THE HOUSE OF NOMURA: The Inside Story of the Legendary Japanese Financial Dynasty

A flawed but fascinating history of the securities colossus that has played a key role in Japan's emergence as a global economic power. An American partner in a British brokerage house, Alletzhauser knows the territory. Having gained access to founding-family papers, moreover, he delivers a knowledgeable account of how Tokuschichi Nomura (the bastard son of a samurai) prospered as a money-changer and bullion trader in Osaka during the early years of the Meiji Restoration. His scapegrace son, who moved the business into stocks and bonds (against the patriarch's wishes), proved a brilliant speculator, engineering megabuck market coups in 1907 and again in 1915. He was also farsighted enough to hire a journalist as a securities analyst, the forerunner of a research department that quietly predicted Japan's WW II defeat before the Battle of Midway. In the meantime, the author traces Nomura's efforts during the 1920's and 1930's to establish an industrial/ banking zaibatsu. He provides telling detail as well on how corporate executives set the stage for a remarkable recovery from the ravages of WW II. In the case of Nomura, unfortunately, the dead are apparently more forthcoming than the quick. The narrative becomes decidedly episodic and anecdotal as it nears the contemporary era. Alletzhauser offers insights into the exacting demands made on those employed by the world's largest financial/investment enterprise. He also touches on Nomura's awesome political as well as fiscal clout and the arrogance it engenders. His coverage of the collusive nature of Japan's rigged capital markets, though, is scanty at best. The same holds true for many open scandals, e.g., systematic bribery of government officials (via market tips or cash), the national media's money-driven reluctance to expose corruption, protection rackets run by mobsters known as sokaiya, and the fact that precious little of Japan's securities wealth has trickled down below society's upper echelons. While the full warts-and-all story of Nomura in the post-Occupation age remains to be told, Alletzhauser furnishes an intriguing and informative appreciation of the firm's formative years.