Former Japan Government Officials Promoted AIJ to Pension Funds

Crony capitalism is one of the reasons for Japan's stagnant economy.

Their economic system is highly structured, and almost feudal in nature, organized around keiretsus. Crony capitalism in the States and the UK is more informal, gang-oriented, and fluid, more beneficial to a few powerful men than entire organizations.

But in both cases what makes it 'work' is the revolving door and mutually beneficial relationships between government and the corporations.

One key difference is that in Japan the power is held more by the organization, and not a narrow personal elite. There is also a much stronger 'safety net' for the public at large. Both societies tend to cover up their financial scandals involving the powerful: the Japanese out of a deep sense of shame, and in the West, out of a deep sense of personal entitlement.

In other words, Japanese crony capitalism it is not as predatory with respect to its own people as is seen in the West. Their policies are designed to procure advantage internationally. That is what makes this AIJ scandal so shocking to the Japanese public.

It has defrauded pensioners and involved western financial firms. We're not in Hokkaido anymore, Toto.

Even with their aging demographics, such protracted stagnation, when not attributable to an exterior force, almost always involves a serious policy error on the part of the fiscal and monetary authorities.

The Japan Times
Ex-insurance official plugged AIJ to pension pals
Saturday, March 3, 2012
Kyodo

A former official of the defunct Social Insurance Agency has revealed he used to recommend troubled AIJ Investment Advisors Co. to pension fund executives.

The former official said Friday that AIJ, which is believed to have lost some ¥210 billion in corporate pension money under its management, invested heavily in his consulting company and also paid fees to it.

He said he recommended AIJ to other former agency officials he met at pension fund seminars. While he denied forcing them into contracts, these former officials may have contributed to AIJ's expansion.

His firm received half its capital from AIJ, as well as some ¥6 million annually in consulting fees for about four years. AIJ also lent employees to his company and paid their salaries.

According to a labor ministry survey, 23 former senior officials of the agency, the predecessor to the Japan Pension Service, landed jobs at pension funds across the country after retiring between August 1999 and September 2010.

A pension fund in Hokkaido where one of the 23 retired officials was offered a post had a pension management contract with AIJ...

A Closer Look At This Week's Intervention In the Metals Markets

Here is a somewhat lengthy video but is quite good.

It goes into a long discussion of bullion bank activity and leasing.

I think that the silver shorts are still staring into the abyss and are quite concerned about their precarious market positions.

But it could have been something more 'official.'

The recent rigging of the LIBOR market is not a bad model for the carry on effect of this market operation that I alluded to the other day. However, I think some of the participants who went along for the ride are getting set up as 'the Big Shorts' are trying to offset their untenable risk.

Silver looks like a ticking time bomb waiting to blow a hole in the paper markets.




Additionally, there was nothing unusual in the lease rates.

Gold Daily and Silver Weekly Charts

The metals continued to consolidate after this week's very calculated and heavy handed 'selling for effect.'

SP 500 and NDX Futures Daily Charts - Orwell Just Threw Up

"When it comes to fighting financial fraud, the Obama Administration’s record of success has been nothing less than historic."

Eric Holder, Attorney General for Obama Administration, Address To Columbia University

May I remind the Attorney General that, in the words of Charles Ferguson, " three years after our horrific financial crisis caused by financial fraud, not a single financial executive has gone to jail, and that's wrong."

Mr. Holder went on to say:

“We found that much of the conduct that led to the financial crisis was unethical and irresponsible. But we have also discovered that some of this behavior — while morally reprehensible — may not necessarily have been criminal.”

And if that is the current standard of justice being applied to wanton, pervasive, and obvious financial fraud and white collar crime by powerful insiders in Washington DC these days, then it will come as no surprise to the thousands of victims of MF Global that no one will be held accountable.  Not to mention the millions of victims of fraud in the mortgage crisis, and the ongoing predatory banking and market fixing.

And the rest of us should not be surprised when we find that nothing is safe from those who think that the law and words mean whatever they want them to mean.

When Obama said "Yes We Can" I think most Americans thought he meant something else.

And the shame and the pity is that this November Americans will be given a choice between Brand A and Brand B, which are in reality the same corporate products, manufactured by the same people, with just different marketing messages.