Our economy has become a tragedy mired within a farce, so sez the befuddled New York Times:

Gas Prices Rise, and Economists Seek Tipping Point

CHRISTINE HAUSER

Gas prices are approaching record highs, but so far most Americans do not appear to be drastically cutting back their driving or even their spending as they did in 2008.

The question, economists agreed, is what happens if prices continue to go up and remain high.

Prices for a gallon of regular unleaded gas are topping $4 at more service stations nationwide, revisiting the bleak territory of three years ago, when the average price for a gallon of regular gas reached a peak of $4.11 on July 17, 2008, according to the Oil Price Information Service.

The survey of about 100,000 stations showed gas prices were now averaging $3.77 a gallon nationwide. The average is already more than $4 in California, Hawaii and Alaska, and analysts at the oil information service said drivers were paying more than $4 at some stations in at least three other states — Illinois, Connecticut and New York.

The government’s Energy Information Administration on Monday put the average price for a gallon of regular gasoline slightly higher at $3.79, up 10.7 cents from the previous week and nearly a dollar higher than the same time last year.

How precious! It’s hard to know where to begin with this article which implies that driving for its own sake along with all the other pointlessnesses of our consumer economy is an unabashed good thing; that the high enough prices are a tragic impediment to ‘growth’ due to their effects on ‘discretionary spending’. Perhaps the first thing to do is for all the analysts to get on the ‘same page’:

S&P 500 earnings are poised to surpass the 2007 peak of $90 a share in the third quarter after surging from $7 in March 2009, the quickest recovery since at least 1900, according to data from S&P and Yale University’s Robert Shiller compiled by Bloomberg. The gap between projected 12-month profits and average earnings over the last 10 years is set to widen the most since 1951, the data show.

PNC Wealth Management, Federated Investors Inc. and ING Investment Management, which together oversee about $1 trillion, say consumer spending will sustain the recovery after government stimulus helped lift profits from the lowest level since the Great Depression. While earnings will slow in the second half, stock purchases by investors who missed the S&P 500’s advance will fuel gains, according to Leuthold Group LLC.

The analysts over @ the Times are busy telling all of us that there is nothing to worry about energy supplies. The price sez something else. What’s up, Times?

We are all sinners in the hands of an angry discretionary spender! Economists wring their hands and hope that ‘this, too … will pass’, opining that prices are in ‘a sweet spot’. What matters above all else is the ongoing adherence to a set of business practices that long- ago outlived their usefulness but are still good for a few advertising dollars. The USA- waste- based economy inches toward the end of the energy supply gang plank. Here’s James Howard Kunstler speaking about the President’s non- leadership and the media attending:

… we are ignoring the most obvious intelligent responses to this (our energy) predicament, namely, shifting our focus to walkable communities and public transit, especially rebuilding the American passenger railroad system – without which, I assure you, we will be most regrettably screwed ten years from now. Mr. Obama had one throwaway line in his speech about public transit and nothing whatever about walkable neighborhoods.

The reason for this obvious idiocy is that it’s all about the cars. That’s all we care about in the USA, the cars. We can’t get over the cars. We can’t talk about anything except how we’ll find magical new ways to run all the cars. This is a very tragic sort of stupidity and if we don’t change our thinking about it, from the highest level on down, history is going to treat us very cruelly.

A special shout-out here to The New York Times, whose abysmal reporting on these issues, once again, is due to their reliance on a single source: the IHS-CERA group, Cambridge Energy Research Associates, the paid public relations auxiliary of the oil industry, led by that mendacious sack of shit Daniel Yergin, whore-in-chief.

How absurd. Our ‘Night of the Living Undead’ economy is ‘surviving’ the credit- collapse of the Eurozone, the immolation of Japan in a sea of Cesium radiation, the triumph of villainy on Wall Street and in Washington over the Constitution, the rise of more petroleum demand in the Middle East and Northern Africa, hyperinflation within China and other developing nations … what harm is there to four dollar gas?

It’s all a shell game. Everyone loses! Nobody is willing to face reality that the money party is finished, that financialism is also finished, that money making money is kaput, that character cannot be bought in a store.

America desperately pines for the return of the ‘Discretionary Spending Fairy’ who along with Utopia is sure to come any second now. More money to afford more gas is right around the corner. Unfortunately, the analysis is faulty not the price which is probably too low in real terms.

America uses its archipelago of military bases, its propensity toward endless warz, its only manufactured good, the ‘dollar’ as bludgeons to separate resources from their owners. These options long ago reached the point of diminishing returns.

The ‘proper’ price for crude is where the market clears at any given time. Right now, that is approximately $122 per barrel. That there is a difference or ‘spread’ of ten dollars between the USA West Texas Intermediate market and the Brent standard used by the rest of the world, suggests the market- clearing limit has not been reached.

