Thorts after a week selling Europe to the Japanese

Tue Nov 16 06:29:04 PST 1999

A few more notes after the latest leg of our world tour .....

1. It's really quite humourous to open up the Financial Times and see, on facing pages i)a long article about the keiretsu system, and how it needs to be broken up because it's holding Japan back, and ii) a long article about Jack Welch's GE, and how its loosely organised conglomerate structure gives it a uniqeu competitive advantage ....

2. Japan is not going through a recession! In trying to organise our trip selling to Japanese fund managers, my boss and I were -- forced to postpone by a week because *all* the flights were fully booked, unable to get rooms in our first choice hotel (the 1150 room Imperial), and pretty unable to get a taxi anywhere. The fund managers were quite reluctant to see us because they were snowed under with visits from European brokers (despite the fact that we're one of the best established gaijin firms out there.) I should have realised this in the summer -- when I was in Switzerland, I dimly noticed that the Japanese recession wasn't so severe as to stop the Swiss watch shops from employing Japanese students in numbers, although the Korean recession was.

3. The Japanese fund managers were noticeably less receptive to our argument that they should sell US, buy Europe than the Yanks had been. Many of them believed that the US economy was in better shape than the European -- even (fantastically to us) that US rates were likely to come down. There's a lot of quite bullish sentiment there and, unless the sample I saw was unrepresentative, I wouldn't expect them to be withdrawing funds from the US any time particularly soon.

4. In general, the Japanese fund managers seemed more thoughtful than the US ones (although this may just be my own prejudice showing). At any rate, they seemed to ask more searching questions, and to understand the underlying economics of banking a lot better. Seeing as several of these people were (identically) the same ones who had been lending officers during the 1980s, I tend to think that there must have been more to the banking crisis than merely incompetent lending.





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