The Conglomerate Family Became A Villain [EN]: Chapter 288

288. Endgame (6)

The Japanese stock market plummeted.

The Nikkei index swiftly broke through the 30,000 mark and plunged into the 20,000s.

This was an unthinkable figure compared to the end of last year when it had surpassed 38,000.

The Tokyo stock market’s crash surprised even Wall Street investors.

“Isn’t this dangerous?”

“It’s hard to call this a temporary drop…”

“How can you call it temporary with this kind of fall?”

The crash in the spring of 1990 was larger in scale than the crash of October 1987.

“Still, we can’t just withdraw our funds like this, can we?”

“That’s right. The Japanese stock market is just in shock due to real estate measures.”

“It will recover to some extent once it regains its senses.”

The idea was that a technical rebound could be expected since it had fallen so rapidly.

Many on Wall Street wanted to observe the situation rather than withdraw their funds.

The situation in Japan was a bit more complex.

Sumitomo Securities held an emergency meeting immediately after the market closed.

“What do you think is causing the stock market crash?”

The team leader’s question was answered by the traders.

“Isn’t it due to the cabinet’s loan regulations, as reported in the media?”

“Are you saying the stock market is falling because of real estate?”

The trader who had spoken earlier shook his head and replied.

“Team leader, the problem isn’t real estate, it’s the loans.”

“Hmm, could it be that people took out loans for real estate and invested in stocks…?”

“I think so.”

At the end of 1989, Japan’s real estate loans allowed for 100% financing of the collateral value.

Those who owned real estate were not only pleased with the rising real estate prices but also took out loans using the increased value of their properties and invested that money in the Tokyo stock market.

In short, the peak of the Tokyo stock market was created by the real estate bubble.

“So, you’re saying that investors who felt anxious about the possibility of loan recalls due to the total loan amount control sold off their stocks en masse.”

Now that they knew the cause, they could also find a solution.

“It seems difficult for it to rise for the time being.”

The team leader nodded and continued.

“It seems so in the short term. But in the long term, it might be a healthy correction.”

For the past two years, the Japanese stock market had continued its relentless rise. He thought it was time for the Japanese stock market to undergo a correction.

‘I was getting tired of it rising every month. It would be okay if it corrected for about half a year.’

In 1990, Japanese financiers did not anticipate that the current shock would last for more than 10 years.

* * *

April 22, 1990.

New York, Wall Street.

Chung Hyun-woo sat facing John Peer and Jeremy Spin.

“Charlie, the time has finally come to leave.”

John Peer argued that they had made enough profit from short selling, so now they should start buying back shares.

Of course, Chung Hyun-woo had no intention of being satisfied with just this much.

“John, leave?”

John Peer replied calmly.

“I mean buying back the stocks and completely withdrawing from Japan.”

Chung Hyun-woo lowered his voice.

“It’s only 29,000 points.”

The profits recorded by Victoria Fund over the past few days were roughly $40 billion.

‘Considering the losses of the past year, it’s barely breaking even.’

The assets under management of Victoria Fund had only recovered to $250 billion due to this massive crash. He hadn’t shorted stocks just to break even.

Jeremy Spin subtly asked him.

“Charlie, have you perhaps considered at what point it would be good to withdraw?”

Chung Hyun-woo slightly raised his voice.

“Since we started short selling, shouldn’t it be at least half?”

Halfway from the peak.

He seemed to be using the ‘cut in half’ point, which stock investors often talk about, as his benchmark.

“Do you really think it will be cut in half?”

Chung Hyun-woo gestured with his right and left hands as he replied.

“There’s a saying that if the mountain is high, the valley is deep. Since it has risen so high, the fall will also be great.”

John Peer was skeptical of Chung Hyun-woo’s words.

“Even so, down to half…”

He predicted that it would be difficult to fall that far, considering the strength of the Japanese economy.

John Peer felt the same way. He wanted to persuade Chung Hyun-woo more concretely.

“Charlie, this crash is due to the government’s loan regulations. Once the shock from the loan regulations subsides, the Japanese stock market will rise again.”

Chung Hyun-woo placed both hands on the table and emphasized.

“After the technical rise, a full-scale decline will begin. We will short sell again then.”

Not withdrawing from Japan, but increasing short selling.

John Peer and Jeremy Spin had no choice but to swallow hard.

“Charlie, it’s dangerous.”

“Increasing short selling could lead to an exodus of investors.”

Chung Hyun-woo did not back down.

“The second crash won’t take long. It will crash again by the fall at the latest.”

John Peer couldn’t help but doubt his claim.

‘Charlie’s predictions have always been accurate. But this prediction is hard to follow.’

He sighed deeply and said.

“Hoo… Charlie, you have to get off when the train stops.”

Chung Hyun-woo asked him.

“Are you afraid, John?”

“Afraid?”

“Are you doubting that the Japanese stock market might rise again and reach 40,000 points?”

John Peer spread out his hands and replied.

“Charlie, we’ve already made $40 billion in profit. Isn’t that enough?”

