The Youngest Son Of A Rich Family Chapter 281

[281] Pandemonium, Wall Street 2

“I know very well that I can’t understand why people do things like this, so I refrain from asking fundamental questions. You just have to focus on the numbers and accurately calculate the financial company’s solvency. You know?”

In the conference room, analysts and fund managers surrounded by accounting data and PC laptops from each financial company were listening to me with sparkling eyes.

Some of them taught me about funds and financial derivatives years ago, but they also listened.

I can’t quite understand it, but there is nothing more frustrating than having to complete a given mission.

Everyone expressed only doubts, and some could not stand it and opened their mouths.

“Howard. These companies are mainstream on Wall Street. Isn’t it a bit ridiculous to calculate the limit of solvency when it is a place that rolls dozens of times more money than our Miracle?”

They waved through the list of companies that manipulate money around the world to make sure it wasn’t really pointless.

I don’t want them to understand everything, but I have to explain the least possibilities.

“Think of it this way. All of our Miracle customers withdraw their money at once. All right so far, right?”

“I guess so. If the customer bears the loss due to sudden withdrawal.”

That’s a very normal answer. We only roll the customer’s money, we don’t gamble.

“But suddenly someone shows up, hands out a credit default swap contract, and charges $100 million. This $100 million must be paid out of our Miracle money, not the customer’s money. Is it possible?”

The premise is the wrong question.

There is no such thing as taking out money at once as if all customers had promised. But now is the time to think only about the numbers.

They were reluctant to speak out the answers they already knew.

“Our Miracle is possible. But you’ll have to give up your bonuses this year and some will have to pack up and leave. A loss of $100 million is an amount someone should be held accountable for.”

Looking at their uncomfortable faces, I continued to speak.

“Imagine Goldman Sachs, Deutsche Bank, Morgan Stanley, Merrill Lynch, etc. are going through the same thing. However, the claim is $10 billion. Can you survive by reducing the number of people without getting a bonus like we did?”

The number of 10 billion dollars over 10 trillion won made them lose their confidence, but they still couldn’t open their mouth.

“This is what I want. How much can large financial institutions pay out of their own money rather than their customers’ money? I can afford to pay, but how much will I be forced to declare default and go bankrupt…?”

One of them, who had been silently listening, opened his mouth.

“It’s time for the kidnapper to calculate the ransom.”

All eyes were on him.

“Ah, it was a study conducted at school. It was a study to calculate the right amount of money that parents would give without notifying the police when they kidnapped their children and demanded money from their parents.”

He was a little taken aback, but shrugged and explained.

“Selling a ransom that is too low relative to the parent’s assets falls short of the criminal risk the kidnapper must bear, and it is foolish to charge more than one can afford to pay. You also have to figure out the character of your parents.”

“The character of your parents?”

I was intrigued by his words.

“yes. So, a normal kidnapping is a face-to-face. Parents who can’t stand injustice can afford to pay, but if they think it’s a little too much, they report it to the police.”

“Then, in this case, are the parents the CEOs of the respective financial companies?”

“It may be so, but we also need to consider their management philosophy, honorary shareholders, and social awareness.”

“You mean it’s difficult to figure out the absolute maximum solvency just by looking at the numbers?”

“Efforts can be made in numbers alone, but they will not be maxed out.”

Without thinking further, I pointed at him.

“You are the team leader of this TFT. The deadline is 2 weeks. Pick the maximum number, not the appropriate number, and report it to me.”

Everyone, not just the person I pointed to, looked bewildered, but it didn’t change my decision.

* * *

When I was figuring out the solvency of financial companies on one side, I was drafting a swap contract with another expert as an assistant.

This is because mortgage-backed securities are not a single product, but a jumbled mix of many liabilities, so it was necessary to set a standard for each security.

We selected the top 50 that traded at the highest price and gave it our own rating of AAA. To others, AAA is a symbol of safety, but to me it’s like a lottery with the biggest dividends.

In the middle of my stock analysis, Rachel Ariev quietly called me over. with a very anxious expression.

“What is it? His expression is young…”

“I went around Wall Street to get information… Howard. I found a few people who thought the same thing as you.”

Of course it exists. I already know how they make money and follow the same path as them.

But I pretended to be surprised and asked.

“Already? Who are you?”

“Greg Lippman and Steve Iceman. John Pauls Ben Hockett… There are individuals and there are institutions…”

“When did they start?”

“Fast people have already been there for two years. It was last year that money started pouring in.”

“They must have lost a lot of money. Hehe.”

It is a losing bet as the value of the mortgage bond product rises. Since it has been betting continuously for two years, if it was an institutional investment, there would have been complaints from customers or a lot of investment money was withdrawn.

“Goldman Sachs manages more than $200 billion in mortgage-backed securities alone. The largest of them bet against is only $700 million. Just by simple comparison, they would be facing a huge loss right now. Maybe it was cut in half.”

