manynovel Chapter 200 Shattered Dreams
Chapter 200 Shattered Dreams
The hall was deathly silent.
Satsuki stood quietly beside Shuichi.
Her gaze was calm and steady as she slowly swept across both sides of the long table. The faces that had just been filled with anger and astonishment because of the "sell order" were now forced to remain silent under her gaze.
"If any of you have any questions about the head of the family's decisions, please raise them one by one and explain your concerns. Don't just shout like street thugs."
"Now that everyone has calmed down, let's resume our discussion."
The people below looked at each other, exchanging knowing glances, none of them willing to be the first to speak.
The silence lasted for a few seconds. On the cushion to the left, the highly respected elder of the Saionji family, Kensuke, slowly closed the bamboo folding fan in his hand.
He placed the folding fan flat on the tatami mat beside his knees, clasped his hands together, and knelt on the ground. His aged body leaned forward, his posture extremely low.
"Young Miss".
Kenjiro's voice was hoarse, carrying a heavy weight of years. He was the first to raise his head, his cloudy eyes filled with unwavering certainty.
"The glory that you and the head of the family have brought to the family over the past three years is evident to everyone present. The entire family has always held your decisions in the highest esteem."
He paused for a moment, the wrinkles at the corners of his eyes pressing together deeply.
"However, cash depreciates with inflation, and the government of Nagata Town changes with elections. Only the land beneath our feet bears the physical foundation that has allowed the Saionji family to stand in Japan for a thousand years. As long as the land deeds are still valid, there is hope for the family to rebuild."
Kenjiro's father's voice trembled slightly as he pleaded.
"Selling off land is tantamount to digging up the family's foundation. Even if it means slightly slowing down the investment in Gokurakukan Phase II or the Odaiba Deep Sea Furnace, and slowly digesting the existing debt, I urge you, Miss and the head of the family, to think carefully. Please be sure to preserve those core assets that bear the family crest."
Satsuki listened quietly to the elder's plea.
She bowed slightly, responding with great composure.
"Lord Kensuke's concerns are extremely farsighted. The land's resilience to risks has been proven over a century and deserves to be respected."
Her gentle voice instantly soothed the tense nerves of the elders.
"The group will continue to hold onto the core plots of land that carry the historical heritage of the Saionji family, such as the main residence in Bunkyo Ward, several villas in Kyoto, and Tōshō Sanso in Karuizawa. I will not touch these foundations left by our ancestors."
Upon hearing this, the elders on the left visibly relaxed, their tense backs slightly easing.
Satsuki's tone then shifted.
"As for the 'Crystal Palace' in Ginza, the 'Pink Building' in Akasaka, and the large number of odd-shaped and marginal plots acquired at premiums during the market frenzy of the past two years, they are purely financial products and must all be put up for sale."
On the right side, in the executive group, the head of the real estate department took out a white cotton handkerchief from the inside pocket of his suit and vigorously wiped away the fine layer of sweat seeping from his forehead.
He took a deep breath, opened a market research report that was a hundred pages thick, and braced himself to provide supplementary explanations.
"Young lady, the decision to preserve the ancestral property was very wise. Regarding those commercial real estate and peripheral plots, I admit that the Odaiba project and the Hokkaido Gokurakukan are burning through massive amounts of cash every day. The group's financial pressure is objectively real."
The supervisor opened the file and displayed a chart with intricate curves. The thick, coated paper gleamed faintly under the light.
"However, according to the latest mathematical model predictions released this week by Nomura Securities and Sumitomo Bank, massive amounts of overseas capital are still pouring into Tokyo. The vacancy rates of core office buildings in Chiyoda Ward and Minato Ward are approaching zero. This heat in the core areas is rapidly radiating to the peripheral plots."
"Existing data models have reached a consistent conclusion: the period of rapid land price growth can be maintained for at least another year. If we prematurely liquidate super landmarks like Crystal Palace, along with those peripheral plots, we will lose an enormous amount of expected revenue. At the year-end shareholders' meeting, the board will also be unable to explain this to our partner banks."
Satsuki listened quietly.
The air in the lobby became somewhat oppressive due to everyone's anxiety. She didn't respond immediately, but instead lowered her eyes, her gaze passing over the open market research report and quietly settling on the real estate manager's face.
A full three seconds of deathly silence.
That condescending, emotionless gaze gradually eroded the manager's previously forced confidence, causing him to unconsciously slow his breathing.
"Manager, your data model is extremely precise."
