Fukushima Leaking 300 tonnes a day of highly contaminated water into the ocean

I have made countless posts about Fukushima over the past several years as to me, it's the biggest and largest man-made disaster in history.

Today, Mish has posted a few links which should give anyone shivers. Here's what Reuters announced: Japan says Fukushima leak worse than thought, government joins clean-up

Highly radioactive water from Japan's crippled Fukushima nuclear plant is pouring out at a rate of 300 tonnes a day, officials said on Wednesday, as Prime Minister Shinzo Abe ordered the government to step in and help in the clean-up.

The revelation amounted to an acknowledgement that plant operator Tokyo Electric Power Co (Tepco) has yet to come to grips with the scale of the catastrophe, 2 1/2 years after the plant was hit by a huge earthquake and tsunami. Tepco only recently admitted water had leaked at all. [...] 

"We think that the volume of water (leaking into the Pacific) is about 300 tonnes a day," said Yushi Yoneyama, an official with the Minister of Economy, Trade and Industry, which oversees energy policy.
[...]

Tatsuya Shinkawa, a director in METI's Nuclear Accident Response Office, told reporters the government believed water had been leaking for two years, but Yoneyama told Reuters it was unclear how long the water had been leaking at the current rate.

Shinkawa described the water as "highly" contaminated.

Another Major Leak of Radio Active Water at Fukushima

As I have stated many times before, the Fukushima meltdown is probably the biggest and largest man-made disaster in history.

Yet, the public's awareness of this human, ecological and economic catastrophe has been very much tamed by the political parties all over the globe and their principal propaganda arm: the mainstream media.

Here's the latest news coming out of Fukushima, and it's awful.

JapanTimes - 2013-04-07 

Around 120 tons of contaminated water with an estimated 710 billion becquerels of radioactivity has probably leaked into the ground under the Fukushima No. 1 power plant, Tokyo Electric Power Co. revealed Saturday. 

“It is the largest amount of radioactive substances that has been leaked” since the crippled facility’s cold shutdown was declared in December 2011, Tepco official Masayuki Ono said.

JPY Gold Silver Update

The Japanese Yen is making headlines. And not the kinds of headlines that sound bullish -- the exact contrarian indicator for actually building a bullish case.

Here's one headline I just found (though it's not new): Shorting Yen Could Be Hedge Funds’ Favorite Trade in 2013

Here a few other points:

• Sentiment is ultra low. One of my friends even mentioned that the DSI is at 7% - the lowest in 8 years at least
• Like many other bloggers, Mish has been talking several times about how low is going and how fundamentals are supporting these levels. Well, whoever thinks in terms of fundamentals when it comes to markets is just rationalising, and at this levels, they are rationalising a trend that is about to reverse.

In the meantime, gold and silver have been scrapping bottom for several weeks, and I think a tradable bounce has started a few days ago.

Fukushima Fish Still Radioactive

IEEE Spectrum reports:

Bottom-dwelling fish living near the coast of Fukushima prefecture are still contaminated with radioactive isotopes, according to a new analysis just published in the journal Science. The study suggests that the sea floor near Fukushima may be contaminated for decades to come.

More than 19 months have passed since the Fukushima Dai-ichi nuclear power station [experienced]  partial meltdowns in three of its reactors and a large release of radioactive materials into the air. Winds blew some of those radioactive materials out to sea, and rain carried them down into the ocean water. In addition, water used to cool the damaged reactors flowed from the coastal power plant into the ocean. In the weeks and months after the accident, plant owner TEPCO struggled to stop leaks of contaminated water into the sea and to create a closed loop for the cooling water.
[...]
Buesseler told me that the most striking finding is that the radiation levels in these fish aren't going down. "I was struck by how they really haven’t changed over the last year," he said. He was looking specifically at the radioactive isotopes cesium-134 and cesium-137, both of which were released in the Fukushima Dai-ichi accident. "Since cesium doesn’t bioaccumulate to a significant degree, and in fact is lost when fish move to a less contaminated area, this implies that the cesium source is still there," he said. The bottom-dwelling fish are probably constantly re-contaminated by radioactive sediments layered on the seafloor, says Buesseler. And it may take decades for those sediments to be dispersed, and for the fishing area to be considered safe again.
[...]
It's also very possible that the Fukushima Dai-ichi power station is still leaking radioactive water, says Buesseler. "It could be that they’re not recovering all that cooling water, there could be leaks in the basement," he says. "Even if they’re not putting new water out, the groundwater is still contaminated."

Remember that this is only the visible part of the iceberg and many horrible things are still being hidden and need to be uncovered or recognised officially.

Severe Abnormalities Found In Fukushima Butterflies

Nature, via Slashdot, writes:

The collapse of the Fukushima Dai-ichi Nuclear Power Plant caused a massive release of radioactive materials to the environment. A prompt and reliable system for evaluating the biological impacts of this accident on animals has not been available. This study suggests the accident caused physiological and genetic damage to the pale grass blue Zizeeria maha, a common lycaenid butterfly in Japan. We collected the first-voltine adults in the Fukushima area in May 2011, some of which showed relatively mild abnormalities. The F1 offspring from the first-voltine females showed more severe abnormalities, which were inherited by the F2 generation. Adult butterflies collected in September 2011 showed more severe abnormalities than those collected in May. Similar abnormalities were experimentally reproduced in individuals from a non-contaminated area by external and internal low-dose exposures. We conclude that artificial radionuclides from the Fukushima Nuclear Power Plant caused physiological and genetic damage to this species.

