Life strange as fiction for Japan bonds
money.telegraph.co.uk
The financial markets were shocked at the unprecedented failure of Japan's government bonds to sell out at an auction two weeks ago. But it was a scenario that hundreds of thousands of Japanese had already read in a best-selling novel.
The book, Nihon Kokusai, or Japan Government Bonds, fictionalises a group of idealistic traders who boycott a bond auction, causing it to fail. Their goal is to force the government to confront the real economic problems rather than keep the country artificially afloat by ploughing borrowed money into public works.
The failure of last week's auction was the result of a loss of confidence in Japan's economic policies rather than a conspiracy. The grim message is the same, however: Japan needs to put its house in order or face the humiliation of effective bankruptcy.
Japan's debt now stands at 140pc of GDP and growing, the worst in the industrialised world. Worse, its economy shows no signs of a recovery from its 12-year slump that would allow it to begin to repay that debt.
Alarm over growing public debt prompted Ms Koda, a 50-year-old former banker, to interview more than 200 people, from bond traders to ministry of finance officials.
What amazed her was the number of insiders willing to blow the whistle, albeit in confidence. She said: "People were eager to co-operate. They entrust me with what they want to say but can't." Despite its unpromising title, the novel sold in excess of 100,000 copies within a few months of going on sale at the end of 2000.
Ms Koda has earned a reputation as a financial seer. Her novel about a hacker discovering huge hidden losses at a bank was followed by a real scandal at Daiwa Bank's New York office involving huge concealed losses.
Her next novel recounted a bank collapse, not long before the 1997 collapse of the Hokkaido Takushoku bank shook Japan.
Ms Koda now says the Japanese must demand that their government act to cure the sick economy. She says: "The Japanese virtue of patience has backfired. People remain silent when they should speak out.
"I want to say 'Wake up, Japanese'." |
