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Strategies & Market Trends : Asia Forum -- Ignore unavailable to you. Want to Upgrade?

To: Stitch who wrote (2748)	3/26/1998 11:58:00 AM
From: Worswick	Read Replies (4) \| Respond to of 9980

"You might tote that golf bag towards the bank." J.R.Nightshreadders The Book of White Noise. For Private Use Only (c) Japan's golf craze becomes a US$77b trap as membership values plummet BENJAMIN FULFORD in Tokyo Japan's drive to become the largest golf-playing nation in the world has missed the fairway and landed in a US$77 billion bunker - handicapped by the country's economic woes. When the economy was swinging, building a golf resort was a licence to print money - all that was needed was a planned resort and then to raise funds by selling memberships, either to corporations or wealthy individuals. The speculative craze resulted in more than 800 golf resorts being built, most of which were charging up to 32 million yen (about HK$1.9 million) for membership with prices increasing by up to 50 per cent a year. Golf-crazy businessmen bought multimillion-dollar memberships as a sign of prestige - most of which are now worth just a sixth of their original value. Close to 10 trillion yen was raised and golf memberships became a popular speculative tool, considered something of a hybrid between owning real estate and owning stock. At the time, many buyers did not pay much attention to a clause in their membership contracts that stated the clubs could, if requested, repurchase the memberships at the purchase price in 10 years' time. Now that average golf-club membership prices have fallen to five million yen, or less than a sixth of their 1989 peak price of 32 million yen, this once-unnoticed clause has become a central feature in many club house arguments involving angry golfers and penniless club operators. As a result, golf-club bankruptcies have left behind 556 billion yen in debt in the past three months alone in what is believed to be only the beginning of a 10 trillion yen financial disaster, according to Tokyo Shoko Research and other sources. The largest company to go under - Nitto Kogyo - was left with a 276 billion yen debt burden in December. Nitto's demise was followed by a string of smaller golf bankruptcies, Tokyo Shoko Research said. The 556 billion yen in bankruptcies in the past three months have all been linked to members' demands for refunds, it said. Since between one and 1.5 trillion yen worth of memberships would be due for refunds in each of the next five years, many more bankruptcies and lawsuits were inevitable, the sources said. "The total is estimated at 10 trillion yen," said Masashi Seki at Tokyo Shoko Research. A 1995 survey by the Ministry of International Trade and Industry put the total at 9.49 trillion yen. "I will never get my money back but at least I get to keep playing golf, but I feel sorry for the people who bought a membership even though they do not like golf," said Toshio Nakajima, a retired executive of a Japanese food firm. These unfortunates would have to keep making payments on the bank loans they took out to buy the membership. For its part, the government has said it has no intention of acting as a caddy to carry the financial burden left by plunging prices. The Ministry of International Trade and Industry, the industry's supervisor, has sworn not a penny of taxpayer's money would be spent bailing out golf clubs. But the crisis has a bright side, noted Hajime Iida, president of I.M. Corp - a company that also specialises in buying and selling golf-club memberships. "Only one out of seven of Japan's 30 million golf players owns a membership," he said. "So now many more of them can afford to be members." Note bene. This is one big goddamn pile of golf balls.