Tokyo Literary Masters: Starting from the Late 1980s

Chapter 192 The Desperate Japanese People

At this point in the Tokyo Stock Exchange, the foreign capital's strangulation had long since moved beyond the initial probing stage and was now fully baring its fangs.

For traders on Wall Street and in London, their current sell-off doesn't even require complex mathematical models.

It was as if they had obtained an extremely precise topographical map. Following the analysis in "The Collapsing Tower," they hammered down on each and every aspect of the housing system, joint guarantees, implicit guarantees from parent banks, and inflated real estate mortgages.

Every short order was precisely aimed at the most vulnerable artery of Japan's financial system.

Faced with this premeditated attack, the Ministry of Finance certainly would not sit idly by.

The internal hotline of Kasumigaseki had been running non-stop since before the opening, dialing one after another to the presidents' offices of Nomura, Daiwa, and Nikko, as well as the headquarters buildings of leading insurance companies such as Nippon Life.

The officials from the Ministry of Finance on the phone skipped the lengthy Japanese pleasantries, spoke noticeably faster, and even revealed a hint of impatience and anxiety.

Although they still stubbornly cling to bureaucratic platitudes like "irrational fluctuations" and "a broad perspective," attempting to cover up the situation by saying "foreign speculation does not represent fundamentals," their almost commanding tone has completely torn away their usual composed facade.

For financial executives who deal with the Ministry of Finance year-round, this kind of "window guidance" that has lost its dignity and is somewhat exasperated is more suffocating than ever before.

When even the usually aloof state apparatus cannot maintain a semblance of composure, it means that a true abyss is imminent.

The financial executives on the other end of the line knew perfectly well that the Ministry of Finance had completely abandoned its stance of mediating negotiations.

Those official pronouncements, tinged with anxiety and force, translate into nothing more than a naked death order: immediately mobilize the proprietary funds of various institutions to step in and take over.

Kasumigaseki needs them to use their massive domestic savings to withstand the onslaught of foreign capital, sparing no expense to firmly hold onto the Nikkei index at the final psychological barrier of 23,000 points.

Because once the 23,000-point level is breached by foreign capital, the illusion of a "technical adjustment" that the authorities have painstakingly maintained on television over the past few months will be completely shattered.

Once the fig leaf falls, what will inevitably follow is a stampede of panic across society.

Under this vast network of administrative relationships, even if the executives of several large institutions are terrified by the flood of sell orders pouring into the trading hall, they can only grit their teeth and issue orders.

Soon, the proprietary trading desks of several large securities firms reluctantly began to operate.

Less than half an hour after the market opened, domestic buyers began pouring into bank stocks and real estate stocks.

Just as heavyweight stocks like Sumitomo, Mitsui, and Dai-ichi Kangyo were being pushed down by foreign sell orders, domestic funds immediately stepped in to support them.

The market was pulled up very well at one point.

Several core bank stocks even managed to turn positive from their intraday lows.

By the close of trading, the Nikkei index had been pushed back above 23,000 points.

That evening, in the financial news, the invited economist pointed to the barely flat candlestick chart and smiled easily as he addressed the camera, stating: "The entry of domestic institutions proves that Japan's internal capital pool remains abundant."

"The selling pressure from foreign investors is just a short-term test. The support from the three major conglomerates and insurance companies is enough to show that the fundamentals of the Japanese economy remain as solid as a rock."

This high-sounding rhetoric was broadcast repeatedly by major television stations.

However, none of the frontline traders actually sitting in front of the trading terminals could manage even a hint of a smile.

Because there was absolutely no sign of "stabilization" on the screen, only one-sided bloodshed.

Foreign capital is not panic selling; it is systematically slaughtering its prey.

There was no trace of retail investors haphazardly selling off their shares on the market. All the short orders were placed precisely and rhythmically: local institutions had just poured in tens of billions of yen in the morning, managing to lift the price of bank stocks by a few points.

However, as the afternoon approaches the market closes, several massive overseas sell orders will fall precisely on time, like a pre-programmed guillotine, instantly burying all of the funds that the Tibetan government has used to support the market throughout the day.

