The Next Morning
As usual, Seok-won arrived at the office and sat down at his desk. In front of him lay a report from Goldman Sachs about Korea, faxed the night before by Landon from New York.
Though only about twenty pages long, the report's contents were anything but light.
Its implications were grave. The moment Seok-won began reading, his face hardened—because what lay within had the potential to become the very trigger that would push Korea, already teetering from currency instability, straight into the heart of the financial storm that was wreaking havoc across Asia in what would later be known as the 1997 Asian Financial Crisis.
"Hmmm…"
He finished the final page and sat upright, letting out a low hum without even realizing it.
The report laid bare, in blunt and unsparing terms, the problems and vulnerabilities Korea was facing.
"Even to me, it looks like we're sitting on a ticking time bomb. I'd love to disagree, but there's really nothing to counter it with."
Seok-won muttered to himself, a bitter expression settling on his face.
The report raised several red flags, but the most alarming was the country's overreliance on short-term foreign debt.
What made the situation more perilous was that the bulk of these liabilities hadn't been borrowed by the government—but rather by large conglomerates, banks, and other financial institutions.
"Korea's short-term external debt—due within a year—has already surpassed its foreign reserves. To hedge funds and currency speculators, we must look like an easy target."
Even without needing confirmation, Seok-won could imagine it clearly: many of the global speculators who had previously ignored Korea were now likely turning their hungry eyes toward it—greed flickering in their gaze, already licking their chops after reading the Goldman Sachs report.
It had always been a question of when, not if—but now, the tidal wave seemed just beyond the horizon, ready to crash down at any moment.
As Seok-won leaned back in his chair, his mind tangled with unease, the phone on his desk buzzed with a low vibration.
He glanced at the caller ID and immediately pressed the button to answer.
"I was just about to call you. Good timing."
[Did you have a chance to review the report I sent?]
Seok-won glanced at the report lying on his desk.
"I've finished reading it. It wasn't very long, but the analysis of Korea's situation was brutally honest."
Landon responded, his voice slightly lowered.
[There are rumors that Merrill Lynch is working on a similar report.]
"Merrill Lynch too?"
Seok-won furrowed his brow as he asked, and Landon replied immediately.
[Yes. As you know, if two of the most influential firms on Wall Street—Goldman Sachs and Merrill Lynch—release similar reports back-to-back, there's a high chance speculative investors will start turning their attention to Korea.]
"That's likely."
Seok-won narrowed his eyes, his expression one of clear discomfort.
"The fact that Goldman Sachs and Merrill Lynch are publishing such similar reports at the same time… It's an odd coincidence."
[Are you suggesting there's something going on behind the scenes?]
For a moment, Seok-won did consider the possibility, but quickly shook his head.
"No, I think it's just that Korea's situation looks unstable no matter who's looking at it."
[I agree. One by one, Asian countries—starting with Hong Kong—have fallen or been shaken by this currency crisis. Now, only three remain standing: Korea, Japan, and Taiwan. It's fair to say Korea's turn is coming soon.]
Seok-won gave a bitter smile and responded.
"Japan, with its semi-reserve currency, the yen, is practically off-limits. And Taiwan has built up a solid enough defense that bringing it down won't be easy. That leaves Korea as the next natural target."
[That seems to be the case.]
After a brief pause, Landon cautiously asked,
[When the attack on Korea begins… will you be taking part in it?]
Seok-won, having already made up his mind, answered without hesitation.
"It's a great opportunity to make a lot of money—but I've already made enough elsewhere. I don't have much appetite for joining in on bleeding my own country dry."
[That's what I expected you'd say.]
"But that doesn't mean I'm going to stand up and fight against the speculators targeting Korea either."
Landon, who had perhaps secretly feared that Seok-won might take a patriotic stand against the market onslaught, let out a quiet sigh of relief.
[That's a wise decision. Of course, if it were you, you could probably go head-to-head with the other hedge funds and hold your ground—but there's not much to gain. There's no reason to take on such an unnecessary risk.]
Seok-won let out a faint chuckle at Landon's reaction.
"If someone were to take the opposite position when hedge funds short the Korean won and manage to hold the exchange rate, the profits wouldn't be small."
[That's true, but…]
Landon sounded a little flustered, prompting Seok-won to reassure him.
"I'm joking. Even I wouldn't dare take on all of Wall Street. That'd be reckless. And even if I managed to win, the hedge funds that lost money would bear a serious grudge. Maybe someday I'll be in a position to handle that—but not yet."
He adjusted the receiver in his hand and continued in a more serious tone.
"Anyway, even if Korea is starting to attract attention on Wall Street, it's not like hedge funds can immediately move in, right?"
[Probably not. Hong Kong's proven to be no easy target, and fighting that battle has already stretched their resources thin.]
"Hedge funds have been hammering away at Hong Kong, but it's still holding out. What's the mood like on their side?"
[So far, there's no major shift. They anticipated from the beginning that it wouldn't be easy.]
Seok-won nodded slightly, as if he'd expected that.
"That's how it is now, sure. But if this drags on, the hedge funds will start to feel the heat just as much as the Hong Kong government."
Currency speculation was always a gamble. A successful bet could bring in a fortune—but if it failed, it could lead to total ruin.
Most hedge funds, including Quantum Fund, had heavily shorted the Hong Kong dollar using leveraged positions funded by high-interest borrowing. That meant their risk would only increase the longer the battle continued.
Their usual strategy was simple: strike quickly, earn returns that exceeded the interest costs, and exit before things turned sour.
[That's true. But even though Hong Kong has the world's third-largest foreign currency reserves, they made a risky move trying to defend both the exchange rate and the stock market at once. Since they've already abandoned the stock market, it's only a matter of time before they give up entirely.]
