Chapter 63
Chapter 63
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Translator: MadScientist
Chapter: 63
Chapter Title: Barings' Hidden Losses
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“What are you blubbering about?”
Yoo Seon-jun showed up after lunch, chomping away on a wad of gum.
I was in a foul mood from imagining all sorts of grim futures, so I shot back curtly.
“Period cramps. Why?”
“...”
It was a lie, but guys wouldn't know. And honestly, I didn't care to explain...
“Anyway, come sit down, Oppa. I've come up with a fun plan.”
“...Already?”
Yoo Seon-jun shot me a look that said Of course as he crossed his legs and plopped into a seat.
Slouch.
His posture was awful.
“We're gonna short the British pound, right?”
“Yeah?”
“So... what can we do with that?”
“What else? Just quit while you're ahead.”
Yoo Seon-jun stared at me like I was out of my mind.
Why? Might as well squeeze every last drop out of it.
“Truth is, I scattered some bait a while back...”
The fact that Britain was pouring everything into defending the pound meant... they couldn't pay much attention to their domestic companies.
Let me dig up an old memory here.
Remember Nick Leeson, the fresh-faced recruit at Barings Bank?
After nailing deals with the Alpha Fund and racking up killer performance, he got promoted to head of the Singapore branch just three years in.
He was only supposed to trade futures, but thanks to my meddling introducing the oh-so-tempting CDS derivative, Leeson got a wicked idea.
“The company bears the risk of bankruptcy instead? Aha! If it doesn't go bust, it's pure profit!”
And yeah... that's technically true.
So Nick Leeson, backed by the Alpha Fund, went wild selling CDS contracts left and right, pumping up stock prices like crazy.
“But if a company that issued bonds goes bankrupt, we're screwed, right?”
Such reasonable doubts didn't faze Leeson with his 88888 account.
Just shift the losses to another account, hide them, and voilà—only the profitable ones show a return rate soaring past 1,000 percent.
It was like saying you're invincible if you ignore the battles you lost, but shockingly, it worked. Barings Bank—that famous institution from novels like The Count of Monte Cristo—didn't notice a thing while Leeson hid over a billion dollars in losses in his past life.
You'd think with employee oversight like that, how did they not go under sooner? Well, they did eventually.
What a tangled, bizarre mess the world is.
And now that guy's on my side.
“Ah, I get it... So a promising employee at Britain's top investment bank is your proxy? And you're egging on his moral hazard to bankrupt the centuries-old Barings Bank?”
“Yep, yep. Sounds fun, right?”
“...Fun, yeah.”
He didn't look convinced at all.
“Come on, think about it. The Soviet Union collapses between late this year and early next. You know that, right?”
“Hold up—that premise is total nonsense! The USSR collapsing this year?”
“Then related government bonds and export companies will tank one after another, their corporate bonds defaulting. Leeson pays out insurance under the CDS contracts, his losses balloon, and he goes even more reckless until he implodes.”
“...And?”
“And! Germany's Bundesbank keeps hiking rates... so the Bank of England focuses on defending the pound. Then we swoop in and acquire bankrupt Barings. Done!”
The key here is bankrupting Barings. Everything else follows the original timeline, but Barings goes under 3-4 years early.
“...”
Yoo Seon-jun looked at me like I was insane.
“What do you think? Perfect plan, right? Snatching it up before they can even arrange a bailout—that's the clincher!”
In the original history, Barings didn't get a bailout anyway, but since I've altered things, better build in safeguards.
“...Well.”
He swallowed hard. I met his gaze with wide, innocent eyes.
“What? Got more questions?”
“Uh... hmm... I dunno. Ha-yeon, I'm out. Thanks for the meal.”
Whoosh.
Yoo Seon-jun tried to bolt. I grabbed his sleeve and gave a thumbs-down.
“Ugh, you coward. Where's your gambler's pride?”
“Hey, I love gambling, but this is too much. Triggering an earthquake at a casino to swipe chips? That's not gambling. You possessed or something?”
I shook my head.
Stubborn unbeliever...
“Oppa, just check one thing for me.”
“What?”
“Can you go to the Singapore branch and see how much loss Nick Leeson's hiding? It's not gambling—it's risk management.”
“...If it's just that.”
Finally convinced, he accepted with lingering suspicion.
◇◇◇◆◇◇◇ March.
Daeha Investment Bank.
Yoo Seon-jun came back to see me, his eyes glazed over in shock.
“...What the hell is this? How... how did you...”
He burst in clutching documents in one hand.
“What? I don't know the details. I just had a hunch. That's why I sent you in the first place.”
“Right, yeah. Jeez...”
Of course I didn't know Nick Leeson's exact status now. He's capable of tanking Barings solo, but building that trust takes time, so I figured losses were still small.
Apparently, since he originally handled Nikkei futures and had Alpha Fund ties, investigating discreetly was easy.
Thud.
Yoo Seon-jun handed me the report. Fresh from school with my backpack, I shoved my elementary textbooks aside and skimmed it.
“How bad is it—”
Investigation Result: Losses in the 88888 account estimated at 50 million dollars (approx. 60 billion KRW). “Hmm...”
...What the hell.
I was speechless.
It's only been two years. Our relationship isn't that deep yet. Slow down, teach.
Even with CDS on top of futures, 50 million in losses already?
And this came out so easily? Then why didn't Barings notice until the brink of collapse?
I've only been pushing Leeson for two years...
“...Phew, that's a relief.”
A sigh reached my ears. I tilted my head.
“Relief? That Barings will be easier to swallow?”
Yoo Seon-jun shook his head.
“That you still have some common sense? Knowing there's stuff even you don't know is suddenly comforting.”
“I always act rationally.”
“Sure you do.”
I do.
Under the premise of knowing the future, my actions are perfectly rational.
“Uh... so... what now?”
I slowly cranked my sluggish brain. Yoo Seon-jun watched me intently.
“Can we acquire it? Taking over a bank means assuming their debts too. Instead of egging Leeson on, we should rein him in.”
As ridiculous as it sounded, he was right.
I'd planned for maybe a billion instead of 1.4 billion since we triggered it early... but at this rate, disaster.
50 million early this year means... by year-end, Soviet collapse pushes it past 500 million.
Then for the 1992 pound short...
At this pace, around 2 billion?
Is he nuts?
Even I wouldn't go that far. I'm heartless, not brainless.
Guess he thinks no one sees with his head in the sand. They didn't, but still...
Rough estimate: 2 billion, maybe more. I did unleash CDS for this, but not this soon.
I can't cover that.
Need ammo for post-Soviet corporate hunts; can't sink it all into Barings.
Might end up doing someone else a favor.
A hollow laugh escaped me.
“This is insane. Ha... Guess it's time for me to do a good deed.”
This could wreck the UK economy. Swallowing tears, I might have to acquire Barings early myself.
“Where's the money coming from?”
“Hmm... Guess we fleece the Bank of England and some hedge funds more. About 1.5 billion should do.”
“...Isn't that basically the Bank of England bailing them out?”
“No, no. That's that, this is this.”
They're broke, so I'm graciously taking the debt off their hands. They should be grateful.
Minor detail: I'm the reason they're broke. But morally perfect otherwise.
We had no idea, honest?
Originally, Barings would've lost even more and gone irredeemable. I'm cutting it short. Plus, the Bank of England got fleeced in the original timeline too.
Phew...
I'm kinda saintly.