thenovelthief Chapter 90
Chapter 90
Translator: DreamscribeDue to the Korea-Japan diplomatic war, companies were put on high alert.
At first, the discussion was about how Korean companies should overcome the uncomfortable situation of having to take unilateral hits from Japan, but now it was dealing with the complete opposite.
“Japan definitely landed a punch on us, so why are they the ones collapsing?”
Japan had harshly criticized Korea and brought out the weapon of semiconductor key component trade restrictions. And just as they had hoped, its impact was considerable.
The Korean government hurriedly filed a complaint with an international court, claiming it was a violation of international trade law, but in reality, it was a useless measure.
It seemed Korea would have to just sit back and take the hits.
But the one who got flipped upside down wasn’t Korea, it was Japan.
“Japan had been making quite a bit of profit from exports to China, but losing that was a major blow. However, the decisive factor was the forces behind the scenes. All those bear funds that dominate the financial sector moved into Japan and were just waiting with bamboo spears in hand.”
“Bamboo spears?”
“Yes. They were ready to stab the moment a trigger event exploded. You know the nature of those bear fund guys. There’s not a single normal person among them. Neither the fund managers running those funds nor the people putting their money in them. Once they start, it’s a fight to the death, one side has to go down no matter what.”
High risk, high return.
There are many funds that pursue high risk and high return.
But a step further than that, extremely aggressive and highly speculative funds are what bear funds are.
“Even if those kinds of guys gathered, how much did they have to amass for the Japanese government to say they’re giving up on YCC?”
Japan had maintained zero interest rates for a long time.
YCC was part of that policy.
But when the Japanese government failed to defend the falling government bond prices, they eventually raised the white flag.
On top of that, the governor of the Bank of Japan made an emergency announcement that YCC would be withdrawn and interest rates would be raised.
“While tens of trillions of won were amassed, the real problem was the domino effect. Prices dropped due to massive short selling, investors became frightened, panic spread. Then everyone began to sell, and this situation unfolded.”
The governor announced a plan to raise interest rates by 3 to 5%, and as a result, the Japanese stock market descended into total chaos over the past two days.
In fact, one might ask what the fuss is about since the rates are only being raised by 3 to 5%.
“Hasn’t Japan maintained zero interest rates for a long time? That’s why there are so many zombie companies in Japan.”
Zombie companies.
Because interest rates were nearly zero, companies could keep barely afloat without needing to pay interest even after borrowing money.
But if the interest rate suddenly rises by 5%, all the money they had borrowed would have to be vomited out as interest payments.
And that’s not all.
Companies that had bought homes or made overseas investments through loans would also face major setbacks.
If interest rate hikes had been gradual, the shock could have been softened.
But with this sudden offensive and the abandonment of YCC, the radical rise in interest rates would inevitably lead to economic collapse.
“Even so, the reason the Bank of Japan made such a decision is because if they didn’t hit the brakes here, it might not just end with the Japanese economy shaking.”
“It was that powerful of a blow?”
“Yes. The U.S.-China trade war inadvertently ended up hitting Japan.”
It was understandable why Japan ended up that way.
But Kang Sung-ho still had one unresolved question.
“But why did those bear funds suddenly decide to attack Japan? Do those bastards usually cooperate with each other like that?”
“No. They don’t share investment information and operate with extreme individualism. But this time, they all moved in unison as if they’d received orders.”
In other words, someone behind the scenes had commanded these highly wild beasts.
“They move individually, yet not just one or two, but that many bear funds all moved under someone’s orders?”
That’s the nature of bear funds.
The managers running those funds are rough types who don’t listen to anyone and just charge forward based on their own convictions.
Yet someone had managed to leash those insane bastards.
“I know it sounds hard to believe. But it’s already well known on Wall Street. People say bear funds moved under the direction of a certain someone.”
“Who was that?”
“That much I don’t know, but what’s known is that Kwangwoon was the first to take a large short position.”
“......Kwangwoon?”
“Yes. As soon as the information spread that Kwangwoon had taken a position, all the waiting bear funds made the exact same bet as Kwangwoon.”
Kang Sung-ho blinked his eyes.
When Kwangwoon suddenly took a large short position, other bear funds followed suit with identical positions, as if they had made a prior arrangement.
What does this mean?
“W-wait a minute. Are you saying that it was CEO Jung Jin-ho who moved all those bear funds?”
“Probably not all of them. Some likely just followed the trend. But it's certain that the bear fund forces that first shocked the market moved according to someone’s instructions. And the fact that Kwangwoon moved first… means he was the vanguard.”
Looking at Jung Jin-ho’s investment record so far, it seemed as if he was cunningly pulling the strings from behind, but upon closer inspection, that wasn’t the case.
Rather, he possessed a brutal aggressiveness, charging straight into enemy lines to plant the flag first.