Satsuki finally spoke.
"You've calculated the flow of foreign capital and the imbalance between supply and demand. So, why do you all think that asset prices in Tokyo have risen to such an outrageous level?"
The head of the real estate department paused for a moment, instinctively wanting to recite the macro analysis from the research report, but was stopped by Satsuki raising her hand.
Satsuki left the shadow behind Shu and stepped onto an empty cushion, sitting down gracefully.
"Since you firmly believe in the existing mathematical models, let's first analyze how the current economy operates."
She placed her hands folded in front of her and glanced at the faces of the executives.
"First, we must reiterate the nature of a bubble economy. The essence of a bubble economy is actually a self-circulating system detached from reality. In short, it is a Ponzi scheme in which asset prices are detached from the support of the real economy and are maintained entirely by 'expectations of future price increases' and 'credit expansion'."
"So, how did Japan's economy develop using this mechanism?"
"This illusory cycle is achieved through a special mechanism. Initially, the appreciation of assets drives up the prices of land and stocks. As the value of collateral increases, banks believe you have more assets and are willing to lend you more money. However, businesses and individuals who receive the money have no intention of investing in research and development or production; instead, they turn around and buy land and stocks again. Prices continue to rise, thus returning to the first step, and the cycle repeats itself."
"As a result, the economy has been rising continuously under such an absurd mechanism that is almost like stepping on its own feet. In the end, the higher it climbs, the harder it falls."
The previously restless atmosphere in the lobby gradually quieted down.
"The fatal flaw of a bubble is that everyone is making money on paper, but society is not producing goods or services to match. When no new money enters the market, the cycle collapses instantly."
"Everyone, am I right?"
After Satsuki finished speaking, the entire hall fell silent.
The family elders and executives present had long been familiar with her ruthless manipulation and held her authority in absolute awe. Therefore, when she brutally dissected and laid bare the cold logic of a Ponzi scheme, the fear of their common sense collapsing felt like an invisible hand gripping their throats.
Regarding the issue of economic bubbles, are there really no Japanese people in this era who can see it? Especially these people in front of me, who can be considered the elite of the elite in their respective fields, are they really completely unaware that the bubble will burst?
No, actually it's that they subconsciously don't want to believe it... or rather, they dare not believe it.
"Young Miss, I think you've misunderstood something."
On the right side, among the senior management, a veteran director in charge of the traditional manufacturing sector bowed slightly. His tone was very tactful, yet it revealed the stubbornness of an old-school industrialist.
"The foundation of Japan's economy remains its extremely strong real economy. Today, our automobiles, semiconductors, and home appliances are among the world's best. Companies like Toyota and Sony continue to expand their global market share, and their market capitalization continues to rise. These solid pillars of the real economy are all the driving force behind Japan's continued economic growth."
The real estate executive nodded in agreement, clearly convinced that he believed in the old director's "strong real economy theory."
Satsuki listened quietly to the elder's statement.
"The companies you mentioned do indeed have substantial profits on paper. However, we should all think carefully: is it really their core, much-vaunted business that supports these enormous figures?"
Satsuki spoke calmly. She turned her head slightly to look at the finance director standing to her right rear.
"Executive Director Endo, distribute the 'Profit Structure Breakdown Report of Japanese Listed Companies' compiled by SA Investment last month."
"Yes."
Endo immediately opened his briefcase, took out a neatly bound stack of documents, and distributed them one by one along the long rosewood table.
Upon receiving the document, the old director's expression changed. The surrounding executives also gradually became serious.
"These materials can all be found in the publicly available financial reports of the respective companies."
Satsuki's voice sounded exceptionally clear in the quiet space.
"Toyota Motors' financial assets have soared from 500 billion yen in the early 1980s to 2.4 trillion yen currently, but its core manufacturing business profits have remained at an extremely low level on average during the same period. In the last fiscal year's closing period, Toyota Motors earned 150 billion yen from financial gains through 'Special Funds.' Its proud core business of automobile manufacturing only generated operating profits of around 100 billion yen."
The sound of rapidly turning pages filled the room.
"Besides giants like Toyota, the same applies to small and medium-sized enterprises," Satsuki continued. "Hanwa Kogyo, a long-established steel trading company, currently has a staggering two trillion yen in financial assets on its books. Do you know what that means? A steel trading company's financial reserves are comparable to those of a large bank!"
"The returns from investment are more than 20 times the profits from the main business. This company has actually become a hedge fund disguised as a trading company."