"How many chips do they actually have left?"

A young trader stared at the plummeting order book, his voice hoarse and trembling.

The senior colleague beside him didn't even turn his head, his gaze fixed on the details of those core bank stocks. After a long while, he lowered his voice and replied, "This isn't about how many shares they have. They don't care about today's ups and downs at all; they're testing how thin our foundation really is."

This statement plunged the entire trading floor into silence.

The Ministry of Finance ordered them to hold the 23,000-point index level at all costs, but foreign capital wasn't targeting any particular day's level; rather, it was targeting the underlying themes outlined in "The Collapsing Tower": bad debts in residential properties, inflated mortgage rates, and so on.

Cross-shareholding and parent bank backing — it's like using a red pen to correct a riddled ledger, hammering down on each flaw one by one.

In the following days, the so-called "market support" completely degenerated into a desperate war of attrition.

The Ministry of Finance called to exert pressure in the morning, securities firms urgently borrowed funds internally at noon, and insurance companies were forced to buy more O shares in the afternoon.

After the market closed each day, seeing the ever-growing huge unrealized losses on their books, the heads of proprietary trading departments at several leading securities firms finally couldn't contain their anger in a private meeting.

"This is not market intervention at all!"

An executive from Daiwa Securities slammed down the financial statement in his hand, gritting his teeth and growling, "This is clearly Kasumigaseki using our balance sheet to clean up the mess they're desperately trying to cover up!"

Despite their anger, when the Ministry of Finance's hotline rang on time the next morning, the executives of various organizations would immediately stub out their cigarettes and adopt the most respectful tone as they spoke into the microphone, repeatedly saying yes.

Subsequently, instructions were issued layer by layer, and the traders at the control panel could only numbly tap on their keyboards, continuing to pour their life-saving money into that bottomless pit.

In this circle, offending the market might only result in a huge paper loss, but if you go against Xia Guan's will, you could be permanently stripped of your right to work in the financial district.

However, no matter how much power the Ministry of Finance has, it can only forcefully suppress the heads of local executives, but it cannot stop the frantic overseas sell-offs on the screen.

The pressure from bureaucrats is meaningless in the face of the strangulation of capital. When their cards have been seen through by the world, no matter how much money they pour in with domestic savings, all they can hear is the despairing sound of a stone sinking into the sea.

Foreign investors' sell orders seem endless, and every time domestic funds try to prop up the index, they are met with even more ferocious concentrated selling from above.

Those leading real estate companies that were once revered as "land myths" have now seen their stock prices plummet dramatically.

The numbers falling one by one on the screen are mercilessly peeling away the glamorous exterior of these companies, exposing the riddled holes inside, riddled with bad debts and inflated valuations.

The Ministry of Finance attempted to forcefully fill the gap created by foreign capital with its massive domestic savings, but they overlooked the physical transmission laws of the financial system.

The panic within the stock exchange will not be confined to electronic screens; the stock price plunge is rapidly spreading along banks' balance sheets, directly freezing the previously loose credit window.

Once the channels for financial support tighten, the artificial heat supporting the real estate market begins to dissipate at a visible rate.

In the streets of Tokyo, Osaka, and Nagoya, the well-decorated real estate agencies were the first to sense this chilling sense of despair.

A few months ago, these stores were always brightly lit on weekends.

A smartly dressed salesperson spread out a location map and revenue statement at the reception desk, while customers, amidst the aroma of coffee, blindly listened to the allure of "prime location" and "last chance to enter."

Now, the provocative posters on the glass door are still brightly lit, but the reception sofas inside the store are empty.

The occasional ringing of the phone no longer carried the anxious urging to sign a contract, but rather the guarded questioning.

Customers began requesting the cancellation of weekend house viewings, demanding the withdrawal of loan documents for re-verification, and even, unprecedentedly, questioning the legal boundaries of "joint and several guarantees" and whether banks would force additional collateral after house prices fell.

The salespeople held the receivers, their usually infallible sales pitches stuck in their throats, and their professional smiles gradually stiffened and turned cold.