If it is 200 billion dollars, it is 200 trillion won. As of 2007, Korea’s budget is 230 trillion won, so the United States is the United States. A single financial company is in charge of a national budget.

I said to Rachel.

“Are you nervous because it’s cut in half? So are you telling me to dry it?”

“no. I just wanted to say that your predictions might not be wrong.”

“Then bet with me?”

He smiled, but she still didn’t let go of her hard expression.

“I want to keep my convictions. Investing, not betting. I will only make investments that produce stable and steady returns. Already, most of my clients supported my approach and agreed to withdraw from mortgage-backed securities. But he didn’t want to bet. It’s my way to meet

the customers ’ needs.”

Rachel wants a defender, not an attacker.

“Please. I also support Rachel’s management style. So please continue to be the CEO of Miracle.”

This is true.

Isn’t New York Miracle a safe for storing my money? Rather than a return on investment, what I want is to be inconspicuously swelled up little by little.

Of course, the name Miracle will rise and fall on Wall Street because of this bet, but the people here should take the credit.

These are the fame and the money.

And I know what Rachel Arief’s uneasy eyes mean.

This is because she realized that the moment I invested a large sum of money in the precarious US financial market, it was the beginning of a crash.

* * *

“Remember. At the same time, a credit default swap contract is entered into. If we sign contracts one by one, there will surely be someone who examines our contracts. We need to get rid of it in an instant before any information leaks out.”

I could see the people holding the contracts holding back laughter as if they were absurd.

It would be the idea that such a stupid contract is welcome anytime, anywhere, and there is no one to doubt and investigate.

“New York is Friday morning, London is Friday afternoon. The London team can enjoy the weekend there.”

Silent laughter spread across the faces of those leaving for London.

It is a business trip like a vacation, where you can easily sign a contract, enjoy the whole weekend, and come back.

They set off, suppressing the desire to cheer.

I finished all the preparations and waited for Friday at a small bar drinking with Rachel.

“How much is everything? What is the total investment amount?”

Rachel asked, licking her lips with a cocktail.

“I set the insurance premium rate a little high. Some of you may have sensed this crisis a little bit by now. You have to pay enough money to blind that anxiety.”

“What percentage?”

“A minimum of 4% and a maximum of 7%.”

“How long?”

“Five years.”

“What… if you think about it, there won’t be a difference between 5 and 10 years, right? After all, it’s next year.”

Rachel let out a self-deprecating laugh.

“Yes. You only have to pay for a year’s worth of insurance.”

“What is the total amount?”

“About 3.5 billion dollars if you set the average premium rate at 5%…”

“You make 20 times the 3.5 billion dollars with this bet. Seventy billion dollars?”

The bartender, who had been refilling his glasses, turned around with a frown.

It must be because of the numbers that middle-aged women and young Asian men talk like nonsense.

In fact, it sounded like bullshit to me too.

70 billion dollars, 70 trillion in our money.

Unrealistic numbers that to me are like passwords or digital signals with lots of circles attached to them.

“You think Wall Street can pay for $70 billion?”

“What do you think of Rachel? Did you hold it too low?”

She pondered and opened her mouth.

“Right now, it’s low enough that there won’t be any problems. But next year, I think you’ll be worried that the amount will be too high.”

“We’ve dispersed to London and New York, so it should be safe.”

“Next year you will catch up or beat Warren Buffett. You’re going to sit down as the world’s No. 1 coder right away?”

“Just as I was not revealed, there are many undisclosed rich people in this world. So, next year’s Forbes list of richest people will still be #1 Warren Buffett and #2 will be Bill Gates.”

Korean chaebol presidents also belong to the hidden group. Personal wealth is announced at around 3 trillion 4 trillion, but how much money is hidden after using companies worth hundreds of trillions like a safe?

“I’ve lived my whole life buried only in numbers, but it’s even confusing to see numbers that cross the boundaries of thinking appear in front of reality.”

Rachel emptied her glass again.

“Do you have any plans on what to do with the money?”

Of course there is.

I can’t tell this woman, though.

“My esteemed grandfather once said this.”

Rachel’s gaze, staring at the glass, turned to me.

“The purpose of money is to make money. Don’t think about where to spend the money. In life, there always comes a time when you need to spend that money anyway. You can worry about spending money then.”

she laughed quietly.

“As expected, the rejects have different ideas. Wasn’t your grandfather very rich too?”

“yes. But if he was alive, he would have been very surprised. I’ve never made $70 billion in one year.”

“You want to be the first since the rise of capitalism?”

is it? I’m sure there must have been another one?

“Isn’t there a story about how the Rothschild family earned enough money to buy all of England during Napoleon’s Battle of Waterloo?”

Rachel shook her head.

“It’s a story that sprang from a conspiracy theory. I just made a lot of money investing in government bonds, and even at current market prices, it didn’t exceed $1 billion.”

The $1 billion the Rothschild family earned is, after all, the people’s tax, and the money I will earn also comes from the pockets of American citizens.

At least I am not a Korean citizen, so my heart is lighter.

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