No6's Financial Markets Thread

[littledavesab]

Well, it looks like we have a big event happening with the earthquake and tsunami in Japan. Markets in Asia are down, but at times like this they don't matter. Just as markets going up or down on the back of what is happening in Libya and Egypt doesn't really matter, people are dying. It's one of the things that tends to disgust me about financial markets, all of them, stocks, commodities, gold, I don't care what it is, the idea that some people may be ok out of making money on the back of death and destruction shows that as a species we still have a long way to go.

 

I know what you mean. But it is sometimes easy to get caught up in the press inspired hysteria re the markets. Trouble is once you start moralising with the markets its difficult to know where to stop - cigarretes, oil / miners (heavy pollutants) etc. Edit I guess maybe the point is that those in the city might celebrate making their millions by visiting a strip club or blowing a few KK on a lunch. Us mere mortals are unlikely to do that.

 

You also have muggers and thiefs who are equally bad examples of the human species!

[littledavesab]

Then it would be widely reported that the opponents to the Saudi regime are islamic fundamentalists or Al Qaeda inspired and therefore would not be in favour of replacing the current dictatorship with a democracy. The US and the usual allies would then intervene, no doubt with some promise of democratic reform being imposed on the current Saudi dictatorship.

 

Now that would REALLY p1ss O Bin Laden off !!!

 

Interesting that a lot of these demo's seem to be asking for democracy. Rather than just pushing for a subsidy or similar to help with food / oil / transport costs ? I remember the neo con Bush plan / hope (hope is more accurate) was for Iraq to be a democratic example for the middle east to follow. Obviously hasnt gome to plan but do wonder if any of it has rubbed off on the neighbouring crowds. Or maybe its just access to the www and new ideas.

[No6]

I know what you mean. But it is sometimes easy to get caught up in the press inspired hysteria re the markets. Trouble is once you start moralising with the markets its difficult to know where to stop - cigarretes, oil / miners (heavy pollutants) etc. Edit I guess maybe the point is that those in the city might celebrate making their millions by visiting a strip club or blowing a few KK on a lunch. Us mere mortals are unlikely to do that.

 

You also have muggers and thiefs who are equally bad examples of the human species!

 

I suppose we could moralise about many things when it comes to markets, but some have more of an immediacy to them then others, Egypt, Libya and the tsunami disaster.

[No6]

I thought this was quite good from an email recently received.

 

In my former life as a money manager, I found that many investors – often aided and abetted by their advisors – use a blinkered approach to the stock market.

 

They believe a successful strategy starts with a hunch about the economy. Based on this, they make an educated guess about what lies ahead for the stock market. This, in turn, leads to a theory about which stocks to buy. But a theory that's based on a guess that's based on a hunch may not be the best foundation for your investment portfolio.

 

Investors hate uncertainty. And history shows that they will pay brokers, hedge fund managers and investment gurus a lot of money to eliminate it.

 

The problem is they can't. Count yourself a sophisticated investor the day you wake up and say, "Given that no one can tell me with any certainty what the economy or financial markets will do, how should I run my portfolio?" This is the beginning of investment wisdom.

 

When my publisher, Julia Guth, first heard me describe my market-neutral approach more than a decade ago, she referred to it as "the Tao of the Dow." (I think she enjoyed saying this, in part, because Tao is also pronounced "Dow.")

 

I had never considered my approach a Taoist one, but as I learned more about this Eastern philosophy, I was struck by the similarities. Consider, for example, the following verses from China's ancient Tao Te Ching. They could be aimed squarely at economic forecasters, market timers, and metaphysical speculators:

 

The ancient Masters

didn't try to educate the people,

but kindly taught them to not-know.

 

When they think that they know the answers,

people are difficult to guide.

When they know that they don't know,

people can find their own way.

 

Or consider this verse:

 

Not knowing is true knowledge.

Presuming to know is a disease.

First realize that you are sick;

then you can move toward health.

 

Or even more simply:

 

Those who know don't talk.

