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Land Of The Rising Bail In: Deposit Confiscation Coming To Japan Next

Tyler Durden's picture





 

We now know that 'muddle through' is over, and just as we noted here "there may only be painful ways out of this crisis" as we evidenced by Europe's attack on Cypriot depositors. With the pillars of Abenomics starting to crumble, it seems plans are afoot to prepare for the bank failures that will come from a BoJ-inspired out-of-control bond market.

As Nikkei reports, Japan's Financial Services Agency will enact new rules that will forced failed bank losses on investors, if needed, via a mechanism known as a "bail-in."

The FSA report also notes that Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases.

So not only will Japanese banks suffer VaR shock-driven needs to reduce JGB holdings but a weaker deposit base will further exacerbate the delveraging.

 


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Tue, 06/11/2013 - 20:21 | Link to Comment buzzsaw99
buzzsaw99's picture

banks profit from bonds = bonus time

banks lose from bonds = bailout AND bonus time

Tue, 06/11/2013 - 20:30 | Link to Comment max2205
max2205's picture

I will be having a sale on hari kari knives....

Tue, 06/11/2013 - 20:47 | Link to Comment ZerOhead
ZerOhead's picture

"The FSA report also notes that Mitsubishi UFJ (MTU), Mizuho Financial (MFG) and Sumitomo Mitsui (SMFG) are among those proposing amendments to allow them to issue the types of preferred shares or subordinated bonds that would be used in such cases"

Fuck that noise... if I am going to be the involuntary victim of a drive-by 'Bail In' I want nothing but equity baby... full fucking Class A non-subordinated testosterone soaked EQUITY... I want the keys to the shitmobile that they just handed me the ownership papers to...

And what I would do next would make those Abenomics clowns turn white and puke huge chunks like Paulson did back in '08...

Tue, 06/11/2013 - 21:17 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

Can things really get that much worse in Japan?  Tokyo is irradiated, the ocean around Japan is an open sewer of radioactive death, all their kids will have leukemia in a few years and everything will soon enough be a tranquil wasteland devoid of all life.  If you take away all the money, can things really get that much worse?

I put in bread in the toaster in the morning.  When it pops out I ask, "Who wants to see what Japan looks like?"

Tue, 06/11/2013 - 21:45 | Link to Comment Buck Johnson
Buck Johnson's picture

Your totally correct, Fukishima is irradiating that whole place along with the ocean.  The BOJ is in trouble and it's no wonder that our markets are having trouble trying to stay positive at all.  Because Japan is about to implode.

Tue, 06/11/2013 - 22:03 | Link to Comment alphamentalist
alphamentalist's picture

when i get pissed about the responsibility shifting tactics of the US govt and the Fed i try to remember the poor kids in fukushima/kanto that are getting tossed on the alter of japanese status quo. they have it worst of all.

Wed, 06/12/2013 - 00:03 | Link to Comment Fuku Ben
Fuku Ben's picture

Agreed

The whole world should be dropping these criminals in the middle of the Fukushima mess. Governments all around the world are complicit in the misery and death they knowingly inflict on those that foolishly entrust them with authority.

Large %'s of kids in and around Fukushima have been sentenced to a painful miserable life and quite possibly also an equally painful early death thanks to the lies and idiocy of a number of governments and corporations.

If you don't read Japanese let me interpret the preliminary results for you. These poor kids are f*cked.

http://www.env.go.jp/press/press.php?serial=16419

http://www.pref.fukushima.jp/imu/kenkoukanri/250213siryou2.pdf

Wed, 06/12/2013 - 03:35 | Link to Comment Non Passaran
Non Passaran's picture

Yes please fucking interpret the results for us.
The first is showing that 99% of the examined suffered no to minimal thyroid gland enlargement.

Wed, 06/12/2013 - 11:10 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Sure, no problem.

They went from 35% having at least something developing in their thyroid, to 43% having at least something developing in their thyroid, in a one year span.  It's also worth noting that the sample size was much larger the second year of the study.  This study had nothing to do with thyroid gland enlargement, these are actual cysts/nodules forming on the thyroid itself.  The longer Fukushima remains completely uncontained (current state), the worse this is going to get.  Note also that the radiation being emitted doesn't just affect the thyroid; any/all glandular tissue is affected here.  Think reproductive organs here.  

