largest quake to occur in 1,200 years along the Pacific tectonic plate.  The initial shock alone was about 100 times stronger than the quake that hit Haiti last year.  We are saddened by the scope of the tragedy, suffering, and great loss of life.

 

The epicenter under the ocean floor was located 110 miles away from the Fukushima Daiichi nuclear power plant on Japan’s northwestern coast.  Damage to the facility has captured media and world attention, and in the process stoked a good deal of imagination, fear, and panic.

 

Japan has over fifty other nuclear reactors, and the other plants in affected areas switched into shutdown mode during the quake, just as they were designed to do. We have spoken to clients and friends who are nuclear energy experts and all of them state that this is not a Chernobyl-type of disaster and the probability of airborne radiation seriously contaminating other parts of the world is remote. 

 

We have spoken to clients and friends who are nuclear energy experts and all of them state that this is not a Chernobyl-type of disaster and the probability of airborne radiation seriously contaminating other parts of the world is remote.

 

Japan has virtually no natural energy resources.  It must continue to rely on nuclear plants to produce electricity.  The Japanese have always been able to recover and regain strength, bolstered by a national industriousness and engineering excellence.  The challenges this time are huge, but if electric services can be quickly restored to the country as whole we expect to see solid economic recovery from the disaster.

 

Thus, economically we do not believe that the disaster’s dislocating effect on world trade is nearly as serious as pessimists contend.  We strongly believe that Japan represents a good long-term buy at current levels, and maintain our existing buy recommendation on Japan."

 

Cheers

[Guest broxburnboy]

As an aside, I recently went through a compulsory full body scan as part of the "security" procedures at the Phoenix airport. The machine uses X-rays... I believe that you get a great deal more harmful radiation through this invasion of privacy than we could ever get from the kind of reactor disaster in Japan.

Considering that there are about 35,000 commercial take offs/landings in the US every day (averaging 100? passenger scans).. what is the total daily bombardment count? What is the risk to the average passenger of contacting induced cancer or DNA damage?

 

Anyone know the numbers and/or comparatives?

 

Cheers

[tengen]

http://www.ritholtz.com/blog/wp-content/uploads/2011/03/radiation.png

[Uccmal]

I would say I used to be pro nuke.  I would say now that I am an educated anti-nuke.  I agree with Partner24 in his assessment that we will look back one day and wonder what we were thinking. 

 

Nuclear Fission is a great source of power, a source that keeps on giving.  Every reactor on Earth has swimming pools of spent fuel rods.  Call it long term job security for the lucky few.  Unless we stumble upon an effective way to break down or further degrade this product, every Nuclear Reactor on Earth is going to have to maintain its present rate of safety for the foreseaable human future.  This means protecting the public from these spent fuel rods and protecting the fuel rods from those who need fissionable material for other purposes.  I am not thinking that anyone has worked up a long term risk or cost analysis of this proposition. 

 

With each passing year the probability of an accident with spent fuel, or aging reactors, or partially decommissioned reactors will approach 1, or 100%, if you like.  In addition, the probability of a 'rogue' state obtaining this fuel for usage as a dirty bomb, or an outright nuke will increase toward 100%.  I am guessing that the costs of maintaining all of this will eventually run into the Trillions of dollars.  Alot of other 'cleaner' power could be developed for those sums of money.

[Guest broxburnboy]

Thanks to Tengen for the informative post.

 

One small matter that is rarely mentioned when discussing past nuclear accidents is the global military use of nuclear power in submarines, aircraft carriers etc. We have had several publicized major accidents involving the sinking of submarines and "broken arrow" nuclear bombs go missing. I wonder how many go unreported.. it reminds me of the gallows humour of the former Soviet Union submariners who claimed they recognized their comrades in the dark because of their glow....

[zarley]

I would say I used to be pro nuke.  I would say now that I am an educated anti-nuke.  I agree with Partner24 in his assessment that we will look back one day and wonder what we were thinking. 

 

Nuclear Fission is a great source of power, a source that keeps on giving.  Every reactor on Earth has swimming pools of spent fuel rods.  Call it long term job security for the lucky few.  Unless we stumble upon an effective way to break down or further degrade this product, every Nuclear Reactor on Earth is going to have to maintain its present rate of safety for the foreseaable human future.  This means protecting the public from these spent fuel rods and protecting the fuel rods from those who need fissionable material for other purposes.  I am not thinking that anyone has worked up a long term risk or cost analysis of this proposition. 