Those who talk don't know.

 

The venerable Tao Te Ching is not an investment guide, of course. It's a 2,600-year-old collection of 81 brief poems that describe a vision of what our lives would be like if we lived in harmony with the way things are.

 

It's among the most translated books in the world, exceeded only by the Bible and the Bhagavad-Gita. The Tao itself represents a transcendent mystery, something we cannot name or even imagine. Interpreted literally, it is "the way" of the universe, an explanation of life.

 

It contains no moral code, however. In fact, the Tao Te Ching is rarely about taking action. More often, it's about the wisdom of inaction and accepting what you cannot change, be it the state of the economy, the death of a loved one, or the behavior of your adult children.

 

Tradition tells us the author is Lao Tzu, a keeper of the imperial archives in the ancient capital of Luoyang, who lived around 600 B.C. But more likely, he didn't exist at all. Like Homer, Lao Tzu is probably a combination of many ancient sages – and the Tao is a compilation of wisdom that came into being over a great period of time. (The words lao tzu literally mean "old philosopher.")

 

Taoist philosophy challenges you to embrace paradoxical thinking. For example, you may believe an affront requires a forceful response. Lao Tzu encourages you to consider humility instead. A problem needs an effective solution? Consider the benefits of non-action first.

 

The ancient symbol of the Tao shows the two phases of the moon conjoined. This represents the yin and yang of the world: masculine and feminine, darkness and light, weakness and strength, action and inaction.

 

In the West, we tend to think that opposites contradict. The Oriental view is that they compliment each other – and it is only when we change our ingrained ways of thinking that we begin to change our world.

 

Taoist philosophy requires an open mind and considerable reflection to be fully appreciated. It reminds us, for instance, that we may be so busy trying to get rich, change the world or improve ourselves that we miss life's essence. Verse 8 says:

 

Fill your bowl to the brim

and it will spill.

Keep sharpening your knife

and it will blunt.

Chase after money and security

and your heart will never unclench.

Care about people's approval

and you will be their prisoner.

 

Do your work, then step back.

The only path to serenity.

 

Taoism offers an alternative view of abundance, one that values maintaining dignity over acquiring social position, and enjoying free time over acquiring possessions.

 

Culture, society and technology have changed a great deal over the last few thousand years. But the Taoist philosophy remains relevant. For example:

 

Knowing others is intelligence;

knowing yourself is true wisdom.

Mastering others is strength;

mastering yourself is true power.

 

Or consider this timeless nugget:

 

Wise men don't need to prove their point;

Men who need to prove their point aren't wise.

 

Lao Tzu said we should have a nature like water. Water can be forceful, yet it is always the first to yield, moving quickly around obstacles and relentlessly seeking the simplest path. With time and persistence, water will wear away the tallest mountains and transform the landscape.

 

People who are confrontational – who remain dogmatic – never learn this lesson. They're more interested in being right than moving forward. The Tao Te Ching says:

 

People are born gentle and weak;

at their death they are hard and stiff.

All things, including the grass and the trees,

are soft and pliable in life;

dry and brittle in death.

 

Stiffness is thus a companion of death;

flexibility a companion of life.

An army that cannot yield

will be defeated.

A tree that cannot bend

will crack in the wind.

 

The hard and stiff will be broken;

The soft and supple will prevail.

 

One of the classics of Oriental literature, the Tao Te Ching is both simple and profound. And it's easy to follow. The secret is not to complicate it.

 

The Tao encourages you to stop feeding your ego and enjoy the fruits of your labor. It teaches that the experience of inner peace is the true gauge of accomplishment.

 

The Tao Te Ching deals with many of the most basic human experiences: birth, death, loss, gain, dignity in the face of challenge, how to judge the character of a person, when to move forward, when to retreat, how to deal with good fortune or ill fate. There is even sage political advice: Governing a large country is like frying a small fish. You spoil it with too much poking.