It is possible that the 2008 high of $147 will be retested. Increasing high prices over time is suggestive of an ominous trend of continually higher prices. This is not inflation per- se but rather a reallocation of increasingly greater economic returns toward fuel acquisition away from other uses. It would be the death knell of energy productivity. Without that, the competitive advantage of industrial production disappears.

This might be happening @ the lower price levels. The possibility exists that the $122 price is so high that the fuel- using ‘system’ is bankrupted by it.

$122 crude is about five times higher than the system that uses it is designed to afford. Crude is a form of capital: our moronic economy burns through valuable capital as an operating expense. Capital vanishes: all forms of it become more expensive as a consequence.

Finance shenanigans have permitted an increase in credit which in turn allows fuel users to bid fuel prices higher increasing the demand for more credit in a vicious cycle. The outcome of the higher bid price for fuel is a further worldwide credit demand which makes credit more expensive in turn. No wonder the Fed is ‘worried’, the outcome is higher and increasing interest rates which are jumping all over the world.

The effect of higher credit costs is the economy’s bankruptcy which cannot endure them. Any base rate higher than near- zero puts finance underwater and the deflationary deleveraging commences.

It is this increased demand across credit markets which is fatal, not the pump price. The same capital input/credit repricing phenomenon took place during the runup to the price spike in 2008.

There is nothing to this price increase that can be ‘fixed’: inputs long- neglected are being repriced to levels that more accurately represent their worth. This calls the system that makes use of the inputs into question. Our crisis exists where the high input costs make the USA- style waste- based economy unprofitable. Reality is papered over with soothing bromides from the establishment which hopes magic takes place and that nobody will notice in the meantime.

Magic and ‘hope’ are what pass for policy in these benighted times: our economy is like a dinosaur with its head cut off, it’s too stupid to know its dead.

Meanwhile, our analytic brethren have problems seeing the deflationary forest for the inflationary trees. The inflationistas insist any day now, the dollar is going to vanish into history’s rathole, leaving behind what, exactly?

How will peeps buy gas without dollars, bro?

Keep in mind that Fed Chairman Bernanke must continue to pump a trillion or so dollars into the economy every single year, without end. Without this infusion, the deleveraging commences, instantly and relentlessly. At the same time, cash infusions like injections of morphine lose their effect over time. What output a trillion dollars in Fed reserves can buy today requires $2 trillion next, then four trillion then eight. Adding the trillion$ has also reached the point of diminishing returns. Where do we go from here? This is ‘efficacy of credit’ is another gang plank that our waste- based economy has reached the end of.

Meanwhile, the Japanese authorities have decided that the nuclear debacle @ Fukushima is worthy of notice, raising the so- called ‘crisis level’ to Seven’:

Japan ups Fukushima nuke crisis severity to 7, same as Chernobyl

TOKYO, April 12, Kyodo

Japan raised the severity level of the ongoing emergency at the crippled Fukushima Daiichi nuclear plant on Tuesday from level 5 to the maximum 7 on an international scale, recognizing that the tsunami-caused accident matches the world’s worst nuclear catastrophe in 1986 at Chernobyl.

The government’s Nuclear and Industrial Safety Agency upgraded its provisional evaluation based on an estimate that radioactive materials far exceeding the criteria for level 7 have so far been released into the external environment, but added the release from the Fukushima plant is about 10 percent of that from the former Soviet nuclear plant.

The nuclear regulatory agency under the industry ministry and the Nuclear Safety Commission of Japan, a government panel, said that between 370,000 and 630,000 terabecquerels of radioactive materials have been emitted into the air from the Nos. 1 to 3 reactors of the plant.

Level 7 accidents on the International Nuclear Event Scale correspond to the release into the external environment of radioactive materials equal to more than tens of thousands of terabecquerels of radioactive iodine 131. One terabecquerel equals 1 trillion becquerels.

Chief Cabinet Secretary Yukio Edano said the government is “sorry to Fukushima residents, the Japanese people and the international community” over the nuclear disaster caused by the massive March 11 quake and tsunami.

The plant operator Tokyo Electric Power Co. also offered an apology to the public for being still unable to stop the radiation leakage, pointing to the possibility that the total emission of radioactive substances could eventually surpass that of the Chernobyl incident.

A considerable amount of the radioactive materials emitted is believed to originate from the plant’s No. 2 reactor, whose containment vessel’s pressure suppression chamber was damaged by an explosion on March 15, said Kenkichi Hirose, a Cabinet Office adviser serving for the safety commission, at a news conference.

”Our estimates suggest the amount of radioactive materials released into the air sharply rose on March 15 and 16 after abnormalities were detected at the No. 2 reactor,” Hirose said. ”The cumulative amount of leaked radiation has been gradually on the rise, but we believe the current emission level is significantly low.”