 

With each passing year the probability of an accident with spent fuel, or aging reactors, or partially decommissioned reactors will approach 1, or 100%, if you like.  In addition, the probability of a 'rogue' state obtaining this fuel for usage as a dirty bomb, or an outright nuke will increase toward 100%.  I am guessing that the costs of maintaining all of this will eventually run into the Trillions of dollars.  Alot of other 'cleaner' power could be developed for those sums of money.

 

I tend to lean this way as well, after watching the events in Japan.  Having no long-term solution for storing spent fuel/waste is a real problem.  And, as you note it will need careful watching over hundreds (thousands?) of years.  Even low probability events become something like a certainty over a long enough time period.  Punting that responsibility to future generations is no small thing.

 

With that said, some of what I've read about Traveling Wave Reactors (http://en.wikipedia.org/wiki/Traveling_wave_reactor) is very interesting.  In theory, these sorts of reactors can use spent fuel from traditional reactors as fuel, and possibly generate something like a fueling feedback loop that is very waste efficient (I am not a nuclear scientist; I do not know how feasible something like this is in practice).  At this point none have been built, but it seems like something world governments should probably put some money into for real-world testing.  I'd bet for the cost of dealing with Fukushima you could do a lot of testing for new reactor technology.

[JEast]

On second thought ...

Just a little more education for those that are interested.

 

Americans living near coal-fired power plants are exposed to higher radiation doses than those living near nuclear power plants that meet government regulations. This ironic situation remains true today and is addressed in this article.

 

http://www.ornl.gov/info/ornlreview/rev26-34/text/colmain.html

 

 

In one of the toughest coal regulatory areas on the plant, what does this say for the folks in non-regulated areas?

 

 

Cheers

JEast

 

 

 

[Myth465]

I dont like Nuclear (too many unanswered questions) but realize that everything sucks in this situation.

 

Nuclear (expensive without a price of carbon using full cost accounting, also not financially viable without Government backing)

 

Coal (expensive with price of carbon using full cost accounting)

Natural Gas (infrastructure issues which will require tons of reinvestment, also fracing problems)

Renewables (expensive will require tons of investment)

 

-------------

 

I would recommend a healthy debate with Americans tell them everything sucks pick your poison and more importantly pay for it (with regard to electric bills, health risk, and black swan risk).

 

-------------

 

If I were God we would sort out this fracing issue and go with natural gas. Use government backed loans for the infrastructure and then highly invest in renewables to make them cheap. Perhaps put a floor on oil to fund all of this and give producers a number to shoot for. $30 oil followed by $150 oil, followed by $40 oil makes it tough to bring something new online.

[Uccmal]

That sounds good God, I mean Myth....

 

Right now I am struggling with the argument that it will take too long to develop and implement alternatives.  The first contolled nuclear pile was in 1942 and the first commercial Nuclear reactor was operational in 1954.  Surely, with enough political will you could simultaneously reduce fossil fuel usage for power and reduce nuclear usage, and increase the amount of available power through a mix of available alternatives. 

 

As for reactors that use spent fuel the Terrawave project looks to be 15 years away - Nuclear Fusion - anyone. 

 

I was reading today about some US companies that are utilitizing solar in the US west.  They provide the funding, clear all the permit hurdles for you, and install the PVs on your roof.  You pay them a monthly fee, forever, for the power at rates comparable to PG&E.  Now I dont see this working very well in Canada or the US north but that is what natural gas is for.

[ericd1]

Sorry I don't agree that renewables suck - the technology isn't available today, but it will be. I expect to see a microbe developed that produces hydrocarbons. That will help solve the transportation issue, maybe even electrical production. Ultimately solar will prevail - the sun provides more than enough energy to power the planet. That will take innovation in conversion and storage. Some modern day Einstein will figure it out.

 

With Dr. Venter and others working on it I believe its possible.

 

http://www.nytimes.com/2009/07/14/business/energy-environment/14fuel.html

 

Take a look at MBLX (on my watch list) They have developed a bio-degradable plastic that's starting to sell. They have a plant in a JV with AMD. They are also working other 'fuel seeds' (In Canada and Texas).

[Hoodlum]

I think the market is currently underestimating the impact on the supply chain.  The ongoing blackouts from the nuclear power issues is hindering Japan's ability to get back up and running.  This is just one of many industries that are impacted.

