The collapse of neon housing prices, of course, is the first to suffer from the major real estate companies.

Because all of their business comes from land, they will also face the impact of the collapse of the housing market.

The scene that happened in the Toranomon Building is almost a true portrayal of today's small and medium-sized real estate companies.

Come to think of it, the prices of many popular areas have been cut in half.

Such an outrageous price difference can directly make many real estate companies declare bankruptcy.

According to economic theory, if the house price falls by more than 10%, then it can be called a house price crash.

If it falls by more than 30%, it is a capitulation of house prices.

And the capitulation of house prices, also known as panic selling, is now in place in one step, and it is currently at this stage.

In just a few months, Neon has gone through the three cyclical stages of housing price adjustment, housing price collapse, and housing price capitulation.

Because the process is so fast, most people don't react.

This includes banks, real estate institutions, corporations, and individuals at large.

The residual value of the land after the collapse was less than half of the previous bank loans.

There is no doubt that real estate institutions are in danger of bankruptcy, and the whole market is in turmoil.

A little wind and grass can cause panic in everyone.

Faced with such a frightened situation, some clubs chose to surrender directly and began to go through bankruptcy procedures.

Some clubs are trying to save themselves, going to the bank to ask for loans, and going to the market to sell the remaining land at a low price, in an effort to recoup the funds.

However, in the face of the collapse of the property market, it is likely that the banks will not give them such an opportunity.

As long as it is insolvent, the bank has the right to recover its loan early.

However, it is clear that the real estate companies and enterprises at this time have no spare time to pay the loans, so it is likely that they will still go bankrupt.

In the face of the collapse of the property market, this is the choice of real estate clubs and enterprises.

And what about ordinary people? Either repay the loan for a lifetime that is higher than the value of your own house, or simply cut off the payment.

But no matter which path it is, it is not good for ordinary people.

Just look at the streets of Tokyo at this time, and the number of homeless people has increased significantly.

They are all people who can't afford to pay their mortgages, or who are homeless after a divorce to avoid debts.

However, this is only the beginning, and it may take some time for the impact of the collapse of land prices to be passed on to ordinary people.

But there is no doubt that whether the real estate club is in crisis or ordinary people cut off their payments, their choices have directly brought a lot of bad debts to the banks.

Because the land has become worthless, the bank is facing the dilemma of not being able to recover the loan secured by the land.

These unrecoverable loans have become bad debts and non-performing assets of banks.

At this time, don't talk about off-the-books gains, they have all come to naught.

Because of the emergence of a large amount of non-performing assets, problems are constantly breaking out within the bank.

The previous financial scandal is not over, the real estate shock is coming one after another, and now the major banks of Neon are in danger.

According to a survey of 21 banks conducted by the Ministry of Finance in '91, the accumulated bad debts of the banking sector as a result of a series of shocks amounted to $110 billion.

A third of this is related to real estate, and now is the beginning of the land shock, and house prices will continue to fall in the future...

In the face of a chaotic situation, I don't know what the bank heads of Miyazawa Kiichi thought about refusing at the meeting half a year ago?

Maybe they don't care, maybe they regret it, but at this point most banks don't have the resources to toss around.

In the face of increasing bad debts, some small and medium-sized banks have taken the lead in huddling together to keep warm.

Saitama and Kyowa Bank are just the first wave, and although they are small local banks, the merger of the two is very symbolic.

This means that the negative impact of the bursting of the bubble has been transmitted to the banks.

Saitama and Kyowa Bank couldn't bear the consequences of a large amount of bad debts just because of their size, so they started to save themselves in advance.

From the merger of the two, Shirakawa Kaede can already deduce that other banks must have suffered the same problem.

The reason why it doesn't seem abnormal right now is because they can hold on for a while.

But it won't be long, especially since Changyin began to sell off EIE shares, which is a landmark event.

EIE International started out in real estate, and it has a large number of real estate investments around the world.

Hotels, universities, resorts, golf courses, all of them are related to land.

Do you know how much a membership card for EIE International's golf courses cost at the height of the bubble?

300 million yen!

During the bubble period, you can speculate on everything, speculate on stocks and land, including speculation on the membership card of the golf course.

At that time, in order to highlight the difference between themselves and the common people, the rich did not go to ordinary stadiums at all.

These top-notch courses developed by real estate developers are what they are aiming for, and it is best if it is a membership system.

Before the stadium was built, EIE International began to eagerly sell membership cards.

Before the stadium is built, it starts selling membership cards, is this normal?

What's abnormal, I haven't seen the Celestial Empire all over the off-plan housing, and even those who sell off-plan properties directly?

As a result, there are not a lot of people who pay for it, and EIE International is playing the same routine.

After the hot speculation of the market, these membership cards became strange goods and once became short-term financial products.

