I was reading an article today about how the return of former Prime Minister Shinzo Abe, now head of the LDP, as the new Prime Minister, could be absolutely devastating in terms of the value of Japanese bonds. Yes, I was actually reading a finance article. Not that I claim to fully understand it but then again, it’s not completely over my head either.
Here’s the first two paragraphs:
Bond Risk at Month High on Specter of Abe Spending: Japan Credit
Japan’s bond market is signaling concern that a government run by Shinzo Abe will ramp up spending to revive growth, adding to a debt burden already twice the size of the nation’s economy.
The cost to protect Japanese government bonds against nonpayment for five years rose every day last week, reaching 76 basis points, the highest level since Oct. 30, according to CMA prices compiled by Bloomberg. Contracts on U.S. Treasuries were at 37.5 basis points. Theextra yield that investors demand to hold 20-year JGBs instead of 10-year notes is hovering near a 13-year high, showing they are pricing in more long-term risk. for the rest of the article click here
So I was thinking, what would be the best way to explain my own sort of aversion to having Shinzo Abe return as PM other than the fiscal meltdown he might create. He is death for Japan Bonds. He is Bond. And then it occurred to me, that with his pro-nuclear policies, he might add another atomic meltdown to the fiscal meltdown or do both. So to fully explain my views on the guy, without taking the trouble to get to serious about it, because after all, Prime Ministers in Japan make fireflies look like turtles, I pondered what would happen if Shinzo Abe played Bond. It might have seemed like a crazy notion a year ago, but the movie starts on December 16th. I can hardly wait.
In light of all the recent information that has come to light about TEPCO and the Japanese nuclear industry’s problems and involvement with anti-social forces, not to mention the industry’s history of criminal malfeasance, we have decided to repost Professor Kingston’s chapter on the subject. It’s from his eerily prescient book Contemporary Japan published long before the Fukushima triple meltdown. It’s a long read but well-worth it. We first posted this in June of 2011.
Those fears were well founded. The history of Japan’s nuclear industry is as dark as Fukushima Prefecture was on the night of March 11th, when a 9.0 earthquake devastated the nation and a meltdown took place at Tokyo Electric Power Company (TEPCO) ‘s Fukushima Daiichi Reactor. TEPCO is only one company among several that has had nuclear “accidents.” In his book published in 2010, Professor Kingston describes the problems and history of Japan’s nuclear power industry. With his permission, Japan Subculture Research Center is publishing the relevant chapters from his book cited above. The book eloquently and objectively sheds light on a the problems endemic in Japan’s nuclear power plants, the ministries that oversee them, and the private companies which manage them, often quite badly and to the detriment of the general public.
The Japanese government puts a great deal of faith in, and spends massive amounts of money on, nuclear energy. This reﬂects policy-makers’ dream of securing energy self-sufﬁciency and explains why two-thirds of the national energy research and development budget is devoted to nuclearpower. In terms of reducing carbon emissions and reducing dependence on oil imported from the Middle East, it is a sensible policy. However, there are good reasons why the majority of Japanese remain skeptical about nuclear power.
Japan has witnessed a series of nuclear accidents over the past two decades that raise serious concerns in an earthquake-prone nation with ambitious nuclear power plans. Japan is totally dependent on imported energy and has thus invested billions of dollars since the 1950s in developing its nuclear energy program. Public concerns about the safety of nuclear power contrast sharply with ofﬁcial insistence that the nation’s facilities are both safe and necessary. Polls consistently reveal that 70-75 percent of Japanese have misgivings about nuclear power and fear that serious accidents might happen.
With dwindling reserves of fossil fuels, high prices, and growing concern about greenhouse gases related to consumption of these fuels, the prospects for the nuclear power industry have brightened considerably. Advocates assert that nuclear power is the trump card in the battle to reduce emissions and curb global warming while critics suggest it is more of a wild card given the risks, high costs, and long-term waste disposal issues involved.
Japan currently operates 55 nuclear power plants, up from 32 in 1987, that supply nearly 35 percent of its electricity needs. The government plans to raise the share of energy generated by nuclear power to 41 percent by 2014. Since 1998 two nuclear power reactors have started up with six more currently slated for installation or expansion. In the following sections we examine some notorious incidents and aspects of Japan’s nuclear power program that help explain why so many Japanese have considerable qualms about the potential environmental consequences. Continue reading The Melting Sun: Japan’s Nuclear Follies