Those Traders, Partners in Fraud

Today's focus is on the first hearing held of Jerome Kerviel and others, proved guilty associates in fraud. Hunt by the press and walls of cameras before to answer the Court. Today is his second day of hearings. He attacks the double standard of banks with staff and with the justice. His boss says that his actions put him alone in front of the justice. Although the amount of his fraud is said that it had never had a parallel in the history of finance, Jerome Kerviel is not the only trader to have hit the headlines. Before him, Nick Leeson, Hamanaka Yasuo, Toshihide Iguchi, or Brian Hunter, to name only the best known, had lost millions, even billions, to the firm employing them. Small selection of some "mad trader". Although banking scandals on the planet are rampant since the establishment of the Bank of St George in Italy in 1407, various swindles have particularly rocked the financial world during the last 100 years. These included the famous BCCI scandal of 1991, which had sunk with liabilities of $10 billion.

Quotes and tales

Jerome Kerviel is a French trader charged with causing a 4.9 billion Euro loss to the Societe Generale Bank, which characterized the culprit as a rogue trader who had worked these trades alone without authorization. This figure was far higher than the bank’s total market capitalization then. Kerviel told investigators that his superiors knew of his trading activities. Kerviel had generated Euros 1.4 billion in hidden profits at the beginning of 2008. He was charged with breach of trust, falsifying documents and computer abuse after the Societe Generale had filed a suit against him on January 24, 2008. Kerviel was formally charged in January 2008 with abuse of confidence and illegal access to computers. He was released from custody a short time after. The charges filed carried a maximum three-year prison term. Earlier, the investigating judges had rejected prosecutor’s bid to charge Kerviel with the more serious crime of “attempted fraud” and refuse bail.

"In March 2009, Madoff pled guilty to 11 crimes and admitted to operating what has been called the largest investor fraud ever committed by an individual. Madoff was arrested in December 2008, on a tip-off from his sons."

... continuing ...

While Madoff said that his firm had liabilities amounting to $50 billion, state prosecutors had estimated the size of the fraud to be $64.8 billion, based on the amounts lying in the accounts of Madoff’s 4,800 clients. It is pertinent to note that the US Securities and Exchange Commission had come under fire for not investigating Madoff thoroughly, despite the fact that questions about his firm had been raised as early as 1999. Madoff’s business, in the process of liquidation, was one of the top market makers on Wall Street. It was estimated to be the sixth largest in this context.

The scheme had begun to unravel in December 2008 as the stock market continued to plunge. Subsequently, as the market downturn accelerated, investors tried to withdraw $7 billion from the firm and in the weeks prior to his arrest, Madoff had struggled to keep the scheme afloat. After the Madoff scandal, the second largest financial sector rip-off in history was the 2008 Societe Generale trading loss incident.

Charles Ponzi

The first-ever known financial sector scam was recorded in 1920, when an investor Charles Ponzi had "taken the Wall Street for a ride"

Story:

"Charles Ponzi was one of the biggest swindlers in US history. Orchestrated after the First World War, Ponzi’s fraud centred on international postal reply coupons, designed to allow mail to be sent internationally. By acquiring these coupons abroad and exchanging them for higher value postage stamps in the US (essentially a form of arbitrage), Ponzi was able to make around a 400 per cent profit. Legally, this scheme was not illegal as Ponzi had advertised for investors and paid handsome windfalls to a handful of them initially. People mortgaged their homes and poured their savings into the company, which was accumulating colossal liabilities. Existing investors were paid off with the money of new investors. At the peak of his scheme in 1920, Ponzi was making around $250,000 per day, an enormous sum for the time. He was indicted on 86 counts of mail fraud and was sentenced to five years in prison. In 1920 again, Alves dos Reis perpetrated one of the biggest frauds in history by forging documents to print around 100 million Portuguese escudos (around $150 trillion in today’s money) in official bank notes. While in jail for forging cheques, Alves hatched a plot to convince a London-based printing company to make 0.2 million notes bearing 500 Escudo denominations for use in Portuguese colonies such as Angola. He then laundered the money and profited from 25 per cent of the proceeds. He was jailed for 20 years in 1930."