Nations Committing Suicide - Part 1, Japan

Japan is a country that I love for their food, their people, and many other things, but unfortunately, their culture and way of thinking has led them to slowly, but surely, make sure that they will shrink as a nation, and become less and less relevant, to the point of disappearing from the map...

1. Their politicians — elected by the people! — and central bankers have created a long term depression that has been going on since 1990 and still no end in sight.
2. Their birth rate doesn't renew generations, and the natality rate is directly related to the fact that most youngsters have been living their entire life in a depression economy and that social mood is very low.
3. They have amassed a public debt of more than 200% their GDP and are on the verge of a currency crisis.
4. The Fukushima incident, 100% caused by negligence, has made of Japan a nuclear waste zone — who knows what kinds of diseases will affect the people in the next 20 to 200 years?
5. And now, I read that  a modern-day Adolf Hitler is running Osaka, and with the rise of the extremes, who knows where this is going to end? While the Bloomberg report below doesn't say much, and it seems like a big exaggeration, I've found another link with much more (I'm still doubtful he's a Hitler-like type of person though).

(Bloomberg) May 30, 2012 — Who knew a modern-day Adolf Hitler was running Osaka? 

Certainly not the majority of the 2.7 million people in the western Japanese city. Toru Hashimoto boasts an approval rating more than twice that of the prime minister. Osakans love their mayor’s crusade against Tokyo’s dysfunction and absolute power over the country. It has Japan’s old guard running scared and comparing Hashimoto to Europe’s most notorious genocidal fascist. 

If the world needs anything, it’s a moratorium on Hitler analogies. As much as one may dislike Barack Obama or George W. Bush, neither bears even the most fleeting resemblance to the maniacal German leader. Suggestions to the contrary are beyond ignorance and vandalize history. Yet for Japanese to turn to a man in this rarefied company speaks volumes about where Japan finds itself in a volatile global environment. 

The desire for change reached a fever pitch after last year’s earthquake and tsunami. Even before the earth shook, the waters rose and radiation leaked on March 11, 2011, Japanese sensed Tokyo had lost its way. Many just hadn’t realized how much. Hence the Tea Party-like dynamic inherent to Hashimoto’s popularity. His drive for greater accountability, decentralized decision making and fresh ideas is as well-timed as it is frightening to the establishment. 

The words “a future prime minister” routinely accompany discussions of Hashimoto’s rapid rise. At 42, he’s young and telegenic in a nation where the other best-known regional leader, Tokyo Governor Shintaro Ishihara, is 79. Hashimoto is unusually blunt in his criticism of national leaders, and his vision is at odds with the prevailing wisdom in Tokyo.
[...] 

Yet at a time when Japanese are grasping for change, Hashimoto is what passes for a breath of fresh air. Take his stance against relying on nuclear power, one that enraged the national government. Hashimoto is doing what any elected leader should: heeding the will of the people. The large majority of Japan’s 126 million people no longer trust power companies and bureaucrats to protect them from another Chernobyl. 

All Yoshihiko Noda has done since becoming prime minister in September is remind voters that the nuclear industry holds the puppet strings even after the Fukushima disaster. Hashimoto is fighting for people, not companies, and good for him. This gives you a sense of how dangerous divergent views are to vested interests in Tokyo -- and why Japan needs more of them. 

Hashimoto’s calls for greater accountability and competition are particularly welcome. His party favors direct elections for prime minister, which would be a genuine revolution in Japan. It wants to scrap one of the two chambers of the Diet to hasten decision making and reduce the gridlock that stops virtually all change in Japan.

The dark side of this would be a charismatic leader becoming too powerful -- even dictatorial. That has opponents calling the movement “Hashism,” a play on fascism. This is a minor risk in a nation with so many checks and balances embedded in its postwar system of government. What really worries the establishment is new ideas that leave its carefully built fiefdoms out of the loop. 

This really is the point. Japan is a prosperous, safe and politically stable place. Yet it may be a little too stable and, in turn, change-averse. Public debt is more than twice the size of Japan’s $5.5 trillion economy, the population is aging rapidly and its global competitiveness is waning. How is the government responding? All it seems capable of doing is naming a new prime minister every nine months and plotting tax increases.
[...]

Japan, it has long been said, needs a new generation of leaders to step forward and engineer a major course correction. Hashimoto, love him or hate him, personifies it, and the extent to which he makes the establishment squirm, and play the Hitler card, suggests this political upstart is on to something. 

(William Pesek is a Bloomberg View columnist. The opinions expressed are his own.) 

Japan's TOPIX Closes at Lowest Since 1983

The TOPIX stands for Tokyo stock Price IndeX and is along with the Nikkei 225, an important stock market index for the Tokyo Stock Exchange (TSE) in Japan, tracking all domestic companies of the exchange's First Section.

Today, the TOPIX closed at a 29 year low!

(Bloomberg) June 4th 2012 — Japan’s Topix Index (TPX) plunged to the lowest level since 1983 and entered a bear market, after disappointing U.S. jobs and China services data added to evidence the global economy is slowing.
[...] The Topix slid 1.9 percent to 695.51 at the 3 p.m. close of trading in Tokyo, the lowest since Dec. 13, 1983, dropping below levels last seen since the global financial crisis following the 2008 collapse of Lehman Brothers Holdings Inc. [...]
“This is a panic selloff,” said Koichi Kurose, chief economist at Resona Bank Ltd., Japan’s fifth-largest lender by market value. “Action from policy makers is the only thing that will calm the market. The market is pricing in a deterioration in the U.S. economy through summer.”

