Chapter 68
Chapter 68
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Translator: MadScientist
Chapter: 68
Chapter Title: Soviet Collapse (5)
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Nick Leeson thought to himself.
'I'm fucked.'
He'd screwed up big time.
He should have stuck to quietly selling options instead of messing around with weird shit like CDS.
The moment news broke of the coup in the Soviet Union, the securities market got obliterated. Naturally, Nick, who had sold options on both sides, suffered massive losses...
"Mr. Leeson! I-is this really okay?"
A staffer asked. Even as his gut burned with anxiety, a reflexive answer popped out.
"It's fine. We've got a few contracts nearing expiration anyway, and more importantly, the coup is dragging on endlessly. If anything, the market's overvaluing the premium right now—that's good news for us."
"Ah..."
The staffer's face showed clear skepticism, but he trusted Leeson anyway—because it was Leeson, after all.
Would it really be okay?
No, it would be okay.
Pushing aside his unease for a moment, Nick brainwashed himself with his own words to the staffer, swallowed all his worries, and reassured the jittery team.
"Come on, everyone! Let's scale up our positions while the premiums are high! Get back to HQ and push for more expansion. Show them the profits from futures trading to sell it."
'Yeah, it'll be fine. It has to be. Just get past this one time. Options straddle selling was a bust, but the CDS contracts are safe until default—this is our chance...!'
Calming his racing heart, Leeson focused on the TV.
Soon after, footage aired of Yeltsin speaking in front of the Soviet parliament building.
[Citizens of Russia, on the nights of August 18 and 19, 1991, President Gorbachev, elected by the legitimate elections of this country, was removed from power. Regardless of the reasons given for his dismissal, we are now facing this illegal coup. Despite all the hardships and trials we endured because of them, the democratization process in this country has expanded even further, and now no one can stop it.]
Thrilling updates followed one after another. Reports that the coup faction couldn't mobilize the military, that the Russian Orthodox Church—one of the Soviet's major political forces, despite communism's hatred of religion—had declared support for Yeltsin. Breaking news like this signaled the coup was nearing its end.
Nick whooped in triumph and clapped his hands.
"That's right! Ahaha! I knew it!"
This wasn't the time to celebrate. He needed to lock in more CDS contracts and jump into a long position fast.
He usually chased steady gains by selling options, but this was a bull market. Leeson knew better than anyone: buy when others were gripped by fear.
Click.
-Ring ring ring!
Then the phone rang. It was from headquarters.
"Ah, Nick Leeson speaking."
-Just checking in, Mr. Leeson. HQ sent a request not to increase positions.
"What? Oh, yeah, sure! Of course! Who do you think I am? The best manager award winner at Barings Bank! Nick Leeson!"
Click.
He hung up, grimaced, and spat out a curse.
"Damn it, when it's this obvious everything's about to wrap up, what's there to be so scared of...?"
No helping it. Expanding known positions would be tough for a while... so he'd have to trade derivatives off the books...
'Gotta keep the under-the-table stuff to plain 3x leverage.'
Concocting a plan that would horrify HQ if they knew—like breathing—Leeson sighed and checked how much cash he needed to cover. Just in case margins ran short tomorrow.
Most financial firms barely worried about margins, but Leeson's were siphoned from shady sources, so he might not even have enough for tomorrow.
"Hey, you there. Bring me the ledger. Yeah? Yeah, it's confidential—don't open it."
He felt a twinge of guilt at the staffer's worried gaze, but it evaporated the moment he cracked open the books.
Like most in finance, his conscience weighed less than a sheet of paper.
"...Alright, and head home early today."
"Pardon? Oh, yes sir!"
As salaried workers with no stake in some far-off country's messy politics, the staff filed out en masse.
Wetting his finger on spit to flip pages and recalculating, Leeson gnawed his nails in frustration.
No one else could handle the full ledger but him. The staff only knew fragments of the big picture.
In a way, it resembled Yoo Ha-yeon's schemes, but far riskier. Leeson wasn't a regressor, after all.