Though bank frauds kept on surfacing since 1920, here follows a list of the most significant scams during the last 20 years:

In November 1989, a junk bond king Michael Milken at the Wall Street firm Messrs Drexel Burnham Lambert, was sentenced to 10 years in jail for securities fraud. Messrs Drexel filed for bankruptcy after being fined $650m in fines and restitution. Milken had headed the bond operations at this US investment bank.

In February 1995, London’s oldest merchant bank Barings, founded in 1762, had collapsed in 1995 after a “rogue trader” Nick Leeson had lost £827 million in speculative trading, mainly on the futures markets. Leeson was a derivatives trader in Singapore for the bank and was supposed to be arbitraging-profiting from the differences between markets by simultaneously buying on one and selling on another. Instead, it emerged, he had been betting on the future direction of the Japanese markets and his un-hedged losses snowballed as he tried to cover his bad gambles. He was sentenced to six and a half years in a Singapore prison.

In September 1995, Japan’s Daiwa Bank suffered a $1.1 billion loss from unauthorized bond trading by Toshihide Iguchi, one of its executives in the United States. He was imprisoned in 1996. In June 1996, Japan’s trading house Sumitomo Corporation suffered a $2.6 billion loss over 10 years from unauthorized copper trades, primarily by chief copper trader Yasuo Hamanaka. Sumitomo fired Hamanaka, once dubbed ‘Mr Five Per cent’ because his trading team was believed to control five per cent of the world’s copper trading. He was later jailed for eight years.

Sources: Les Echos, The Star, The Washington Post,

The International News

http://bit.ly/cS9oBK

History of financial scandals

http://bit.ly/9wPtjC

Reporter's Notes

✍✍✍ Rabid!

The fascinating world of Japanese Green Tea!

The magic and spiritual beauty of a Japanese tea ceremony

Archeological evidence suggests that people consumed tea leaves steeped in boiling water as many as 5,000 years ago. Botanical evidence indicates that India and China were among the first countries to cultivate tea. Green tea has been consumed throughout the ages in India, China, Japan, and Thailand for pleasure and traditional Chinese Japanese and Indian medicine. Have you ever thought about breaking from your everyday black tea routine, and trying some green tea? Perhaps you thought it is too exotic, or were unsure how it would taste. It's time to get out of your tea ignorance, and brew up a cup of green tea. This will change your life! Journey into the fascinating world of O-Cha in the Shizuoka region, on Japan southern Pacific coast, on the foot on the Mount Fuji!

Black tea? Green tea? It comes from the same plant (Camellia sinensis), but the difference is in the processing. Green tea is dried, but not fermented. The shorter processing gives green tea a lighter flavor than black tea. It also helps keep all the beneficial chemicals intact, which is why green tea is so good for the organism.

Food delicacies tea-leaves base, in Kakegawa city, shizuoka prefecture

Matcha! The secret and tasteful Green tea is to be served at a Japanese tea ceremony With a light green color, it served according to the old rule of the Japanese Tea ceremony and often mixed with Japanese cakes.

Green tea (O-Cha, Matcha) nowadays has other functions than just drinking or eating leaf tea, it is good as a medicine. Soft medicine. This is possible through various researches, and evidence is starting to reveal that green tea contains many components that are good for human health, and is effective against aging, overweight, preventing influenza, the so-called lifestyle diseases, dementia.

Shizuoka Prefecture is a well-known traditional green tea region with geographical features and climate suited for growing tea. It is Japan’s top producer of green tea, and has 41% of Japan’s tea production, and 42% in terms of crude tea output. With its high production technology, Shizuoka produces high quality green tea, winning prizes in various fairs.

In the run-up to the 4th International Conference on O-CHA Culture and Science in October later this year, I noticed the varied efficacy of green tea, looked at the aspects of using tea in medical treatment and saw where it is produced. Also Shizuoka is offering a new business model in agriculture, on the theme of self-sufficiency and the environment, and bringing back into use the much-discussed abandoned farmland.

Governor Heita Kawakatsu of Shizuoka Prefecture fancies the green tea and the productive environment of regions. "Shizuoka has everything the Fuji san, te sea the land and the mountains, the water is delicious and the tea the best in the world! He interpreted the whole concept here in music VDO

Click the arrow to watch Governor Heita Kawakatsu

singing his tea favorite "ballade".

