As Buffett Talks Down Japanese Devastation, His Munich Re Announces Massive Loss, Forecast Miss Due To Earthquake
If one was merely listening to the Octogenarian of Omaha this morning on CNBC, one could easily have left the latest cheerleading attempt by the man who has made both an art and a science of frontrunning the government's rescues of the most incompetent and insolvent organizations in America (and later writing oped's both thanking and criticizing Uncle Sam for doing everything possible to transfer as much taxpayer money into Warren's right pocket just before the hypocrisy medication kicks in) to hypnotize the lemmings into believing all is fine in Japan. If indeed that would be the case, one may therefore be excused for not noting the killer irony of one Munich RE coming out just a few short hours later, saying it expects to not only see $2 billion in losses due the events in Japan, but miss its 2011 profit target by a mile, considering the firm had a $3.4 billion profit target. The kicker, of course, is that Munich Re is owned more than 10% by the same demented individual noted above, who has now gone full retard in his attempts to sucker as many sheep into the slaughter just so he can recover, through secondary and tertiary channels, some of his imminent losses in Japanese insurers and reinsurers. And considering that the Nikkei just reported total earthquake-related losses may be up to ¥25 trillion, or roughly ¥20 trillion more than covered by the Japanese Reinsurance Fund, Buffett better be right...Or if not, he better be petitioning the Japanese government to bend over just like America did 3 years ago, and once again bail out his "genius investor" derriere.
From Property and Casualty:
Due to the earthquake and tsunami in Japan, Munich Re says it will not reach its profit target for 2011 after reporting an expected loss of more $2 billion from the event.
The Munich, Germany-based company says its estimated loss of around €1.5 billion (U.S. $2.1 billion at the current exchange rate) is after retrocession and before tax.
The company’s 2011 profit target had been around €2.4 billion ($3.4 billion).
Munich Re says its initial loss estimate is based solely on modeling. Owing to the extent of the destruction, further possible aftershocks and difficult cleanup operations, it will be many weeks before the losses are assessed and all the claims notifications from Japanese primary insurers have come in, says the company.
And here is why the final "one time" catastrophic loss for Munich Re may mean the company has to say goodbye to its entire projected profitability this year, not to mention further "one time" rescue funding from the likes of the German, US and Japanese governments... or else [insert token End of the World scenario here]:
The government estimates direct damage from the March 11 earthquake and tsunami at 15-25 trillion yen, significantly more than the roughly 10 trillion yen for the Great Hanshin Earthquake of 1995.
Economic and Fiscal Policy Minister Kaoru Yosano is expected to present the projection to relevant ministers on Wednesday in the monthly economic report. The damage estimate, the first to be released by the government, will serve as a basis for compiling supplementary budgets and drawing up reconstruction plans.
A JX Energy petrochemical complex in Chiba Prefecture suffered extensive fire damage.
The estimate covers damage to such infrastructure as roads and ports as well as destruction of homes, factories and other buildings. The figure does not include economic losses resulting from the problems at the Fukushima Daiichi nuclear power plant and rolling blackouts.
A large area, from northeastern Japan to the Tokyo region, suffered major damage from this month's quake and tsunami. Private-sector research institutions have estimated damage from the disaster at 10-20 trillion yen.
Of course, none of this should ever be mentioned by the fawning admirers of the octogenarian at CNBC. After all, considering the vesting schedule of their shares, it very well may have occurred to some that the last thing they want to do is cross the kindly grandfather who just may put up a bid for Comcast when all is said and done, now that the Berkshire empire needs a media outlet from whence to issue its propaganda spin: an event that will result in immediate cash vesting of each and every share, and instant liberation from the clutches of the middle class for such immense reporting talents as Becky Quick et al.
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