The safety commission said it estimates the release has come down to under 1 terabecquerel per hour.

How reassuring is the Nuclear Fallout Fairy! ‘Seven’ is just a number, right? Here is the discussion about Reactor 2 from last week:

The operating pressure for this kind of reactor when making steam and electricity is approximately 1000 psi. Ordinarily, water and steam are circulated around the core with the reactor ‘throttled’ or ‘accelerated’ by inserting or withdrawing control rods along with increasing/decreasing the flow of feedwater. Excess steam is vented into the suppression pool where it is condensed. The power cycle has steam flowing from the fuel elements through the power turbine to a condenser which is the heat exchanger for the reactor. Condensate is pumped back into the core. Work is a flow of heat from the fuel toward the ocean by way of the turbine and condenser.

Important feedwater pumps along with control rod drive mechanisms are located within the pressure vessel under the core. This core is the metal can that contains the fuel- and control rods. It sits high inside the pressure vessel dry well which is within the throat of the pressure vessel. The core is where the boiling takes place. Vents equalize the pressure so that it is the same within the core as well as within the rest of pressure vessel.

The obvious weak point of the design is where the pressure balance tubes (parts ‘e’ in Figure 1) connect to the suppression pool. There are eight of these radiating like spokes from the central flask of the pressure vessel. Where the tubes join the suppression pool are elaborate welded and mechanical joints that cannot accept stresses that more regular shapes such as the sphere and torus can.

Other weak areas are where tubular sections of the suppression pool are welded together, where pipes and valves are attached to the suppression pool and where conduits and ducts such as control rod hydraulic lines penetrate the pressure vessel.

Most of the non- welded pipe joints are conventional flange fittings with gaskets. The amount of pipe and fittings within the containment is significant. It is likely that much of the piping in all the Fukushima reactors was severely damaged by the earthquake, before cooling problems emerged.

It is likely that all three reactor explosions originated in the suppression pools and specifically in areas of the pools that were unable to contain an instant increase in steam pressure. Steam pressure would flash when fuel melted and flowed through core fittings and pipes into the bottom of the pressure vessel and from there into the suppression pools.

Since all the reactors are of more or less identical design, shared identical vulnerabilities and were subject to the same cooling abuses it is likely that all met the same explosive fate in the same place, within the suppression pool area.

Severe fuel meltdowns caused powerful steam explosions that damaged the suppression pools and compromised the containments. The simple explanation for the flows of radioactive water and isotopes in the plant area seen today is the multiple explosive failures of reactor containments.

With all the fuel @ the plant complex open to the environment, radioactive isotopes continue to escape. Meanwhile, the operator continues to employ more vaporware such as having minimum- wage contract laborers attempting to ‘turn on’ the ‘reactor cooling systems’ which are becoming ever- more radioactive piles of useless junk. Here’s what the NRC said about Reactor 1:

Core Status:

Core is contained in the reactor pressure vessel, reactor water level is unknown.
The volume of seawater injected to cool the core has left enough salt to fill the
lower plenum to the core plate.(GEH,INPO,Bettis,KAPL).

It’s assumed the salt clogs the bottom of the pressure vessel. Of course, nobody knows where the reactor fuel is. It is possible that all of it in all the different reactors is lurking @ the bottoms of the various containments, itching for trouble …

Turning on the cooling systems is the ‘Panacea of the Moment’ to be replaced in good time by the next Panacea of the Moment: the abandonment of a large part of Japan. Sez Estimable Ellen Canterow @ Tom Dispatch as she lances President Obama’s non- energy policy:

Ongoing events. It was a curious and entirely disingenuous way to describe the ever-worsening disaster at Fukushima when, just the day before, Japan’s prime minister, Naoto Kan, told his Parliament, “The earthquake, tsunami and the ensuing nuclear accident may be Japan’s largest-ever crisis.” He said this, it’s worth reminding ourselves, about a country that, within living memory, saw more than 60 of its cities reduced to ashes through systematic firebombing and two metropolises obliterated by atomic bombs, losing hundreds of thousands of its citizens in one of the most devastating wars of a conflict-filled century. In fact, the very morning that Obama gave his speech, the New York Times quoted Tetsuo Iguchi, a professor in the department of quantum engineering at Nagoya University, about a subject that only a few outside observers had dared to previously broach: the prospect of a swath of Japan becoming an irradiated dead zone. “The worst-case scenario is that a meltdown makes the plant’s site a permanent grave,” Iguchi said.

At least the Soviets had the sense to corral the manpower needed to put the nuclear demon into some kind of bottle. It appears that TEPCO’s management is waiting for the Nuclear Containment Fairy or Optimus Prime and the rest of the Transformers to show up and do the heavy lifting for them.