Green tea and Health benefits

Dr. Yoichi Sameshima, Director of the Green Tea Medical Application Center of the Kakegawa City General Hospital studied a more effective treatment for hepatitis C, he found the possibility that green tea’s antioxidant and metabolism efficacy may be effective in preventing and treating the so-called metabolic syndrome.

Kakegawa Study is the epidemiology research co-conducted by Tohoku University, Kakegawa City and Kakegawa City General Hospital. The three-year research, which started in June 2009, is aiming to collect scientific evidence from human beings on green tea’s effect, to explicate which kind of green tea is most effective, and to develop new food products. By the time this research concludes in fiscal year 2011, between 5,000 and 10,000 citizens will have cooperated in the research.

Currently, it is said that 20 million people in Japan are either suffering from or are likely to suffer from metabolic syndrome, and 2/3 of the Japanese die of lifestyle-related illnesses. 230 million people in the world are suffering from diabetes’ effect and the number of patients is on the rise. In these situations, green tea’s anti-arteriosclerosis effect has been proved through many experiments on animals, but few on human beings, and is therefore it is not yet established scientifically. Therefore, the KAKEGAWA STUDY is a unique and widely-noticed major research.

To name some major areas where green tea appears to be effective:anticancer, antioxidant, antibacterial, antivirus, reduces blood pressure and blood sugar, deodorant, prevents cavities.

Dr. Naohide Kinae (R) President of the University of Shizuoka, Dr. Tsutomu Nakayama (L) Professor and Dean School of Food and Nutritional Sciences

In December 2009, the University of Shizuoka and ITO EN conducted a co-research project and found that the catechin in green tea holds back the activities of the H1N1 virus; this was the first verification on a cellular level.

And how to make a living with tea business?

Kazuhiro Matsuki, moved to Shibakawa-cho, Shizuoka Prefecture, after working for 17 years in hotels and restaurants with Joel ROBUCHON both at home and abroad. On abandoned farmland, he is developing agricultural projects to revive agriculture in mountainous land and diffuse a new business model. Annual sales: over 150 million Yen!

Aiming at permanent agriculture by featuring self-support and recycling, the farm produces over 80 items of seasonal garden vegetables and herbs, which are 100% free of pesticides and chemical fertilizers.

Shibakawa-cho is at a height of 200m above sea level with abundant melt water from Mount Fuji, suitable land for agriculture. In the 20 areas of the 3 hectare farm, a rotation system is adopted and they are producing small amounts of but various kinds of vegetables. The farm is trying to use a form of agriculture which is environmental friendly and totally free from pesticides.

Clean farming

100% free of pesticides, using organic fertilizer and homemade grass compost, the owner of this farm, Mr. Yoshiharu Matsushita, is managing a 9 hectare organic tea field and he does everything from planting tea bushes to manufacturing tea.

In 2008, he obtained the international certification of the Japan Organic & Natural Foods Association (JONA). The certification is based on the policies of the International Federation of Organic Agriculture Movements (IFOAM) and is awarded to those who meet JONA’s international standards. Mr. Matsushita has been exporting tea to France since 1998, the exact same tea even after receiving the certification. It is the first Japanese green tea to be exported to Europe that meets the international standards with organic certification. Then came the testing part and I have to say that I enjoyed both the Ma-Cha tea and the delicate art of Green tea service.

"Green tea Gourmet" corner, a selection of Best Green Tea

Sencha is the most popular of Japan's green teas. It has a lightly astringent taste along with a slight sweetness. Lesser quality sencha tea is called bancha

Dragonwell green tea (also called Lung Ching) is the ultimate green tea. The name comes from a legendary well in the West Lake region of China where the tea is produced. The colour is bright green and the flavour is quite brisk. Be prepared to pay more than usual for this quality tea

Macha is the kind of green tea used in tradtional Japanese tea ceremony. It's ground up very fine, and the tea is whisked when prepared. The flavour is light and sweet. Macha works well added to desserts too.

These tea leaves are rolled into tight, little balls that apparently resemble old-style gunpowder. Because of the rolled form, Gunpowder green tea stays fresher longer than most other green teas. The taste is fresh and a little grassy.

Jasmine isn't exactly a kind of green tea, but is a blended tea with green tea leaves and jasmine flowers. The blossoms give the tea a very refreshing taste, and fragrant aroma.