Wed, 06/12/2013 - 04:53 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

I wonder have birth defects risen on Japan since the nuclear disaster. No one is saying.

Wed, 06/12/2013 - 03:30 | Link to Comment Non Passaran
Non Passaran's picture

Bugger off GW

Wed, 06/12/2013 - 05:17 | Link to Comment Mentaliusanything
Mentaliusanything's picture

The following are the Banks that have been given permission to"Bail In"

Citigroup, HSBC,Deutsche Bank,JPMorgan Chase,BNP Paribas,Barcleys, Bank of New York Mellon, Bank of America,Misubishi UFJ FG,Credit Suisse, Morgan Stanley, RBS,UBS,Bank of China, BBVA,Groupe BPCE, ING, Group Credit Agricole, Mizuho FG, Nodea, Santander, Societe Generale, Sumitomo MitsuiFG, Unicredit Group, Wells Fargo, Standard Chartered, State Street..... and of course Who else but the Bank thats not a Bank but a gambling den of thieves... Goldman Sachs.

The are deemed to be systemically " Important Financial  Institutions"

Hat tip to the FSA OF SWITZERLAND

If they fail you lose baby!..... Watch and wait but be under No Illusion the credit cycle rolled over at Easter and continues.

Many other Banks have been told to prepare should one fail the stopping ofbthe falling Dominos will be brutal.

 

Tue, 06/11/2013 - 20:21 | Link to Comment cristo
cristo's picture

I am shocked !!!!!!!!!!!!!

Tue, 06/11/2013 - 20:22 | Link to Comment urbanelf
urbanelf's picture

Bare in?

Tue, 06/11/2013 - 20:23 | Link to Comment arkel
arkel's picture

Coming to a bank near you.

Tue, 06/11/2013 - 20:45 | Link to Comment TheEdelman
TheEdelman's picture

In Japan, bail-ins are also stated as a:

 

1...2...3...Karate CHOP!

Tue, 06/11/2013 - 22:05 | Link to Comment alphamentalist
alphamentalist's picture

opening a new account earns you not a toaster, not a spiderman towel, but a free gi! sign up now. supplies are limitless. 

Tue, 06/11/2013 - 20:25 | Link to Comment Scisco
Scisco's picture

So depositors are investors... right?

Tue, 06/11/2013 - 20:27 | Link to Comment buzzsaw99
buzzsaw99's picture

Taxpayers take the loss when banks are winning at bonds, pension funds and taxpayers take the loss when banks lose at bonds. Either way the CEO gets a bonus. Simple really.

Tue, 06/11/2013 - 20:31 | Link to Comment Scisco
Scisco's picture

Good job if you can get it. I just hope my belief in karama is justified.

Tue, 06/11/2013 - 21:19 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

Your belief in karma is justified.  Karma's aim is not so great though and it tends to miss a few ...

Tue, 06/11/2013 - 20:52 | Link to Comment Never One Roach
Never One Roach's picture

The Roaches will get their 7-course Kobe steaks, sake and Geisha no matter what:

 

http://www.dba-oracle.com/images/food_steak.jpg

http://geishajapan.files.wordpress.com/2011/03/geishahalfnaked1.jpg

Tue, 06/11/2013 - 20:25 | Link to Comment markar
markar's picture

if that isn't bullish for gold I don't know what is

Tue, 06/11/2013 - 20:30 | Link to Comment Major Major Major
Major Major Major's picture

Option 1: Pull Yen out of bank and buy stawks

 

Option 2: Pull Yen out of bank and buy JGBs

 

Option 3: Pull Yen out of bank and buy gold / silver

 

Option 4: Don't pull out and pray... <--- This is what I usually do, but I don't hold Yen, and my side piece lets me.

Tue, 06/11/2013 - 20:35 | Link to Comment JohnG
JohnG's picture

I took option 4 and ended up with a kid.

Tue, 06/11/2013 - 21:21 | Link to Comment Fish Gone Bad
Fish Gone Bad's picture

+1

Medical science now knows where babies come from, so its really not the mystery people purport it to be.

Tue, 06/11/2013 - 20:53 | Link to Comment BigInJapan
BigInJapan's picture

Option 5: Pull Yen out of bank. Pull yourself out of Japan.