“John, aren’t you forgetting the $30 billion loss we had before that?”

As the two men’s opinions sharply clashed, Jeremy Spin intervened.

“I think Charlie is right, and John is right too. So, please lower your voices.”

Chung Hyun-woo knew about Japan’s lost decade [a period of economic stagnation in Japan that began in the early 1990s], so he didn’t back down.

“This crash is an opportunity that is hard to come by again.”

John Peer put his hands together and said.

“Charlie, aren’t you satisfied with the current profits?”

He knew very well what the end of greed looked like.

‘Excessive greed ruins everything.’

John Peer owned 10% of Victoria Fund’s shares, so he could see huge profits if the fund’s earnings increased.

But he wanted a safe retreat rather than those profits.

“Let’s draw a line.”

John Peer paused at Chung Hyun-woo’s words.

“You mean draw a line?”

Chung Hyun-woo gestured as if drawing a line on the table and said.

“If the Japanese stock market recovers to 33,000, I will buy back half of the shares according to John’s opinion.”

The idea was to decide whether to withdraw or expand short selling depending on whether the Japanese stock market recovered.

John Peer stroked his chin.

‘33,000…’

It was an ambiguous number.

“Wouldn’t 32,000 be okay?”

“John, shouldn’t it rebound by at least 10%?”

The current Nikkei index was in the 29,000s, so a 10% increase would be close to the 33,000 points that Chung Hyun-woo had suggested.

It was when John Peer sighed again.

Jeremy Spin stepped in to support Chung Hyun-woo’s opinion.

“I think 10% isn’t bad. I agree with Charlie’s opinion.”

When he agreed, John Peer had no choice but to give in.

“Okay. Then we’ll set the line at 33,000 points.”

Chung Hyun-woo was barely able to persuade John Peer and Jeremy Spin by suggesting a 10% increase.

‘No one would believe it if I said that Japan would enter a recession for the next 10 years.’

In 1990, Japanese products were still selling well in the United States, and advertisements for major companies such as Sony and Toyota were filling the American media.

But Chung Hyun-woo knew that Japan’s lost decade had begun.

‘This is a falling knife [a stock market term for a rapidly declining stock or index].’

The falling knife that no one could stop was the lost decade.

* * *

Summer of 1990.

The Japanese stock market succeeded in rebounding as expected.

Tokyo’s financiers breathed a sigh of relief, and Wall Street investors who had invested in Japan also regained their smiles.

On the other hand, John Peer called Chung Hyun-woo with a gloomy expression.

“Charlie, the Nikkei index rose to 31,700 points yesterday.”

“John, there’s still a lot left until 33,000 points, isn’t there?”

They had drawn a line at 33,000 points.

“That’s true, but I think it’s now in a complete recovery phase.”

The Japanese stock market had stabilized.

Chung Hyun-woo certainly didn’t think so.

“John, let’s wait and see.”

“Until 33,000 points?”

“That’s what we decided.”

Two days later.

His words to wait and see became reality.

The Nikkei index fell below 30,000 points again, and investors began to suspect that Japan’s recession was materializing.

After checking the Nikkei index, John Peer sat down with Jeremy Spin.

“Jeremy, what do you think?”

Jeremy Spin spun the mug of coffee around and raised his voice.

“About the Japanese stock market?”

“Yes.”

“It’s falling.”

“Do you think it will fall further?”

Jeremy Spin was a conservative.

“I don’t know.”

When he avoided giving a definite answer, John Peer narrowed his brows.

“Jeremy, I want to hear your honest opinion.”

“My honest opinion?”

“Yes, not an opinion that compromises appropriately, but your own.”

Jeremy Spin took a sip of coffee and said.

“I think we should respond, not predict the future.”

“Are you saying we should respond by looking at the charts?”

“Rather than charts, it’s the direction of policies or the market.”

John Peer slowly nodded.

“I agree with that. But isn’t Japan’s future bright?”

Products made in Japan could be found in this office without even going outside the building. The Japanese economy was literally dominating the world.

Jeremy Spin replied to his words in a dry voice.

“John, the sun above our heads doesn’t leave a shadow [meaning that even the most powerful entities have their weaknesses or hidden problems].”

John Peer groaned lowly.

“Hmm, are you saying that now is Japan’s heyday?”

“Discord is being heard all over Japan.”

Jeremy Spin was a cold man. While John Peer was paying attention to China, he had been gathering information on the Japanese economy as a whole.

As he told the information he had gathered one by one, John Peer groaned lowly.

“Ugh, I didn’t know the situation in Japan had deteriorated to that extent.”

What Jeremy Spin presented to him were the rise in Japanese real estate prices, the debt ratio of Japanese households, and the Japanese government’s unofficial goals and measures.

“The debt ratio of companies is also increasing every quarter.”

John Peer lowered his voice.

“If the debt ratio of companies is increasing while real estate prices are fixed…”

“It means they don’t have the ability to repay the loans. And the increase in loan interest will worsen the competitiveness of companies.”