Take aways:

1. Too many people talk about panic for the panic to be real. There's no panic yet, as the VIX shows. These are orderly, slow, market declines. This also tends me to believe that we haven't reached the bottom yet, and that any bounce will happen only later. 
2. Flashback in March 2011: Marc Faber has already mentioned he is very bullish on Japanese and so has Mish, with whom I have respectfully been in disagreement.
3. Flashback in Jan 2011: I would agree on everything [with Mish], but Japan [which he likes].

All Tuna Tested In California Were Contaminated with Fukushima Radiation

Via ZeroHedge:


CNN reports today:

Low levels of radioactive cesium from Japan’s Fukushima Daiichi nuclear accident turned up in fish caught off California in 2011, researchers reported Monday.

The bluefin spawn off Japan, and many migrate across the Pacific Ocean. Tissue samples taken from 15 bluefin caught in August, five months after the meltdowns at Fukushima Daiichi, all contained reactor byproducts cesium-134 and cesium-137 at levels that produced radiation about 3% higher than natural background sources

The Wall Street Journal quotes the studies’ authors:

“The tuna packaged it up and brought it across the world’s largest ocean,” said marine ecologist Daniel Madigan at Stanford University, who led the study team. “We were definitely surprised to see it at all and even more surprised to see it in every one we measured.”

[...]

“We found that absolutely every one of them had comparable concentrations of cesium-134 and cesium-137,” said marine biologist Nicholas Fisher at Stony Brook University in New York state, who was part of the study group.

As Reuters points out:

Unlike some other compounds, radioactive cesium does not quickly sink to the sea bottom but remains dispersed in the water column, from the surface to the ocean floor.

Fish can swim right through it, ingesting it through their gills, by taking in seawater or by eating organisms that have already taken it in ….

As CNN notes:

Neither [of the scientists who tested the fish] thought they were likely to find cesium at all, they said. And since the fish tested were born about a year before the disaster, “This year’s fish are going to be really interesting,” Madigan said.

“There were fish born around the time of the accident, and those are the ones showing up in California right now,” he said. “Those have been, for the most part, swimming around in those contaminated waters their whole lives.”

One of the studies’ authors told the BBC:

The fish that will be arriving around now, and in the coming months, to California waters may be carrying considerably more radioactivity and if so they may possibly be a public health hazard.

Japanese Academic Economist Suggests Beauty-Tax

Courtesy of Courrier International and Google Translate, I can share the completely insane idea of this Japanese academic economist: The idea is to tax beautiful people more than ugly people, in order to make them look more attractive to japanese women, and hence allow them to start a family and bring kids to a society that is shrinking.

Of course, only academics leaving in their economic dreamland and ivory tower can come up with such irrational and surreal ideas.

To begin with, I can say as irrational as the idea is, it is nonetheless insulting to women, degrading them to greedy people only interested in the bottom line of their husband...

The idea is so silly, I cannot believe I have to spend time debunking it...

• Who would be in charge of deciding how "handsome" or "ugly" you are? Whoever will be given this role would receive such a massive power that it would only create a massive amount of corruption the Japanese society. 
• Even if it were to be objectively decided who is handsome and who is not, this creates a massive incentive for people to make themselves look ugly in public, and on the contrary could achieve the exact opposite of the silly idea.
• It's been time and again concluded that beyond a certain level, raising taxes only incentivizes people to hide their income. Only in economic dreamland can a tax rate of 80 or 90% be considered.

The Japanese government, after having completely destroyed the lives of 2 generations of Japanese people, and also having now made the whole planet a nuclear wasteland should just Harakiri and leave the japanese people and the world population alone.

Takuro MORINAGA This is sort of single men in four categories - beautiful kids, normal, moderately ugly and the ugly - and increase of 100% tax rate applicable to the fine, which would double their tax income. The moderately ugly, however, benefit from a reduction of 10% and 20% of ugly. Currently, the income tax is a progressive tax rates that increase with six depending on the income bracket: 5%, 10%, 20%, 23%, 33% and 40%.In the case of a hunk enjoying comfortable incomes located in the top, the tax rate would be 80%. If we add local taxes, which levy 10%, a handsome and rich would leave in addition 90% of its income in taxes.  

How do you think this can it be used to check the increase in the number of single people in our country and the phenomenon of marriage later and later? What shocked me the most during the last census [in 2010], is to see that almost 50% of Japanese men aged 30 to 35 were still single. Why is that? The system of lifetime employment collapsed in our country [since the bursting of the bubble economy in the early 1990s] and the practice of marriage for life, which was supported by the latter collapsed in his tower. In the past, neighbors who interfere with all or the wife of a superior is spontaneously offered to play matchmaker for young men, even for those with unattractive. These were "enquiquineuses" handing opportunities for meetings by holding out with young people. At the time, they could afford to move young women of marriageable age in the following argument: "Although it is not very attractive, he works in a good company. With it, you'll be alone all your life! "But today, with the end of the system of lifetime employment, work and income are based on merit. In addition, we are currently witnessing the bankruptcy of the national pension system. Now, only a handful of men have both the job security, income stability and stability of the old days, once that compensated the lack of physical attractiveness. These matchmakers around us, no matter how well intentioned they may no longer play their role in being sure of their making.  

