Rebirth 79: I opened a bank in the United States

Chapter 999 Profit Without Cash

A logical chain appeared in Carter's mind:

Because of the relationship between low interest rates and open restrictions on corporate bond issuance, the financing channels of Japanese companies have turned to the bond market in recent years.As for bond market investors, because of the fiery market atmosphere and strong market confidence, almost all of them underestimate the risk premium part!In other words, simply ignore the issue of the company's repayment of money!
On the one hand, in the past, the Ministry of Finance would review the qualifications of these companies intending to issue bonds, review their revenue, and ensure that they can afford to pay their debts.Ordinary investors who are used to this model will subconsciously trust them more and believe that they will definitely be able to pay back the money.

This kind of feeling is a bit like the feeling that listed companies in China used to be very powerful.In the era of the approval system, it is not an exaggeration for companies that can go public to say, "It is not easy for them to go bankrupt even if they want to go bankrupt".After all, if they can be approved for listing, it means that their business situation has been checked to the bottom: Is the profit situation good?Stable or unstable?

As long as there is an indicator that is not safe, it cannot be listed.Needless to say, there is no need to talk about credit for such a company!It was suddenly changed to a registration system. During such a shift period, not all investors can change their thinking in time!
On the other hand, in a speculative fever, making money seems easy!I can make money so easily as a small person, so wouldn't it be easier for those big companies to make money?It doesn't make sense to pay back the money!
The collision of these two ideas is like stepping on the right foot with the left foot: the more investors believe in the solvency of corporate bonds, the easier and lower the cost for these Japanese companies and companies to raise funds through bonds!

So I became more obsessed with financing through bonds, and at the same time, during that period.Regardless of whether those companies have participated in real estate speculation or not, even if they still stick to their old roots in the manufacturing industry, they have hit the "J effect" period, that is, rising export earnings!The cost of overseas investment is decreasing.
This money is easy to earn!So, go ahead and borrow money and earn more!

The more bonds you issue, the more investors think you are reliable!If you have the ability to spend money, are you afraid that you will not be able to earn it? !I have been borrowing money to expand investment, which shows that the revenue is very stable!Good company!
Quack buys while quack issues bonds.

Japanese commercial banks standing on the ground were dumbfounded after Japanese companies and investors stepped on their left foot and stepped on their right foot to go to the sky!

These big companies with excellent credit standing and the biggest demand for loans have all gone to issue their own bonds.How are their loans issued?To whom?
At this time, the Bank of Japan also opened its mouth and set KPIs that must be completed for everyone, and how much loans must be released to me every quarter.
It's done!It's all over!

This logical chain connects with the previous one, that is, when all these Japanese companies went to issue bonds by themselves, the bank loan quota could not be fulfilled.So it aimed at: secondary customers, individual customers, and then took real estate as collateral and began to issue loans.And people who have received loans will also use this money to consume, invest, and further inflate the bubble, making the entire economy look hot.
But if understood in this way, the stock market does not seem to be the core of the Japanese economic collapse!
"Hey, friend, do you need a loan? Big banks guarantee loans, super low interest rates, as long as you have a house!"

Just as Carter was staring at the notebook in his hand, thinking about the problem, someone suddenly patted his shoulder.Carter turned his head in amazement, and looked at the guy in a suit and leather shoes with a work badge on his chest who suddenly appeared beside him.

Carter suddenly had a strange feeling
"Why are you doing all your loan business here?!"

"Hey, what's the matter? The stock market is booming now. Borrowing money to speculate in stocks can be understood as off-market allocation of funds to increase your own income. Well, although the recent interest rate hike has slowed down the rise in stocks, our Japanese It is powerful but it is obvious to all! As long as our products are still needed by the world, the stock’s growth rate is just a matter of speed. I see you, American? Or Canadian? You are here for this purpose, too. Exactly, for For foreign customers, we also have Sumitomo Bank.”

"No need! I don't trade in stocks, goodbye!"

With a snap, he closed his notebook, and Carter turned around and left.

Carter has also realized that this scene looks familiar. Isn't this the Junket Operator in the casino? !
Crazy, utterly crazy!

Back at the preserved residence in Chiyoda, Carter packed some drinks and hot food on the road.Then, sit in front of the computer, download the published financial reports of listed companies, and watch them while eating.

To be honest, Carter is not a professional accountant.But in dealing with these things, it is impossible for Carter not to learn at all. He has learned some general things.Maybe there is no problem of financial fraud, but it is not difficult to understand the financial report.

But less than half an hour later, Carter put down the beer in his hand, because he found that he couldn't understand the financial reports in front of him!

Since 88, the profits shown in the financial reports of almost every Japanese company have risen sharply.What's interesting is that all the rising parts are recorded as capital gains.
This concept is very general.
The rent earned by the company from renting out its assets is capital income; the price of a certain valuable asset of the company rises, and the money obtained from selling it can be said to be capital income.

If one or two companies have experienced a sharp increase in capital gains this year, Carter may not doubt anything.But almost all listed companies have this situation, and the financial reports of 88 and 89, compared with 87, are all in terms of income from this project, which is far different.

Then Carter had to suspect that there was something wrong with it!

"Hello, is this Murata Accounting Firm? Ah. I want to ask a question. In 88, I saw that in the financial reports of many companies, the income of capital income has been greatly improved. I would like to ask This is why. What? What am I doing, uh, an international student! Out of interest in accounting, I took this major course, and then I took some financial reports to see and practice my hands? Hello?!"

Listening to the busy tone that the phone was hung up after saying "I'm sick", Carter smiled indifferently.Anyway, in terms of direction, Carter already has a guess
In 88, I didn't hear of any major economic events in Japan, but there was the Rui Keli scandal, but that obviously won't be the key to the increase in corporate capital income.That must be a recording problem!For example, new accounting standards are adopted
And it is not difficult to obtain this information. If you call some accountant training school, most people will not mind saying that much.

In 88, Japan did update an accounting standard: it is allowed to record the appreciation of the stock held by the company into the profit of the year according to a certain proportion!

This is a bit scary!

The market price of a stock is inconsistent with the return it brings.A $10 share of stock will most likely pay the same annual dividend as a $20 stock.

As for the difference in stock prices, it can only be said to be book figures. As long as you don't sell it, you have no cash in hand!

Since 88, these "profits" with no cash at all began to appear in the financial reports of various companies on a large scale
(End of this chapter)