Saturday, October 17, 1987.
Saitama Prefecture, Kasumigaseki Country Club.
The lawn had been trimmed to the smoothness of velvet, with autumn-red maple leaves scattered along the edges of the fairway. In the distance, the faint silhouette of Mount Fuji rose against the horizon. The sunlight was pleasant, and a light breeze stirred the air. Under normal circumstances, it would have been an ideal day for golf.
A crisp "thwack" rang out as a club struck the ball. The white sphere soared upward in an awkward arc before slicing sharply to the right and landing in the sand trap.
"Off again," muttered Tanaka, managing director of Sumitomo Bank. He handed his club to the caddie, removed his white gloves, and wiped the fine beads of sweat from his forehead.
"You don't seem to be on your best form today, Managing Director," Shuichi observed politely, leaning on his own club with a courteous smile.
"Probably didn't sleep well last night," Tanaka sighed. He accepted the towel from the caddie and glanced around the course.
Luxury cars still lined the edges of the grounds, and groups of wealthy businessmen in polo shirts stood together in quiet clusters. Yet the hearty laughter that usually filled the air had vanished, replaced by low, anxious murmurs. Nearly everyone had a bulky "brick" mobile phone clipped to his belt, and from time to time a man would stop to answer a call, his expression tense.
"Mr. Saionji," Tanaka lowered his voice and leaned closer. "What do you make of what happened in New York last night?"
On Friday the Dow Jones Industrial Average had fallen 108 points. That single number now lodged in everyone's throat like a fishbone.
"A technical adjustment," Shuichi replied lightly as he bent down to push a tee into the grass. "The market has been rising for more than a year. A pullback is only natural. As long as Japan's economic fundamentals remain sound and NTT continues to climb, there is no need for alarm."
This was the standard reassuring line everyone was repeating to one another.
"Yes, yes," Tanaka agreed, though the creases on his forehead refused to smooth away. "Still… I've heard that foreign capital has been withdrawing quite aggressively. Goldman Sachs and Morgan Stanley appear to be quietly trimming their positions."
He glanced at Shuichi, eyes flickering with curiosity. "What about your family's S.A. Investment? Any significant moves lately? Word is that you have been quite active overseas."
Shuichi set up his ball and took a practice swing. "Nothing major. As you know, Satsuki enjoys following trends. She bought some American technology stocks, but lately she seems stuck with them and is feeling rather anxious."
"Oh? Stuck?" A faint spark of relief appeared in Tanaka's eyes—the comfort of shared misfortune. "Then there is nothing to fear. If even clever investors like you are holding on, the market must still be sound. We simply need to be patient; it will recover eventually."
Tanaka patted Shuichi on the shoulder and laughed heartily, as though the earlier gloom had lifted. "Come, let's keep playing! Today I am determined to sink a birdie!"
Shuichi watched Tanaka's back as the older man strode toward the sand trap. The man's shoulders seemed strangely unsteady. Shuichi tightened his grip on the club. If Tanaka knew that S.A. Investment had already liquidated its long positions and was now holding billions of dollars in bets on a market collapse, that carefree expression would probably twist into something far worse than tears.
"Thwack."
Shuichi's ball flew straight and true, landing only three yards from the flagstick—a beautiful shot. Yet to him the ball looked more like a stone balanced precariously on the edge of a cliff: one strong gust and it would tumble into the abyss.
October 18, Sunday.
Fear was quietly fermenting. The weekend closure of the markets did not bring calm; instead, it gave rumors and panic fertile ground in which to grow.
Saionji Main Family Residence, tea room.
The television was tuned to NHK, which was airing news from the United States. On screen, U.S. Treasury Secretary James Baker stood before a cluster of microphones, his face grim.
"If West Germany does not lower interest rates to stimulate its economy, the United States will have no choice but to consider further devaluing the dollar…"
Satsuki sat cross-legged on the tatami mat, peeling an orange. "Did you hear that tone?" she asked, placing a segment in her mouth without looking at her father. Her eyes remained fixed on the screen. "That is the final nail in the coffin of the Louvre Accord."
"What do you mean?" Shuichi set down his teacup, a flicker of unease crossing his face.
"Six months ago the G7 nations agreed at the Louvre to stabilize the dollar exchange rate together. The understanding was simple: no one would raise rates, no one would devalue the currency, and together they would keep inflating the bubble. But now the Germans, worried about inflation, have secretly raised their rates. The Americans are panicking, and Secretary Baker is openly threatening Germany. He is essentially telling speculators around the world that the G7 alliance has collapsed and no one intends to defend the dollar any longer."
Satsuki swallowed the orange, the sweet-sour juice bursting across her tongue. She wiped her hands with a tissue. "That's it, then. Any funds still hesitating now have only one thought: get out. Run from the dollar. Run from U.S. stocks. Run anywhere, as long as it is not inside this burning house."
Shuichi stared at the well-dressed American official on television. The man continued to speak at length about macroeconomic policy, yet every word he uttered was pushing the global stock market closer to the edge.
"Tomorrow…" Shuichi's voice felt dry. "Tomorrow is Monday."
"Yes. Monday." Satsuki picked up the remote and switched off the television. The screen went black, reflecting their slightly blurred images. "Asian markets will open first—Hong Kong, then Tokyo. We have the privilege of sitting in the front row, watching exactly how this wave will break."
October 19, Monday. 8:00 a.m.
The sky over Tokyo was overcast, the clouds hanging low and heavy.
Marunouchi, Saionji Industries headquarters.
Inside the private trading room prepared for S.A. Investment, the atmosphere was thick with tension. More than a dozen screens glowed on the wall. The leftmost display showed the Hong Kong Hang Seng Index futures.