Seok-won shrugged.
"Both sides are playing a game of chicken. We won't know the winner until someone blinks. But if I had to guess, I'd say the odds favor Hong Kong this time."
[I figured as much. That's why, instead of shorting the Hong Kong dollar, you only placed a short bet on the Hang Seng Index futures.]
Seok-won smiled—then, as a thought struck him, asked,
"Oh, right. What about the Dow futures position? Has that all been settled?"
[I meant to report on that as well, but with the Goldman Sachs report suddenly coming out, it completely slipped my mind.]
Landon's voice took on a slightly excited, proud tone as he continued.
[We made a return of 12.6%, earning $1.67832 billion. After taxes and other costs, the net profit comes to $1.53 billion.]
Seok-won's expression softened with satisfaction—it was exactly the kind of result he'd been hoping for.
"Not bad at all. Good work."
[While the battle in Hong Kong is still raging, other hedge funds will be smarting when they find out we made over $1.5 billion in just a few days from New York.]
"There must've been quite a few margin calls triggered in this market crash. That'll make it sting even more."
Seok-won chuckled, agreeing with Landon's remark.
[In fact, there are already rumors that several small hedge funds based at 237 Park Avenue have gone bankrupt. Oh—and apparently, Mondale Partners just placed a massive short bet on Nikkei futures.]
Hearing the name, Seok-won immediately pictured the face of Mondale's CEO—someone he'd had an unpleasant run-in with in the past.
"They may have been a step behind us, but with the ongoing Asian currency crisis, the downside is still wide open. Looks like they'll have their fun too."
[The Nikkei has already dropped more than 20% from its recent peak. Are you saying it'll fall even further?]
Seok-won grinned, lifting one corner of his mouth.
"My target return when I took a position in Nikkei futures was at least 50%."
[What?]
Landon let out a gasp, clearly stunned.
For Seok-won's prediction to come true, the Japanese stock market would have to suffer a collapse on the scale of a full-blown post-bubble crash.
Landon found it hard to believe that even with the shockwaves from the Asian financial crisis, Japan could be hit that hard.
But then again, the person making this call was Seok-won.
Despite his doubts, Landon couldn't help but swallow dryly—because deep down, a part of him wondered if it really might happen.
[If that really comes to pass, it would be nothing short of a disaster.]
Seok-won responded with a calm, deep smile.
"For Japan's stock market, it would be a nightmare. But for us—who've already taken short positions—it would be the opportunity of a lifetime."
***
Mapo – Daehung Group Headquarters.
President Park Jin-hyung entered the chairman's office after being summoned. Inside, seated on the sofa around Chairman Park Tae-hong—who wore a grave expression—were Chief Secretary Gil Seong-ho and Mido Department Store President Min Pil-gi, both already waiting.
"Sit down."
Chairman Park Tae-hong looked up at his eldest son and spoke.
"Yes, sir."
Cautiously scanning the mood, Park Jin-hyung sat down in the empty seat next to Chief Secretary Gil.
Chairman Park, dressed in a crisply ironed white shirt with a red silk tie, exhaled a long stream of smoke before pressing the half-burned cigarette out in a crystal ashtray.
He then looked around at the gathered men and began speaking in a heavy tone.
"I had lunch with Assemblyman Joo today. He asked whether we'd be interested in acquiring Taehwa Shopping, which has just filed for court receivership."
"...!"
All three men looked visibly startled at the completely unexpected news.
"You didn't say we'd take it, did you?"
Park Jin-hyung asked quickly, his expression suddenly tense.
"I just said I'd think about it and left it at that."
"Whew. That was the right move."
Leaning back slightly, Chairman Park narrowed his eyes at his eldest son, who had just let out an obvious sigh of relief.
"So, you're against the acquisition?"
Park Jin-hyung met his father's gaze with a firm and serious expression.
"Under different circumstances, it might be worth considering. But with the economy deteriorating this rapidly, taking over Taehwa Shopping would do us more harm than good."
Chief Secretary Gil chimed in in agreement.
"I feel the same. Lotte Department Store has already expanded into Busan. If they're bringing this proposal to us now, it likely means they approached Lotte first and got turned down."
"That's probably the case."
Chairman Park Tae-hong gave a small nod, as if he had already suspected as much.
Still seated with his arms crossed, he turned his gaze toward Min Pil-gi, the president of Mido Department Store.
"What's your opinion?"
"We've already halted construction on the Gangnam branch and are operating under austerity measures. Even if the government and creditor banks agree to write off a significant portion of Taehwa Shopping's debt, taking on such a heavy burden right now would be too risky."
Min Pil-gi, like the others, voiced a skeptical stance.
Chairman Park didn't look particularly disappointed either—it was clear he hadn't been keen on the idea to begin with.
"It's a tempting asset, but acquiring Taehwa Shopping now would be like taking on a ticking time bomb. Since everyone's against it, we'll decline the offer."
President Park Jin-hyung, who had been nervously watching in case his father got greedy, quietly breathed a sigh of relief.
"Anyway, has the payment from the Ansan factory sale come through?"
At that, Park Jin-hyung straightened up and answered.
"Yes. The full amount—20.9 billion won—was deposited this morning."
"With liquidity drying up across the market, we're in a time where every penny of cash counts. Don't use it elsewhere—set it aside in case of emergencies."
"Understood. I'll make sure of it."
Chairman Park looked around at the group gathered before him and let out a weary sigh.
"These days, hardly a day goes by without hearing about another company going bankrupt. I wonder when things will finally start to improve."
His face, as he spoke, was deeply clouded with concern.
TL/n -
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