Golden Spoon Investment Portfolio - Chapter 202

—————
This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
—————

202. Damn those American bastards!

Ministry of Finance, Chiyoda Ward, Tokyo, Japan.
As Sato Kazuya, the Minister of Finance dressed in a dark suit, entered the lobby of the government building with his entourage, the waiting journalists surged forward in a rush.
They thrust microphones forward and bombarded him with questions.

“Following Nissan and Sony, Nippon Life Insurance has also been revealed to have suffered foreign exchange losses of 400 million dollars. We’d like to hear your comments on this!”
“Please share your thoughts on this situation!”
“What measures does the Ministry of Finance intend to take against the Eldorado Fund, which sold these derivative options?”

Faced with the barrage of loud questions, Minister Sato, a seasoned politician, calmly surveyed the journalists surrounding him, straightened his shoulders, and opened his mouth to speak.

“Regarding this situation, the Ministry of Finance and the Cabinet recognize the gravity of the matter. We have decided to conduct emergency safety inspections and factual investigations into currency option products that have caused massive losses to domestic companies. Additionally, we will thoroughly examine whether the Eldorado Fund adequately explained the risk of losses when selling high-risk derivative financial products, and whether the products contain any illegal provisions. Should any problems be discovered, appropriate punishments and sanctions will be imposed.”

Then a journalist from NHK extended his microphone and asked a question.

“Does that mean legal measures could be taken against the Eldorado Fund, despite it being a foreign company?”
“Of course. Regardless of whether it’s foreign, if they’ve violated domestic laws, they deserve to be punished.”

As Minister Sato answered firmly, another journalist quickly posed a follow-up question.

“Is the travel ban imposed on John Porter, the branch director, and other Eldorado Fund executives a preliminary measure in accordance with this?”
“That’s correct.”

Minister Sato gave a brief answer and subtly gestured with his eyes.
His attendant stepped forward and spread both arms, blocking the view.

“The Minister has duties to attend to, so we’ll take no further questions.”
“Will relief measures be provided to the affected companies?”
“Please give us just one more comment!”
“Minister! Minister!”

The journalists persisted with their questions, desperate to extract one more story, but Minister Sato simply waved his hand lightly and stepped into the Elevator.

“How was that?”
“As always, you answered skillfully and well.”

At the attendant’s response, Minister Sato smiled with satisfaction.
Minister Sato had deliberately stepped before the journalists and displayed a resolute demeanor, accentuating his commanding presence—a move calculated entirely with next year’s cabinet reorganization in mind.
Of course, there was an intention to mollify the public criticism directed at the cabinet, but what truly mattered was the image of himself presented to the masses.

‘The Prime Minister’s resignation and the cabinet’s complete dissolution are all but certain following July’s Upper House election defeat. Rather than go down with a sinking ship, I should be plotting my passage to another vessel.’

The Liberal Democratic Party had won the election despite the mounting crises—the Kobe earthquake, the Tokyo subway sarin attack, and countless other pressing issues—yet they had hesitated to assume power immediately, requesting the current cabinet’s continuation until next year.
They had no desire to inherit a regime now only to be buried in its filth, so they had dumped all the arduous cleanup work—labor that would earn nothing but curses—onto the current cabinet’s shoulders.
Minister Sato, fully aware of such dark machinations, let out a derisive chuckle and spoke.

“Cunning bastards.”
“Sir?”
“It’s nothing.”

As he dismissed the matter with a wave, the attendant asked no further questions and straightened up.
The Liberal Democratic Party’s scheme to use the current cabinet as a scapegoat was contemptible, but Minister Sato himself was hardly in a position to condemn them—he was already in covert contact with the party despite the cabinet still functioning perfectly well.

‘Since I originally came from the Liberal Democratic Party and merely broke away temporarily, there’s no shame in returning to the main house.’

Minister Sato rationalized his position with such thoughts.
With the election won but the Liberal Democratic Party failing to secure a majority, now was the opportune moment to maximize his leverage and switch his party affiliation once more.