Satsuki placed her hands together in front of her, her gaze sweeping across both sides of the long table.
"Let's look at the statistics from the Ministry of Finance and the Tokyo Stock Exchange. From 1986 to 1988, about 50% of the profit growth of manufacturing companies listed on the Tokyo Stock Exchange's First Section (main board) came from 'non-operating income' (i.e., investment income). Do you still think this prosperity is caused by the real economy?"
The head of the real estate department opened his mouth, but no sound came out.
"But... even so, it doesn't prove that the economy will definitely collapse..."
On the right side, an executive stared at the document in his hand and muttered something under his breath, unwilling to give up.
Satsuki precisely focused her gaze on Endo, who was standing at the lower right of the long table.
"Executive Director Endo, what monetary actions did the Bank of Japan take in May of this year, and again two weeks ago?"
Endo broke out in a light sweat, but thanks to his high level of professionalism, he immediately provided accurate data.
"After two increases in the benchmark interest rate, the current benchmark interest rate has risen from last year's extremely low point to 3.75 percent."
"Three point seven five percent."
Satsuki repeated the number.
"Even though the Bank of Japan has announced an interest rate hike, do you still think the economy won't collapse?" Satsuki asked the person from before.
The man immediately fell silent.
"Okay, then I'll give you another example."
Satsuki's gaze returned to the head of the real estate department.
"Let's say I have 10 billion yen right now. If I use that money to buy a building in Ginza, the annual rental income would only be 200 million yen, which is a 2% return. However, the current long-term loan interest rate at banks has reached 3.75%, and it may even exceed 5% in the future. Mathematically, this is a 'negative interest rate spread,' meaning my cost of holding the property is already greater than my return on assets."
"So, in conclusion, my only reason for buying this building is... to bet that its price will go up next year."
Only heavy breathing filled the room. All the executives' faces changed. They were used to the frenzy of rising land prices, but now they were forced to confront this most basic addition and subtraction.
"We all know that in finance, if an investment completely loses its ability to generate cash flow and relies solely on resale for profit, it's like a tulip that will wither at any moment and can't be considered a real asset at all."
"As long as prices stop rising, or even if they don't fall but just remain flat, the high holding costs and interest will drag the company down."
"Just think about how many 'tulip maniacs' Japan is holding right now? Once economic growth stops, the entire country's economy will be dragged down."
On the left, Kenji's folding fan trembled slightly in his hand. His old-fashioned Chinese mindset still held him firmly to the land.
"Young Miss's interest calculation is indeed ingenious." Kensuke's elder swallowed hard, forcing himself to speak, "However, land is ultimately different from stocks. Japan is, after all, an island nation with a large population and limited land. As long as the population exists, the demand for land will always exist. Even with high interest rates, future buyers will continue to pour in, and the game can continue."
The surrounding executives, as if grasping at a last straw, nodded in agreement.
This "land myth" is a truth that their generation has believed in since childhood.
Satsuki quietly looked at the elder, ignoring their feelings.
Her current plan requires a group of elites who can absolutely execute orders, and they must not be allowed to harbor any foolish superstitions about the land.
"Executive Director Endo, distribute that last chart."
Endo immediately pulled out several documents with bar charts printed on them from the bottom of his briefcase and distributed them to everyone.
Have any of you noticed the age structure of the Japanese population?
Satsuki picked up her teacup, blew on the floating leaves on the water, and spoke in a calm tone.
"Take a look at that population pyramid chart in your hands. Based on statistics from the Ministry of Health, Labour and Welfare, Japan's working-age population will peak in 1995, after which it will begin an irreversible decline."
Everyone looked down at the charts in their hands, and their initial confidence began to waver.
"Kensuke-sama is right. The land myth is built on the foundation of 'more people than land,'" Satsuki said, putting down her teacup. "However, the main force buying houses is young people. In five years, the number of young people buying houses will plummet. Who will maintain this 'land myth' then?"
Satsuki's voice echoed in the deathly silent hall, each word piercing the heart.
"The current sky-high land prices are an economic boom achieved at the expense of the purchasing power of two future generations. There simply aren't that many people in the future; this prosperity is entirely built on a non-existent future!"
"Once that critical point is crossed, the supply and demand relationship will be completely reversed."
Silence lingered for a long time.
For them, the myth of Japan's perpetual economic growth was almost as self-evident as sunrise and sunset. This trend had continued for 40 years, and they had grown up in this environment. Now, suddenly, they realized that the truth they had believed in their entire lives was false?