Volume 2: The Green Years Chapter 55: Taking Advantage of the Fire to Loot

  "Han Shao, you rushed me back this time, is there something big going on again?" After solving Chen Yaxin's matter, Zhu Jianjun had a relaxed face, but he couldn't help but feel some suppressed doubts and asked anxiously.

  As usual, Leng Bingxue had made a big move again, and many details couldn't be explained clearly over the phone, so he flew back to Xichang to report in detail. Zhu Jianjun was also happy to see this every time, as he wanted to see what kind of myth Leng Bingxue would create next. Moreover, he had 5% shares in the company, and his assets increased with each gain, although not comparable to Leng Bingxue's, but still quite impressive globally. It seemed that no one could resist the temptation of money.

  His icy family assets exceeded 4 billion, and Zhu Jianjun himself also had more than $200 million in assets, which is equivalent to nearly 1 billion yuan. In just four years, he went from being a poor unknown to a billionaire with assets of nearly 1 billion, a story that seems like a fairy tale, but can only become a reality by following Han Shao.

  "Of course there is," asked Leng Bing coldly and slowly: "How much money can the company mobilize at present?"

  Zhu Jianjun's heart skipped a beat upon hearing this, this was definitely a big move. He thought for a moment and quickly said: "Now, more than 3 billion US dollars have been cashed out from the American futures market, and at most a few more billion can be withdrawn from other places to make up for 4 billion. If you want more, you must sell the stocks of the three major companies we currently hold."

  Cisco Systems was founded in 1984 by a married couple who were both working as professors at Stanford University. In 1986, they produced their first router, which enabled different types of networks to be reliably interconnected, sparking a communications revolution. At the time, the company's valuation wasn't very high, and Cold Ice bought 30% of Cisco's shares for less than $100 million. Both parties were thrilled with the deal, but Cold Ice knew that by 2008, Cisco would become one of the most successful companies in the US, with annual revenues reaching $39.5 billion, a veritable goldmine.

  Dell Computer was founded in 1984 by Michael Dell. In 1992, it was first ranked as one of the world's top 500 companies by Fortune magazine. Dell Computer is a leading global computer systems company, a major provider of computer products and services, and the largest direct sales personal computer company in the world, with total revenues reaching $32.1 billion. Following historical precedent, in 1988, to raise capital, Dell went public with an initial public offering (IPO) of 3.5 million shares at $8.50 per share. However, due to the strong intervention of Fly Far Company, in early 1987, Zhu Jianjun flew to the United States and invested $50 million in Dell, acquiring 40% of its shares. With sufficient funds, Dell naturally canceled its original plan to issue stocks for fundraising through an IPO.

  With the help of Ling Bing Han's foresight, Fei Yuan Corporation not only invested in Cisco Systems and Dell, but also instructed Zhu Jianjun to buy Microsoft stocks with all his might when they first went public on NASDAQ in March 1988. The opening price was $21 per share, and Fei Yuan Corporation eventually purchased over 300 million shares of Microsoft stock at an average price of $32 per share, investing nearly $1 billion, accounting for almost 30% of the circulating shares and 10% of Microsoft's total shares, becoming the third largest shareholder of Microsoft. To date, with the development of Microsoft, the stock price has risen to $97 per share. The stock value has increased by more than 300%, and Fei Yuan Corporation has made a profit of $2 billion from this alone.

  Everyone thought it was over, but Leng Bingxue knew that the legend had just begun.

  In the past, it's no exaggeration to say that the entire earth was under the halo of Bill Gates. By July 16th, 1999, Microsoft's stock market value had broken through the $500 billion mark, becoming the first company in history to break through the $500 billion mark. Its stock market value was close to the sum of the stock market values of Exxon, Coca-Cola and AT&T, the three largest traditional companies in the US. In fact, only 8 countries in the world have an economic scale exceeding $500 billion, and the US's GDP also reached $500 billion only in 1960. Bill Gates has been steadily sitting on the throne of the richest man in the world for four consecutive years, with his personal wealth being approximately $100 billion, just from the market value of Microsoft stocks he holds. On July 16th, 1999 alone, his personal wealth increased by $4.7 billion. In fact, Bill Gates only owns about 45% of Microsoft's shares.

