thenovelthief Chapter 109
Chapter 109
Translator: DreamscribeIs it possible to short sell with 700 trillion won?
In fact, taking a short position with 700 trillion wasn't that difficult of a task.
It's easy to understand if you think about Whiterock.
That astronomical investment capital of a whole $13.5 trillion is being absorbed by the current global market, isn’t it?
They also take long positions depending on the nature of their funds, and they also take short positions.
Already, hundreds of billions are going into shorts.
How is something like this possible?
It is possible because they do not pour money into a single market but inject funds into various places across the world.
In other words, just like them, we have to take short selling positions across the entire global stock market in order to absorb that much money.
“Isn’t the amount traded worldwide in a single day over several thousand trillion won? Of course, it would be difficult to suddenly absorb that much money in just one day.”
Of course, we're not suddenly injecting 700 trillion won in one day.
We have to spend several months building short positions so that we don’t shock the market.
“But taking a 700-trillion-won short position as a single entity… we will probably be the first in history.”
It is possible to scatter 700 trillion won across the world and build short positions.
But a single entity intentionally taking short positions with this much capital is something that has never happened before.
Because the market cannot absorb it?
No. It’s because the risk in case of failure is far too great.
That is the difference between us and a large asset management firm that takes astronomical short positions like we do.
They take shorts for hedging purposes.
We are throwing in all our assets purely to make money from it.
“Three months. This is the estimate our side calculated.”
Three months is the time needed to liquidate all assets and simultaneously build the positions.
“If we move as fast as possible, it’s three months. This way, we can minimize the shock to the market.”
Our team’s analysis was accurate.
For the pension fund, three months is enough time to build positions across the global market.
“Of course, three months is only the target estimate. That’s because you, CEO-nim, haven’t told us which markets we should take positions in yet.”
I handed the prepared documents to the Chairman of pension fund.
“This is……. ”
“The portfolio you requested.”
The Chairman’s eyes sparkled as he quickly took the documents and looked through them.
“S&P 500 SPY 15%, QQQ 10%, from AAL to CCL 10%, VIX futures 5%, Euro Stoxx 50 10%, 5% in the German DAX as well…….”
Soon after, Chairman Choi took off his glasses.
“It’s much more detailed than I expected. The U.S., France, Germany, Eurozone bank stocks, and so on.”
“Yes. Singapore, Hong Kong, and Japan are included as well.”
“Surprisingly, Korea is not included?”
“If we end up making a profit and it comes out that we shorted in Korea and made money, public sentiment will turn ugly.”
At my words, the Chairman let out a small laugh.
He looked very satisfied.
“And I mixed the ratios appropriately from emerging market ETFs and energy-related short positions to REITs ETFs, IYR, and VNQ.”
“Yes. It’s extremely detailed and has a wide variety, so that’s a relief. We won’t have to worry about choosing products at all. And since the money will be divided and scattered constantly, we shouldn’t have to worry too much about market shock either.”
For the next three months, the National Pension Service will be extremely busy.
They have to liquidate their own assets while simultaneously taking positions.
Especially since this is not limited to one market but requires borrowing shares evenly across global markets to short sell, even three months is a very tight schedule.
“But we have to do it. We’ve already burned our bridges after all.”
“......Will things be okay internally? The opposition must be severe.”
“Yes. The directors are already trying to stop me by seeking help from the government.”
“Are you sure it’s okay?”
“It’s fine. It takes longer than you think to remove me from the Chairman’s seat. And on top of that, the work has already progressed quite far. Even if someone else comes to replace me, it’s already too late to reverse things.”
Already, it meant the brakes had been ripped out.
“And even if we end up making a huge profit, someone will have to take responsibility for this. Isn’t it the people’s money? Since we used it for speculation, of course we must ensure that such a case never happens again by punishing appropriately.”
“.......”
“But I have no intention of making Kwangwoon take responsibility. Kwangwoon only provided advice, and the one who made the decision and carried it out was me alone. When all of this is over, I will shoulder everything by myself.”
If the National Pension Service makes a huge profit through this operation, internally they will applaud him.
But externally, that would not be possible.
Setting aside the ethical issue of making money through short selling, the biggest problem was that the people’s money had been used to make a speculative bet.
“I’m also at an age close to retirement. As an office worker, I’ve achieved all I needed to achieve. So even if I have to resign in disgrace, I have no regrets. As long as I can use this to save the future generations.”
In Chairman Choi’s eyes, I could feel determination.
Even though he clearly knew what his ending would look like.
“I have nothing I can dare say to that.”