In the past, during those frenzied years, customers only cared about whether they could secure a quota.

Now, awakened by both the harsh reality and the film "The Collapsing Tower," the nation is finally beginning to question what kind of deadly debt noose is tied behind the names they signed.

This is precisely the disease that Tibet Province fears most.

The stock market can be propped up by directives, and news can be embellished by experts, but once ordinary homebuyers, who are ultimately the ones taking over the losses, stop buying, the fuel pool at the bottom of the bubble economy will be completely cut off.

In this high-leverage game of musical chairs, the most fatal thing is never the slowing down of the drumbeat, but the sudden awakening of the people at the bottom of the pyramid, who completely refuse to pay for this mess with their own lives.

Shunichi Takahashi's previously prized "relay baton" style highly leveraged financial products collapsed completely under these circumstances.

This debt game, propped up by expectations, will inevitably expose itself to the light of day once the initial clients stop blindly signing off on new debts.

By the end of December, the physical data compiled by the Ministry of Finance had deteriorated to a chilling degree.

New applications for personal real estate loans have plummeted, the cancellation rate of high-leverage financing has risen sharply, and there have been widespread defaults on housing-related projects. Even many well-funded leading real estate companies have begun to humbly beg banks for extensions.

In the latest internal risk assessments submitted by several core city banks, "a sharp contraction in customer confidence" has been listed for the first time as a core warning sign of a systemic crisis.

For the bureaucrats of Kasumigaseki, these eight words were far more devastating than the plunge in the Nikkei index.

Because they finally realized that when ordinary families tightly clutched their pockets and refused to sign loan agreements, no matter how much the Ministry of Finance issued orders, it could not conjure up real money to fill the hole.

The date was January 1, 1990.

Today is the Japanese New Year, which should be the most dignified time of the year for the country.

The shops along the street lowered their roller shutters, and pine branches and shimenawa (sacred ropes) adorned the entrances.

The TV was playing a rebroadcast of the Kohaku Uta Gassen (Red and White Song Battle), with the emcee in a kimono smiling broadly and saying auspicious words.

However, that year, an unsettling silence permeated the dining tables of many middle-class families.

The newspapers no longer featured department store discounts and promotions, but instead highlighted the Nikkei index's plunge in red, the Financial Times' overseas report, and a joint condemnation from the European publishing industry regarding the attack on Kitahara Iwa.

These heavy news stories, like fine, ice-cold thorns, precisely pierced the hearts of everyone currently paying off their mortgages.

Families preparing to buy a house, or those who have already signed a joint guarantee, are in a good mood.

In an ordinary home on the outskirts of Tokyo, the cheerful laughter coming from the television seemed particularly jarring.

The husband at the dining table had no appetite for the sumptuous New Year's dishes, with a stack of unsigned real estate loan documents lying beside him.

When his wife hesitantly asked if they should still sign the contract after the New Year, he remained silent for a long time before finally shaking his head firmly.

Similar scenes are being repeated under countless rooftops across Japan.

At the shrines where people first visit the temple, office workers are no longer discussing where their year-end bonuses will go, but rather the panic over bad debts and the impact of debt.

Many families who originally planned to rush to the sales office immediately after the holiday simply took advantage of the break to dig out their dusty contracts and sit by the heater to review them word by word.

Those terms that bank tellers used to gloss over with a professional smile—"additional collateral," "joint guarantee," "valuation adjustment"—now seem like sharp claws reaching out from the paper, ready to strangle the necks of an entire family.

The New Year holiday had just ended when a statistical report declaring the complete collapse of the defenses flooded into the Ministry of Finance building in Kasumigaseki.

If the data at the end of December was merely a warning of the crisis, then the figures after New Year's Day signaled the complete collapse of public trust.

The number of new real estate loan applications has almost dropped to zero, the post-holiday contract confirmation rate has plummeted, and the rejection rate for loans with guarantees has increased exponentially.

For the Japanese economy, which is driven by high leverage, the greatest fear of a bubble is never short-term short selling in the stock market, but rather the collective awakening of those who bought at the bottom.

