Health disasters have economic and political consequences that extend far beyond the hospitals and intensive-care units. Via The Japan Times, a case in point: Tepco investors may be wiped out. Excerpt:
Tokyo Electric Power Co.'s shareholders may be wiped out by the cleanup costs and liabilities stemming from the worst nuclear accident since Chernobyl.
The company faces claims of as much as ¥11 trillion if the crisis lasts two years and could lead to nationalization, according to Bank of America Merrill Lynch. Investors including Mitsushige Akino and Edwin Merner also urge shareholders to brace for further losses.
Tepco has tumbled 78 percent, the worst performer on the MSCI World Index, since the March 11 earthquake and tsunami knocked out cooling systems at the Fukushima No. 1 nuclear plant, causing radiation to leak. Should the crisis persist, the utility may be unable to repay bondholders and could be taken over by the government, Merrill said.
"Some sort of capital reduction or dilution is inevitable, depending on the degree of shareholder responsibility," said Akino, who oversees about $450 million at Ichiyoshi Investment Management Co., not including Tepco's stock. "It's not yet clear whether it will be down to zero or just halved, but it won't be what it is now."
Tepco fell 18 percent on the Tokyo Stock Exchange on Wednesday, reducing its market capitalization to ¥750 billion. The company was valued at ¥3.5 trillion before the 9.0-magnitude earthquake struck the Tohoku region.
If a similar collapse had happened to a comparable corporation in the US or Britain, investors wouldn't be leaping from their offices; they'd be dead from cardiac arrest before they could reach the windowsill.
We can blithely ignore the dengue deaths in Brazil, the cholera deaths in Haiti and the bird flu deaths in Egypt. But if Japan's economy staggers, the rest of us will stagger as well.
