The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s [Paperback]

Christopher Wood (Author)

Book Description

Publication Date: December 15, 2005

The Bubble Economy tells the story of the greatest failure of Japanese economic management since 1945. In the second half of the 1980s Japan's financial madness and arrogance centered on a booming stockmarket and rocketing land prices, which dragged the solid manufacturing economy into a whirlwind of outrageous speculation. Then the boom when spectacularly bust, leaving in its wake a withered stockmarket, crashing land prices, mountains of bad loans, an economy in recession, and a slew of political and financial scandals, graphically exposing the seedy underbelly of Japan's feudal finance system. The Bubble Economy reveals how Japan is spending the first half of the 1990s paying off these excesses in a process that threatens the world's economies with dire consequences, and questions many of the myths built up around Japanese management, pointing to levels of incompetence never before thought possible.

Editorial Reviews

From Publishers Weekly

Japan's recent stock market crash and economic troubles may not portend catastrophe, according to Wood ( Boom and Bust ) in this analysis of Japan's current crisis. The situation will bring needed banking and market reforms, will correct the 1980s ' wildly overvalued assets, will further open Japanese markets to the West and will force the country closer to Western - style capitalism. In the process, however, there are likely to be further devaluations, higher unemployment and possibly serious political unrest. Wood vividly details Japan's feudal structures in banking, insurance, real estate and investment , which upended the world's most impressive economy and brought about the recent scandals. He analyzes the country's international buying sprees, which he views as misconceived, and foresees additional implosions. He is nevertheless optimistic that Japan's effects on the West will be less horrendous than predicted. Wood criticizes current popular notions that Japan's unique culture permits it to play successfully by different rules. This is an important and accessible study.
Copyright 1992 Reed Business Information, Inc. --This text refers to an out of print or unavailable edition of this title.

Product Details

• Paperback: 224 pages
• Publisher: Solstice Publishing (December 15, 2005)
• Language: English
• ISBN-10: 9793780126
• ISBN-13: 978-9793780122
• Product Dimensions: 7.9 x 4.9 x 0.7 inches
• Shipping Weight: 7.2 ounces (View shipping rates and policies)
• Average Customer Review: 5.0 out of 5 stars  See all reviews (3 customer reviews)
• Amazon Best Sellers Rank: #872,376 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

9 of 9 people found the following review helpful:

5.0 out of 5 stars Superb.Banker financed real estate and stock market bubbles lead to a catastrophic collapse after the economy is deregulated, December 12, 2009

By 

Michael Emmett Brady "mandmbrady" (Bellflower, California ,United States) - See all my reviews
(VINE VOICE)    (REAL NAME)   

This review is from: The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s (Paperback)

The author has done an excellent job in demonstrating that the consequences of allowing the private banking industry and its allies in the financial services industry,be it in the United States,Japan,England,Iceland,etc., to provide speculative debt leveraged finance,or to engage in such behavior themselves,will always lead to the bubble collapsing and some kind of economic downturn.

The Japanese story goes like this.Douglas MacArthur reformed and revitalized the Japanese state and economy.He set up a closely regulated financial sector.Up until 1985,the Japanese made sure that there was little or no speculative finance in their economy.However,under pressure from the Reagan administration,they foolishly decided to open up their highly regulated capital markets and deregulated them.They dismantled their controls.They allowed speculators,manipulators, and organized crime groups to penetrate their financial centers.The result was that two bubbles,one in real estate and one in stocks,were allowed to inflate to immense levels before starting their inevitable collapse in 1993.The Japanese economy emerged from a severe ,near depression only in 2004.For example,unemployment went from an average of 1.5 % to a little over 6 %.It has never been the same since.

The reader will note that this is practically the same scenario as occurred in the United States starting in early 1925.Two bubbles,in real estate and stocks,were deliberately fueled by Morgan,Strong and Mellon.Only Herbert Hoover tried to stop them in early 1927.Unfortunately,President Coolidge made it clear to Hoover that he could do nothing because the FRS (Fed) was set up to be functionally and operationally independent of the United States Government even though it was created by an act of a Congress heavily paid off by the banking industry.This is why the Fed is subject to no budget , no audit,and is called a quasi private ,quasi public government agency.It is essentially a facade or Potemkin-like village set up that allows the largest, private commercial banks to dominate while giving them the cover of trying to blame the government when their speculative game plan self destructs. This has been happening for thousands of years.

Practically the exact same thing has occurred in the United States in the 2003-2009 time period.Only the names are different.The sub prime loans of today were called balloon payment loans in the mid to late 1920's.The massive use of margin account financing then becames the massive use of financial derivatives now.

I highly recommend this book.

6 of 6 people found the following review helpful:

5.0 out of 5 stars Right on the Money!, July 23, 2001

By A Customer

This review is from: The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s (Hardcover)

We moved to Japan 6 years ago with only a vague understanding of Japanese political-economy. We ran across Christopher Wood's book at a local bookstore. It was fascinating and has proved to be an astoundingly accurate depiction foretelling the events of today. I picked the book up again today and concluded that, short of having a crystal ball, this guy had to have been the lone voice of common sense and sound reason on the planet at the time he wrote this book. People must have regarded him as an oddity at the time. One wonders where he is now and what he is doing.

7 of 8 people found the following review helpful:

5.0 out of 5 stars Highly recommended reading on Japan's economic plight., December 28, 1998

By A Customer

This review is from: The Bubble Economy: Japan's Extraordinary Speculative Boom of the '80s and the Dramatic Bust of the '90s (Hardcover)

Let's face it, many of the "Japan experts" have totally missed the boat. Mr. Wood's book, published in 1992, was "right on the money" and predicted Japan's current economic plight (although underestimating abit the time it would take to get there). This book provides readers with valuable insights into how the Japanese political economy functions (and doesn't function). By focusing on fundamentals, particularly the banking system, Mr. Wood provides the reader with a framework for analyzing the daily tidbits of information coming out in the press.