Like the jasmine tea, genmaicha isn't a kind of green tea but a blend. This time, sencha green tea is mixed with toasted brown rice. This tea has a distinctive flavour.

Anji green tea is becoming popular due to its fine and subtle flavor. Its grown in the Zhejiang region of China and has thin little leaves that look almost black in dry form.

Press tour and interviews realized with the Foreign Press Center, Japan ( FPC ) 2010/o5

Reporter's Notes

Elected Kan stirs DPJ's factions' war after Ozawa 150 MPs' defeat

Ichiro Ozawa, the shadow shogun, ousted?

Democratic Party of Japan (DPJ) legislators close to former DPJ Secretary-General Ichiro Ozawa are intensifying their struggle opposition against Prime Minister-elect Naoto Kan. The opposition of this DPJ faction comes after the Kan appointement of Yukio Edano, former state minister for government revitalization and a staunch Ozawa opponent, to succeed Ozawa as Democratic party secretary-general.

With the House of Councillors election looming this summer, Kan aims to recover the declining public support rate for the government and the DPJ by projecting an anti-Ozawa image. But such a strategy could adversely affect the stability of the administration, only boosting discontent among members of the pro-Ozawa group.

Ozawa's faction agitation is next move. He and his 150 MPs' to act in the shadow until September DPJ convention leadership election. Ozawa will strike again...

Sources: Reporter's notes

Naoto KAN elected today as Japan New Prime Minister!

Activist turned politician, with today's new prime minister, who said Japan does not change?

April 12th at the Foreign press club in Tokyo, I asked Naoto Kan, whom we invited as deputy premier then to our luncheon- press conference if he would "have the guts to assume the duty of prime minister" if Hatoyama had to resign because of the "Henoko Futenma" problem?

Blank question I was aware of (I know him and often chatted with him before) but the only Q-one that counted, and to my surprise KAN did not say he would not become Prime Minister. His diplomatic comment at this time was to candidly state the "he always believed that Hatoyama should and could serve 4 years of mandate."

It took a few weeks to Mr. KAN to take the power!

Naoto KAN (pronunciation NAO - TO - CAN) elected today as Japan new DPJ president and is to succeed to Yukio Hatoyama as Prime Minister after Constitutional adoption by the Japanese Diet where the DPJ has a comfortable majority. 291 votes for Kan and 129 for his opponent. In a policy speech for the Democratic Party of Japan's presidential election, Kan said today he will continue to work on four key policies hammered out by Hatoyama. Those are creating an East Asian community as a regional forum modeled on the European Union, cutting greenhouse gases by 25 percent by 2020 from 1990 levels, decentralizing Japan's administrative power, and enhancing public services. Kan, 63, who was deputy prime minister and finance minister in the Hatoyama Cabinet, was challenged by Shinji Tarutoko, 50, a House of Representatives member, for leadership of the party. I explained the origin of this victory these last days on this blog. The major aspect of the future weeks is how to transform this personal victory of Mr. Naoto Kan into a party victory and one way to deal with it is to clean the "money politics" file and come clean with voters. Also important is the role to play by the shadow boss" of DPJ and that is how to deal with Mr. Ichiro Ozawa... and to see if a broader conversation about Japan Asia and Japan EU and US strategical interests is to come. Faulty on the Japan US base relocation, Hatoyama cabinet collapsed after months of bilateral crisis. Okinawa still pondering. They won't on the Upper House election to come announced for 11 th of July.

Kan is expected to form a new cabinet this evening, after he wins a prime ministerial election at plenary sessions of both houses of the Diet this afternoon. The new party executive lineup is expected to be announced later in the day the Daily Yomiuri writes http://bit.ly/aLKwQv

KAN today at the DPJ gathering VDO

Click the arrow above

Naoto KAN biography

Naoto KAN Married with two sons, he enjoys to play "Go", the strategy chess alike game... He is a veteran opposition leader and civic activist; a founder of the Democratic Party (DPJ) that swept the LDP from power in September 2009. He now finds himself prime minister following the abrupt resignation of Yukio Hatoyama. He ran four times for parliament before winning a seat. Naoto Kan was born in Yamaguchi in the south, the son of a factory manager. A physics graduate from the Tokyo Institute of Technology, he ran a patent firm and then became a civic activist, focusing on environmental issues. In 1980 he won a seat in parliament as part of the tiny Social Democratic Federation. He served as health minister under a coalition deal with the LDP in the mid-1990s, becoming very popular after he exposed a scandal involving tainted blood products. He forced bureaucrats to release documents which showed the government had failed to prevent the use of HIV-infected blood products for transfusions. The scandal provoked a public outcry, and his handling of it propelled him high in opinion polls.