"Boss, Hong Kong has opened!" shouted Itakura—nominally president of an entertainment company, but today dragged in as Satsuki's designated front man. He pointed at the screen.
The once-calm green line plunged the instant trading began. Minus 120 points. Minus 200. Minus 300. There was no meaningful rebound. Sell orders cascaded like a waterfall, instantly overwhelming any buy orders.
"The Hong Kong Stock Exchange has just announced they may suspend trading!" Itakura's voice rose.
"So soon?" Shuichi loosened his tie, suddenly short of breath. "What about Tokyo? How is Tokyo holding?"
At 9:00 a.m. sharp the Tokyo Stock Exchange opened. The Nikkei index opened 200 points lower. The trading floor descended into chaos—telephones rang incessantly, traders gestured wildly.
"It seems to be holding for now," Shuichi said, eyes fixed on the screen. Although the index had fallen, it had not collapsed like Hong Kong's. The drop remained contained at roughly one percent. After all, Japan's economic fundamentals appeared stronger than those of the United States or Hong Kong. NTT, the market's anchor, still stood—shaking, but not yet fallen.
"This is merely the appetizer," Satsuki remarked from her corner chair, sipping an iced coffee. She did not even glance at the screens. "The current decline is only polite panic triggered by Hong Kong. The real disaster is still sleeping."
She checked the clock on the wall: 9:30 a.m. in Tokyo, 8:30 p.m. in New York. Wall Street remained in darkness. The fund managers holding enormous short positions were probably lying awake in bed or silently praying.
"Wait for it," Satsuki said calmly, taking another sip. "Until 10:30 tonight. Until that opening bell rings in New York."
The day stretched on.
When the Tokyo market finally closed, the Nikkei had fallen more than 600 points—a drop of 2.35 percent. Although the decline was steep, in such turbulent times many people allowed themselves a sigh of relief.
"Japan still seems safe," salarymen told one another over beer in izakayas after work. "As long as it doesn't crash outright, it should rebound tomorrow."
Yet inside the Saionji family's trading room the lights remained bright. No one left. Takeout sushi sat untouched on the table, growing cold. The wall clock showed 10:25 p.m.
Shuichi stood before the red telephone line that connected directly to New York. His palms were damp; he kept wiping them on his trousers.
The phone rang. Once. Twice.
"Hello…" Frank's voice finally came through—hoarse, tense, trembling as though he stood before a firing squad. "Boss, five minutes left."
In the background the pre-opening bell of the New York Stock Exchange rang louder than ever, like a swarm of flies trapped inside a sealed jar.
"How does it look?" Satsuki took the receiver.
"Bad. Very bad." Frank's voice shook. "Pre-market indications are nothing but sell orders. They are piling up like a mountain. Almost no buy orders visible. Market makers are hiding; no one wants to catch a falling knife. Many blue-chip stocks—IBM, General Electric, Merck—may not open at all. The bid-ask spreads are too wide to match. This feels like the last second before the dam bursts."
Satsuki kept her eyes on the digital clock: 22:29:50.
Ten seconds.
Nine.
Eight…
"Dong——!!!"
The clear sound of the opening bell traveled clearly across the ocean into the Tokyo trading room.
The New York stock market had opened.
"How is it?!" Shuichi could not help shouting.
There was a two-second silence on the line.
Then Frank's near-hysterical cry erupted: "No opening price! IBM didn't open! Alcoa didn't open! Half the component stocks can't trade at all! Look at the S&P 500 futures—watch the futures!"
On the trading-room screen the S&P 500 futures chart flickered, then drew a nearly vertical red line downward. It smashed straight through the floor.
"Limit down! The futures have hit limit down!" Frank screamed, his voice mixing raw fear with a twisted kind of ecstasy. "The machines! Those damn portfolio-insurance programs are starting to sell! They're supposed to protect portfolios, but they're just killing each other! Boss—our put options… our options…"
He gasped as though he had inhaled pure oxygen. "The market makers' quoting systems have gone insane. Implied volatility has jumped to 150 percent! Our options' value has multiplied tenfold… twentyfold… and it's still rising!"
On the main screen the Dow Jones index finally displayed its first number: down 200 points. It had doubled Friday's drop in a single moment.
But this was only the beginning.
As the stocks that had failed to open gradually found matching trades, the index began to plunge like a kite with a snapped string.
Down 300 points.
Down 400.
Down 500.
It was free fall. No support levels held. No technical indicators mattered. All the usual chart theories became meaningless in the face of pure panic—raw, primal, animal panic.
In the trading room Itakura collapsed onto the floor, his face ashen. He stared at the lengthening red line on the U.S. market display and felt as though the world itself was ending.
"Five hundred points…" Shuichi leaned heavily on the table, his fingers trembling. "That means… trillions of dollars have simply vanished?"
"It's not over yet," Satsuki said quietly, still holding the receiver. Her face showed neither fear nor joy—only the solemn gravity of someone witnessing history unfold.
"Frank, do not sell," she instructed the frantic trader on the other end. "This is not the bottom. Wait until fund managers start jumping from buildings. Wait until the exchange itself tries to shut everything down. Wait until the drop exceeds twenty percent. Only then will we close our positions."
On the other end Frank could no longer speak. He could only watch the account balance on his screen swing wildly. The numbers were so large they made him dizzy—wealth squeezed from the ruins of countless bankruptcies.
Outside the window, Tokyo's night remained calm. In the distance Tokyo Tower glowed with its familiar red lights. Most residents were already asleep, unaware that a financial explosion of historic proportions was detonating across the ocean.
Satsuki set down the phone and walked to the window. She picked up a glass of ice water and pressed it against her flushed cheek.
"Father," she said softly, "prepare the net. Tomorrow morning, when the sun rises, the sky over Tokyo is going to collapse."