As long as people remain unaware and continue signing, the Ponzi scheme of the real estate company can use new debt to cover up old debts, and the real estate company can forcibly maintain its inflated valuation.

But after this New Year, which was awakened by both the cold wind and the novel, the sound of signatures from the lower classes was completely silenced.

The last cornerstone upon which the bubble empire depended for survival was completely stripped away in this silent rejection that swept across society.

With the collapse of the last cornerstone, the Ministry of Finance's original plan to gradually cool things down through a "soft landing" instantly lost all room for maneuver.

On January 7, 1991, the sword of Damocles finally fell.

Tibet Province could no longer hold on. Under the dual pressure of being strangled by international capital and experiencing a domestic credit collapse, it was forced to prematurely lift the lid.

The decree on "total regulation of real estate financing," which was originally planned to be implemented in stages and in a gentle manner, was hastily pushed to the table ahead of schedule.

The Ministry of Finance has officially issued a strict order, mandating that financial institutions immediately and comprehensively reduce real estate-related loans and stop providing funding to high-risk projects.

New loan approvals were completely blocked, and there was no hope of extending existing projects. The cash flow of housing institutions that relied on refinancing existing loans was instantly cut off.

Almost simultaneously, the Bank of Japan unexpectedly launched its most aggressive interest rate hike.

Interest rates plummeted like a guillotine, freezing the financial system, which hadn't even had a chance to catch its breath, completely within a single day.

The policy reversal has become a more deadly weapon than the sell-off by foreign capital.

The stock market reacted decisively, with the Nikkei index plummeting below the 20,000-point mark. The arrogant myth that countless experts had confidently predicted would "break through 50,000 points in the spring" collapsed like a giant tower whose foundation had been emptied.

On the Tokyo Stock Exchange's giant electronic screen, the ghastly green plummeting figures resembled rampant mold, devouring all life.

Immediately afterwards, this extreme cold, through the capital chain, froze the physical real estate market.

Buyers disappeared overnight, and a massive sell-off ensued, bringing all trading to a standstill.

Everyone finally understood in the bone-chilling cold: the house was still the same house, the location was still the same location, but once no one was willing to buy it, once the bank stopped honoring it, it became a heavy shackle that was stuck in their hands, unable to be sold, unable to be lent out, and for which they had to pay out interest every day.

When major television stations forcibly cut off their regular New Year's special programs and inserted emergency reports about the Ministry of Finance's comprehensive tightening of financing, the entire nation of Japan finally witnessed a visceral outpouring of pain.

After a brief silence, countless family living rooms erupted in chilling screams and wailing.

In a cramped apartment in Adachi Ward, a middle-aged office worker, who had just signed an 80 million yen multi-generational loan to secure a "prime location," stared intently at the Ministry of Finance bureaucrats whose expressions flickered on the television screen. His eyes were bloodshot as he overturned the low table in front of him.

Scalding hot tea spilled onto the tatami mat. In despair, he clutched his hair, letting out a wild, hoarse roar: "Liar! It's all a lie! You clearly said there was no foam at all!"

Such horrific scenes are spreading to every corner of Tokyo.

The owner of a shop in Kanda, who had been running his business for decades, signed a joint guarantee for a relative out of courtesy. Now, seeing the news report that "the old project has been suspended," he collapsed to his knees in front of his shop, weeping and slapping himself repeatedly.

A housewife holding her baby frantically dialed the perpetually busy phone number of her bank's account manager in a public phone booth, tears completely ruining her exquisite makeup.

After a brief period of despair came a raging fury at being discarded by the state apparatus.

Completely out of their minds, the crowds rushed into the streets, blocking the entrances of banks and residential property management offices in various cities.

Enraged men pounded on the bank's tightly closed security shutters with bricks and baseball bats. The deafening clang of metal clashing, accompanied by vehement curses, echoed through the streets: "You bastards from the Ministry of Finance, come out here! Give us back our whole family's lives!"

Only at this moment, when people were completely driven to the brink of despair and watched helplessly as their family assets instantly turned into deadly debts, did they realize with bloodshot eyes that every warning Kitahara Iwao wrote in "The Collapsing Tower" was true!