Women unable to judge men in a long term perspective, they focus on those that they like the first glance.Hence the emergence of ikemen [equivalent of "pretty boy", ikemen is a neologism formed from Iketeru, "cool, attractive", and English men, men]. It's terrible! Today, the fact that so handsome with two or three women at once no longer shocks anyone, whereas previously it would have been accused of being a runner and double game play! Currently, in Japan and the United States, the economic gap between the 1% of winners and losers of 99% is problematic, but there is a much greater disparity between men based on their ability to seduce women. I believe money alone can reduce this gap. Based on the results of a survey on the structure of employment, a think tank has calculated the number of married men in the 25-30 years depending on income levels. It showed that over 70% of men with annual incomes of more than 10 million yen [about 95 000 euros] were married. However, the more income fell, the number of marriages decreased and, as we approach the one million yen [9,500 euros], only one in six men were married. I asked the following question to my students at Dokkyo University [in the suburbs of Tokyo]: "Between a handsome rich poor and ugly, which would you choose for a husband?" To my surprise, the two options have won the same number of votes. 

Japan Update: Tokyo Soil Would Be Qualified as “Radioactive Waste” In the US — Fukushima Reactor with Fatally High Radiation Levels, Hardly Any Water To Cool It

For those who are still in denial, put your reality lenses on: Fukushima is the biggest man-made disaster in history, and it is still impossible to assess its impact, although my opinion is that it will take decades, if not more, for us to fully grasp it.

I have friends in Japan who are in denial, and friends who have been relocated by the European/American employers, and who are still in denial. One of them is actually back to Tokyo for two weeks for holidays and laughs at me every time I tell him about the situation in Japan.

Tokyo is a city that I love — and also many parts of Japan, which I have travelled extensively.

I have crossed Japan from both business and leisure trips since the disaster at Fukushima.

All these make me very sad, but more than sadness, it's infuriating (though 100% expected) that the governments will do everything in their power to hide the truth. We just have to count only on our own judgement and on the Internet to keep the truth available.

From the Washington Post (via AP):

TOKYO — One of Japan’s crippled nuclear reactors still has fatally high radiation levels and hardly any water to cool it, according to an internal examination Tuesday that renews doubts about the plant’s stability. 

A tool equipped with a tiny video camera, a thermometer, a dosimeter and a water gauge was used to assess damage inside the No. 2 reactor’s containment chamber for the second time since the tsunami swept into the Fukushima Dai-ichi plant a year ago. The probe done in January failed to find the water surface and provided only images showing steam, unidentified parts and rusty metal surfaces scarred by exposure to radiation, heat and humidity. 

The data collected from the probes showed the damage from the disaster was so severe, the plant operator will have to develop special equipment and technology to tolerate the harsh environment and decommission the plant, a process expected to last decades. 

Tuesday’s examination with an industrial endoscope detected radiation levels up to 10 times the fatal dose inside the chamber. Plant officials previously said more than half of melted fuel has breached the core and dropped to the floor of the primary containment vessel, some of it splashing against the wall or the floor. 

Particles from melted fuel have probably sent radiation levels up to dangerously high 70 sieverts per hour inside the container, said Junichi Matsumoto, spokesman for Tokyo Electric Power Co. 

Note: 7-8 sieverts are considered fatal doses. Few instruments are capable of measuring more than 10 sieverts.

From Wikipedia:
Maximum acceptable dose for the public from any man made facility: 0.001 Sv/year
Criterion for relocation after Chernobyl disaster: 0.35 Sv/lifetime

“It’s extremely high,” he said, adding that an endoscope would last only 14 hours in that condition. “We have to develop equipment that can tolerate high radiation” when locating and removing melted fuel during the decommissioning. 

The probe also found the containment vessel — a beaker-shaped container enclosing the core — had cooling water up to only 60 centimeters (2 feet) from the bottom, far below the 10 meters (yards) estimated when the government declared the plant stable in December. 

[...] 

Three Dai-ichi reactors had meltdowns, but the No. 2 reactor is the only one that has been examined because radiation levels inside the reactor building are relatively low and its container is designed with a convenient slot to send in the endoscope. 

The exact conditions of the other two reactors, where hydrogen explosions damaged their buildings, are still unknown. Simulations have indicated that more fuel inside No. 1 has breached the core than the other two, but radiation at No. 3 remains the highest. 

The high radiation levels inside the No. 2 reactor’s chamber mean it’s inaccessible to the workers, but parts of the reactor building are accessible for a few minutes at a time — with the workers wearing full protection. 

[...] During a recent visit by a group of journalists including The Associated Press, the head of the plant said it remains vulnerable to strong aftershocks and tsunami and containing contaminated water and radiation is a challenge. Radioactive water had leaked into the ocean several times already. 

Workers found the fresh leak of 120 tons from a water treatment unit this week from one of its hoses, with estimated 80 liters (20 gallons) escaping into the ocean, Matsumoto said. Officials are still investigating its impact. [...]

Via WashingtonsBlog (via ZeroHedge):

Nuclear engineer Arnie Gundersen took 5 random soil samples in Tokyo recently, and found that all 5 were so radioactive that they would be considered radioactive waste in the United States, which would have to be specially disposed of at a facility in Texas:

Tokyo Soil Samples Would Be Considered Nuclear Waste In The US from Fairewinds Energy Education.

On YouTube (please click on CC to get the English subtitles). This report is one of the most troubling and scary ones, exposing the levels of radiations, the actions of Tepco and the J-Gov to hide the truth and prevent people from talking to the press. There's even a high-respected Japanese doctor, saying on behalf of the government, that if you keep smiling, you won't be hit by radiation.

Another similar report, on France24 in English this time: 

Japan Update: GDP Sinks, Record Trade Deficit, Fukushima Temperature Surpasses 752 Degrees, Pension Funds Nightmare Scenario

23 years into the depression following the Government and Central Bank sponsored the real estate and credit bubble in Japan, and with trillions of dollars wasted on Keynesian stimulus, there's still no end in sight, and things are actually getting worse and worse — depending on what the government will do, the end game is either going to be: massive multi-trillion default on the JGBs or hyper-inflation. Nice huh?