Tue, 06/11/2013 - 20:33 | Link to Comment darteaus
darteaus's picture

BOHICA!

Tue, 06/11/2013 - 20:41 | Link to Comment buzzsaw99
buzzsaw99's picture

google translate: ??????????????

 

it didn't work, so here it is: http://missywpp.wordpress.com/2013/06/11/%E3%81%93%E3%81%93%E3%81%AB%E8%...

Tue, 06/11/2013 - 20:35 | Link to Comment alfbell
alfbell's picture

 

 

Kind of off thread but not really.

Is anyone familiar with HS Dent's newsletters, blogs, interviews and books to know whether he was truly as accurate as he says he was about his predictions over the last 20 years?

I just started getting into him. He's really put his credibility on the line because he has very outwardly predicted a deflationary depression starting no later than the end of 2014.

Anybody have the skinny on this guy?

Tue, 06/11/2013 - 20:43 | Link to Comment fonzannoon
fonzannoon's picture

I clearly remember his flagship "dent demographics fund" bombing and being folded into another loser fund about a decade ago.

Try Schiff, he is usually early, but right.

Tue, 06/11/2013 - 20:45 | Link to Comment drdolittle
drdolittle's picture

You're talking about " the roaring 2000s" guy right? Dow to 20k?

Think that's the same guy. If so, not so much, cheerleader, book promoter, trend follower.

Tue, 06/11/2013 - 20:55 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

Harry Dent is predicting Dow 3300

Tue, 06/11/2013 - 21:06 | Link to Comment disabledvet
disabledvet's picture

is he related to Harvey Dent?

Tue, 06/11/2013 - 21:15 | Link to Comment dick cheneys ghost
dick cheneys ghost's picture

sometimes.......

Tue, 06/11/2013 - 22:09 | Link to Comment Matt
Matt's picture

Two-Face the Hedge Fund manager. some days he calls for the end of the world, the next he calls for DOW 20,000.

Wed, 06/12/2013 - 07:50 | Link to Comment drdolittle
drdolittle's picture

In 1999 he had a book out, "the roaring 2000s" where he predicted dow at 20,000. Now, after the crash he predicts 3300. I think he's late to the trend. Maybe use him as a countertrend signal.

Wed, 06/12/2013 - 08:50 | Link to Comment S5936
S5936's picture

Harry( flim-flam ) Dent is as phony as a 3 dollar bill. Can't believe he's still around, his track record rivals Greenspans. Stay away.

Tue, 06/11/2013 - 20:35 | Link to Comment Mototard at Large
Mototard at Large's picture

Just like Cyprus, Spain, Canada and the UK are all either planning or already doing...

Tue, 06/11/2013 - 20:45 | Link to Comment Surging Chaos
Surging Chaos's picture

You just got Cyprused!

Tue, 06/11/2013 - 20:53 | Link to Comment alfbell
alfbell's picture

 

 

Don't drone me bro!

Don't Cyprus me bro!

Don't Corzine me bro!

Don't QE me bro!

Don't record my emails and phone calls bro!

Don't turn my dollars into toilet paper bro!

Don't Obamacare me bro!

Don't high tax me bro!

Don't frisk and xray me bro!

Don't disarm me bro!

Don't chip me bro!

 

Tue, 06/11/2013 - 23:47 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

You and me might be able to do some business together, just don't fiat me bro!

Tue, 06/11/2013 - 20:52 | Link to Comment BigInJapan
BigInJapan's picture

This roundeye is taking his money and going home.

 

Wed, 06/12/2013 - 10:14 | Link to Comment NoTTD
NoTTD's picture

Just a Gaijin man in the land of the rising sun.

 

http://www.youtube.com/watch?v=SlfdQXrCL-w

Tue, 06/11/2013 - 21:02 | Link to Comment Kirk2NCC1701
Kirk2NCC1701's picture

Dishonest Abe,

I think you're going Japanese, I think you're going Japanese, I really think so.

Tue, 06/11/2013 - 21:14 | Link to Comment bitgroin
bitgroin's picture

The Japanese article says losses will be forced on investors, not depositors.

