Wednesday, October 14, 1987.
Tokyo's night burned crimson beneath the relentless glare of neon lights. In Azabu-Juban, inside the exclusive Club, the Rokumeikan Hall shimmered under the dazzling brilliance of a massive Austrian crystal chandelier. Its refracted rays stabbed at the eyes while the melodic cascade of an overflowing champagne tower blended with the rich aroma of Cuban cigars and the booming laughter of men intoxicated by their own invincibility.
"Three million, one hundred thousand! Another record high at today's close!"
A pot-bellied real-estate president raised his glass, his cheeks flushed a deep liver-purple from alcohol and excitement.
"NTT! This is the power of Japan! What do those Americans know? Their AT&T is nothing but a glorified bill collector, while our NTT is the future itself!"
The crowd around him erupted in sycophantic laughter.
"Well said, President Tanaka!"
An official from the Ministry of International Trade and Industry loosened his tie and exhaled a thick plume of smoke.
"The United States is nothing more than a bankrupt beggar drowning in debt. I hear their trade deficit figures released this morning are going to be catastrophic again. Hahaha—let them run deficits! In the end, it will be us Japanese using those very dollars to buy their buildings!"
"I've already instructed the finance department to prepare five billion. Next week we're heading to Manhattan to buy the dip!"
"Cheers! To a powerful Japan!"
"Cheers!"
The crisp clink of colliding glasses rose and fell throughout the hall.
Shuichi stood in a quiet corner of the banquet, nursing a glass of soda water. He wore a perfectly tailored suit, his signature gentle smile fixed in place as he nodded politely to those who greeted him in passing. Yet his palms were slick with cold sweat.
The Tokyo stock market had gone mad in recent days. The Nikkei index charged forward like a bull in heat, oblivious to any warning signs. Everyone around him had lost their senses—even the maids in his own household were debating whether to take out loans to buy fractional shares of NTT.
Behind this frenzy, Shuichi felt as though he were cradling a live time bomb.
In S.A. Investment's New York accounts, nearly all core technology stocks had been pledged to raise hundreds of millions of dollars in cash. It was an enormous gamble. If American stocks kept climbing, they would face crippling interest payments and miss the rally. If the market fell…
"Father."
A small, clear voice interrupted his thoughts.
Shuichi looked down. Satsuki had appeared beside him without a sound. She wore a simple black dress, a delicate pearl clip fastened in her hair. In this glittering hall crowded with boastful men, she looked like a lost porcelain doll.
Only Shuichi knew that this doll was the most dangerous predator in the room.
"Aren't you going to have some snacks? The escargot is excellent," he said, forcing a smile.
"I have no appetite."
Satsuki glanced at the president in the center of the hall, who was loudly boasting about his letter of intent to purchase Rockefeller Center. A flicker of pity crossed her eyes.
"Father, do you hear that sound?"
"A sound? What sound? Everyone is laughing."
Shuichi knew his daughter was about to speak in riddles again and played along.
"No," Satsuki shook her head. "It's the sound of ice cracking."
She tugged gently at his sleeve.
"Go to the study. Frank's call is coming."
…
On the second floor, inside the private study, the heavy soundproof door sealed away the clamor from below. Only the monotonous "zz-zz" of a fax machine spitting out price quotes disturbed the silence.
"Ring—ring—"
The red secure telephone rang exactly on time.
Shuichi drew a deep breath and lifted the receiver.
"Hello?"
"Boss? No—something's happened!"
Frank's voice came through breathless, punctuated by chaotic shouting in the background and the furious smashing of keyboards.
"The U.S. Department of Commerce just released the August trade deficit—15.7 billion dollars! It smashed every expectation! Wall Street has erupted!"
"The Dow Jones plunged right at the open! Blue chips, tech stocks—everything is falling!"
Shuichi's heart tightened painfully.
It had begun.
It had finally begun.
"How much has it dropped?" Satsuki asked calmly.
"Currently down three percent! It doesn't sound like much, but the momentum is vicious. Selling pressure is flooding in too fast!"
Frank's voice carried a clear note of anxiety.
"Boss, the stocks we pledged at the bank—their market value is shrinking rapidly. We haven't hit the warning line yet, but the bank's risk-control department just called with a heads-up. If it keeps falling, they'll demand a margin call."
"That is precisely what I wanted to see," Satsuki replied, seated in a high-backed chair, her fingers tapping lightly on the desk.
"Frank, forget about those stocks. Even if they crash through the floor, at worst we simply hand them over to the bank."
"Now, with the cash we have on hand, I want you to do one thing."
"Buy."
"Buy?!" Frank sounded stunned. "Buying the dip now? It's far too early—the knife has only just begun to fall!"
"Who said anything about buying stocks?"
Satsuki let out a cold, quiet laugh.