The interest rate hike did not only affect real estate. When interest rates rose, it became difficult for companies to invest and operate.

“Companies will go bankrupt soon.”

John Peer felt that Jeremy Spin’s words sounded like a death sentence.

“Bankruptcy?”

“They won’t go bankrupt because they can’t sell their products.”

“The profits earned from selling products couldn’t overcome the interest burden?”

“That’s right.”

If the profitability of manufacturing companies fell due to unexpected cost increases or new product failures, the interest rate would not miss the opportunity to devour the companies.

“And there’s this part too.”

The data Jeremy Spin presented was the decline in the value of the yen.

“This is!”

The yen-dollar exchange rate.

It was an indicator that most investors paid attention to in 1986, but most had stopped paying attention to in 1990.

“Doesn’t the graph give off a very negative feeling?”

John Peer thought.

‘If Charlie is a young genius who has announced a new theory, Jeremy is like a seasoned scholar who has verified that opinion.’

The evidence presented by Jeremy Spin all argued that Chung Hyun-woo’s opinion was correct.

“Is Japan sinking?”

“I don’t know about sinking, but it will be difficult for the time being.”

Jeremy Spin thought that Japan would have a hard time for at least 3 or 4 years.

‘They grew the bubble too much.’

He thought they should have burst the bubble in 1988. But the Japanese government didn’t do that. They were afraid of the recession, so they grew the bubble even bigger, and by 1990, they had reached a point of no return.

“I’m glad you’re here.”

Jeremy Spin slightly raised his voice.

“Glad?”

“Even if I’m not here, you’ll solve everything.”

“John.”

“I’m leaving for China tomorrow.”

John Peer was scheduled to leave for China to establish a Victoria Fund branch in Shanghai.

“Have a good trip.”

Jeremy Spin always seemed calm. But he constantly collected and analyzed data to maintain that calmness.

* * *

Miami, USA.

Chung Hyun-woo was lying with Sarah on Palm Beach, known as one of the world’s three major beaches.

“Are you okay?”

Sarah nodded at his question.

“I’m fine.”

Chung Hyun-woo’s forehead was full of wrinkles.

“I think there are more than 10 cameras filming us.”

Since the two became lovers, the number of paparazzi following them has increased several times.

And Miami’s Palm Beach was the perfect place for those paparazzi to operate.

Sarah said in a cheerful voice.

“Let’s just think of it as fan service.”

If you are conscious of the paparazzi, you are losing to them.

That’s what she was thinking.

‘They’ll follow us even if we run away to a desert island.’

They were ghosts drawn to the mirage of fame.

‘Maybe my sister became a university professor because of them.’

If Laura Hilton had entered the entertainment industry, the paparazzi would have followed her like fish in water.

“Tell me if it’s annoying.”

“Even if we use the bodyguards to chase them away, they’ll come back soon.”

“Still.”

Sarah turned her body and said.

“Wouldn’t it be better to have a slightly more romantic conversation than that?”

She didn’t want to ruin her rare vacation because of the paparazzi.

“I’m sorry.”

Sarah poked his forehead with her finger and said.

“I know. Your body is here, but your thoughts are all in Japan.”

Chung Hyun-woo paused and asked.

“Was it that obvious?”

Sarah smiled and replied.

“You even talked in your sleep.”

Chung Hyun-woo’s face turned red at her answer.

“Was it that bad?”

Sarah leaned her head against his chest and said.

“It wouldn’t be Charlie if you whispered sweet words like a playboy.”

“…….”

“That’s why I think I liked Charlie.”

There were playboys everywhere who spouted plausible words that they would love you forever.

‘A really good man doesn’t say those words.’

She was a woman who knew how to distinguish between real and fake.

“Soon, right?”

Chung Hyun-woo tilted his head and asked back.

“Soon?”

“I mean withdrawing from Japan.”

Sarah also seemed to expect that Chung Hyun-woo would soon withdraw from Japan.

“No.”

“No?”

“I want to watch the situation a little more.”

“Hmm… a little more?”

It was when Sarah sighed briefly.

Swoosh. Swoosh.

A man approached with the sound of stepping on sand.

“Charlie, it’s a phone call.”

The person who handed Chung Hyun-woo the cell phone was his bodyguard, Von Ticker.

He was guarding Chung Hyun-woo and Sarah with his colleagues around him.

“Von, thank you.”

Chung Hyun-woo received the new cell phone released by Motorola.

“This is Charlie.”

The person who called him was Jeremy Spin.

“Charlie, we’re in trouble.”

In trouble.

Chung Hyun-woo couldn’t help but narrow his brows.

“Is there a problem in New York?”

Jeremy Spin answered his question.

“It’s not New York. The Nikkei index has exceeded 33,000 points.”

The Nikkei’s rebound.

This was a completely unexpected development.

‘The Nikkei has risen again?’

Moreover, the Nikkei’s rebound was exceeding the line of 33,000 points that he had drawn for the two of them.