 

http://www.nikkei.com/article/DGXNASGC1100T_R10C13A6EE8000/

Tue, 06/11/2013 - 21:29 | Link to Comment suteibu
suteibu's picture

The IMF declares only insured/guaranteed depositors should be protected...like in Cyprus.

"The legal framework will need to clearly specify which bank liabilities may be restructured under the bail-in power. To improve transparency and avoid uncertainty, only subordinated and senior unsecured debt should be subject to bail-in. Insured/guaranteed deposits, secured debt (including covered bonds), and repurchase agreements should be excluded from restructuring."

Tue, 06/11/2013 - 21:37 | Link to Comment mrjohn
mrjohn's picture

I think it says the burden will be put on investors, not passed on to tax payers

but of course the Zero Heads will never let accuracy get in the way of a good piece of alarmism

Tue, 06/11/2013 - 22:11 | Link to Comment Matt
Matt's picture

Depositors are creditors that can be converted into equity holders, therefore depositors ARE investors.

Wed, 06/12/2013 - 11:29 | Link to Comment Panafrican Funk...
Panafrican Funktron Robot's picture

Included in the definition of "investor" are deposits in excess of insured guarantee.  Applied to the U.S., this would mean aggregate deposits in excess of $250,000.  If you have $300K in the bank, then $50K of that is "investor funds".  

Backing reason behind this is pretty simple.  $9.6 trillion USD in deposits is insured by $25-$30 bln in FDIC insurance funds.

But hey, never let ignorance get in the way of trashing ZHers.  

Tue, 06/11/2013 - 22:08 | Link to Comment Uchtdorf
Uchtdorf's picture

The article does indeed use the word "toushisha" which is Japanese for investor. But if you're gonna take somebody's money and give him preferred stock or subordinated bonds in return what kind of investor do you think that would be? Right, the kind who invests by opening a regular account in the bank. In other words, Cyprus Part Deux 

Wed, 06/12/2013 - 03:39 | Link to Comment Mentaliusanything
Mentaliusanything's picture

If you deposit your hard earned into ANY Bank you are an "Unsecured Lender" ego you are a unsecured investor. The bank can do what it wants with it.. they can gamble it on a derivitave or loan it to a NINGA.They can buy shares in their own bank or buy dodgy Bonds. If it goes tits up you stand last in line. If you check World wide the Bail in is now dried ink. You think Cyprus was a one off?. First to move when one of the top 20 get burnt will at least have some cash and that cash will buy you what you bid. Trust me on this. Return of Capital trumps return on Capital in any card game you boys like to play in.

Wed, 06/12/2013 - 10:16 | Link to Comment NoTTD
NoTTD's picture

Post Cyprus, "investors" = "Depositors".

Tue, 06/11/2013 - 21:22 | Link to Comment Mine Is Bigger
Mine Is Bigger's picture

The Japanese are famous for keeping their wealth in bank deposits.  This is a scheme to scare them into moving money into what the parasites want -- securities, properties, etc. to steal their money "legally."  The Wall Street has been dying to get their hands on the massive Japanese private-sector wealth.  Abe and other U.S. puppets are making things easier for Wall Street banksters.  

Wed, 06/12/2013 - 03:26 | Link to Comment Non Passaran
Non Passaran's picture

Don't know about that... That sounds like a scheme to push a sane person into buying (more) PMs

Tue, 06/11/2013 - 21:29 | Link to Comment kito
kito's picture

More signs that they will skank (h/t fonz) the money rather than bail out the banks by printing........get ready folks and keep dollars outside the system.....

Tue, 06/11/2013 - 21:40 | Link to Comment fonzannoon
fonzannoon's picture

I mean could they not make it more obvious? WTF? Who announces the skank pre skank?

That used to defeat the purpose??????

Wed, 06/12/2013 - 10:09 | Link to Comment NoTTD
NoTTD's picture

They have an appointed offical called the Skankmeister to announce that.

Tue, 06/11/2013 - 22:04 | Link to Comment BeerBrewer09
BeerBrewer09's picture

Inflationary scenario still makes the most sense. They can buy a bunch of commodities with newly created currency before inflation trickles down, right up until it goes parabolic. Then when everyone is holding the (worthless) bag, they buy even more stuff with the commodities they bought before. WIN!