He went on to co-launch the DPJ and led it during the election of 2003, establishing the party as a credible opposition force and potential challenge to the LDP. But a year later he stood down, after admitting that he had failed to make state pension payments for 10 months while he was health minister. Although his failure to pay was an apparent oversight, Mr Kan said he was resigning to avoid further damaging the DPJ. Five years later, he became deputy prime minister when Mr Hatoyama swept to power amid widespread popular discontent with the LDP government. He was also appointed to head the National Strategy Bureau, a new body charged with wresting control of policy-making from the powerful bureaucracy. But he took over the finance portfolio four months later after Hirohisa Fujii stepped down due to ill health. Announcing his candidacy to replace Yukio Hatoyama in June, he emphasised his ordinary roots. "I grew up in a typical Japanese salaryman's family. I've had no special connections," he said. "If I can take on a major role starting from such an ordinary background, that would be a very positive thing for Japanese politics." Popular because of his unorthodox route to the top, he is known as a keen debater and his nickname is "Ira-Kan" - ira being short for irritable - because of his reportedly quick temper. He is the 5th Prime Minister of Japan in 4 years.

Some media quotes

"I will tackle and pull Japan out of deflation through comprehensive measures from the government and the Bank of Japan," Kan said said in the statement, hinting that he would seek greater cooperation from the central bank. He pledged to resume fiscal reforms and work toward sustainable finances, including possible tax hikes, to ensure a strong social security system for Japan's aging population. Addressing concerns about financial scandals, he vowed to keep politics clean and tighten campaign financing laws. Kan is seen by many analysts as the DPJ's best hope for restoring confidence in its ability to govern and deliver a viable roadmap for the future. He is everything Hatoyama was not (decisive, outspoken and a grass-roots populist with common roots.)

Unlike recent prime ministers, he was not born into an elite political family. Several past prime ministers, including Hatoyama, had fathers or grandfathers who were also prime ministers. "I grew up in a typical Japanese salaryman's family," Kan said at a news conference yesterday in Tokyo. "I've had no special connections. If I can take on a major role starting from such an ordinary background, that would be a very positive thing for Japanese politics."

Diplomacy: Regardless of who is at the helm, Japan's foreign and security policies are unlikely to shift drastically. The Democrats took power promising to steer a diplomatic course more independent of close ally the United States, but Hatoyama's efforts to do so hit a roadblock when he failed to find an alternative to keeping a U.S. Marine airbase on Japan's southern Okinawa island. Tokyo and Washington have agreed basically to implement a 2006 agreement to shift the Marines' Futenma airbase to a less crowded part of Okinawa, host to about half the U.S. troops in the country. But local opposition clouds the outlook for implementation, and experts worry that Hatoyama opened a Pandora's box by fanning anti-base sentiment that could undermine the 50-year-old alliance. The next prime minister will also likely keep stressing the need to deepen ties with Asia including China, given Japan's increasing reliance on the region for economic growth. Currency: Kan caused a stir when he became finance minister in January by saying that he would work with the Bank of Japan to weaken the yen, and that "it would be nice" if the Japanese currency slipped further. But he has since toed the government line that stable exchange rates are desirable, but levels should be set by the markets. (agencies)

Quoted from the Mainichi Shimbun editorial

Perspectives on Japanese politics by Hiroto Kosuge,

Political News Editor in Chief

A change of prime ministers has become an annual event in

Japan. The past four years saw four prime ministers, each

of whom is either the son or grandson of a former prime

minister. This has raised questions about whether a

decline in the quality of prime ministers is attributable

to an electoral system that allows nepotistic succession

and problems involving political parties' ability to

develop leaders, or to a decline in the ability of the

nation as a whole.

Outgoing Prime Minister Yukio Hatoyama is the founder of

the ruling Democratic Party of Japan (DPJ), and was

burdened with the public's expectations for a historic

transfer of power. Nonetheless, Hatoyama caused confusion

in his own administration over the issue of relocating U.S.

