The global financial Ponzi gets crazier by the day, and more often than not the mad men who run Japan Inc. are front and center. But even Japan’s whacko Prime Minister, Shinzo Abe, has outdone himself with the Japan Post Holdings IPO.
We could start with the fact that after trading up roughly 25% from the offer price in an apparent fit of nationalistic mania, the holding company and its two subsidiaries were valued at $140 billion. Needless to say, that sporty valuation was not owing to the fact that Japan’s 24,000 unit postal savings system experienced a sudden spurt of growth.
In fact, revenue has been falling for years, and net profits have been nothing to write home about. Indeed, the group’s offering release indicated an expectation that the net income of Japan Post Holdings would drop 23% to 370 billion yen in the year ending next March 31.
Stated differently, Abe & Co have foisted on Japan’s retail public, which got upwards of 75% of the shares sold this week, the vastly inflated stock of a dying public bureaucracy which by its own admission is now ‘earning’ 33% less than it did in FY 2013.
This post was published at David Stockmans Contra Corner by David Stockman – November 5, 2015.
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