“No wonder the bear funds had no choice but to follow.”
The extreme aggression they themselves pursued.
But as human beings, they are bound to feel fear.
That’s why they hesitate.
But when Jung Jin-ho charges in first with certainty and without hesitation, the bear funds gain courage and follow behind him.
“So it takes an even crazier guy to leash the crazy ones?”
But why did Jung Jin-ho do that?
It wasn’t a company, but the Japanese government they were up against.
“Maybe CEO Jung Jin-ho was angry. With Japan imposing semiconductor export regulations this time, the semiconductor companies he’s pushing would falter.”
“So he punished the guys who touched his turf?”
“Since the government can’t do anything about it right now, maybe he decided to take matters into his own hands.”
Japan was clearly the one under attack, yet Kang Sung-ho felt a chill run down his spine.
He had never imagined in his wildest dreams that such a violent strike would be directed at the Japanese government.
When this incident first broke out, Kang Sung-ho never even considered the option of fighting against the Japanese government.
Because the idea of a company going head-to-head with a government like Japan’s simply didn’t make sense from the start.
That’s why all he did was ponder how to coax the Japanese government and change their mind.
But Jung Jin-ho, as expected, was different.
Rather than bowing his head and submitting, he chose to deliver a clean punch straight into the face of the Japanese government.
“Even if I die, I won’t bow…”
It felt like a powerful echo was resonating deep within his chest.
It was as if something was boiling up from his core.
Maybe that’s why.
“Bring me all the related reports analyzing how much damage Japan will take from this rate hike, and how the economy will change going forward.”
Kang Sung-ho had also grown sick of trembling and tiptoeing around Japan.
***
“Companies that had sent all their capital overseas are now rushing to retrieve their money. There's even a lot of real estate being released in various countries."
This was just before Japan’s bubble burst.
An enormous amount of money had flowed overseas.
That’s why, if you look up the owners of expensive land in various countries, you’d find they were almost all Japanese.
Why did the yen become a major currency?
Ironically, it was thanks to the bubble.
Before the bubble burst, Japan had the second highest economic influence after the United States, and they had purchased a large amount of foreign real estate, stocks, and art.
But after the bubble burst, Japan experienced repeated cycles of deflation and inflation, eventually fixing the rate to zero, which made the yen a safe asset.
That’s why countries hold onto dollars and yen.
Even if Japan takes economic damage, they know that thanks to what their ancestors spread across various countries long ago, they can always recover by harvesting those assets.
Above all, what must not be forgotten is that Japan is the world’s largest net creditor nation.
In other words, they had far more money lent out to others than they had borrowed.
“But even for Japan, the collapse of YCC is a major shock. The zero interest rate that’s been upheld for decades has been broken, causing companies to go bankrupt one after another and paralyzing the financial system in an instant.”
The problem was that this YCC collapse was so severe that even their overseas assets couldn’t serve as a defense.
Moreover, it takes time to bring back the assets that were scattered overseas.
Even if they put real estate on the market, they can’t sell if there’s no buyer, and bonds have maturity periods.
Moreover, the fact that the Japanese government and companies never imagined that the zero interest rate would be broken so abruptly meant they were caught completely off guard and suffered a significant blow.
“Right now, Japan is in chaos. Due to the plummeting government bond prices, banks, insurance companies, and other financial institutions are either becoming insolvent or facing bankruptcy one after another.”
The biggest problem was the banks.
When deposits come in, banks typically invest the money in the safest assets possible, and that’s government bonds.
They invest only in so-called safe government bonds, believing there's no way their prices would crash.
Through the interest generated from those, they gradually increase their customers’ money.
But when the Japanese government bonds they purchased start dropping in price en masse, the customers who had entrusted their money to those banks begin to panic, and that eventually leads to withdrawals.
If that gets worse, a bank run occurs.
And that was exactly what was happening in Japan.
Many banks were already refusing withdrawals, and some had even filed for bankruptcy.
For us, even when Japan announced strong trade sanctions, the general public didn’t really feel the impact on their skin.
But in Japan, the entire population was experiencing the brutal fear of the YCC collapse.
“Our position are all settled, right?”
“Yes. It took some time to clear everything due to the massive volume, but the Gold Reagan side handled it quickly, so the liquidation is complete.”
With the position fully closed out, the amount that fell into our hands was exactly 10 trillion won.
We had earned a staggering 4 trillion won in a short period and exited before the collapse worsened.
“Wow… 10 trillion won.”
“So now we can manage 10 trillion won just with the investment capital from the securities firm?”
This was the moment we had finally reached our initial goal amount of 10 trillion won.
“But, CEO-nim. When exactly did you contact the bear funds?”
“Huh?”
“I heard the bear funds moved almost simultaneously the moment we made our move. Those people are known for not listening to others, but weren’t they acting on your orders?”
