Chapter 287: A Prophet’s Words and Shifting Tides

These days, I practically commuted to the HW Group chairman’s office. My purpose was to monitor the funds being poured into Dubai—funds that were about to detonate like a bomb over Vice-chairman Jin Dong-gi’s head.

“Do-jun, are you sure about this? Is the financial crisis from the US weaker than we thought?”

Chairman Lee Hak-jae tossed the morning paper aside.

“If the US financial crisis has a weak impact, we’ll end up giving Jin Dong-gi wings. If his cash flow remains stable, he’ll make a fortune next year and solidify his position even further.”

As I unfolded the newspaper he’d thrown, my eyes nearly popped out.

How could these people be so clueless about what was happening in the world?

Is this the extent of the foresight of the so-called leaders of Korean finance?

『Korea Development Bank Considers Acquiring US Giant Financial Group Lehman Brothers.

Concrete acquisition terms already proposed.

Offers to acquire shares in three tranches: $23, $18, and $6.4 per share.』

“These lunatics. Why would they acquire a company on its deathbed?”

“Are you certain?”

“Absolutely. Lehman Brothers won’t receive any bailout from the US government. They’re beyond saving. Bankruptcy is imminent.”

After its bankruptcy, Nomura Securities, aiming to become a global investment bank, would acquire only Lehman Brothers’ Asian and European divisions.

The acquisition price for the European division was a mere $2, contingent on retaining all employees, and $225 million for the Asian division.

Nomura Securities, with its ₩11 trillion in equity capital, likely viewed this as an opportunity to establish itself as a global investment bank, justifying such an investment.

Offering $23 per share for a company that could be acquired for a mere $2 suggests either utter foolishness or a shady deal.

The Korea Development Bank isn’t that stupid, so the nature of the ongoing transaction is obvious.

As a state-run bank, the Korea Development Bank’s acquisition of the bankrupt Lehman Brothers would inevitably lead to massive losses, ultimately borne by the taxpayers.

While the misuse of taxpayer money isn’t my primary concern, this presents an excellent opportunity.

“I need to hold a press conference.”

“What? To stop the Korea Development Bank?”

“That’s the pretext. The real purpose is to issue a prophecy, a warning that a financial tsunami from the US will engulf Korea.”

Chairman Lee Hak-jae frowned.

“Your intention isn’t a warning, but to detonate a bomb prematurely.”

“There are only a few days left. The moment Lehman collapses will signal the collapse of the global economy. Whether I announce it or CNN News does, the outcome is the same, but this is an opportunity to boost my credibility.”

“Are you going into politics? What will you use this credibility for?”

“So that when I expose the corruption in the Soonyang Group’s succession process later, public opinion will be on my side.”

“Honestly, that brain of yours…”

He offered a pointless jab, seemingly to conceal his surprise at my plan.

“Hold the press conference in two days. We have apartment complexes underway in the provinces. Soonyang and Daehyun are both mired in the mud, so I’ll give them a push.”

I had suspected as much, but Chairman Lee Hak-jae and I were surprisingly well-coordinated.

* * *

“The Bush administration is on the verge of injecting hundreds of billions of dollars in public funds. Over eight million homes have become derelict, Bear Stearns is beyond recovery, and the mortgage-backed securities are deemed unrecoverable, freezing the entire US. I assure you, Lehman Brothers cannot avoid bankruptcy.”

“Chief of staff Jin Do-jun, are you referring to the same Lehman Brothers that the Korea Development Bank is currently negotiating to acquire?”

“Yes, there is only one Lehman Brothers.”

“Are we to interpret this as your assertion that the Korea Development Bank’s acquisition attempt is misguided?”

“Misguided is an understatement. I simply cannot fathom it. When a company goes bankrupt, its stock is worth zero. To pay $26 per share for worthless assets? You’d be better off buying pebbles on the street. At least you’d have something to throw when you’re angry.”

As the press conference continued, a slow burn of anger ignited within me, but I kept my voice level.

“Have we already forgotten the events of ten years ago? The reckless spending of dollars resulted in the people bearing the brunt of the pain. The US financial crisis is already casting a dark cloud over the global economy. In a situation where we should be preparing for the worst, pouring dollars into a failing company is akin to treason.”

“Are you perhaps comparing this US financial crisis to the IMF crisis?”

“They are fundamentally the same. The only difference is that the epicenter is the US, not Asia.”

The mention of the IMF caused a stir among the reporters. They understood that this was no time for complacency.

“Mr. Jin Do-jun, are you implying that another crisis like the IMF is about to begin?”

The IMF still held significant weight. It was like a national trauma that couldn’t be escaped.

“It depends on how we respond. Rigorous analysis from each institution is crucial. We must not show any complacency.”

These were the words of Korea’s young Warren Buffett.

The economic newspapers featured me on their front page, while the mainstream papers ran my story in the business section. Even the entertainment-focused sports newspapers printed my picture.

Broadcasting companies were no different.

They knew that the title of young, genius investor and Soonyang heir guaranteed viewership.

While it wasn’t the lead story, my press conference received significant coverage.

It was unprecedented for a chaebol to issue a warning to a national institution. Usually, universities or economic research institutes took on that role.

