Chapter 532: You're late, you have to queue up
On Christmas Eve, the new cabinet member Kiichi Miyazawa summoned all the major leaders of the Japanese financial world.
Discussions on measures to improve the bubble economy can only be said to be less than half successful.
Do the Japanese government's cabinet and Ministry of Finance know that the bubble is bursting?
Of course we know that the pioneer who led the bursting of the bubble was Yasushi Mieno of the Bank of Japan.
From the beginning of the year to the end of the year, the stock market experienced two consecutive sharp declines, which was a symbol that the bubble was bursting.
However, there were differences of opinion within the government when it came to the bursting of the bubble.
The Ministry of Finance, led by Haneda, believed that it was only the stock market that collapsed.
Although Neon's real estate market has fallen a lot in the past two months, from the perspective of historical data, land prices are still high.
Even the property tax that was originally expected to be enacted in January, the Ministry of Finance decided to implement it as planned.
And the cabinet, no, to be more precise, it is Miyazawa Kiichi himself.
He believes that the bursting of the Japanese economic bubble was not the stock market, but the real estate market and land market.
No one can predict how Japan's land prices will trend in the future, but Miyazawa Kiichi firmly believes that if land prices fall too quickly, it will deal a fatal blow to Japan's credit system.
If the banks' non-performing loans continue to deteriorate, the real estate market will collapse.
Now the turning point of the property market has appeared, so the situation has not become out of control yet.
Only by solving the root problems as early as possible can Neon transition to a recovery phase in a timely manner from its decline after the bubble burst.
Yes, even though Kiichi Miyazawa realized the precariousness of the real estate market and made a series of efforts to this end.
But he is pessimistic and still believes that even if the bubble has a soft landing, Japan will still enter a period of recession.
What we are doing now is to shorten the recession period as much as possible and get Neon on the track of recovery as soon as possible.
That's why we had this Christmas Eve meeting. The first two of the three resolutions were emergency temporary measures.
One is the special stock market financing plan, which is the last resort to ensure that the credit system does not collapse.
One is the securities company compensation plan, which is a response to a series of financial scandals in the outside world and an explanation to the public.
In addition, compensating industrial companies can also play a role in maintaining stability.
What Japan needs most now is stability, not data such as GDP and industrial value-added.
The last one is the government-led support for real estate companies, which is to solve the potential non-performing loan problem of banks.
Unlike the other two resolutions, this is a long-term measure and the most fundamental way to solve the problem.
A dedicated agency established by the government takes over the land, which can control the amount and price of land listed on the market.
Simply put, the land will be temporarily nationalized, and then gradually released over a few years or even a dozen years.
In this way, although the housing prices are falling, at least they are not falling in an disorderly manner or like an avalanche.
However, the government alone cannot handle the massive amount of funds worth tens of trillions of yen or three or four hundred billion US dollars.
That’s why all the major banks in Japan need to work together to take over the land.
However, neither the banks, the financial community, nor the Ministry of Finance agreed with such a plan.
They believe that although land prices have fallen, real estate companies can still make profits.
If the real estate company is profitable, the bank's loans will not become bad debts.
The bank is safe, so why invest huge sums of money to acquire a real estate company?
Logically speaking, there is nothing wrong with this, but it is premised on the fact that land prices do not collapse.
It can be said that all parties, including banks and the Ministry of Finance, are betting that the land prices in Neon will not plummet.
Unfortunately, with this idea in mind, Kiichi Miyazawa's action of investing state funds to save the real estate market was ultimately not realized.
This is Neon's last chance to save itself after the bubble bursts.
Now, along with numerous voices of opposition, it has disappeared into a quiet night.
…
The Miyazawa Cabinet, which came to power slowly in late 1990, finally made a public response to the Hayama incident and a series of turmoil in the Neon economy.
Before the press conference held in Tokyo, Miyazawa actually wanted to go his own way and publicly promised to invest national relief funds to save Neon's economy.
However, his plan frightened his personal secretary Nakajima, so under emergency coordination, Nakajima secretly passed several notes to Miyazawa.
This is the so-called "current operational policy" put forward by the Ministry of Finance, and it agreed to discuss the issue of establishing a dedicated institution.
However, there was no mention of investing national funds. In other words, it was shelved and the problem was left for the future.
Because of the strong opposition from people around him, Miyazawa himself was a little shaken at the last moment.
So when facing the reporters, he only took out the first two resolutions, which are the so-called "operational plans."
As for the idea of establishing a dedicated institution, it ultimately only became a sentence.
"If necessary, we will not hesitate to invest state funds for relief."
What should be helped? Should it be the stock market or the property market? Miyazawa didn't say it out loud.
Because a series of compensatory measures were announced, as well as a determination to provide relief to the stock market.
The Nikkei index, which had been hovering around 15,000 yen, finally began to slowly rise to around 18,000.
However, the Ministry of Finance's subsequent actions once again caused controversy.
The compensation previously promised to industrial companies by securities companies constitutes a double standard.