 

Despite his wisdom, Lao Tzu expected skepticism. He seemed to know his message would not always be well received:

 

When a superior man hears of the Tao,

he immediately begins to embody it.

When an average man hears of the Tao,

he half believes it, half doubts it.

When a foolish man hears of the Tao,

he laughs out loud.

If he didn't laugh,

it wouldn't be the Tao.

 

Our lives are full of responsibilities and obligations. Technology and the pace of modern life add even more pressure and anxiety. Yet it's possible to gain understanding from the Tao Te Ching, a more than 2,000-year-old discourse on the nature of existence.

 

Taoism teaches that to be truly free we must be able to work with change rather than against it. We should be humble, flexible and detached from most worldly concerns. The art of abundance is often a matter of recognizing, appreciating and celebrating life as it is:

 

If you look to others for fulfillment,

you will never be truly fulfilled.

If your happiness depends on money,

you will never be happy with yourself.

 

Be content with what you have;

rejoice in the way things are.

When you realize there is nothing lacking,

the whole world belongs to you.

 

http://spiritualwealth.com/

 

[jerpy]

Well, it looks like we have a big event happening with the earthquake and tsunami in Japan. Markets in Asia are down, but at times like this they don't matter. Just as markets going up or down on the back of what is happening in Libya and Egypt doesn't really matter, people are dying. It's one of the things that tends to disgust me about financial markets, all of them, stocks, commodities, gold, I don't care what it is, the idea that some people may be ok out of making money on the back of death and destruction shows that as a species we still have a long way to go.

 

Unfortunately the global nature of the world we live in, means investing in simple producing companies that have little political impact in nigh impossible. It's not like you can pick a company and say they produce widgets, make x profit, the share price rises and everyone is happy. More often the market leaders can often be tainted by some aspect, the widget makers labour would no doubt be considered cheap or slave labour for some.

 

My best ethical stance was not to invest in cigarette or weaponary manufacturer's in future.

[No6]

Unfortunately the global nature of the world we live in, means investing in simple producing companies that have little political impact in nigh impossible. It's not like you can pick a company and say they produce widgets, make x profit, the share price rises and everyone is happy. More often the market leaders can often be tainted by some aspect, the widget makers labour would no doubt be considered cheap or slave labour for some.

 

My best ethical stance was not to invest in cigarette or weaponary manufacturer's in future.

I was essentially referring to the immediacy of a disaster (natural or otherwise)and the fact that certain markets may react to this, negative or positive, and that some people will make money off the back of it, or at worse try to promote certain investments on the back of it. There is a wider debate to be had about the ethicacy of markets, more general exploitation and there are no easy answers to these questions. One look at China and India's lack of concern re industrial pollution is a good current example, but there are 100's more.

[No6]

Well, we will soon see if this holds up.

 

Global Stock Rally May Withstand Japan Disaster as Economic Growth Tops 4%

 

Stocks in Japan may extend losses when trading resumes though the worst earthquake on record in the third-biggest economy is unlikely to dent the two-year bull market in global equities.

 

The Nikkei 225 Stock Average will slide about 2 percent when trading begins, futures show. The domestic impact may be limited because lost production from the Tohoku region where the quake struck might not be enough to spur a recession, Bank of America Corp. said. The Bank of Japan pledged to ensure financial stability by providing liquidity.

 

The fastest global economic growth since 2007 and record U.S. profits that helped spur the 95 percent rally in the MSCI All-Country World Index of 45 nations should be intact, investors said. While the quake adds to concerns such as violence in Libya and Europe’s debt crisis, shares may benefit from reduced inflation expectations as damage to oil refineries curbs demand for crude.

 

http://www.bloomberg.com/news/2011-03-13/global-stock-rally-may-withstand-japan-disaster-as-economic-growth-tops-4-.html

 

Japan Plans Spending Package as Quake Slams World's Most Indebted Economy

 

Prime Minister Naoto Kan, battling what he called Japan’s worst crisis since the end of World War II, plans a post-earthquake rebuilding package, a step that may worsen the challenge of curbing the world’s biggest public debt.