Here are main items from the past week or two:

Feb. 13 (Bloomberg) -- Japan’s economy shrank an annualized 2.3 percent in the fourth quarter, more than economists estimated, as slumping exports undermine a recovery from last year’s record earthquake. 

The contraction compared with the median forecast for a 1.3 percent decline in a Bloomberg News survey of 26 economists. Growth was a revised 7 percent in the previous quarter, the Cabinet Office said today in Tokyo.

Another report, another opportunity for the economists — usually referred to as "the useless bunch of highly overpaid ignorants" — to prove how useless they are and how little they understand about the economy.

Feb. 19 (Bloomberg) -- Japan posted a record trade deficit in January as the yen’s strength and weaker global demand eroded manufacturers’ profits and slowed the nation’s recovery from last year’s earthquake and tsunami. 

The gap widened to 1.48 trillion yen ($19 billion) and shipments dropped 9.3 percent from a year earlier as energy imports surged, a Ministry of Finance reported in Tokyo today.

[...] In Japan, the country’s trade deficit of 2.49 trillion yen in 2011 was the second largest since World War II. That also contributed to the nation’s current-account surplus sliding to a 15-year low in 2011.
[...]
“Clearly Japanese manufacturers are struggling,” Hiroshi Shiraishi, an economist at BNP Paribas SA in Tokyo, said before the report. “We aren’t really expecting a major pick-up in external demand because the U.S. and Europe are undergoing balance sheet adjustments.”
[...]
Japan’s exports to the EU, its third-largest export region, fell 39 percent from 2007 to last year, according to Ministry of Finance figures.
[...] 

With global demand for imports out of Japan dropping, and energy imports into Japan surging, I guess that the BoJ must be very clever to try to weaken the Yen, right?

 And in addition to the economic depression, the natural and human catastrophes are pilling in. Here's an update on Fukushima — an made in Japan, man made global disaster:

Feb. 13 (Bloomberg) -- Tokyo Electric Power Co. said the temperature in one of the damaged reactors at its Fukushima nuclear station rose to levels above safety limits even as it injected increased amounts of cooling water. 

One of three thermometers indicated the temperature at the bottom of the No. 2 reactor pressure vessel rose to 93.7 degrees Celsius (200.7 Fahrenheit) today, higher than the 80 degrees limit, Ai Tanaka, a spokeswoman for the utility known as Tepco, said by phone today. 

 But Zero Hedge claims:

But major Japanese news sources Yomiuri and Jiji note that the thermometer in reactor 2 has since climbed to 272.8 degrees Celsius, and then hit the upper limit of the thermometer at 400 degrees Celsius (752 degrees Fahrenheit).

Finally, pension funds are struggling in Japan with rates at record 0.5% for the past 2 decades or so, and equities not performing globally. Fraud and lies will not help solve the issues.

Feb. 23 (Bloomberg) -- Japan’s financial regulator ordered AIJ Investment Advisors Co. to halt its business after finding the asset manager’s clients funds of about 183.2 billion yen ($2.3 billion) may be “adversely affected” and started a probe into the 263 asset managers operating in the nation. 

“We’ve ordered AIJ to halt business for a month in order to safeguard investors, as it appears client assets have been adversely affected,” Financial Services Minister Shozaburo Jimi told reporters at a briefing in Tokyo. The regulator is still investigating the firm and can’t comment on losses. The suspension lasts from today until March 23, the regulator said. 

AIJ, a Tokyo-based asset-management firm, may have lost most of the 200 billion yen ($2.5 billion) it manages for companies’ pension plans, the Nikkei newspaper said today, citing unidentified securities investigators. Regulators have been investigating AIJ since the end of January and are unable to explain where some money went, the Nikkei reported. 

Japanese pension plans have been suffering from two decades of slumping markets and an aging population. Alternative investments were becoming one of the options for the retirement funds, which have traditionally invested mainly in bonds, as ways to maintain steady returns and fund retiree benefits in a country where more than one in five people are over 65. 

AIJ, led by Kazuhiko Asakawa, was established in April 1989, and had 120 clients including pension plans with 183.2 billion yen in assets as of the end of 2010, according to a statement from the Financial Services Agency, adding it has 12 employees. 

Only 12 employees?? Wow, you might start from here. How can a firm with 12 employees manage 120 clients and manage many billions of asset?

Japan and the Myth of Independent Central Banks

Let's start about the following quote from Wikipedia on the Bank of Japan (BoJ):

A major 1997 revision of the Bank of Japan Act (jp:日本銀行法) was designed to give it greater independence;^[10] however, the Bank of Japan has been criticized for already possessing excessive independence and lacking in accountability before this law was promulgated.^[11] A certain degree of dependence might be said to be enshrined in the new Law, article 4 of which states:

In recognition of the fact that currency and monetary control is a component of overall economic policy, the Bank of Japan shall always maintain close contact with the government and exchange views sufficiently, so that its currency and monetary control and the basic stance of the government's economic policy shall be mutually harmonious.

However, since the introduction of the new law, the Bank of Japan has persistently rebuffed government requests to stimulate the economy

Now Bloomberg headlines:

Feb. 10 (Bloomberg) -- The Bank of Japan is set to refrain from additional monetary easing next week because of signs of strength in the global economy and the boost from reconstruction work after last March’s earthquake.

Governor Masaaki Shirakawa’s board will maintain the overnight lending rate at between zero and 0.1 percent on Feb. 14, according to all 13 economists surveyed by Bloomberg News. A 55 trillion yen ($712 billion) asset-purchase program will remain unchanged, 12 said. 

