TOKYO -- When the $240,000 retirement payout arrived, these were the places to invest it: a savings account at 2.2 percent interest and a stock market priced at more than triple the world norm.
That was June 1988, a year and a half before the burst of Japan's "bubble economy."
Four years later -- and 32 months into postwar Japan's worst bear market -- a retiree who put 60 percent into savings and 40 percent into stocks has seen his $240,000 lump sum -- earned in 33 years of six-day weeks -- shrink to just over $192,000.
The retiree is Ta--i Adachi, 59, who spent his 33 working years as a white-collar "salaryman" for Matsushita Electric, maker of household brands like National and Panasonic.
For Mr. Adachi and millions like him, the question of the 1990s is how much more they can afford of the much-publicized business-government "partnership" that guided Japan's postwar "economic miracle."
Many who got hurt when the bubble burst want to know whether business and government have become such cozy partners that the public can no longer trust key institutions.
"It seems they've made the stock market go up again, for now, but they can't make people like me ever trust a stock broker again," Mr. Adachi said last week. "For people who retired when we did, it has already been almost three years of torture. I just want a chance to get my money out."
"They" have made the Tokyo Stock Exchange's most-quoted index, the Nikkei 225, rise more than 3,000 points, or 23 percent, in the eight market days since it closed at 14,309.41, on Aug. 18. It closed yesterday at 17,555.00. After the morning session of trading today, the index had gained an additional 74.06 points, or 0.42 percent, rising to 17,629.06.
What has driven up the market recently is the government's decision to coordinate the biggest attempt ever made to massage life back into the financial markets of the world's No. 2 economic power.
But most analysts agree with Mr. Adachi that financial markets here need fundamental reform far more than ever-grander manipulation.
"Millions of people trusted Japan's financial markets, and their trust was betrayed," said Yoshio Terasawa, a retired executive of Nomura Securities, the world's biggest brokerage. "You can't have a healthy market without small investors, and they won't come back until they see a change in the way the place is regulated."
What broke Mr. Adachi's trust in the market, and that of millions like him, was not just the long, deep bear market. For him, the key moment occurred just over a year ago.
The stock brokerage firm that took a commission of more than $5,500 off his investment confessed that it paid tens of millions of dollars to "compensate" corporations and billionaires who had been given "guarantees" that they wouldn't lose money. Much of the cash for their "compensation" came from commissions paid by retirees and other small investors like Mr. Adachi.
Unlike Mr. Adachi, millions of those individuals dumped stocks at big losses after last year's revelations. They were disgusted with Japan's entire financial community.
Yet, in all the government plans announced and leaked to reporters in the past two weeks, there was scarcely a genuflection toward that wave of disgust. Retirees and other small investors struggling to survive the bear market went virtually unmentioned. Instead, the government set out to salvage loan companies, brokerage houses and other private interests that got in over their heads.
As for market reform, the government stood pat on a plan announced earlier this summer. Nominally, that plan would create a new securities "watchdog" agency modeled broadly after the U.S. Securities and Exchange Commission.
But the powerful finance bureaucracy, whose own nonfeasance had let the "guarantees" scandal happen in the first place, launched and won a year-long battle to keep the new watchdog subordinate to itself.
"The Ministry of Finance works like a chamber of commerce for whoever it's supposed to regulate," said Mr. Terasawa, a newly elected member of the upper house of the Diet, Japan's parliament. "That new agency isn't a watchdog. It's the fox, being put in charge of the chicken coop. It's a fraud on the public."
Instead of reform, government decisions announced and leaked during the past two weeks would:
* Rewrite bookkeeping rules for Japan's beleaguered banks, whose still-pricey stocks have led several of the s steepest slides.
* Try to create a still-vaguely defined corporation to buy up land used as collateral for borrowings that have long since gone bad at bank-affiliated loan companies.
* Pour up to $70 billion in new projects into the economy.
Economists and stock analysts have been especially skeptical of rewriting bank bookkeeping rules in the middle of a financial crisis.
"That's typical Ministry of Finance [MOF] thinking," said Halvor Ellicksen, an adviser to foreign pension fund operators. "Just change the way you keep the books, so it doesn't show, and pretend the problem went away."
"For the first time, the markets have proved they are bigger than MOF," he said. "This won't fool investors in London and New York, and I'm not sure it will fool investors in Japan any more, either. Japanese banks are in deep trouble. The only way out is very conservative lending over a very long time."