Friday, April 10, 2015

Friday Feature Review: Beat Takeshi explains China's Shadow Banking Bubble on Japanese TV?

Last Sunday April 5, 2015. Beat Takeshi, a well known actor and comedian in Japan, hosted his regular weekly show called TV Tackle, but the subject was far from regular. China's shadow banking system and its huge bubble, mirrors Japan's own 20 years before, and was the subject. 

As Michael Douglas said in Wall Street 2, "only a fisherman recognizes another fisherman", and only a former bubble economy like Japan, can see what a second bubble looks like for China, having fully been there. The shadow banking twist though, brings new meaning to huge bubble numbers. At its peak China current shadow banking bubble is over 8 times the size of Japan's peak.

Meeting wild--spending real Chinese, who live in large condo residences of 720 square meters or more, adds to the appeal of TV voyeurism. The US$40 million interior of this condo begs the viewer to wonder, where did the money come from? Is it real or may much of its value evaporate like it did in Japan?  Is China's economy having another "bubble movie part 2" just 8 times larger than Japan 20 years before?

To say that his show is light in content, and far from hard hitting journalism is hard to argue with. However, this week's show had a real sense of impact that only a former bubble economy could sense. Unlike the US, where investigative shows like 60 minutes have huge audiences in prime-time, Japan has similar shows, but never with the same audience numbers. I have to wonder if this is changing? 

The opening showcased huge spending of the growing tourist influx visiting Japan, often from mainland China, and the excess spending they attempt while in Japan. The authentic, and rarely fake items, sometimes only made & sold in Japan by major designers, are highly prized back in China. 

It is satisfying to see that a possible shadow banking bubble is even now discussed on prime time Japanese TV. It often is a sign that a pop may soon be around the corner. Time will tell of course, but hopefully later, not sooner. Japan needs the tourist dollars right up until the Olympics in 2020.

Please visit us for our Friday Feature Review where TMJ Partners will review books, movies, and anything else with a financial theme.  Thank you for reading and learning more about how money is made in finance!

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