What happened just 4 days later?

Feb. 14 (Bloomberg) -- Japan’s central bank unexpectedly added 10 trillion yen ($128 billion) to an asset-purchase program and set an inflation goal after an economic slide fueled criticism it has been slower to act than counterparts. 

An asset fund increased to 30 trillion yen, with a credit lending program staying at 35 trillion yen, the Bank of Japan said in Tokyo today. The BOJ also said that it will target 1 percent inflation “for the time being.” 

Stocks rose and the yen weakened against the dollar as the central bank expanded stimulus for the first time since October to revive an economy that shrank an annualized 2.3 percent last quarter. Lawmakers had urged extra efforts to counter deflation after the Federal Reserve adopted a 2 percent inflation target and the European Central Bank expanded its balance sheet. 

Today’s decision “shows the BOJ bowed to political pressure,” said Hiroaki Muto, a senior economist at Sumitomo Mitsui Asset Management Co. in Tokyo. “There will probably be limited impact on the yen’s gains.”

These reports show two things:

1. The economists, this pathetic bunch, are always wrong, and heard on the exact opposite side of what is really going to happen.
2. Independent Central Banks are independent for only as long as they act in the way that pleases the Government and they do what the Gov expects them to do. After all, their independence is given by the Government, and can be taken back anytime, with a simple law. For this reason, the same way that the Japanese government can force the BoJ into more easing, the US Government will at some point force the Fed into stopping the madness — or force the US into defaulting on their debt, since the Fed QE programs do nothing but adding more debt to the US balance sheet...

Whatever the outcome, it's time to put an end to this. Hopefully, we'll have a peaceful end with Ron Paul. 30 years of deflation, or 3 years of hyperinflation are too destructive of the people, the economy and the country as a whole.

In the meantime, in Japan

Japanese firms are still bleeding cash and the vicious circle is still intact

Feb. 3 (Bloomberg) -- Panasonic Corp. almost doubled its annual loss forecast to a record 780 billion yen ($10 billion), the latest Japanese electronics company to predict weaker earnings because of Thailand floods and slowing demand for TVs. 

The revised estimate, which includes goodwill writedown, compares with the 420 billion-yen loss Panasonic predicted in October. The loss in the 12 months ending in March will be the biggest since the world’s largest maker of plasma TVs was founded in 1918. 

President Fumio Ohtsubo is eliminating jobs, shifting output overseas and trying to transform the Osaka-based company into a leader in solar panels and rechargeable batteries amid mounting competition in TVs. Panasonic joins Sony Corp. and Sharp Corp. in increasing loss forecasts as they struggle to cope with weak sales after the floods and March earthquake in Japan crippled plants and suppliers.           

Today's Japanese Casualties: Canon, Fujifilm and Olympus

Following the two previous posts, Japanese Chartology, Japan's Collapse is Approaching Fast, here's today's dreadful news coming from Japan:

Jan. 31 (Bloomberg) -- Canon Inc., the world’s largest camera maker, fell the most in 10 months in Tokyo trading after forecasting annual profit that missed analyst estimates and saying its president will resign. Fujifilm Holdings Corp., a smaller camera maker, also dropped on a weaker outlook.

[...] Canon said yesterday profit will increase less than 1 percent for a second straight year, citing the slowing global economy. Fujifilm cut its estimate for annual net income by 48 percent.
[...]
President and Chief Operating Officer Tsuneji Uchida, 70, will leave both posts in March and be replaced by Chairman Fujio Mitarai, 76, the maker of cameras and printers said yesterday. Uchida will become an adviser, the company said.
[...]
Fujifilm, which makes cameras, printers, cosmetics and medical products, cut its estimate for annual operating profit by 19 percent and its revenue forecast by 3.9 percent, citing the stronger yen, the slowing economy and production setbacks due to floods in Thailand.

The company proposed a partnership yesterday with Olympus Corp. Fujifilm wants to combine its X-ray and ultrasound technology with the medical businesses of Olympus, which is seeking ways to boost capital after restating assets last year amid an accounting scandal.

Japanese Chartology

Japan in a few charts:

The Stock Market is still down more 75% since the collapse of the late 1980s:

Inflation rate — or, as you can, the deflation rate, since the same period. Could the same thing happen to the US and Europe?

The 10 Year JGB, yielding between 2% and 0.5% in the past 15 years — could the same thing happen in the US and Europe?

BoJ interest rate. Japan has been in ZIRP for the past 15 years — could the same thing happen to the US and Europe?

The Government Debt-to-GDP ratio — above 200%, much much higher than any European country:

And the demographic time-bomb about to hit Japan:

Population growth — the population is actually declining:

People above 65 years old — pensioners are exploding relative to the rest of the population. They pay little to no taxes and sell their pension's investments:

People between 15 and 64 years old — declining steadily. These are the people who work, pay taxes, produce and invest in their pension funds:

People under 14 — there's no new generation waiting to take over. It's normal to see such a low birthrate. Would you think about having children if you were in a depression, having hard time meeting months ends and no knowing what tomorrow will bring?

Japan's Collapse is Approaching Fast

The BoJ, Japan's Central Bank, is a prime example of irresponsibility and ignorance, having been printing like madmen (Bernanke is probably their biggest admirer) for the past 20 years by buying JGBs (Japanese Government Banks) helping the state to borrow as much as 250% of their GDP, and more recently starting to buy real estate and equities ETF — I lack words to qualify these actions.