‘If I play this opportunity well, securing a position in the next cabinet should be effortless.’

Minister Sato mused that he would be most pleased to reclaim the coveted post of Minister of Finance, and as the elevator doors slid open, he strode purposefully into the corridor.
The staff seated at their desks in the carpeted hallway and the adjoining office quickly rose to their feet and bowed as Minister Sato entered.

“Welcome, Minister.”
“Mm.”

With an arrogant nod, Minister Sato spotted Vice Minister Okawara among the office staff and his expression brightened with convenient timing.

“I was just about to call for you. Come along.”
“Yes, sir.”

Vice Minister Okawara followed Minister Sato into the inner ministerial office.
Unbuttoning his jacket and settling into the seat of honor on the sofa, Minister Sato gestured with his chin for Okawara to sit rather than stand.

“If you’ll excuse me.”

Okawara took a seat on the empty sofa to the right.
Sato then leaned back and asked.

“How is the investigation progressing?”
“We’ve summoned personnel from the Eldorado Fund and are collecting their statements on the relevant matters while analyzing the seized materials, but we haven’t uncovered any evidence of wrongdoing yet.”

Seeing the dissatisfied expression, Okawara quickly added to his remarks.

“So I’m thinking we should shift our approach by focusing on the profit-loss structure of the problematic option and establishing that it was an unfair contract from the start.”
“Hmm. Is that so?”

Sato straightened his posture from his reclined position, showing interest.

“Tell me specifically how you plan to proceed.”

Okawara, feeling inwardly relieved, adjusted his posture and explained calmly.

“Looking at how the derivative was structured, when the exchange rate moves within the contract range, the maximum profit margin falls short of 15%, but if the option is triggered by breaking through the upper band, the loss ratio is designed to exceed 400%.”

Sato’s eyes gleamed.

“Now that you mention it, this really is a contract structured to be unilaterally favorable to one side.”
“That’s why we intend to focus on this aspect and pressure the Eldorado Fund.”
“Excellent. If we frame it that way, it certainly constitutes illegal conduct. We can impose penalties and administrative sanctions, not to mention legal prosecution.”

Hearing the low chuckle, Okawara agreed with those words.

“It won’t be easy, but I believe it’s possible.”

The two men’s reasoning completely ignored the fundamental nature of derivatives, where profit margins inherently reflect probability.
When Japanese companies had entered into option contracts, the likelihood of the dollar-yen exchange rate rising above 100 yen had been extremely low.
Therefore, in a trend favoring yen appreciation with high probability, lower profit margins were inevitable, just as greater losses were unavoidable during declines.
But regardless of such considerations, Sato wore an expression of deep satisfaction at having manufactured grounds for accusation.
Then, in a gentle voice, he praised Okawara.

“You’ve found a truly excellent approach. I’m very pleased with it.”
“I’m glad to hear that.”
“Yes, yes. Just continue as you have been.”

At that moment, a staff member from the adjoining office knocked and entered.

“Apologies for the interruption.”
“What is it?”

Sato Kazuya, suddenly interrupted mid-conversation, asked curtly.

“It’s a call from Vincent, the United States Department of Commerce Secretary.”

At this unexpected timing, both Sato Kazuya and Vice Minister Okawara widened their eyes in surprise.

“Put him through immediately.”
“Yes, sir.”

As the staff member hurried out, Sato Kazuya tilted his head and muttered to himself.

“What could that fellow possibly want all of a sudden.”

For the United States Department of Commerce Secretary to contact him without prior consultation was quite exceptional, so Okawara wore a puzzled expression as well.
Moments later, the telephone on the side table next to the sofa rang, and Sato Kazuya immediately picked up the receiver.
He spoke first in English with a distinctly Japanese accent.

“Hello.”
[Mr. Sato. It’s been a long time.]