 

Policy makers will need to compile a spending bill “over the medium to long-term” to cope with the aftermath of the 8.9- magnitude earthquake and the tsunami it triggered, Chief Cabinet Secretary Yukio Edano told NHK Television. For now, officials will use about 200 billion yen ($2.4 billion) left over from the budget for the fiscal year ending March 31, he said.

 

To maintain financial stability, Bank of Japan Governor Masaaki Shirakawa said the central bank will provide “massive” liquidity. The northern Tohoku region most affected by the disaster makes up about 8 percent of gross domestic product, and is host to factories making products from cars to beer. It also has a nuclear power plant the government said is at risk of a meltdown after an explosion.

 

http://www.bloomberg.com/news/2011-03-12/japan-faces-another-leg-down-in-its-fiscal-health-after-quake.html

[jerpy]

I was essentially referring to the immediacy of a disaster (natural or otherwise)and the fact that certain markets may react to this, negative or positive, and that some people will make money off the back of it, or at worse try to promote certain investments on the back of it.

 

Likewise in the main, but I suppose my post did broaden it further. Immediately I think of CEY and how it was shorted/ marked down on Egypt's problems. Not really much to do with any change in the companies operations was there? All bar the much exaggerated sit in by a few non core operatives I believe.

 

Was still an opportunity for some though.

[No6]

So far today the UK market seems to have avoided any panic reaction. Hopefully the doom and gloom scenarios predicted by some will be avoided.

[jerpy]

So far today the UK market seems to have avoided any panic reaction. Hopefully the doom and gloom scenarios predicted by some will be avoided.

 

Well some will no doubt have cashed in and be holding £'s sterling as a safer option Need we say more.

[jerpy]

Markets tanking everywhere, have to admit I cashed some of my remaining U.K shares in favour of SUK2 as a balance to the few long sides I hold, it's worked before, so seems a good hedge right now.

 

Wonder how many others are doing similar?

[No6]

Markets tanking everywhere, have to admit I cashed some of my remaining U.K shares in favour of SUK2 as a balance to the few long sides I hold, it's worked before, so seems a good hedge right now.

 

Wonder how many others are doing similar?

Markets now coming back a little. I'm expecting a bounce once the nuclear fears, rational or otherwise, subside. That could be several days though.

 

Could be bargains out there for the brave. Too many like falling knives at the moment though. best wait for some to settle.

[No6]

This will have been lost with the market minds elsewhere.

 

Profit Margins at 18-Year High Signal Bigger Dividends Coming for S&P 500

 

Record earnings fueled by the highest profit margins since 1993 are giving executives more leeway than ever to boost dividends as the bull market enters its third year.

 

Margins will climb to 8.9 percent in 2011, the highest level in at least 18 years, according to data compiled by Bloomberg on non-financial companies in the Standard & Poor’s 500 Index through March 11. Greater profitability combined with dividend cuts during the credit crisis have pushed earnings to 6.53 percent of the gauge’s price, or 3.5 times more than its payout rate, close to the record 3.6 multiple in January.

 

A total of 95 companies led by Aetna Inc. (AET) and Carnival Corp. have raised dividends as the fastest economic expansion in six years and five straight quarters of earnings growth increased confidence among chief executive officers. Of the 380 that pay dividends, 378 are forecast to maintain or increase them, according to data compiled by Bloomberg using options prices, profits, management statements and peer comparisons.

 

“The economy seems to be doing well and earnings are on the recovery path, which companies wanted to be sure about before they raised their dividends,” said John Carey, a Boston- based money manager at Pioneer Investments, which oversees about $250 billion. “I feel relatively confident that most of the dividends out there are secure, and we’ll see some fairly broad based increases.”

 

http://www.bloomberg.com/news/2011-03-14/profit-margins-at-18-year-high-signal-bigger-s-p-500-dividends.html

 

[No6]

With the doom and gloomers having a field day, Robbie Burns, the Naked Trader puts it into context.

