Takuya Nakayama set down his pen and looked at Sato.
"We need to move fast, but we can't risk our reputation by releasing a half-baked product. Let's get the initial architecture ready. Once the wind is in our sails, we'll be ready to take off. Can you do it?"
Hideki Sato stared at the framework diagram on the paper, his mind already racing through the specific hardware choices and circuit layouts.
"The redundant design for the driver circuits will add some extra work to the initial R&D phase, but it's technically feasible." Sato tucked his notebook away and stood up. "I'll assemble a team immediately and form the Project 16 Handheld Group."
"Go on. Make sure to coordinate closely with the software development department. Find out exactly what they need from the new hardware," Takuya instructed.
Sato nodded and turned to leave the office.
The moment the door closed, his mind was already packed with the upcoming schedule.
Sega's Hardware Department was about to enter another sprint.
Sato had barely stepped out of the office, the door still swinging shut, when a set of hurried footsteps echoed down the hallway.
Takuya Nakayama had just emptied the cold barley tea into the sink and refilled his glass with warm water when two knocks sounded on the doorframe.
"Come in," Takuya said, turning around with the glass in hand.
Hoshino pushed the door open and entered. His shirt sleeves were rolled up to his elbows, and he clutched a thick stack of faxed papers. The edges of the pages still bore the indentations from the fax machine's rollers, and the smell of toner wafted through the cool, air-conditioned office.
"Am I interrupting your break?" Hoshino pulled out a chair and spread the papers flat across the large, solid wood desk.
"Even if you are, I still need your report," Takuya said, settling back into his executive chair and blowing on the steam rising from his glass. "News from the Bangkok team?"
Hoshino nodded.
For the past six months, the elite research team he had assembled had been working around the clock, monitoring the economic fundamentals of several Southeast Asian nations. This stack of faxes was the latest intelligence they had just compiled and sent back, covering key indicators from May to July 1996.
Takuya picked up the top page—a macro-economic report. The data was densely packed across the sheet.
Export volume, changes in foreign exchange reserves, short-term external debt balances, current account deficit ratios, and the daily trading volume of the Stock Exchange of Thailand.
"Look at the export data for May," Hoshino said, tapping a figure in the middle of the table with his pen. "It's down 5% year-on-year. That's a first in their decade of rapid economic growth. The side effects of the Baht's fixed exchange rate against the US dollar are fully manifesting. As the dollar strengthened on the international market, the Baht was forced to appreciate with it, slashing the competitiveness of their export manufacturing sector in half."
Takuya Nakayama turned to the second page, his gaze stopping on the charts for real estate and the stock market.
"The signs of foreign capital flight are impossible to hide," Hoshino continued. "In June, the Bangkok stock market index fell by 8%. Over 30% of the high-end office buildings under construction on Sukhumvit Road have halted work. Local financial firms that borrowed short-term foreign currency loans to speculate on real estate and stocks have stretched their capital chains to the breaking point. The bad debt rate is jumping up by the week."
What was interesting was the Bank of Thailand's response strategy.
"To maintain the fixed exchange rate, the Bank of Thailand spent approximately three billion dollars of its foreign exchange reserves in July, buying up Baht on the open market," Hoshino reported, delivering the most critical intelligence. "International speculators have already begun tentatively shorting the Baht in the offshore market. This three billion is just the first installment of tuition the Thai government had to pay."
Takuya Nakayama placed the faxed paper back on the desk and clasped his fingers together in front of him.
The logic behind these superficial events was laid bare in the accompanying analysis report from the research team.
Shrinking exports meant they couldn't earn enough foreign exchange, while a massive amount of short-term foreign debt was coming due for principal and interest payments. To prevent the exchange rate from collapsing, the central bank had no choice but to deplete its already meager foreign exchange reserves to absorb the selling pressure. It was an inescapable, vicious cycle.
The trajectory of events aligned perfectly with the line Takuya Nakayama had drawn in his office over half a year ago. There had been no fundamental deviation.
"Three billion thrown in won't even make a ripple," Takuya Nakayama remarked. "The appetites of those Wall Street hedge funds can't be sated by a few billion. This amount is just an appetizer for them. The real show is still to come."
Hoshino leaned forward, hands resting on his knees, his words quickening.
"We can now begin drafting the plan for the next phase of fund reallocation and strategic positioning," Hoshino reported on the operational progress. "Over the past few months, we've established five offshore shell companies in the Cayman Islands and the British Virgin Islands, fully integrating all funding channels. By utilizing a multi-layered nested equity structure, we've successfully concealed Sega's original source of funds. We've also completed the testing of the hedging interfaces with several multinational investment banks. As soon as the capital is in place, we can establish short positions in the foreign exchange futures market at any time."
"What leverage ratio have you set?" Takuya asked.
"A conservative strategy. Not exceeding ten times leverage," Hoshino replied. "With ample time for preliminary preparations, we've meticulously calculated the risk margins. This will ensure our returns while preventing a forced liquidation due to initial market volatility. We have to survive to collect the final payout."
Takuya Nakayama picked up the fountain pen on the table and drew two lines on the memo.
"When will the complete operational plan be ready?"
"Next week," Hoshino answered decisively. "I will submit the plan for discussion and a vote at next Tuesday's regular Board of Directors meeting. It will cover the scale of fund mobilization, the flow of funds through offshore accounts, the specific exchange rate hedging strategy, and a contingency plan for Sega's internal capital chain defense in case the crisis spreads to Japan."
From spotting the first clues to building the data models and now presenting the operational plan, the entire process had been carried out with meticulous precision.
Hoshino, a seasoned financier who had lived through Japan's bubble burst, was truly flawless in his execution.
"What's this?" Takuya Nakayama leaned back in his chair, his tone teasing as he looked at Hoshino's slightly weary but spirited face. "Judging by your posture, you can't wait to get in on the action, can you?"
Hoshino froze for a moment, then burst out laughing.
"You've seen right through me," he admitted candidly. "Back home in Japan, the Ministry of Finance keeps preaching about stimulating the economy, yet everyone is just fretting over the stagnation. The chance to stir up trouble in the international financial markets, to snatch meat right from the jaws of those Wall Street wolves... I'd wake up smiling just dreaming of it."
He paused, his smile fading as his expression turned serious.
"But rest assured, I know my priorities. This capital is the foundation for Sega's future expansion. The Investment Department's primary rule will always be the safety of the principal. We won't be the ones sticking our necks out; we'll just be riding the wave."
Takuya nodded in approval.
"Alright, go prepare the proposal. I'll be watching your performance at next week's Board of Directors meeting."
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