Marine Corps Air Station Futenma in Okinawa Prefecture, and

announced that he will step down saying, "My resignation

will serve national interests."

No other prime minister has ever apologized to the public

using self-denigrating words. However, the important thing

is to reconsider the significance of the transfer of power

by scrutinizing the Hatoyama administration's merits and

demerits, and to see some positives in Japan's politics.

The prime minister stood by his own guns when he strongly

urged DPJ Secretary-General Ichiro Ozawa to step down as

well. A political funding scandal involving Ozawa's former

secretaries is largely responsible for the sharp decline in

the approval ratings for the Hatoyama Cabinet. Ozawa's

battle against prosecutors, which involved the DPJ, wasted

much of the administration's energy. The scandal, along

with a case in which Hatoyama's mother provided a large

amount of funds to his political fund-raising organization,

has caused the public's distrust in the administration.

Those involved were never summoned to the Diet for

questioning. Such a thing never happened under the

previous administration led by the Liberal Democratic Party

(LDP) when its members were involved in scandals.

The DPJ, which had gained public support through its

cleanliness appeal, became so insensitive to the issue of

politics and money because its members are afraid of the

power of Ozawa. Even though it is difficult, DPJ

legislators should have firmer convictions and the belief

that they can overwhelm Ozawa. The Hatoyama

administration's failure to utilize bureaucrats' expertise

also caused its ability to govern to decline, contributing

to its collapse.

In other words, the Hatoyama administration confused the

problem of bureaucrats who land lucrative post-retirement

jobs after receiving generous retirement allowances, and

the utilization of bureaucrats' expertise in working out

policies. The administration failed to work out a national

strategy for several key issues including security policy,

slashing greenhouse gas emissions and rehabilitating the

deficit-ridden state budget, which could call for a hike in

the 5 percent consumption tax. The National Strategy

Bureau, which the DPJ-led government planned to set up as

the government headquarters for working out a national

strategy, never functioned because no relevant legislation

was enacted to give it legal grounds. The Hatoyama

administration began its work by criticizing the LDP-led

government without making a clear definition of a transfer

of power.

Unless the DPJ-led administration learns a lesson from its

failure under a new leader without attributing the problem

solely to Prime Minister Hatoyama's personal

qualifications, the significance of the transfer of power

following the DPJ's landslide victory in the 2009 general

election would be brought to zero.

http://bit.ly/btS0lP

✍✍✍ How come the ex-Foreign affairs ministry Tomohiko Taniguchi, who now teaches at Keio university, succeeded in being one of the rare commentators able to spread his analysis on several "globish" speaking TV channels? He is virtually unknown in the Japan's pools of political commentators who could not give much credit to an ex contracted diplomat under the LDP ruling.

Sources: reporter's notes, agencies, The Mainichi shimbun,

Daily Yomiuri, ajc.com

Japan Prime Minister Hatoyama Resignation: Who’s the Pigeon?

Yukio Hatoyama high-up following his resignation...

Everyone! Remain calm! Mr Ozawa is in charge and Kan will run as I wrote yesterday on this blog.

Update: Thursday June 3rd

May 27, the day before the announcement of the new base relocation accord, Koshiishi had been joined by only a handful of other DPJ lawmakers in pressuring Hatoyama to step down. "What are they going to do by dismissing Hatoyama? They have no strategy for afterward," an aide to Hatoyama said at the time. But the tide changed after the prime minister kicked SDP chief Mizuho Fukushima out of his Cabinet for her refusal to endorse the government's relocation policy Friday and the tiny party decided to leave his coalition Sunday in protest. Many DPJ lawmakers then began openly criticizing the party leader. According to the sources, Ozawa, who had been silent about the moves within the party, finally instructed his aides on Sunday -- "It's OK now to move to oust Hatoyama." Other testimony suggesting Ozawa's willingness to sack Hatoyama suggested the DPJ secretary general made an inquiry around that time about whether there had been any cases in which an attestation ceremony for new Cabinet members had been held at the Imperial Palace on a Sunday. It was obvious that Ozawa, who often says "a political vacuum is not permissible," was preparing for the possible launch this coming Sunday of a post-Hatoyama Cabinet, the sources said." (Sources: Kyodo news dispatch)

Well, all of it was expected since 48 hours. The biography of the ex-prime minister Hatoyama is rolling uninterrupted on the TVs' in a record timing. Everyone was quickly ready right after Prime Minister Hatoyama announced his resignation on a special TV broadcast. Under a beautiful spring sun, Tokyo seemed to have been not that much disturbed. The stock index, the Nikkei, lost just 1,12% while the Euro quoted 1 $ 22, 112 Yen 10 and the $ closed at 91 Yen.

