On March 15, 2011, the Tokyo Stock Exchange lost 51 trillion yen in market value in just two days. The author argues for market closure and government buybacks to shield Japanese companies from foreign control, recalling Japan’s recovery from Hiroshima and Nagasaki and calling for the creation of a new capitalism for the 21st century.

On March 15, 2011, facing the stock market crash after the Great East Japan Earthquake, the author reflects on how this situation differs from “Black Monday” or the “Lehman Shock.” In response to the loss of 51 trillion yen in national wealth in just two days, the author proposes closing the market and having the government buy back shares of Japanese companies. The author emphasizes the importance of a national resolve to protect one’s own country and advocates for a return to the spirit of post-war recovery.

In just two days, the market capitalization of the Tokyo Stock Exchange First Section decreased by 51 trillion yen.
2011/3/15

Market capitalization of TSE First Section falls by 27 trillion yen, Nikkei’s drop ranks third in history

Amid growing concerns over the nuclear accident caused by the Great East Japan Earthquake, selling accelerated further in the afternoon session on the 15th. The Nikkei 225 closed at 8,605.15 yen, down 1,015.34 yen from the previous day.
The decline rate was 10.55%, ranking third after the 14.90% fall on Black Monday, October 20, 1987, and the 11.41% drop on October 16, 2008, during the post-Lehman collapse.
Trading volume hit 5.777 billion shares, setting a record for the second consecutive day.
Market capitalization of the First Section ended at 261.3851 trillion yen, a drop of 27 trillion yen from the 14th.
On March 11, it stood at 312.4544 trillion yen—an overall loss of 51 trillion yen in two days.
(Source: Morningstar Inc.)

But both Black Monday and the Lehman Shock were disasters born of human greed.
This time—was it the same?

To stand naked before what was obvious, losing 51 trillion yen… no doubt someone has made a massive profit.
Instead, as I proposed last week, the Tokyo Stock Exchange should have been closed.

From the 150 trillion yen lying idle in banks, invest 51 trillion—buy back the stocks dumped on the market, mostly by foreign investors (though some Japanese too). And buy them at a steep discount, since they wanted to dump them anyway.

Had this been done, foreign holdings of Japanese equities would have plummeted, and the Japanese market would have become far more stable.
Better still, Japan would have shown the spirit to protect its own wealth by buying the shares of the companies that have supported and developed this nation.

Our recovery from this catastrophe—the greatest disaster in modern centuries—should be achieved with our own strength and will. Heaven helps those who help themselves.

Japan is a country that rose even after Hiroshima and Nagasaki.
Have we forgotten that, after watching brain-dead television for over 20 years?
Even if Fukushima were to suffer a meltdown, it could not surpass Hiroshima and Nagasaki.

To those who dropped the bombs, I would say this: we, who were bombed, still built the world’s second greatest power.

The stock traders chatter about the future of Japanese equities—if so, then let the nation buy them all.
Since they are dumping them, buy at a steep discount.

Those who dare treat Japan’s finest companies as if they had suddenly become worthless, those who talk down our markets—such people should never again be allowed to dictate our economy.
Revoke their licenses. If Ieyasu were alive, he would exile them to Sado Island—where they would also be safe from the radiation they so fear.

When the atomic bombs fell, the radiation that spread across Japan far exceeded anything from Fukushima.
Did the Japanese perish?
Did we all fall ill from radiation-related disease?

This is the moment to put a period to 20th-century capitalism, which has allowed such people to rule us.

We need not use private assets.
Issue government bonds up to the 51 trillion yen lost these past two days.
If selling resumes tomorrow, shut down the market, and with those funds, buy back the stocks—whether held by foreigners or Japanese—at that moment’s price.

The average dividend yield of TSE First Section companies is about 2.5%. Even after paying bond interest, there would still be profit left over.

Mr. Yosano—Japan’s fundamentals have not changed.
The core has not been destroyed. Saying so into a microphone without taking any action convinces no one—not the capitalist brats.

We must build capitalism for the 21st century.
The stocks of our nation’s finest companies should be owned by our nation. The dividends should go to us.
Foreign holdings would quickly fall to around 30%—a perfectly appropriate level for protecting our own country.

Later, when foreigners come back begging to buy, then we can sell—at the highest price.
But always keep their share below 30%.

That, I believe, is how we protect the nation we love.
No more listening to the chatter of capitalist brats about what foreign investors think or what foreign countries say.

As after the war, from the burnt ruins, when we all worked together, let us again show our national characteristic—decency.
Let us, as the world’s finest shareholder, support Japan’s greatest companies so they may further refine their research, technology, and business strength.
Thus they will rise from excellence to the very highest tier, and Japan with them.