"I want you to buy put options. S&P 500 Index, deep out-of-the-money. Set the strike price at eighty percent of the current level. Expiration: next month."
Silence fell on the other end of the line.
Several seconds passed before Frank swallowed audibly.
"Boss… have you lost your mind?"
"Eighty percent of the current price? You're betting the market will drop twenty percent within a month?"
"That's impossible! Nothing like that has happened since World War II. This is throwing money into the ocean!"
"Besides, even though the premiums are cheap right now, to offset the losses from the pledged stocks we'll need an enormous position…"
"Then open an enormous position," Satsuki said, her voice utterly steady, as if discussing the weather. "Take eighty percent of the cash on hand and buy put options with all of it. Go all-in. That is an order. Execute it."
Frank remained silent for a long time.
Finally, he let out a groan that bordered on despair.
"Fine. You're the boss. Your call."
"If we lose everything this time, I'm opening a hot-dog stand under the Brooklyn Bridge."
"Go ahead," Satsuki replied. "You'll thank me later."
She hung up the phone.
Shuichi collapsed onto the sofa, every ounce of strength drained from his body.
All-in.
Hundreds of millions of dollars in cash, spent on lottery tickets that only paid out at the end of the world. If the market fell by only ten percent, or if the decline was merely gradual, every yen would vanish into thin air.
"Satsuki… will it really fall that much?" Shuichi's voice trembled. "Twenty percent? In a single day?"
"Father, have you heard of programmatic trading?"
Satsuki walked to the window and gazed out at the pitch-black night sky.
"To protect the returns of large funds, Wall Street invented something called 'portfolio insurance.' Whenever the market falls, computers automatically sell stock-index futures to hedge the risk."
"It sounds perfect, doesn't it?"
She reached out and traced a jagged downward line across the mist-covered glass.
"But they overlooked one fatal flaw."
"When every computer follows the same logic and sets the same stop-loss threshold, once that threshold is breached…"
"All the machines will issue 'sell' orders at the same instant."
"Futures collapse, dragging down spot prices. Spot prices collapse, triggering even more machines to sell futures."
"It becomes a death spiral."
Her finger slashed heavily downward.
"At that moment, there will be no buyers left in the market—only machines frantically shouting 'sell' into empty air."
"That is free fall."
"What we must do is cast our net at the bottom of the cliff."
…
Friday, October 16, 1987.
The day was gray and gloomy.
When the Tokyo stock market closed, the Nikkei—already influenced by Wall Street—slipped a few hundred points. Yet inside The Club, optimism still reigned.
"Just a technical adjustment!" the same real-estate president blustered. "It will be fine after the weekend. Monday will open strong! We must trust the resilience of the Japanese economy!"
Meanwhile, across the Pacific in New York, the Dow Jones had closed down 108 points, a 4.6 percent drop. Though significant, many seasoned traders viewed it as still within a manageable range. After such a long rally, a correction was only natural.
On the trading floor, exhausted brokers loosened their ties and made plans to unwind at a bar.
"Finally over. What a brutal week."
"Yeah, get some decent sleep this weekend. It should bounce back on Monday."
"Those damn machines messed everything up, but the big institutions will step in to support the market."
They comforted one another as they left Wall Street behind.
None of them realized this was merely the first drop of rain before the deluge.
Back in Tokyo, at the Saionji main residence, Satsuki stood before a large calendar, red marker in hand. She drew a bold X across the square for October 16.
Her gaze then shifted to the next row.
Two empty squares remained: October 17 (Saturday) and October 18 (Sunday).
This would be the longest, most agonizing weekend in the history of global finance.
Fear does not rest on weekends. Instead, it ferments wildly—at dinner tables, over telephone lines, and in newspaper headlines. Retail investors would stare at Friday's crash numbers and grow more terrified with every passing hour. Leveraged fund managers would lie awake both nights, frantically calculating the margin shortfalls they would face at Monday's open.
When the sun rose on Monday morning, the fear accumulated over those two days would crash down like a tsunami, shattering the fragile dam of confidence in an instant.
"Two more days."
Satsuki drew a heavy circle around October 19.
The red ring stared back at the greedy world like a bloodshot eye.
"Are you ready, Father?"
She turned to Shuichi, who sat on the sofa clutching his Buddhist prayer beads.
"On Monday morning, we will go to The Club."
"To witness the most magnificent fireworks in history."
Shuichi closed his eyes and slid one bead along the string.
"Namu…"
He was not sure whether he was praying for the Saionji family's survival or offering a requiem for those about to leap from skyscrapers.
Outside the window, the wind had died completely.
This unnatural silence was far more suffocating than any storm.
The situation had reached its most dangerous point. People continued to act as if everything was normal, but the ground beneath them had already begun to collapse.