They are now coming with another great idea: buy foreign bonds with freshly printed yens. 50 trillion of them:

Jan. 26 (Bloomberg) -- Japan’s finance minister should allow the central bank to create a 50-trillion yen ($643 billion) fund to buy foreign bonds to combat the yen’s gains, a former Bank of Japan deputy governor said.

“Everything will be solved once the finance minister says okay,” Kazumasa Iwata, 65, said in an interview in Tokyo yesterday. As a member of a government panel on national strategy, Iwata proposed the facility in October, an idea Finance Minister Jun Azumi signaled he was reluctant to embrace because it would be equivalent to currency intervention, which is dictated by his ministry.

Please note this unbelievable statement from Iwata: "Everything will be solved once the finance minister says okay".

In the meantime, their economy is collapsing fast. Here are just two examples from the past couple of days:

Jan. 27 (Bloomberg) -- NEC Corp. fell the most in 10 months in Tokyo trading after forecasting its third annual loss in four years and announcing 10,000 job cuts. 

Jan. 26 (Bloomberg) -- Nintendo Co., the world’s largest maker of video-game machines, more than tripled its full-year loss forecast as the success of Apple Inc. devices erodes demand for the company’s 3DS handheld player. 

The net loss in the year ending in March may be 65 billion yen ($838 million), compared with an earlier forecast for a 20 billion-yen loss, the Kyoto, Japan-based company said in a statement today. That was more than the average 29 billion-yen loss forecast by 18 analysts tracked by Bloomberg.

Add to that the fact that the demographic outlook in Japan is horrible, and the also the fact that most people will be contaminated by radio active waste sooner or later, it's not to difficult to imagine that the future of Japan the way we know it is at stake in the coming decade or two.

On the shorter term, I believe that Japan will soon reach their limit in their abilities to borrow and/or roll their debt and that shorting their government bond might be a low risk high reward trade.

I will write in another post how smaller speculator who have no access to the bond markets could try to position themselves for this event.

Fukushima Tragedy: Regulators Allow Radioactive Waste Dumping in Tokyo Bay

This is a must-see presentation summing up the radio-active hazards that the Japanese are facing, and also people all over the world.

In addition to that, it seems like the Japanese government has decided to simply dump all the radioactive waste into the wild, which will contaminate sooner or later the whole planet for thousands if not millions of years.

When I think that my friends believe I've lost it simply because I won't drink my favorite beer (Kirin) or any other Japanese beer, I guess we now know that I was right not trusting the Japanese government to keep us safe...

TEPCO Believes Mission Accomplished &

Regulators Allow Radioactive Dumping in Tokyo Bay 

from Fairewinds Energy Education on Vimeo.

Is the Japanese government and the IAEA protecting the nuclear industry and not the people of Japan by claiming that Fukushima is stable when it is not? Fairewinds’ chief engineer Arnie Gundersen outlines major inconsistencies and double-speak by the IAEA, Japanese Government, and TEPCO claiming that the Fukushima accident is over. Dynamic versus static equilibrium, escalated dose exposures to the Japanese children and nuclear workers, and the blending of radioactive materials with non-contaminated material and spreading this contaminated ash throughout Japan are only a small part of this ongoing nuclear tragedy.

Governments and Central Banks in Panic Mode

In case some people were not sure, these below are not signs that everything is fine and that the green shots of 2009 are not producing an impressive massive harvest... quite the opposite.

Euro Central Banks Seen Providing Up to $270 Billion via IMF

(Bloomberg) — 02 Dec 2011 — A European proposal to channel central bank loans through the International Monetary Fund may deliver as much as 200 billion euros ($270 billion) to fight the debt crisis, two people familiar with the negotiations said.

At a Nov. 29 meeting attended by European Central Bank President Mario Draghi, euro-area finance ministers gave the go- ahead for work on the plan, said the people, who declined to be named because the talks are at an early stage. The need for a new crisis-containment tool emerged as the effort to boost the 440 billion-euro rescue fund to 1 trillion euros fell short.

Swiss Government May Consider Negative Interest Rate Policy 

(Bloomberg) — 01 Dec 2011 — Switzerland’s government said it may consider additional measures including negative interest rates to aid the country’s central bank in its fight against the appreciation of the Swiss franc. [...]

Stocks surge on Central Bank liquidity offering

Nov. 30 (Bloomberg) — The central banks of the U.S., the euro region, Canada, the U.K., Japan and Switzerland agreed to cut the cost of providing dollar funding via swap arrangements, the Federal Reserve said, and agreed to make other currencies available as needed.

China said earlier today it will cut the reserve requirement ratio for banks by 0.5 percentage points from Dec. 5, while data on U.S. business activity and the employment and housing markets topped economists’ estimates.

 U.K.’s Cable Urges ‘Unlimited Powers’ for ECB Amid Euro Crisis

Nov. 13 (Bloomberg) — U.K. Business Secretary Vince Cable said the European Central Bank needs unlimited powers to support the euro and the region’s debt-ridden economies.

“If a monetary deal’s going to work, the central bank has to have unlimited powers to intervene to support economies, and indeed banks, to prevent collapse,” Cable said in an interview on BBC television’s “Politics Show” today. “They need to have that clearly at a European level, and that’s one of the issues that hasn’t yet been adequately clarified.”

Releasing 70,000 Psychiatric Patients Shows How Deep Japan's Debt Problems Are

If I remember correctly, they did the same in San Francisco in the Reagan years?

Anyway, when you reach such extreme decision, it really means that you are back to the wall and have hard time finding space to breath.

Yet again, the case for the unintended consequences of the government's action are highlighted (see below).