Unaffected, after the US Japan cold on the Okinawa - Futenma US bases, and the scandals on political donations, the markets, the Japanese bureaucracy, the ordinary Japanese, expected this move.

Hatoyama resignation was not such a shock for 75% of the insular as they already gave up hopes in politics, 9 months after not quite seeing any change into their purse and plate following the historic (and hysterical) victory of the Democrats versus the Liberals. Now what is going wrong with all these prime minister who give up one after the other in Japan!!? (Abe, Aso in LDP, now Hatoyama -- 'pigeon mountain' in Japanese language-- for the DPJ)

"Et maintenant"?

The ruling Democratic Party of Japan who has a majority at both chambers of the Parliament will now choose its new leader this Friday, June 4th, and a new Cabinet is likely to be launched Monday June 7th. Contenders? As I wrote on this blog, there is his Deputy Naoto KAN, or the Transport minister Seiji Maehara, Foreign Minister Okada, Yoshito Sengoku, the national strategy minister, (not the appeal type but what Japan needs now is not a bella figura, but a man able to deliver politics to seduce the flocks), he is a socialist minded. Also on line a couple of younger such as Kazuhiro Haraguchi (who denied he would run). Haraguchi like Maehara are the free-market policies types, and he is known for calls to shift policy responsibilities away from the central government and offer more to regions. A call that could attract the local municipalities harshly slaughtered since years by successive national government policies.

The favorite Japanese Deputy Prime Minister and Minister of Finance Naoto KAN will NOT likely attend a planned meeting of Group of 20 finance ministers and central bankers in South Korea this weekend, because he will participate to the Democratic Party inner presidential elections to select the "candidate".

What is coming after, constitutionally speaking. First is the question about Ichiro Ozawa. Will he or not "let go". He certainly left his position at the DPJ as Party de facto "boss". But... he is known to favor best strategy for election, a job he occupied since 20 years when he worked at the top ladder of the LDP, and his knowledge to organize an election is fundamental. He is said to have provoked Hatoyama resignation, there is much speculation on his future role in mapping the July election. Without Ozawa, the Democratic party is in turmoil.

Agenda:

"A leadership election will be held Friday, and the Cabinet is likely to be organized and (a new prime minister) is likely to give an inaugural address Monday," Ozawa said during the meeting, which was held shortly after Prime Minister and DPJ President Yukio Hatoyama announced his decision to resign. The council members decided at the same meeting that the DPJ would hold a general meeting of DPJ Diet members on Friday to choose a new leader, who will succeed Hatoyama as prime minister, according to participants. Once the new leader is elected prime minister in the Diet, that person will pick others as members of the new Cabinet. The officers also confirmed that all members on the council will resign, including Ozawa, the participants said. A DPJ president is normally elected with votes from party lawmakers, party members and supporters.

But party rules stipulate that in the event of a vacancy in the post in the middle of a leader's tenure, a new president can be chosen at a general meeting at which party lawmakers will cast their votes. Such a system is preferred when the Diet is in session because the formal leadership election process takes several weeks to complete. Rules used to pick a party leader at a general meeting are devised in each such election. In the last leadership election in May last year, which was held upon Ozawa's resignation over a funds scandal, candidates who collected endorsements from 20 or more party lawmakers filed their candidacy. Hatoyama was then elected in a secret ballot among party lawmakers. A party leader's tenure is normally two years, but a leader chosen at a general meeting serves the remainder of the predecessor's term. Hatoyama's term lasts until the end of September, essentially the end of the tenure of his predecessor Ozawa. Whoever is chosen at the meeting of party lawmakers on Friday will therefore have to stand again in another leadership election by the end of September.

Ozawa Ichiro VDO http://bit.ly/aeYaKp