“This just needs to succeed. Honestly, I still don’t know. Even after extracting all kinds of data, the current global financial market shows nothing but a golden future. And yet, CEO Jung, you proposed this enormous operation to me.”
And still, he had chosen to stake his fate on my side.
“What on earth is happening that so many assets will fall? At this level, nearly every market would suffer a crash……”
While I paused for a moment, wondering how I should explain this.
Chairman Choi quietly observed my face.
“I asked something unnecessary, didn’t I. Isn’t Kwangwoon a place that creates something out of nothing? I won’t ask further. Ah. But doesn’t Kwangwoon not have an asset management firm yet? If you’re truly confident this will succeed, you should establish one in advance. With this outcome, the National Pension’s funds will end up being managed there in the future.”
Wearing a faint smile, Chairman Choi finished his tea.
How should I put it.
He looked almost enlightened.
Even though he knew he would be criticized whether he failed or succeeded, he was throwing himself into this for future generations.
On top of that, he firmly stated that he would take all responsibility and step down.
“......!”
Just then, I felt a tingling sensation at my fingertips, and something new came into view.
It was Chairman Choi, glowing faintly in blue.
This was exactly the phenomenon I saw when interviewing employees.
Which meant…… could it be……?
‘Do we have a place for an advisor in our company?’
It seemed far too early for him to retire completely.
***
AstraZenon was originally not a company ruled by a single person, but one that all shareholders managed together.
But then the conqueror who destroyed the United Kingdom took the company as his spoils of war.
From that moment, the company was chaos itself.
This conqueror had taken pharmaceutical companies across Europe one by one, merged them, and completely disrupted the operational system.
“But it’s really strange. Normally, when a system collapses like that, it takes months- no, sometimes even years, just to restore normal operations, but here it didn’t even take a few days.”
When Kwangwoon suddenly invaded without warning, overturned the company, and carried out reckless mergers, AstraZenon’s CEO, Luke Wayne, thought that the downfall of this prestigious company had finally come.
But strangely enough, the opposite happened.
He felt the company was running even more smoothly.
“You could call it the power of restructuring. I don’t know who in Kwangwoon is giving the orders, but they understood our company, and every other merged company, down to the bone.”
The key was restructuring.
When people hear restructuring, they imagine indiscriminate layoffs, but here, it wasn’t like that at all.
They filled personnel only where truly necessary, and boldly cut away where it wasn’t, solving in one sweep even the long-festering problems inside AstraZenon itself.
That was what made it frightening.
Just how long had Kwangwoon been looking into AstraZenon?
Otherwise, there was no way they could cut away the rotten branches and plant new ones the moment they acquired the company.
It meant they had prepared thoroughly, long in advance, to take over this company.
“All of that is fine. But the problem is the return, isn’t it? They’re throwing money around in places that make no sense. What on earth is Kwangwoon thinking?”
After acquiring shares, Kwangwoon injected additional investment through a paid-in capital increase.
At the time, they thought it was simply to raise their own share ratio.
But they poured every bit of that investment into a technology called mRNA.
More precisely, it was divided into three technologies.
A technique that synthesizes antigens with mRNA and injects them.
Nanoparticle delivery technology.
Hyper-immune-response blocking technology.
If these three technologies were pushed to their limits and integrated, it would be possible to create a stable vaccine in a very short time.
“But isn’t it extremely inefficient to ignore everything else and invest only in this? mRNA technology still needs a lot more development.”
That was the strange part.
If properly developed, the technology undoubtedly had great potential.
It could even solve inherited genetic diseases.
But for the sake of the company’s profits, there were far more urgent priorities.
Yet Kwangwoon was pouring all of its investment solely into this area.
“And it’s not even as if they’re developing it slowly for the far future. They’re acting like something is chasing them…….”
“On top of that, they’re not pressuring us for returns.”
“Is it really okay for us to sit still like this and do nothing? The patents for our blockbuster drugs are ending soon, and it’s time to develop and produce new medications.”
No one could understand what Kwangwoon was thinking.
They heard it was a place that pursued maximized profits.
But their behavior made one question whether they even cared about running the company.
“For now, let’s just follow what the higher-ups order as best we can. This company is no longer operated by multiple shareholders. And for us, well, there’s no performance pressure, and we just need to do what we’re told, so it’s convenient and nice.”
“That’s true, but… what if the company collapses like this……?”
Part of them wondered if it was okay to take salaries while doing so little.
But beneath that was a fear that the company might suddenly disappear because they were doing nothing.
It was only natural, considering AstraZenon, once a fortress, had been acquired by Kwangwoon.