  The stock should be sold, and it should also be after ten years. At that time, this 10% stake can bring in more than $20 billion to Feiyuan Company. And Microsoft after the millennium, entangled in lawsuits, its glory is no longer...

  The shares of these three companies are the treasures in the icy cold hearts, how can they be sold now?

  "Those stocks are all gold mines, and the returns will be counted in hundreds of times later. Now it's decided that we can't move them." Leng Bing coldly and decisively rejected Zhu Jianjun's proposal, and resolutely said: "40 billion is enough, you go back and prepare, next month take people to Japan."

  "Going to Japan? Great, I've long wanted to make a move in Little Japan." Zhu Jianjun's interest was piqued as soon as he heard this, and he hastily said: "This damn little Japan, which committed so many heinous crimes in China back then, I'll go too, to fight for the country's honor."

  People of their age have basically grown up watching landmine warfare and tunnel warfare, and the hatred for Japan has reached the bone. In fact, not to mention Zhu Jianjun, even Leng Bingxue was a thoroughbred angry youth in his previous life, and he had no good feelings towards Japan except for its world-renowned AV. This time, with an opportunity that comes once in a thousand years, how could they miss it?

  After the 1980s, Japan's foreign investment grew rapidly. In September 1985, the finance ministers and central bank governors of the United States, Japan, West Germany, France, and Britain held a meeting at the Plaza Hotel in New York, deciding that the governments of the five countries would jointly intervene in the foreign exchange market to cause the dollar to fall against major currencies in an orderly manner, increasing the export competitiveness of US products and solving the huge trade deficit of the United States. This is known as the "Plaza Accord". From then on, under pressure from the United States, the yen appreciated all the way, rising from 250 yen per dollar at the time to 120 yen per dollar in just a few months.

  The Bank of Japan lowered the discount rate five times in succession, from 5.0% in January 1986 to 2.5% in February 1987, with a view to expanding domestic demand by increasing investment and consumption. Excessive liquidity funds flowed massively into real estate and stock markets.

  The Japanese stock market began a slow recovery in 1983, and the Nikkei 225 average rose above 10,000 by early 1984. Following the Plaza Accord, the market entered a period of sharp inflation. By January 1986, the Nikkei 225 had risen to 13,000; it would reach 26,000 by September 1987. Despite suffering a setback in October 1987 when worldwide stock markets crashed on "Black Monday", Japan's market continued its upward momentum. In 1988, the total market value of Japanese stocks rose to over ￥477 trillion (US$3.9 trillion), more than double the 1985 figure. By December 29, 1989, the Nikkei 225 had risen to an all-time high of 38,915.87; it would not be surpassed until April 2013. The price-to-earnings ratio for Japanese stocks reached a record 70.6 times earnings at the peak. This was nearly triple the P/E of the market in 1985. Total market capitalization of Japanese stocks had grown to over ￥611 trillion (US$4.9 trillion), more than 1.48 times the GDP of Japan.

  The stock market's great wealth effect led people to buy new cars, golf club memberships and brand-name products, with personal spending increasing year after year. New home construction skyrocketed, and the entire Japanese archipelago was bathed in affluence. Japan's outward investment was also remarkable, with its annual direct investment abroad rising from $22 billion in 1986 to $68 billion in 1989. From 1985 to 1990, there were 21 cases of Japanese companies acquiring more than ￥500 billion worth of foreign companies, including Sony's acquisition of Columbia Pictures shares from Coca-Cola and Mitsubishi Estate's purchase of Rockefeller Center, which shocked Americans.

  At that time, the entire Japanese archipelago was indulging in unprecedented prosperity and madness. People even firmly believed in the Yamato myth that stock prices would only rise and never fall, and land prices would only go up and never come down. On January 3, 1990, Nihon Keizai Shimbun conducted a stock market forecast with 20 famous entrepreneurs, and everyone optimistically believed that the stock price in 1990 would continue to soar to 42,000-48,000 points.

  However, contrary to expectations, on April 2, 1990, the Nikkei average plummeted to 28,002.07 points, a decline of 28.05% from its peak at the end of 1989. On October 1, 1990, it fell further to 20,221.86 points, and the total market value of stocks disappeared by over ￥270 trillion. The fall in stock prices also led to panic selling in the domestic bond market, with funds rapidly flowing out of Japan. The Japanese financial markets were thrown into chaos, with stocks, bonds, and the yen all plummeting simultaneously. In the autumn of 1990, real estate prices began to collapse.