In any case, this is sad and lives are at stake. But there's no way out of this and nature's law will prevail.

Sept. 14 (Bloomberg) -- [...] the government [...] wants to empty 70,000 beds to reduce the highest rate of psychiatric hospitalization among developed nations, lowering its 1.8 trillion yen ($23.5 billion) annual mental-health payments. Facing the world’s largest public debt and the fastest aging society, Prime Minister Yoshihiko Noda is trying to curtail growth in the country’s 34.8 trillion yen-a-year health bill. 

“The only thing the government has in mind is cutting medical costs,” said Yugo Miyata, who runs Yokohama Camellia Hospital on the outskirts of Tokyo. “If hospitals force out 70,000 patients immediately, we must be ready for several thousand of them to be homeless on the street.” 

The effort to reverse a five-decade policy of isolating psychiatric cases is unrealistic because most patients have no living relatives or have been hospitalized too long to cope outside, and because of the stigma in Japan of having a mentally ill relative [...] 

Care of the mentally ill accounts for 5.2 percent of the nation’s 34.8 trillion yen medical bill.

While the U.S. and western Europe began closing asylums and integrating patients into the community in the 1960s, in Japan the stigma of mental illness has ensured that the nation’s 1,076 psychiatric hospitals maintain a 90 percent occupancy rate. Japan has 13.5 times more psychiatric beds per 100,000 people than the U.S. and 4.5 times more than the U.K., according to OECD data. [...]

The mentally ill have been largely separated from society in Japan since the 1950s, when the government prohibited people from locking up sick relatives at home.  [...] 

“Many patients don’t need medical care,” said Okazaki at Tokyo Metropolitan Matsuzawa Hospital. “But they have no home to return to as their parents have died and their siblings don’t feel they have a duty to support them.” 

Treating Japan’s more than 300,000 psychiatric in-patients costs about 400,000 yen per patient per month on average, according to a 2009 health ministry survey. Between 70 percent and 100 percent of that cost is covered by the government, depending on the patient’s age and relatives’ ability to pay. For seniors, the state pays as much as 90 percent of the bill.
[...] 

With large subsidies, psychiatric hospitals, 90 percent of which are owned by doctors, have little incentive to release patients, according to the OECD report. Government payouts for seniors had “the unintended effect of turning hospitals into de facto nursing homes,” the report said. “Keeping patients in beds is an easy way to gain revenue.” 

Psychiatric patients in Japan are hospitalized for 307 days on average, compared with just over a week in the U.S. and about 11 weeks in the U.K., according to government figures. [...]

"Turning Japanese?" — "The US is Different"

The most dangerous sentences in the investment world always contain the word "different":

• This time it's different
• This country/city is different

These sentences are always followed a financial disaster.

So what about the US? Is it on the same path as Japan? Mr H, a friend of mine, sent me this report published on the FT

Turning Japanese? Not so fast, the US is different 

“Turning Japanese” was a classic one-hit wonder by The Vapors in 1980 and three decades later it is certainly not music to the ears of US policymakers and debt-strapped households as the world’s largest economy struggles for traction. 

The bursting of Japan’s debt bubble in the early 1990s heralded years of deflation and subdued growth, in spite of endless fiscal and monetary stimulus efforts. More That has seen equities languish, with the Nikkei 225 Average some 80 per cent below its peak, and kept the 10-year Japanese bond yield below 2 per cent since early 1999. Three years and counting since the bursting of the US credit and mortgage bubble, the yield on benchmark 10-year Treasury notes sits below 2 per cent, a level that suggests the US is in danger of emulating Japan’s experience of two lost decades. 

One significant concern is that, unlike Japan in the 1990s, the US is struggling at a time when growth expectations across much of the world are slowing. China is tightening policy and no one really knows the extent of contagion that may erupt from the denouement of the eurozone debt crisis, safe haven buying is pulling Treasury yields lower. 

While there are similarities between Japan and the US, there are crucial differences and 10-year yields below 2 per cent should be placed in context. For starters, the US does not face deflation at this juncture and also has a central bank that has been very proactive given its dual mandate of seeking stable prices and maximum employment. The US policy response since 2008 has been far faster than what occurred in Japan during the 1990s. 

Therein resides the hope for investors that the process of repairing financial and consumer household balance sheets will conclude well before the end of the decade. [...] 

Such efforts appear a hostage to the febrile political climate and a new stimulus plan announced by President Barack Obama to boost the economy this week, faces a tough ride through Congress. All of which leaves the Fed with the task of boosting the economy, as fiscal measures face the ranks of austerity hawks in Washington.[...] 

The drop in the 10-year yield below 2 per cent reflects eurozone fears and positioning by investors who hope to sell their paper back to the Fed, rather than a signal that the US is moving into a Japanese-style deflationary spiral. With the Fed determined to stop the US from sliding into deflation, an eventual recovery slowly beckons as households rebuild their savings and home prices stabilise. And “Turning Japanese” will simply remain a 1980s pop music artefact.

My take is that the author is not only completely ignorant of economics and the way the credit and fiat based currency system works, but is also completely incapable of even opening a history book and look at what happened in Japan.

Moreover, as I have stated many times in the past, "hope" is not a strategy. Buying risk on "hope" is completely stupid. Thinking that the Fed can do anything to boost borrowing when the social mood is reverting to debt averse and when both the consumer and the government are over-burdened with debt is completely is showing how high in the ivory tower the academics and journalists are.

The bottom line is that the more they will deny it, the higher the probability it will happen. It's actually happening as we speak. Deflation and the Greater Depression. You'd better admit it and start moving with the flow than deny it and face the wall a few months down the road.