At that time, the officials of the United States who came to Neon to inspect the country, after hearing about the sky-high price of 300 million yen, they once thought that this was the price of the golf course.

There were many strange phenomena in the crazy period, but now the price of the same EIE International golf membership card has fallen to the point where no one cares about it even in the hundreds of thousands of yen.

The reason for this huge difference is that the golf courses of EIE International are unfinished.

Before the property market collapsed last year, EIE International was already at risk of breaking the capital chain.

The collapse of the stock market is the trigger, and the long stretch of its own front is the root cause.

Now that land prices have collapsed, EIE International is in jeopardy.

In the face of such a situation, as its main bank, it stands to reason that Changxin Bank should actively rescue it.

But at this time, Changyin itself is unable to protect itself, how can it have the spare strength to save EIE International.

To put it bluntly, Changyin gave up the rescue of EIE International and sold 20% of its shares, which is a move to lose the car and protect the commander.

In '86, when Oharu Takahashi of EIE first approached Changyin to apply for a loan of $350 million.

The headquarters of Changyin knew that the figures reported by EIE were too much water, and even the details of the project were not at all.

But it still agreed to the other party's application and began to lend money.

The reason why this happened was because when EIE applied for the loan, it mentioned the purchase of a large amount of land.

At that time, banks only considered one thing when lending to other institutions: whether the collateral was real estate or not!

In the face of the doubts of the local branches, the headquarters of Changyin replied very simply: it is ridiculous to worry about cash flow or rate of return, which is what only the United States did.

As a result, with the acquiescence of the headquarters, EIE borrowed $8 billion from Changyin in just four years, totaling 1.1 trillion yen.

All this money was used by the EIE to buy real estate around the world, and as the value of the land appreciated, Changyin's assets swelled to $300 billion.

However, the bamboo basket was empty, and the land price plummeted.

Not only was EIE International unable to repay the loan, but Changyin's originally inflated assets also became a drag.

Coupled with the double whammy of the stock market, banks' cash flows are already starting to show signs of drying up.

Even in this context, the Ministry of Finance still prohibits banks from arbitrarily cutting off loans and forces big banks to bail out small financial institutions in distress.

This model has its origins in the post-war economic recovery's primary banking system, the so-called "convoy" model of the banking sector.

It guarantees that financial institutions, entities, will not go bankrupt and that banks will support them in the event of a crisis.

The same model applies between small banks and large banks.

In other words, the market rules of survival of the fittest do not apply to neon's banking industry.

Judging from the experience of the modern market, this rigid model is undoubtedly backward.

But this is neon, and the power of conservatism is often beyond the imagination of outsiders.

However, under the pressure of the Ministry of Finance, Changyin's support for EIE lasted for nearly a year, and now it has to give up.

The reason why Changyin ignored the order of the Ministry of Finance was because it found that the EIE was a bottomless pit.

Due to the large size of the paving, many of EIE's real estate developments around the world are still in the construction stage.

If the capital chain is broken, there is a risk of shutdown, and if you want to complete the project as soon as possible and realize cash, you need uninterrupted capital investment.

After leading the EIE, Changyin also tried to invest a certain amount of money.

But Neon's current real estate market is destined to be all the previous investment.

As a result, Changyin decisively announced that it would give up its controlling stake in EIE after some internal calculations.

The bad debts generated within EIE Changyin alone are as high as 1.5 trillion yen, and the bad debts generated in other fields are also about 2.8 trillion yen.

That is to say, at this time, Changyin's bad debts have reached 4 trillion yen, and this figure has even dragged Changyin itself into a place of no return.

Of course, as a neon super-first-class bank, Changyin is still covering the lid, and the bad debts have not been exposed.

But others don't know about Changyin's situation, but Shirakawa Kaede and Arai Yu know.

Why did he deliberately detonate the neon real estate bubble in advance, isn't it just for this day when the sea is crossing? Otherwise, who will do the thankless work?

From 86 onwards, Shirakawa Kaede ordered Arai Yu to secretly collect information on major banks.

Because most of them are listed banks, their investment in the real estate industry can be roughly estimated from the annual financial reports.

Combined with the market situation in recent years and the information of major real estate companies, these calculated figures are basically the same.

The actual loss of Changyin was 4 trillion yen, and the result of Shirakawa Kaede was about 3.6 trillion.

But whether it is 3.6 trillion or 4 trillion, there is no doubt that this figure is beyond the scope of Changyin itself.

Because according to the intelligence collected over the years, Changyin's own loan business is only 11 trillion yuan.

There are already 4 trillion bad debts, accounting for about one-third of the total business, not counting other bad debts.

If such a high bad debt rate is not unexpected, the final outcome of Changyin will not be too good.

And now Shirakawa Feng plans to continue to speed up this process, Changyin is not dead, how can Beidu Bank complete the upgrade?

(End of chapter)