 

Markets

 

 

On behalf of all investors:

 

******* ***** this ********** market is **** and it's impossible to ***** *********** **** .

One minute it's ******* up then down then ******** all over the ****** place.

 

Arrrggghhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhhh!!!!!

 

That's better.

 

First thing to say I suspect nearly everyone reading this has probably taken losses this week or at least lost some paper profits due the black swan event in Japan outside our control.

 

But remember: you still have a house (well, I hope) , money in the bank and somewhere safe to live. You're not in fear of your life from an exploding nuclear plant or radioactivity, or fearing another earthuqake.

 

You could have just had your life totally devasted like the poor souls in Japan who have literally lost absolutely everything.

 

So if you are upset about any losses, consider how great your life really is here in the UK and in reality the money you lost is irrelevant over the longer term as long as... you really were using money you could afford to lose.

 

And we should also be grateful that despite its faults, we live in a peaceful democratic country that doesn't have earthquakes.

 

I know I am very grateful, however dire our politicians happen to be.

 

Now you know why I as well as many others always repeat this (don't use money you cannot afford to lose) and why my books contain so many stories of people losing nearly all their money, often in the main because of overusing leverage.

 

Also the market for investors anyway, should be considered a medium to longer term thing. If you didn't sell at the top, consider whether your favourite company is likely to be higher by the end of the year.

 

I've certainly lost some great paper profits this week by staying in some things, but my thoughts are they will be higher, and in some cases, much higher later this year. So I'm pragmatic about it. And also I've lived through similar crises and lived to tell the tale.

 

And like the website I don't ever consider a profit a profit till it is well and truly banked.

 

Markets have surely tumbled more than they should have if there weren't so many robot traders and leverage trading on CFD's and spreadbetting.

 

With I suspect so many investors and traders having overleveraged or borrowed money to trade they didn't have, the whole situation has been made a lot worse.

 

Margin calls will have forced many to sell most of their holdings, the good with the bad and so the good gets hit indiscriminately.

 

There's so much fear about at the moment. But remember when the papers and the TV says "fear of"... it is just fear. It fills airtime and inches of newspaper space which lots of lovely drama which gets bigger audiences.

 

I absolutely hate getting suckered into selling stuff at the bottom of fear selling. I saw an interesting chart somewhere on the net, can't remember where showing how markets bounced back after a nuclear incident, and pretty much each time the market sold off heavily, and then after about 4 days it began a bounce. Also on each occasion after a few weeks the markets were way higher than when the sell off began.

 

More.....................

 

http://www.nakedtrader.co.uk/

 

[jerpy]

With the doom and gloomers having a field day, Robbie Burns, the Naked Trader puts it into context.

 

As always and the simplicity of understanding leverage. That said and excuse the bad pun, but if you saw a wave coming wouldn't you head for higher ground.

 

Pleased I scaled back a few and hedged with a down bet, it may miss the bounce back, but somehow I don't see markets racing away on any bounce long term. So happy to protect profit, by taking a few chips off the table. Lots of falling knives for sure.

[littledavesab]

I guess Hendry is right but for all the wrong reasons...........

 

Hendry himself is doing this by buying credit default swaps (simply put, a form of insurance) on Japanese corporate credits, believing these to be the instruments most likely to be affected by any form of contraction.

 

 

QUOTE (littledavesab @ Oct 28 2010, 05:50 PM) Some interesting comments on Japan on this thread

 

I also found Hugh Hendry's interview on KWN interesting - he talked about shorting the debt (in a clever way) of large Japanese industrials

 

I also remember Hugh on FBB (or Commodity Watch Radio as it then was) a couple of years back where he mentioned he likes 25 year cycles and Japan had (at the time) about 8 years to go to get back to its previous level (or have a good go)

 

And what is Hendry up to?