On the last day of 1990, Japan Business suddenly revealed a compensation list led by the Ministry of Finance .
Without exception, all of those registered are top-notch companies such as Toyota, Nissan, NTT, Mitsubishi Heavy Industries, and Sumitomo Electric Industries, Ltd.
In other words, the 120 billion yen in compensation only goes to large companies, and small businesses do not appear on the list at all.
Such blatant double standards have not only been collectively condemned by small businesses, but also by commentators who have fiercely criticized the Ministry of Finance.
However, in the face of external criticism, the Ministry of Finance simply played dead and did not respond.
Such arrogant and irresponsible behavior has further increased people's distrust of it.
…
On January 1st, we entered the year 91.
This day is not only the New Year, but also the day when the property tax is officially implemented.
The year-end festive season should have been a time to celebrate the New Year, but the sky over Tokyo was covered in a layer of haze.
People in big cities, especially those who own more than one property, are paying attention to the trend of housing prices after the New Year.
After finally getting through the New Year holiday, on January 4th, the doors of all major real estate agencies were crowded with people.
Everyone is here to sell their houses. If they don’t, the annual tax of several million yen will be wasted, and the average family’s annual income will be completely wasted.
This is just the choice of the people, and those real estate companies have also begun to sell collectively.
The first plots of land that began to fall sharply were basically located in the central area, Minato Ward, and Chiyoda Ward.
Because this is a prime location in the whole of Tokyo, most institutions purchase land here for speculation.
Even in the past, the frequency of land transactions in these areas far exceeded that of other regions.
So on January 4 alone, land prices in the core area fell by 6%.
But is this the end? The market is blindly following and panicking.
When the property market is flooded with lots of land listed for sale, a crash is almost inevitable.
The property market fell by 13% in January, and the recovery that people had expected did not come.
It fell 18% in February, and the property market recovery that people had been expecting has still not come.
20% in March, 29% in April…
In just a few months, the land prices in Neon have returned to the level near 1987.
It seems that land prices are still high compared to 1985 years ago.
However, in the three or four years from 1987 to 1990, the asset returns brought by the two or three times increase in land value all vanished into thin air.
What’s more crucial is that many families, real estate companies, and institutions took over the land during the craziest period from 1988 to 1990.
Now that land prices have returned to the level of 1987, the loans they owe are more than twice the value of the land.
…
May, Akasaka, Toranomon Building.
As the most prosperous place in Minato Ward, Toranomon Building is also a landmark building here.
However, just like the bustling port area, the rooftop of Toranomon Building is also particularly lively today.
"Squeak~" The iron door on the rooftop, which was rarely opened, welcomed another guest.
Matsui, who was in a gloomy mood, was stunned by the scene before him as soon as he stepped onto the rooftop.
"Hey, you're late so you have to queue up."
A middle-aged man, with his suit torn off and his tie thrown somewhere, was looking at the new visitor to the rooftop with a nonchalant look, cigarette in hand.
"Huh?" Matsui glanced at the rooftop. He still couldn't figure out why there were so many people on the rooftop which was usually deserted.
"Hey, I'm talking to you." The middle-aged man's voice came from afar again.
"Me?" Matsui pointed at himself uncertainly.
"Come here," the middle-aged man waved at him with the hand holding a cigarette.
Matsui, feeling puzzled, didn't want to pay attention to him at first, but after thinking about it carefully, it seemed that none of it mattered.
With a sneer in his heart, Matsui walked over calmly.
"Which company are you from?" The middle-aged man stood on the edge of the roof with one foot, his arm resting on his knees, and chatted casually like an old friend.
"Hidewa Real Estate" For some reason, facing this middle-aged man, Matsui's originally nervous mood unconsciously relaxed .
"Xiuhe," the middle-aged man sighed with inexplicable meaning.
"You guys have suffered a heavy loss this time. I heard that the several plots of land in the port area were just acquired in the middle of last year?"
"Hai" Matsui answered and couldn't help but sigh.
It was the middle of last year, when land prices were at their highest.
Who would have thought that in just one year, the popular plots of land that were once snapped up by everyone would become
Now not only has the price been reduced by more than half, but no one is interested in buying it.
"Where is your president, the guy on the mountain?" The middle-aged man seemed to know Xiuhe very well, and he naturally asked about the president of this real estate company, Yamagami.
When Matsui heard the other party mention his own president, he fell silent.
His eyes unconsciously moved away from the middle-aged man and turned to look at the port streets a few hundred meters below.
"So he has already gone down." The middle-aged man nodded with a sense of loss.
"This guy even asked me to be one step ahead in doing something like this. It's really too much."
The indignant middle-aged man threw the short cigarette butt on the ground and crushed it hard with his foot.
"Senior, you..." Matsui hadn't finished his words.
Suddenly, another man in a suit not far away shouted loudly, then jumped down without looking back.
Matsui stared blankly at the place where the man had just disappeared, feeling a little at a loss.
Although the figure was no longer there, the shouting seemed to still echo in the air, hitting Matsui's chest again and again.