At that, all the employees’ eyes turned and pierced straight into me.
“......”
Bear funds.
I don’t know a single person associated with them.
Not a manager, not even a staff member.
Yet for some reason, the moment Kwangwoon took a position, those bear funds took the exact same position, as if we had coordinated in advance.
That, ultimately, was what led to the collapse of YCC.
I had unintentionally become the Korean version of George Soros.
The difference being, we earned even more than George Soros with much less capital. And unlike him, I hadn’t conspired or pre-arranged anything with various funds.
“......”
What should I even say to this?
The employees’ eyes were filled with eager anticipation, pressing me for an answer.
“I have nothing to do with them.”
I thought their eyes would turn to disappointment, but instead, the reaction was the opposite.
“Ah. I’m sorry.”
Department Head Seo suddenly bowed his head so low his forehead almost touched the table.
“I asked something I shouldn’t have. I forgot for a moment that there are things we must not know, and even if we do, we must pretend we don’t.”
“......?”
“I’ll never ask such a question again, so please forgive me.”
“Ah. It’s okay.”
“Yes. Then, CEO-nim… where will the next investment be…”
Holding onto a massive 10 trillion won and leaving it idle without putting it to work would be a serious crime.
I reopened the Japan-side research report that had been full of noise the last time I looked at it.
Back then, it had been so full of grotesque noise it looked like someone had maliciously scribbled all over it.
“......!”
But now, one by one, the signals were starting to shine brilliantly.
***
“I was surprised too. I heard that even before the Japanese government made an official announcement, CEO Jung was already preparing in advance? As if he was ready to land a clean punch on the Japanese government’s face.”
“......Me?”
“Don’t play dumb. I saw how you subtly adjusted the schedule through Kwangwoon Shipping to deliberately trigger chaos in Japan’s logistics. Haha. It was incredibly meticulous. What kind of thoughts do you usually have to come up with a plan like that?”
Chairman Kang Sung-ho was clearly in a very good mood today, downing glass after glass of alcohol.
“Thanks to CEO Jung, our government officials are walking around with their shoulders thrown back. You’d think they were the ones who pulled it off. Those cowards who used to just sit there and take the hits.”
“Well, as long as it worked out well for everyone, that’s all that matters.”
“Tsk. Sometimes I wonder, are you really just a good person, or are you hiding your true self on purpose?”
“I’m exactly as I appear.”
“And yet someone like you turned Japan into that mess? Completely smashed them to pieces. Japan is so wrecked right now, no one even knows when or if they’ll recover.”
In desperation, the Japanese government eventually lifted the trade restrictions they had placed on Korea.
They understood that if they clung to their pride now, the situation would only get worse.
That’s why Chairman Kang Sung-ho was drinking so happily today.
“Honestly, getting parts from overseas was already a struggle. This is a relief. But I learned something important from this. Relying solely on imports will always leave you vulnerable to counterattacks one day.”
“Are you planning to build a proper factory domestically?”
“Yeah. We’ll figure out a way to bring in the technology, too. And the thing is, with Japan stuck deep in a financial crisis, company shares are getting dirt cheap. I’m even thinking about making an acquisition.”
Even in the report I saw yesterday, a few companies were shining brightly.
But I didn’t buy in.
It was because I didn’t get that gut feeling to buy right away.
“I learned a lot from what you did this time, CEO Jung. Funny, isn’t it? That someone much younger than me could teach me so much.”
“Sounds like you’re getting drunk again.”
“No, I’m still sober. You showed us something this time. Instead of backing away in fear and bowing your head, you showed us it’s better to bite back, even if that’s all you can do. Of course, you basically dropped a tactical nuke. Keuk.”
This was a characteristic of Chairman Kang Sung-ho.
When he drank, he suddenly got very talkative.
“Looking back now, I think I was lucky. If I’d made the wrong move back then and ended up making you my enemy… whew. I don’t even want to imagine it.”
“Why do you keep making me out to be some kind of villain?”
“Villain? CEO Jung, you’re a patriot. A patriot! You’ve made the hearts of all 50 million of our citizens feel refreshed!”
I was just about to stop pouring his drink, thinking it was probably time to send him home.
“CEO Jung.”
The glaze in Chairman Kang Sung-ho’s eyes suddenly cleared, sharpness returning to his gaze.
“When I saw you even move the shipping line this time, I knew exactly what you’re planning.”
“...What do you think I’m planning?”
As if pretending not to know was pointless, he stared at me and grinned.
“You’re trying to paralyze both logistics and finance to turn Japan into an international outcast. Then you’re going to scoop up everything inside. Isn’t that right?”
“......?”
“That plan… can’t you let me in on it too?”
*****
TL Note:
Merry Christmas????, happy holidays, and happy New Year to all of you!
I'll be taking a short break and will start posting new chapters in the first week of the new year.
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