"Nikkei futures 3,000 contracts, JGBs 2,000... Profit and loss calc..."
-Thud.
Leeson's hand froze mid-balance sheet.
'Huh...?'
In that brief moment, losses had snowballed.
-$300 million.
The amount he had to cover by year-end.
Nick Leeson's heart grew even more numb.
◇◇◇◆◇◇◇ From then on, staff quitting time got pulled earlier.
"Y-you're really letting us go? I'm out!"
"...G-good work."
Some eyed him suspiciously, others guessed the dirt and prepped to bolt.
In a finance firm, everyone clocking out while the boss stayed? That was basically declaring he'd shoulder the Singapore office solo. Something had to be rotten.
-Can he really handle it alone?
He wondered the same, but Leeson had no choice.
He was certain no one who truly grasped his madness would back him.
Like that, once the staff had all clocked out, the empty Singapore office.
Nick Leeson took a slow deep breath and gathered his thoughts.
"Okay, this is an opportunity. An opportunity..."
With quitting time bumped up, he no longer had to worry about prying eyes in the evening.
Sure, the straddle sell had tanked options trading hard, but it was fine. More cash from HQ would cover it eventually.
Just borrow to pay back, right?
...He'd have to hide the loss for a bit.
He was deep in 88888 account addiction, but everyone who could stop him had been ousted by this balance-sheet-defiling genius investor.
'Margins are the real worry, though.'
Anyone could see holding these positions was insane.
Not that he'd cooked books and pulled every illegal trick—he had his own "rational" mad path, like any master con.
'A safer way... Ah! That's it!'
Objectively, still batshit crazy.
"Ahaha! Why didn't I think of that? Gotta ask HQ for more cash!"
Mixing unease with a hearty laugh, he bolted for the bank.
The dim sunset lit his path.
When Leeson arrived at Citibank Singapore, a teller recognized him and hurried over.
"Ah! Mr. Leeson? What brings you? Need help?"
"Withdraw everything left. All of it."
Stressing the last word, he flashed a friendly smile.
"Everything? Oh... Understood."
The teller tilted his head but fetched the cash. Leeson's wild strategies yielding huge wins was legendary.
Pulling the full $50 million HQ had allocated, Leeson headed to Simex and handed over the dollars.
"Here, your margin. Ahaha, been paying late lately, felt bad... Brought it all at once. Uh... Might be a tad late next month? Come on, between us."
-Honk honk!
Driving through tangled Singapore streets, Nick returned to the office. Walking the dark hall, he sighed.
"Hoo... Just hold out this time, just this once..."
-Scribble scribble.
Leeson gathered stacks of documents and tweaked a few numbers.
The Citibank balance? Obviously '0'. He'd just drained it.
But Leeson saw it differently.
'If I'm refilling it anyway... It's just a transfer, right? No loss, no margin spent.'
So reporting to HQ that the cash was safe in Citibank's vault should be fine?
Just a minor 'relocation' from Citibank Singapore to Simex. Sure, $50 million wasn't minor...
Money was relative anyway. In this war of millions won and lost daily, what was that?
'$50 million is huge—I gotta divert it. Covering that lets me hold positions and still profit!'
Doublethink rivaling 1984's Party loyalists. The Soviets were crumbling, but their legacy lived on in this rabid capitalist.
And so months passed...
📰 Breaking News [Declaration No. 142-N on the Creation of the Commonwealth of Independent States. In connection with the creation of the Commonwealth of Independent States, by the will of the highest state bodies of the Republic of Azerbaijan, the Republic of Armenia, the Republic of Belarus, the Republic of Kazakhstan, the Kyrgyz Republic, the Republic of Moldova, the Russian Federation, the Republic of Tajikistan, Turkmenistan, the Republic of Uzbekistan, Ukraine... The Supreme Soviet of the Republics of the USSR confirms that with the creation of the Commonwealth of Independent States, the USSR ceases to exist as a state and as a subject of international law.] The Soviet Union was gone.
Leeson's foresight—sharper than any regressor's—had nailed it again.
Now, $50 million was 'trivial.'