“So we should at least put our heads together and think about how we can help the company grow. Even if all investment funds are pouring into mRNA, we can still use the capital we already have……”
“CEO-nim.”
A staff member rushed into the meeting room and handed something over.
“What is this?”
"It's a document from WHO."
“What? WHO?”
“Yes. They say they’re sending this document not only to us but to all pharmaceutical companies right now.”
Soon after,
“!?”
Martin’s face twisted in shock as he read the document.
***
The financial market was peaceful.
Hadn’t so many incidents occurred until now?
Especially after the typhoon called Kwangwoon swept through the financial market several times, peace had returned.
The shipping industry, which had been forcibly dismantled by the EU, continued to grow, and although Singapore had shaken once due to the financial crisis that hit it, it soon returned to normal.
Singapore had taken heavy damage, but they were praising themselves, saying they had put down even stronger roots because of this event.
Japan, too, had been trampled by Kwangwoon and was thought to be unable to recover for a long time, yet somehow it fired a signal flare of revival and began full-scale transformation.
That is what a typhoon is.
After it sweeps everything away, new flowers bloom in its wake.
“But…… this part is really bothering me.”
He could understand why Kwangwoon was quiet.
EU forcibly tore their company away, and through that they realized they could not rampage anymore. So it made sense if they were trying to stay as quiet as possible… but…
“Why on earth is it the Korean National Pension Service?”
The problem was on that side.
What was the National Pension Service?
In terms of pensions alone, it's the third largest in the world.
And they had been showing suspicious movements for several months.
“They sold off all their bonds, the safest asset class, liquidated the shares they held, and even their real estate? And on top of that, they’re taking short positions with that money?”
“Yes. The operation progressed so slowly that even we didn’t notice it at first.”
“How much are they taking short?”
“That’s the issue. Judging from the stir at securities firms in other countries, it seems the National Pension is scattering money across nearly all markets, America, Europe, Asia, everywhere.”
“Wait. Does that mean… they’re using their entire fund? For short selling?”
“No one in their right mind.... no, even a fairly crazy bastard wouldn't do something like that.”
Yes. Common sense says so.
The money the National Pension holds isn’t a small amount.
And it isn’t their own money. It’s the people’s money.
Using that for speculative short selling even in part would already be a problem, but using all of it to build short positions worldwide was insane.
“But the situation is undeniably strange. They spent months slowly liquidating positions without shocking the market and simultaneously built short positions. We can’t know the exact scale, but… what if they really bet everything?”
“That guy earlier said it too. Even a lunatic wouldn’t do that. If they lose just 1%, tens of millions of dollars evaporate.”
“Yes. Ironically, people used to say similar things whenever Kwangwoon stirred up trouble.”
“.......”
And the National Pension and Kwangwoon were in the same country.
Could it be that the reason Kwangwoon was so quiet was because they were doing something else behind the scenes?
Using the National Pension as a smoke screen.
“Check what Kwangwoon is doing right now.”
“Ah, yes. But Director-nim, we received a rather unusual report.”
“What is it?”
“You remember the pneumonia case that occurred in Wuhan a few months ago…?”
“Wuhan?”
Reynold tilted his head.
He felt like he had heard it somewhere.
“Where is that?”
“China. At the time it didn’t seem like an important report, but it appears the situation has now spread significantly. It seems the WHO sensed something serious as well, they’ve been sending notices to all pharmaceutical companies for the past month requesting research on the virus and development of a vaccine.”
“How severe is it?”
"WHO may soon declare an international public health emergency."
“......Is that very serious?”
“If they declare the emergency and the situation still doesn’t improve, then it becomes a pandemic. A declaration of global spread.”
Reynold furrowed his brow.
“So what? A contagious disease like the Black Death is spreading?”
“Yes. Except this one seems to have a higher transmission rate than the Black Death. People travel all over the world now.”
Something about that felt off.
“But the WHO hasn’t declared an emergency yet. It could improve soon.”
“But if it doesn’t? If what you said actually happens and a real pandemic breaks out?”
“That’s hard to predict easily, but… a pandemic means every country will close its borders, and then…”
Reynold completed the thought, having already run the calculation.
“The Great Depression. The largest depression in history.”
If all trade stops and international movement halts, what follows?
A financial crisis.
People will panic in the face of something humanity has never experienced before and dump all their holdings.
That could bring a financial crisis even larger than the 2008 subprime crisis.
“Then, Director-nim, what happens to Kwangwoon and the National Pension?”
Kwangwoon had liquidated its shipping business and taken over pharmaceutical companies.
And the National Pension had suddenly dumped all its assets and taken massive short positions.
What did all of this imply?
“Don’t tell me……!”