  The collapse of the bubble economy led to a sharp decline in Japan's economic growth rate, from 6.0% in 1990 to 1.1% in 1992. The total market value of stocks plummeted to ￥289 trillion in 1992, down 52.7% from 1989. The crash in stock and land prices severely reduced the value of financial assets held by households, leading to a sharp decline in personal financial assets and a credit crunch that caused consumer spending to shrink sharply. In 1991, Japan's car sales growth rate turned negative for the first time since 1981, while nationwide condominium sales fell by 41.3% year-on-year, the lowest level in 14 years. The stock market crash led to a financial system crisis and plunged the Japanese economy into a period of stagnation known as the "Lost Decade". Although the economy has shown signs of recovery in recent years, the disposal of non-performing loans was not completed until 2005, and the stock market has never regained its former glory. After hitting a low of 7607.88 points in April 2003, it is now hovering around 17,000 points, equivalent to only 43% of its peak during the bubble economy. The Japanese stock market's bull run came to an end with the collapse of the economic bubble.

  From $1 = 250 yen before the Plaza Accord to $1 = 80 yen in 1995, the yen's decade-long appreciation has dealt a nearly devastating blow to Japan's manufacturing sector. In the words of C. Fred Bergsten, director of the Institute for International Economics in Washington, the US wanted to force up the value of the yen so that "Japan would stew in its own juice."

  In June 1995, the Bank of Japan announced that the banking system's bad debt totaled ￥400 trillion (approximately $4 trillion USD) among Japan's 150 largest commercial banks for the year. According to estimates by Salomon Brothers in the United States, the total bad debt in the Japanese banking system was approximately ￥1 quadrillion (approximately $10 trillion USD). In contrast, in 1980, the total bad debt in the Japanese banking system was only ￥10 trillion (approximately $100 billion USD), with a bad debt ratio of just 0.5%. Over the course of fifteen years, bad debt had grown by a factor of 100, illustrating the devastating effects of the bubble economy's "weapon". However, it must be acknowledged that despite ten consecutive years of yen appreciation, the yen's exchange rate did not collapse (i.e., plummet), which speaks to the health of Japan's economy at the time.

  The Japanese government implemented unprecedented large-scale expansionary fiscal policies to resist the economic disaster brought about by the bursting of the bubble and to stimulate economic growth. For example, in August 1992, ￥11 trillion was invested in fiscal funds to stimulate economic growth, ￥13 trillion in April 1993, and ￥15 trillion in 1994. Fiscal investment increased year by year, causing government debt to grow rapidly. However, each effort ended in failure.

  At this time, less than half a year away from the peak of Japan's economic bubble, it was the craziest time for the Japanese. In six major cities in Japan, the prices of residential, commercial and industrial land rose by double digits every year, from $6,000 per square meter in 1970 to $62,000 per square meter in 1991, an increase of more than tenfold, setting a record unprecedented in the world. In comparison, the price of land in New York City was only $1,200 per square meter. By the end of the 1980s, Japan's land wealth accounted for 70% of the country's total wealth. At that time, some Japanese people proudly said: "Selling all the land in Tokyo can buy the whole United States." Unfortunately, this arrogant Japanese did not know that Japan's land prices were driven up by Americans.

  The economic bubble in Japan was able to inflate to this extent because of the arrogant mentality of the Japanese people at that time. Because the foundation of speculation in both the stock market and real estate is confidence. Without ultra-high confidence, how can there be an ultra-high bubble? Since World War II, Japan has been under US management, with the US as its protector, so Japan had to follow the US's arrangements in all matters. Whatever Americans said, Japanese could only say "yes". Now that Japan has become America's largest creditor, the Japanese have reason to say "no" to Americans. The entire nation of Japan was deeply immersed in the thrill of being able to say "no" to the US.

  $4 billion is a drop in the bucket for Japan's entire economy, to put it another way, this amount of money can only buy more than 60,000 square meters of land in Tokyo, but if you want to set up a situation and take advantage of the collapse of Japan's economic bubble to make a profit, then it is enough.