 

http://www.forbes.com/feeds/ap/2011/03/27/general-specialized-consumer-services-japan-earthquake-car-crisis_8377549.html

 

In the weeks ahead, car buyers will have difficulty finding the model they want in certain colors, thousands of auto plant workers will likely be told to stay home, and companies such as Toyota, Honda and others will lose billions of dollars in revenue. More than two weeks since the natural disaster, inventories of crucial car supplies - from computer chips to paint pigments - are dwindling fast as Japanese factories that make them struggle to restart.

 

Because parts and supplies are shipped by slow-moving boats, the real drop-off has yet to be felt by factories in the U.S., Europe and Asia. That will come by the middle of April.

 

"This is the biggest impact ever in the history of the automobile industry," says Koji Endo, managing director at Advanced Research Japan in Tokyo.

 

Much of Japan's auto industry - the second largest supplier of cars in the world - remains idle. Few plants were seriously damaged by the quake, but with supplies of water and electricity fleeting, no one can say when factories will crank up. Some auto analysts say it could be as late as this summer.

 

 

[Parsad]

I think both solar and nuclear are the future.  Although not nuclear in the form we know now. 

 

Bill Gates' travelling wave reactors could be a real game changer if they work.  Bigger than anything else, and probably provides the best long-term cost/risk benefit.  Cheers!

 

http://www.forbes.com/2010/03/24/nuclear-power-innovation-technology-ecotech-bill-gates.html

[Guest broxburnboy]

Rick Rule on Japan's Energy Future and investor implications:

 

http://321energy.com/editorials/energyreport/energyreport033011.html

 

A good read.

Cheers

[Hoodlum]

The market seems to be suggesting this won't drag on.  This is just one industry as I know Sony is getting hit hard from this.  Canon is projecting a 27% drop in earnings from the earthquake.  The Nuclear problem has added a significant level of complexity that previous earthquake cleanups have not had to deal with.  At this point know one really know how long this will drag out.

 

http://www.theglobeandmail.com/report-on-business/honda-toyota-extend-north-american-production-cuts/article1977559/

 

The parts shortage caused by the disaster in Japan means Toyota will shut all its Canadian and U.S. assembly plants for five days – with the exception of a Kentucky plant that will close for four days – between April 15 and April 25.

 

That move came after Honda announced, earlier Friday, that the cut in output of about 50 per cent at all its North American plants will be extended through the week of April 18.

 

“We anticipate that additional production adjustments will continue after that date,” Honda added in a statement.

 

Toyota is reopening its Japanese plants and running them at 50 per cent of normal levels for two weeks beginning April 18, but will then close them for a spring holiday and assess the availability of parts before deciding whether and/or when to start them up again.

 

A senior American Honda Motor Co. executive told industry publication Automotive News earlier in the week that the production cuts could last for another 60 to 90 days.

 

[Hoodlum]

Japan will be shutting down 3 more reactors that were not impacted by the earthquake.

 

http://www.theglobeandmail.com/news/world/asia-pacific/japan-urges-three-reactors-be-suspended-over-safety-concerns/article2012877/

 

Mr. Yamada said the walls aimed to protect the pumps from damage from an earthquake and tsunami, and it will take a year or one and a half years to complete the construction.

 

The plant provides power to around 16 million people in central Japan. Faced with a possible power crunch due to the shutdown, the prime minister sought public understanding.

 

“We will experience some power crunch for sure. But we can overcome this with public support and understanding,” Mr. Kan said.

 

 

[zarley]

Story of a small village that built a defensive seawall to protect against tsunami: http://news.yahoo.com/s/ap/20110513/ap_on_re_as/as_japan_village_that_survived

 

FUDAI, Japan – In the rubble of Japan's northeast coast, one small village stands as tall as ever after the tsunami. No homes were swept away. In fact, they barely got wet.

 

Fudai is the village that survived — thanks to a huge wall once deemed a mayor's expensive folly and now vindicated as the community's salvation.

 

The 3,000 residents living between mountains behind a cove owe their lives to a late leader who saw the devastation of an earlier tsunami and made it the priority of his four-decade tenure to defend his people from the next one.

His 51-foot (15.5-meter) floodgate between mountainsides took a dozen years to build and meant spending more than $30 million in today's dollars.

 

This made me think of one of the many Buffettisms -- Predicting rain doesn't matter, building arks does.  $30 million insurance policy against total devastation seems like a pretty good bargain right about now.