hip pocket. They saw the man ring the bell, saw the workers stop their activi-
ties. Worst of all, they saw the looks on their faces. And this was just the
beginning, the traders knew. Parts suppliers would stop because the assem-
blers would cease buying their products. Primary-metals industries would
slow down drastically because their main customers were shut down. Elec-
tronics companies would slow, with the loss of both domestic and foreign
markets. Their country depended absolutely on foreign trade, and America
was their primary trading partner, one hundred seventy billion dollars of ex-
ports to a single country, more than they sold to all of Asia, more than they
sold to all of Europe. They imported ninety billion or so from America, but
the surplus, the profit side of the ledger, was just over seventy billion Ameri-
can dollars, and that was money their economy needed to function; money
that their national economy was designed to use; production capacity that it
was designed to meet.
For the blue-collar workers on the television, the world had merely
stopped. For the traders, the world had, perhaps, ended, and the look on their
faces was not shock but black despair. The period of silence lasted no more
than thirty seconds. The whole country had watched the same scene on TV
with the same morbid fascination tempered by obstinate disbelief. Then the
phone began ringing again. Some of the hands that reached for them shook.
The Nikkei Dow would fall again that day, down to a closing value of 6,540
yen, about a fifth of what it had been only a few years before.
The same tape was played as the lead segment on every network news
broadcast in the U.S., and in Detroit, even UAW workers who had them-
selves seen plants close down saw the looks, heard the noise, and remem-
bered their own feelings. Though their sympathy was tempered with the
promise of their own renewed employment, it wasn’t all that hard to know
what their Japanese counterparts felt right now. It was far easier to dislike
them when they were working and taking American jobs. Now they too were
victims of forces that few of them really understood.
The reaction on Wall Street was surprising to the unsophisticated. For all
its theoretical benefits to the American economy, the Trade Reform Act was
now a short-term problem. American corporations too numerous to list de-
pended on Japanese products to some greater or lesser derive, ami while
American workers and companies could theoretically step in to take up the
slack, everyone wondered how serious the TRA provisions wore. II they
were permanent, that was one thing, and it would make very good sense for
investors to put their money in those firms that were well placet! to make up
Ihe shortfall of needed products. But what if the government was merely
using it as a tool to open Japanese markets and the Japanese acted quickly to
concede a few points to mitigate the overall damage? In that case, different
companies, poised to place their products on Japanese shelves, were a better
investment opportunity. The trick was to identify which corporations were
in a position to do both, because one or the other could be a big loser, espe-
cially with the initial jump the stock market had taken. Certainly, the dollar
would appreciate with respect to the yen, but the technicians on the bond
market noted that overseas banks had jumped very fast indeed, buying up
U.S. Government securities, paying for them with their yen accounts, and
clearly betting on a major shift in values from which a short-term profit was
certain to take place.
American stock values actually fell on the uncertainty, which surprised
many of those who had their money on “the Street.” Those holdings were
mainly in mutual-funds accounts, because it was difficult, if not impossible,
lo keep track of things if you were a small-time holder. It was far safer to let
“professionals” manage your money. The result was that there were now
more mutual-funds companies than stock issues traded on the New York
Stock Exchange, and they were all managed by technicians whose job it was
to understand what went on in the most boisterous and least predictable eco-
nomic marketplace in the world.
The initial slide was just under fifty points before stabilizing, stopped
there by public statements from the Big Three auto companies that they were
self-sufficient enough, thank you, in most categories of parts to maintain,
and even boost, domestic auto production. Despite that, the technicians at
the big trading houses scratched their heads and talked things over in their
coffee rooms. Do you have any idea how to deal with this? The only reason
only half the people asked the question was that it was the job of the other
half to listen, shake its collective head, and reply, Hell, no.
At the Washington headquarters of the Fed, there were other questions, but
just as few hard answers. The troublesome specter of inflation was not yet
gone, and the current situation was unlikely to banish it further. The most
immediate and obvious problem was that there would be-hell, one of the
board noted, already was!-more purchasing power than there were prod-
ucts to buy. That meant yet another inflationary surge, and though the dollar
would undoubtedly climb against the yen, what that really meant was that
the yen would free-fall for a while and the dollar would actually fall as well
with respect to other world currencies. And they couldn’t have that. Another
quarter point in the discount rate, they decided, effective immediately on the
close of the Exchange. It would confuse the trading markets somewhat, but
that was okay because the Fed knew what it was doing.
About the only good news on that score was the sudden surge in the pur-
chase of Treasury notes. Probably Japanese banks, they knew without ask-
ing, hedging like hell to protect themselves. A smart move, they all noted.
Their respect for their Japanese colleagues was genuine and not affected by
the current irregularities which, they all hoped, would soon pass.
“Are we agreed?” Yamata asked.
“We can’t stop now,” a banker said. He could have gone on to say that
they and their entire country were poised on the edge of an abyss so deep that
the bottom could not be seen. He didn’t have to. They all stood on the same
edge, and looking down, they saw not the lacquered table around which they
sat, but only an infinity with economic death at the bottom of it.
Heads nodded around the table. There was a long moment of silence, and
then Matsuda spoke.
“How did this ever come to pass?”
‘ ‘It has always been inevitable, my friends,” Yamata-san said, a fine edge
of sadness in his voice. “Our country is like … like a city with no surround-
ing countryside, like a strong arm without a heart to send it blood. We’ve
told ourselves for years that this is a normal state of affairs-but it is not, and
we must remedy the situation or perish.”
“It is a great gamble we undertake.”
“Hai.” It was hard for him not to smile.
It was not yet dawn, and they would sail on the tide. The proceedings went
on without much fanfare. A few families came down to the docks, mainly to
drop the crewmen off at their ships from a last night spent ashore.
The names were traditional, as they were with most navies of the world-
at least those who’d been around long enough to have tradition. The new
Aegis destroyers, Kongo and her sisters, bore traditional battleship names,
mainly ancient appellations for regions of the nation that built them. That
was a recent departure. It would have struck Westerners as an odd nomen-
clature for ships-of-war, but in keeping with their country’s poetic traditions,
most names for the combat ships had lyrical meanings, and were largely
grouped by class. Destroyers traditionally had names ending in -haze, denot-
ing a kind of wind; Hatukaze, for example, meant “Morning Breeze.” Sub-
marine names were somewhat more logical. All of those ended in -ushio,
meaning “tide.”
They were in the main handsome ships, spotlessly clean so as not to de-
Iract from their workmanlike profiles. One by one they lit off their jet-tur-
bine engines and eased their way off the quays and into the channels. The
captains and navigators looked at the shipping that was piling up in Tokyo
Bay, but whatever they were thinking, for the moment the merchantmen
were merely a hazard to navigation, swinging at their anchors as they were.
Below, those sailors not on sea-and-anchor detail mainly stowed gear and
saw to their duty stations. Radars were lit up to assist in the departure-
hardly necessary since visibility conditions this morning were excellent, but
good practice for the crewmen in the various Combat Information Centers.
At the direction of combat-systems officers, data links were tested to swap