 

QUOTE Prominent UK hedge fund manager, Hugh Hendry, the CIO and CEO of Eclectica Asset Management, has started taking short positions on China on expectations that the Asian powerhouse will slow down, reports the Financial Times this week. Very few fund managers are taking this stance, in large part because the very process of "going short" on China is extremely difficult; shorting Chinese stocks is tricky even for Chinese nationals. Fund managers looking to take a bearish stance are therefore required to explore indirect, proxy alternatives. Hendry himself is doing this by buying credit default swaps (simply put, a form of insurance) on Japanese corporate credits, believing these to be the instruments most likely to be affected by any form of contraction.

 

http://www.hedgeweek.com/2010/10/07/63716/...corporate-bonds

[No6]

As always and the simplicity of understanding leverage. That said and excuse the bad pun, but if you saw a wave coming wouldn't you head for higher ground.

 

Pleased I scaled back a few and hedged with a down bet, it may miss the bounce back, but somehow I don't see markets racing away on any bounce long term. So happy to protect profit, by taking a few chips off the table. Lots of falling knives for sure.

That's certainly true and I wasn't downplaying the seriousness of the situation. The markets were certainly due a correction, but I don't buy the bear view that they were due a big tumble regardless of the tragedy that has struck Japan. Bears have been saying that for most of the last 2-3 years and have been consistantly wrong in their calls. I don't think there is any credit in being finally right on the back of a tragedy, although the vast majority of bears will clearly be as horrified as everyone else at what has happened to Japan. Some, however, almost revil in the fear that this has created, my inbox while not full of spam market services has quite a few from those trying to sell their expertise on the new bear market. A few not so long ago were talking about Japan, or Japanese smaller companies inparticular, as the new trade of the decade. Most are probably now 30%+ cheaper, so still worth buying now?

 

As for the longer term from here, much will probably depend on how long the Fukushima Daiichi disaster goes on for. One of the things that it is impossible not to notice is the impact of the internet on information, good or bad, getting around the globe. This is one of the major differences with other nuclear disasters like Three Mile Island and Chernobyle. It took years to clean up those plants, can you imagine what is going to happen with Fukushima? This is something that the gloomers will be able to make stories of for years, or until something else as bad takes its place. Horrible to say it, but probably sooner rather than later markets will price this in. Companies that are currently falling that have no connection with Japan or the nuclear industry, or (again horrible to say it) might actually benefit from the tragedy because they will either sell to Japan or pick up market share that otherwise would have gone to Japanese companies, will rebound. One UK company, Aggreko which supplies temporary power solutions may find it gets more business because of the earthquake.

 

The wider consequencies of Japanese reconstruction and how it will take place are unknown at the moment, but Japan might just come back stronger from this. One thing we do know is that the world often recovers quite quickly from these disasters. The Indian Tsunami of 2004 claimed 300,000 lives and the Sichuan earthquake in China in 2008, 90,000. The economic cost was high for the region and individual countries, but they have come back.

[No6]

Bounce so far today, interesting to see if the support level on the chart holds. Ftse and Dow (below)both on or close to support levels at more or less the same time. Robot trading now in place for a bounce off of support levels?

 

[No6]

Has the Dow found a support level? Time will tell.

 

[No6]

Markets tanking everywhere, have to admit I cashed some of my remaining U.K shares in favour of SUK2 as a balance to the few long sides I hold, it's worked before, so seems a good hedge right now.

 

Wonder how many others are doing similar?

 

SUK2 looks interesting on the weekly chart. Suggests that either the move up will be short lived, or the bounce off support in the FTSE chart above will be short lived. If the Bollinger band begins to open on SUK2 weekly that would suggest the FTSE is in trouble.

 

[No6]

London's index of leading shares was up 82 points at 5,680.25 at lunchtime, ending six days of falls which has wiped more than £50bn off the value of shares.

 

Miners, energy stock, and technology stocks, which have fallen heavily since the earthquake and tsunami hit last Friday, rose as traders said shares looked oversold.