It does make sense to keep PMs/FRNs outside of any system. FRNs will work right up until they don't, in which case you will need PMs for when everything goes black market.

Bail-ins would create immediate bank runs. You can't hide bail-ins. Inflation is the much more cowardly and slow way to boil a frog. If you keep telling people there is no inflation based on some bogus government lies, they might actually believe it! Also, the key with inflation is that most people don't understand the way it works or even who to blame, so they work longer hours, go further into debt, etc. Even fewer people know how to protect themselves from inflation. I know a lot of seemingly intelligent people that can't figure out why the stock market is so high, and everything is getting so expensive, and they can't find a job, etc.

TPTB win tremendously through hyperinflation. They get vastly wealthier, buy everything, and get to control people even more than they do now. They also choose what happens afterwards. Sure, some of us will do great, but they will dominate. Put it together, man.

Tue, 06/11/2013 - 22:46 | Link to Comment three chord sloth
three chord sloth's picture

Twenty years too late. They should've ackowledged these banks had failed decades ago.

Tue, 06/11/2013 - 23:03 | Link to Comment yogibear
yogibear's picture

Instead of going Kamikaze on the banksters they will probably commit suicide. The banksters know this.

Tue, 06/11/2013 - 23:20 | Link to Comment Nue
Nue's picture

You know back in a sane world. When you said investor and bank in the same sentence you were talking about the stock and bond holders. Now your talking about the depositors. In which case why even have deposit insurance.

Tue, 06/11/2013 - 23:47 | Link to Comment OneTinSoldier66
OneTinSoldier66's picture

Becuase you have to keep up the pretense that Bankers are important, and honorable men.

 

Seriously, you couldn't have possibly asked a better question Nue! Doh!

Wed, 06/12/2013 - 02:48 | Link to Comment giggler123
giggler123's picture

The moment that happens; then its game over for euroland, people will see what started at home has happened again in such a short period of time over seas that even the silver generation cant simply ignore?  can they?

Funny, I spoke to my work colleage about the loss of depositor money and he never heard anything about it.  He said, I don't listen to the news.  But when I told him, he was googling, asking around the office, do you think they'll do it here in the UK?  Very interesting and makes me wonder how many just simply ignore everything until its in their face.

Wed, 06/12/2013 - 04:11 | Link to Comment smacker
smacker's picture

 

The term that's been adopted in the US/UK/EU and elsewhere by the political and central bank criminals to confuse depositors and distract them away from the Cypress term "bail-in" is "Bank Resolution".

This document dated 10th December 2012, issued jontly by the BoE & US FDIC sets out in confusing banker-speak what their plans are for bail-ins if/when the need arises:

  "Resolving Globally Active, Systemically Important,  Financial Institutions"  http://www.fdic.gov/about/srac/2012/gsifi.pdf

It is my view that in the UK, no forewarnng of a bank bail-in will be given by anybody. People will simply wake up one morning to hear that XYZ Bank is closed for 2-3 days whilst it take actions to "resolve" itself. Meaning, while it runs its computers to steal money from depositor accounts.

Perhaps the most devious aspect is that in the UK, the BoE & commercial banks have the authority to go ahead and implement the policy without any official public announcement by the Chancellor, thereby saving the Chancellor from getting it in the neck. He will simply duck the issue and pass it over to the banks as if it has nowt to do with him.

Wed, 06/12/2013 - 10:08 | Link to Comment NoTTD
NoTTD's picture

You mean it would be a  surprise attack?    Well, the Japs are experts at that.

Wed, 06/12/2013 - 14:11 | Link to Comment smacker
smacker's picture

Not if one believes the conspiracy theories ...

Wed, 06/12/2013 - 08:55 | Link to Comment S5936
S5936's picture

95 %

Wed, 06/12/2013 - 05:01 | Link to Comment Wile-E-Coyote
Wile-E-Coyote's picture

Umm I was thinking if the people around Fukushima are radioactive therefore they should be classed as a biohazard. Are these individuals allowed to travel freely? Imagine sitting on a Trans Pacific flight with one of these people; that nice warm feeling might be something sinister.

Wed, 06/12/2013 - 10:06 | Link to Comment NoTTD
NoTTD's picture

Banzai,  motherfuckers!!!

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