A Funny Story Out of Japan

Wanna hear a funny story?
There’s this guy in Japan named Yoshiaki Murakami. (Wait, it gets better.)
He’s a legend in the Japanese mutual fund industry. To some people, he’s like a folk hero. The reason for his popularity is that he stands up for shareholders, and let’s just say that that’s not too “groovy” among the Japanese financial elite (it’s too…American).
But now Murakami is in serious hot water. Apparently, he heard from some guys at an Internet company called Livedoor that they wanted to buy a company called Nippon Broadcasting. Actually, Murakami didn’t think they were serious, but he already owned lots of Nippon, and he bought even more. Well, the Livedoor guys were serious, and they went after Nippon. The fight turned ugly and Livedoor lost. But the stock soared and Murakami sold his stake to Livedoor making a huge profit.
That’s pretty smart business, except for a minor problem—it’s against the law. Now Murakami has been arrested for insider trading. This is a HUGE deal in Japan. It would be like the Feds busting Jim Cramer on live TV.
But now, it’s gotten even weirder. It turns out that a guy named Toshihiko Fukui invested 10 million yen with Murakami. Oh, did I mention that he’s the head of the Bank of Japan? So not only has Cramer been arrested on live TV, but he’s managing Bernanke’s money! That’s what we’re talking about. Some people are now demanding Fukui’s resignation. The Japanese market just had its biggest one-day plunge since 9/11.
Come to think of it, the story really isn’t that funny.
The side story is that the Japanese economy is actually doing well for the first time in years. Fukui has hinted that he might lift interest rates from their current level of 0%. He just balked at an increase, but it’s coming soon. This scandal might actually have an impact on what the BOJ does.

Posted by on June 15th, 2006 at 7:12 am


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