It was a rare occurrence, successfully capturing public attention, and public opinion leaned favorably towards me.

Within a single day, the Korea Development Bank appeared to retract its interest in acquiring Lehman Brothers, claiming it was merely a review and not a concrete plan.

I also achieved my true objective.

Economic professors at universities, who had remained silent, began to voice their concerns, and numerous economic research institutes released papers warning of a bleak future.

Moreover, when news broke on major foreign outlets on September 14, 2008, that Lehman Brothers had filed for bankruptcy with a staggering ₩700 trillion, my name resurfaced.

Thanks to this, I also gained some additional benefits.

“Chief of staff, the press conference was a stroke of genius. Haha.”

Vice President Jang Do-hyung chuckled happily.

“Have you seen the news articles?”

“About being called a prophet?”

“Yes. Investment genius, prophet… These are the nicknames you’ve earned. While the social elite constantly paint rosy pictures of the future, urging people to buy stocks and homes—anything to extract their money—you’re the only one speaking frankly about the crisis and advising people to hold onto their wallets.”

“Praise is useless without tangible benefits.”

“The company of the most conscientious leader. That’s what our Soonyang Financial Group has gained. Our stock price is rising, and customers are flocking to us. It’s had a greater impact than hundreds of TV commercials. Haha.”

Lehman Brothers’ bankruptcy plunged South Korea’s financial market into a state of panic.

The combined market capitalization of the KOSPI and KOSDAQ evaporated by ₩51 trillion in a single day, and while the stock prices of securities firms plummeted by over 12%, Soonyang Securities was the only financial company to see its stock price rise, a miraculous feat.

Vice President Jang Do-hyung chuckled heartily while subtly observing my reaction.

“Reporters are eager for follow-up interviews. Should we schedule some?”

“No. Any more talk, and my hand will be revealed. This is the perfect amount. Public curiosity needs to remain for them to continue listening to me. What about the Korea Development Bank? Was my instruction carried out?”

“Yes. I treated the bank president and executives to dinner and provided them with some gifts—enough to ensure they don’t harbor any resentment.”

“Excellent work. Now, we must be fully prepared. The domino effect of the global economic collapse is beginning. Make all investment decisions with utmost caution.”

Predictions immediately surfaced that the US unemployment rate would increase by at least 10%, and Europe wouldn’t be an exception.

Articles also reported that foreclosed homes in the US had already exceeded nine million. The US domestic economy would completely freeze.

If the US, the world’s largest consumer market, froze, China, the world’s factory, would also suffer immensely.

Signs of collapse were already evident in Chinese manufacturing. Over ten million people had lost their jobs.

These laid-off workers were earning a meager $70 to $80 a month.

When the currents shift at the top, it’s always the poorest who suffer the most.

Engineers created computers and spaceships.

Financial engineers created the dream of getting rich, earning salaries dozens of times higher than those of engineers as their reward.

But when the dream turns into a nightmare, those who bought the dream are ruined. Those who sold the dream suffer no harm.

On October 4th, the financial engineers of Wall Street, the cause of this tragedy, held yet another lavish party, funded by George Bush’s $700 billion bailout.

The US government acquired a majority stake in AIG Life with $160 billion and injected $15 billion into Goldman Sachs.

Immediately after receiving government funds, Morgan Stanley paid out $14 billion in bonuses to its executives, and Goldman Sachs distributed its entire government bailout as bonuses.

Finally, Rachel from New York Miracle emailed me a photo of an account statement showing an astronomical figure of $56 billion, along with a single line of text.

Congratulation! World’s Richest Person!

* * *

Facing the upcoming presidential election, the US had already injected over $7 trillion to contain the financial crisis and planned to inject a similar amount in the future.

While its status as the key currency was shaken, this seemed to halt the tsunami of the crisis in Europe.

As it became clear that Asia would only experience a strong typhoon, everyone breathed a sigh of relief and once again revealed their hidden greed.

As always happens during crises, the rich got richer, and the poor got poorer.

The new administration implemented sweeping tax cuts and eased regulations on reconstruction to overcome the economic slowdown and domestic demand contraction.

Thanks to this, the chaebol conglomerates began to sing a song of prosperity once more.

“Perhaps your plan has failed. This might just make Soonyang Construction richer.”

Chairman Lee Hak-jae paced anxiously, studying the status board.

“They’re operating on debt and credit. They’re finished if they can’t collect those debts. Don’t worry and let Soonyang Construction and Daehyun Construction do as they wish. If they want to build apartments, let them build. If they want to build shopping centers, let them build.”

“Dubai is fine! Didn’t you say it would collapse with the US crisis?”

“It’s festering. It still needs time to rot and decay.”

“We have over ₩3 trillion tied up in those two companies alone. It might reach ₩5 trillion next year.”

“With that money, we might acquire Soonyang Group’s heavy industries division and Daehyun’s construction affiliates at a bargain price.”

I displayed an air of composure to the anxious Chairman Lee Hak-jae. We needed to invest more and give more. Money was overflowing. I met with the presidents of commercial banks in succession, not to spend money, but to entrust it to them.

They bowed deeply as soon as they saw me, as if meeting a savior.