Those elites from Tibet who swore they were "absolutely safe" were the murderers who pushed them into the fire.

Amidst the public's furious roars and the issuance of government decrees, this earth-shattering bang, announcing the collapse of Japan's bubble economy, exploded a full two weeks earlier than the original historical trajectory.

When the avalanche of macroeconomic policies hits ordinary people, it never comes with obscure financial jargon.

It will only turn into a cold bank call, a debt collection notice, and a family that has been completely shattered.

The Yamada couple were just one of the millions of ants crushed by the times.

Just a few weeks ago, they finally succumbed to Takahashi Shunichi's persuasion and signed the purchase contract for that apartment in the suburbs of Tokyo.

That day, in the VIP room of Sumitomo Bank's Shinjuku branch, Shunichi Takahashi, dressed in a well-tailored dark suit, smiled with a smile that was neither frivolous nor overly enthusiastic, perfectly embodying the professionalism and restraint of a financial elite: "Mr. Yamada, there is indeed a lot of noise in the market right now. Controversies in novels and the media can easily make people emotional, but asset allocation must never be swayed by emotions."

Shunichi Takahashi confidently assured that there would be no problem with 90% of the loan and that the bridging funds would be properly arranged. He even commented on Kitahara Iwao's warning in a tolerant but helpless tone: "Literary works certainly have their value, but novels are novels after all. Mr. Kitahara doesn't understand economics."

It was this highly deceptive professional approach that ultimately led Yamada to sign the contract, plunging his parents' retirement home in the countryside into a deep abyss of collateral liability.

They thought they had caught the last train to financial freedom, but little did they know it was a hearse hurtling towards a cliff at full speed.

After the "total amount regulation" document was issued, the bank immediately notified them that the previously promised bridge loan funds had been completely stopped, the collateral needed to be re-evaluated, and the subsequent default risk would be borne by the customer.

Yamada sat at the dining table, listening to the polite yet cold voice of the employee on the other end of the line, feeling as if he had fallen into an ice cave.

He tried to argue based on Takahashi's original promises, but all he got in return was a dismissive "You need to confirm the liability for breach of contract with the real estate company yourself."

When asked about his parents' property, the person on the other end of the phone casually uttered the words "disposal process".

These four words are as light as a casually flipped page of a document, but to the Yamada family, they represent the old house where their parents lived their whole lives, the persimmon tree in the yard, the eaves where their mother aired out quilts in winter, and the wooden stool where their father drank tea in the morning.

Overnight, all the warmth that had been imbued with the old man's life's work was coldly stuffed into the debt that was about to be liquidated by the bank.

His wife stood beside him, her face pale, uttering broken sobs, while Yamada felt as if the whole world was spinning.

The next day, Yamada stormed into the real estate company to question the staff, but they quickly shifted the blame to the bank's policy and insisted that the penalty for breach of contract would be enforced according to the contract.

He rushed to Sumitomo Bank, but didn't even get to see Shunichi Takahashi.

After waiting anxiously in the reception area for two hours, all I received was a "Statement of Circumstances" handed to me by a young staff member.

O

Looking at the flimsy piece of white paper, Yamada suddenly burst into a bitter laugh, sending chills down the spines of the staff in the reception room.

Late that night, he returned home like a lost soul and pulled out the book "The Collapsing Tower" that he had tucked deep into the drawer.

The bookmark is still on Chapter Seventeen.

The man in the book, who bought a house with high leverage, whose bridge loan funds dried up and whose collateral dragged his whole family down, rushed into the bank lobby for the last time on such a cold afternoon.

Yamada read through the pages one by one.

This is not a fictional novel at all, but a death sentence for his entire family written months in advance.

The cold, printed words on the pages about the collapse of bridge financing and the liquidation of joint guarantees scraped at his nerves like a boning knife.

He saw his fingers convulsing violently and uncontrollably, his eyes bloodshot, and his underwear soaked with cold sweat.

After a long while, he shakily slammed the book shut.

He sat motionless in the room like a lifeless sculpture, staring intently at the apple-peeling knife on the coffee table, until dawn.