 

"Technically we were due a bounce. In the short-term we are nearing oversold territory," said Ian Williams, analyst at Altium Securities, but added that it was "probably not much more than an oversold bounce".

 

German and French investors also returned sending stocks up 2.1pc and 1.9pc respectively.

 

http://www.telegraph.co.uk/finance/markets/8382474/FTSE-100-jumps-as-G7-respite-brings-out-bargain-hunters.html

[No6]

Not sure how much longer "shock" rises in inflation can be ignored.

 

UK inflation in shock jump to 4.4pc and borrowing rises

British inflation jumped to a shock 28-month high of 4.4pc and public borrowing recorded its worst February since records began last month, official data showed on Tuesday.

The news will be a blow for George Osborne as he puts the final touches to his 2011 Budget on Wednesday.

 

February's surprise rise will worry the Bank of England which has been battling to bring inflation back to its 2pc target. Sterling rose sharply against the dollar to $1.6393 - the highest level in 14 months - on expectations that interest rates will rise sooner rather than later.

 

http://www.telegraph.co.uk/finance/economics/interestrates/8397537/UK-inflation-in-shock-jump-to-4.4pc-and-borrowing-rises.html

[No6]

With uranium under the cosh, what about thorium? Reading the article below you do wonder what's not to like, but how many thorium miners are there? If China is heading this way then they must be getting the thorium from somewhere. Perhaps we can make a list of thorium miners?

 

Safe nuclear does exist, and China is leading the way with thorium

 

A few weeks before the tsunami struck Fukushima’s uranium reactors and shattered public faith in nuclear power, China revealed that it was launching a rival technology to build a safer, cleaner, and ultimately cheaper network of reactors based on thorium.

 

This passed unnoticed –except by a small of band of thorium enthusiasts – but it may mark the passage of strategic leadership in energy policy from an inert and status-quo West to a rising technological power willing to break the mould.

 

If China’s dash for thorium power succeeds, it will vastly alter the global energy landscape and may avert a calamitous conflict over resources as Asia’s industrial revolutions clash head-on with the West’s entrenched consumption.

 

China’s Academy of Sciences said it had chosen a “thorium-based molten salt reactor system”. The liquid fuel idea was pioneered by US physicists at Oak Ridge National Lab in the 1960s, but the US has long since dropped the ball. Further evidence of Barack `Obama’s “Sputnik moment”, you could say.

 

Chinese scientists claim that hazardous waste will be a thousand times less than with uranium. The system is inherently less prone to disaster.

 

“The reactor has an amazing safety feature,” said Kirk Sorensen, a former NASA engineer at Teledyne Brown and a thorium expert.

 

“If it begins to overheat, a little plug melts and the salts drain into a pan. There is no need for computers, or the sort of electrical pumps that were crippled by the tsunami. The reactor saves itself,” he said.

 

“They operate at atmospheric pressure so you don’t have the sort of hydrogen explosions we’ve seen in Japan. One of these reactors would have come through the tsunami just fine. There would have been no radiation release.”

 

================

 

US physicists in the late 1940s explored thorium fuel for power. It has a higher neutron yield than uranium, a better fission rating, longer fuel cycles, and does not require the extra cost of isotope separation.

 

The plans were shelved because thorium does not produce plutonium for bombs. As a happy bonus, it can burn up plutonium and toxic waste from old reactors, reducing radio-toxicity and acting as an eco-cleaner.

 

http://www.telegraph.co.uk/finance/comment/ambroseevans_pritchard/8393984/Safe-nuclear-does-exist-and-China-is-leading-the-way-with-thorium.html

[ecoface]

With uranium under the cosh, what about thorium? Reading the article below you do wonder what's not to like, but how many thorium miners are there? If China is heading this way then they must be getting the thorium from somewhere. Perhaps we can make a list of thorium miners?

 

Riggerbeautz started a thread on this a few days ago.

[No6]

Riggerbeautz started a thread on this a few days ago.

 

Won't hurt to add something here.