CASES CASE 10.1 Money in Motion Jake Nguyen runs a nervous hand through his once finely combed hair. He loosens his once perfectly knotted silk tie. And he rubs his sweaty hands across his once immaculately pressed trousers. Today has certainly not been a good day. Over the past few months, Jake had heard whispers circulating from Wall Street-whispers from the lips of investment bankers and stockbrokers famous for their out- spokenness. They had whispered about a coming Japanese economic collapse-whispered because they had believed that publicly vocalizing their fears would hasten the collapse. And today, their very fears have come true. Jake and his colleagues gather round a small television dedicated exclusively to the Bloomberg channel. Jake stares in disbelief as he listens to the horrors taking place in the Japanese market. And the Japanese market is taking the fi- nancial markets in all other East Asian countries with it on its tailspin. He goes numb. As manager of Asian foreign investment for Grant Hill Associates, a small West Coast investment boutique specializing in currency trading, Jake bears personal responsibility for any negative impacts of the collapse. And Grant Hill Associates will experience negative impacts. Jake had not heeded the whispered warnings of a Japan- ese collapse. Instead, he had greatly increased the stake Grant Hill Associates held in the Japanese market. Because the Japanese market had performed better than expected over the past year, Jake had increased investments in Japan from 2.5 million to 15 million dollars only 1 month ago. At that time, 1 dollar was worth 80 yen. No longer. Jake realizes that today's devaluation of the yen means that 1 dollar is worth 125 yen. He will be able to liquidate these investments without any loss in yen, but now the dollar loss when converting back into U.S. currency would be huge. He takes a deep breath, closes his eyes, and mentally prepares himself for serious damage control.