The following afternoon, although the lobby of Sumitomo Bank's Shinjuku branch was still bright and clean, the original aroma of premium coffee had been replaced by a suppressed sourness.

Although Shunichi Takahashi was still wearing that well-tailored haute couture suit, there were obvious wrinkles at the cuffs.

He was sitting on a soft leather sofa in the open reception area, not to serve a new client, but to deal with a bad debtor who had been waiting for him for three hours.

He mechanically adopted his composed and impassive elite persona, his voice hoarse and almost distorted, attempting to pacify the other party with his dry jargon: "The current chaos is merely a necessary price of market adjustment. It is precisely at times like these that we need to remain calm and not be led astray by extreme news emotions. This is the golden period for asset restructuring—"

This rhetoric has long lost its former persuasive power, and even seems ridiculous and weak.

His embarrassment after being penalized and having his bonus confiscated contrasted sharply with the still-fashionable expensive suit he was wearing.

Just then, the bank's heavy glass doors were violently smashed open by a burst of force.

A biting winter wind, carrying the desolation of the streets, swept into the lobby in an instant, tearing the warm air to shreds.

Yamada, who hadn't shaved for days and whose eyes were bloodshot, was wrapped in a wrinkled, cheap coat and exuded an aura of despair and death.

Like a wild beast cornered in a desperate situation, he stared intently at his prey on the sofa and charged straight at Takahashi Shunichi.

Before the receptionist and security guards could react and stop him, Yamada had already pounced on him with overwhelming ferocity.

He grabbed Takahashi's expensive silk tie, yanking him off balance, and pulled a cheap fruit knife from his coat pocket, pressing it firmly against Takahashi Shunichi's artery.

At that moment, a series of shrill screams erupted in the lobby, and the customers who were conducting business scattered in panic like a flock of startled sheep.

The security guards who rushed up froze on the spot when they saw the cold blade pressed against the pulsating artery in Takahashi's neck, unable to even pull out their batons.

Takahashi Shunichi was completely terrified. The fruit knife, which usually seemed somewhat comical, now felt incredibly real as it severed all the sophisticated vocabulary he had in his mind about interest rates, assets, and hedging risks.

Yamada's wrist and the blade were trembling violently, but the madness in his eyes, driven to the brink of insanity by the destruction of his family, was more terrifying than the blade itself.

"You're saying that's fiction!"

Yamada roared hoarsely, tears and snot smeared all over his contorted face. His shrill screams echoed back and forth under the high ceiling of the lobby, making everyone's eardrums go numb.

"You say the experts guarantee there won't be any problems! You say the policy will absolutely not change!"

"You said the bank would definitely arrange the funds! And now?! The bridging loan is gone! The default penalties are piling up! My parents' retirement home in the countryside, where they've lived their whole lives, is going to be liquidated and taken away by you!"

"It was you, you bunch of swindlers in suits, who ruined my whole family!"

The entire hall fell into a deathly silence, with only the heavy, suppressed breathing of the people remaining.

Many employees and customers trembled in the corner, not only because of the violence before them, but also because every word Yamada shouted sounded exactly like the lines of the desperate man in Chapter Seventeen of "The Collapsing Tower".

Reality and fiction overlapped in a chilling way at this moment, perfectly seamless and word for word.

"Mr. Yamada—please, calm down—"

Shunichi Takahashi's lips were as white as paper, and he could only stammer out a few words through his teeth.

"calm?"

Yamada suddenly grinned, a laugh more chilling and terrifying than a cry, and said, "When I was calm, you used persuasive tactics to force me to sign! When I was scared, you mocked Kitahara-sensei for not understanding economics!"

"When I wanted to back down, you said opportunities don't wait for anyone! Now my whole family is about to be collected for their deaths, and you're telling me to calm down?!"

With a final roar, Yamada's wrist slammed down, and Takahashi Shunichi's neck was instantly bitten open by the sharp blade, from which a bright red line of blood oozed out.

Feeling the real warmth and stinging on his neck, Shunichi Takahashi let out a groan that went off-key, his knees buckled, and he slid down to his knees uncontrollably.