The TEPCO Bail Out Begins: Japanese Government To Foot "A Portion" Of Compensation Costs

As predicted when we outlined the imminent surge in TEPCO CDS nearly two weeks ago, when the utility was trading still in the double digits, we speculated that the Japanese government will have no choice but to step in and rescue the pre-collapse utility. Indeed, that is now reality, with Reuters reporting that "the Japanese government is looking at paying off a portion of the compensation Tokyo Electric Power Co will owe to evacuated residents, local farmers and others directly hit by the emergency at the Fukushima Daiichi nuclear power plant." The question we have is how much did Japan bulls such as Buffett purchase in TEPCO stock in advance of this latest pseudo-socialization in which taxpayers once again bail out private shareholders, and just how much of his decision to acquire said stock would have been predicated on the knowledge another taxpayer-to-right pocket transfer was imminent.

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