Sato Kazuya instantly recognized Vincent’s voice.
It was hardly surprising, given that they had met several times during the Japan-United States automobile negotiations.

“Secretary Vincent, to what do I owe the honor of your personal call?”

Though somewhat tense, Sato Kazuya was a seasoned politician, long worn smooth by years in the political arena.
As he spoke with a composed tone that belied his expression, a blunt response came from the other end.

[I suspect you know better than I do why I’m calling.]

At that remark, a thought flashed through Sato Kazuya’s mind, and his brow furrowed.

“Is this call about the Eldorado Fund, by any chance?”
[That’s correct. Since we’re both busy people, let’s skip the pleasantries and get straight to the point.]
“….”
[I want you to stop the unwarranted investigation and pressure on the Eldorado Fund immediately.]

Sato Kazuya, his brow furrowed, took the receiver and responded while trying to conceal his displeasure.

“It seems you’re under a misunderstanding. We are investigating the Eldorado Fund’s illegal activities in accordance with proper legal procedures.”
[Surely you don’t think we made this call without first reviewing the contract details between Japanese companies and the Eldorado Fund.]

Sato Kazuya held the receiver in silence, his face rigid and unyielding.

[We are fully aware that you’re pressuring the Eldorado Fund to appease domestic Japanese public opinion. So don’t escalate this further—let’s end it here.]

At that, an indignant Sato Kazuya openly displayed his displeasure and countered.

“For the United States Government to dictate terms regarding Japan’s internal affairs is a clear violation of our sovereignty!”
[Isn’t it the Japanese Government that is subjecting the American company Eldorado Fund to unfair and discriminatory investigation and pressure? This is disrespectful to the United States and violates the trade agreements between our two nations.]

Vincent pressed forward with a stern, unyielding tone.

[If this continues, we will regard it as a serious case of unfair treatment that harms American interests and will take appropriate measures under the Omnibus Trade and Competitiveness Act.]

The moment Sato Kazuya heard those words, his heart sank.
The Omnibus Trade and Competitiveness Act that Vincent had invoked included the so-called Super 301 provision, which allowed ruthless and discriminatory retaliatory measures against target nations.
If Super 301 were invoked, tariffs as high as 100% could be imposed on specific products, import quotas implemented, various surcharges levied, and trade agreements terminated—all extraordinarily severe retaliatory measures.
Sato Kazuya, the color draining from his face, gripped the receiver tightly and spoke.

“You’re saying you’d go that far over just one fund?”
[We cannot tolerate any infringement on American interests or harm to our companies.]
“Hmm….”

Confronted with an even firmer stance than expected, Sato Kazuya contorted his face and let out a low groan.
He had never anticipated that America would take such a hardline approach, which made the situation all the more bewildering.

[I have no desire to see Japan-United States relations deteriorate either, so I hope you’ll make a wise decision.]
“Wait….”

Vincent hung up the phone without waiting for a response.

“Damn it!”

Sato Kazuya, his pride thoroughly wounded, spat out a vicious curse and slammed the receiver down as if he meant to shatter it.

“Those damned American bastards!”

As he fumed and tried to compose himself, Okawara, who had been watching carefully from beside him, ventured to speak.

“Is the United States protesting the Eldorado Fund incident?”

Sato Kazuya offered no response, merely scrunching his face before biting his lip firmly.

“Drop the unfair contract angle we discussed earlier.”
“Sir?”

Okawara’s eyes widened as he stared, but Sato Kazuya deliberately looked away.

“And if we close the case immediately, we’ll look ridiculous. Drag it out appropriately, then wrap it up as a no-fault conclusion.”
“Are you serious?”
“How else can I respond when they’re using Vincent, the Commerce Secretary, to threaten us? Damn it all!”

At his outburst, Okawara quickly bowed his head in understanding.

“Understood.”

Sato Kazuya loosened his tie roughly, his face etched with irritation.

“I tried to deflect public criticism, and now I’m the one taking the fall.”

—————
This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
—————