Chapter 71
Chapter 71
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Translator: MadScientist
Chapter: 71
Chapter Title: The Value of 1 Pound (2)
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📰 Breaking News Sweden Raises Short-Term Interest Rate Again! A dubious, dazed voice came from beside me. Yoo Seon-jun, who had just returned home after finishing up work in Germany, rubbed his eyes while watching TV with me.
"This, this... what the hell. 500%?"
It was no wonder.
Sweden's short-term interest rate had been 75% until yesterday. That alone was already utterly insane.
75%, a whopping 75%.
Even if it was just a temporary measure meant to last only a few days, it meant paying three-quarters of the principal in annual interest.
No one had predicted that Sweden would hike rates even further to this level.
"They say, no, they're actually... doing this...?"
Yoo Seon-jun, who had been studying economics for less than five years, groaned as he encountered a case unlike anything in the books he'd read so far.
Even grizzled veterans with decades in the game must be out of their minds right now, so I couldn't blame him too much.
I calmly watched the news, having a rough idea of what the future held.
-"Short-selling is one thing, but derivatives traders are reporting millions in losses in the blink of an eye. If the Swedish central bank holds the line for just a couple more days, estimates say losses could balloon to tens of millions..."
The short-term rate wouldn't hold at 500% for long before dropping back down, but that didn't make the money the speculative forces had lost disappear.
For the record, most of that money was now mine.
I grinned cheerfully.
"See, Oppa? I told you so."
"..."
Current profits: 500 million dollars.
◇◇◇◆◇◇◇ Short-term interest rate at 500%...
No words needed. It's insane.
It's like someone freezing to death using banknotes as kindling. Cornered Sweden had turned bloodshot eyes on itself and jammed a knife to its own throat.
Even 50% would be called crazy, but 500%?
Annual interest payments five times the principal—or 15% per month. Nothing but madness comes to mind.
No matter how temporary, jacking short-term rates that high would naturally shred the stock market.
And it wouldn't stop there. Companies tied to interest rates would evaporate in an instant, margin calls would erupt everywhere. Leverage means borrowed money, so maintenance margins would drain dozens of times faster.
The Swedish central bank had resorted to the most extreme of extremes to defend the value of the krona.
But in the original history, it hadn't made much impact. What good is a '500% rate' if Sweden's league couldn't sustain it?
It wasn't a base rate hike, just a temporary pull-up via liquidity controls and soaring lending rates. If speculators smashed the krona anyway, it was meaningless.
Plus, by then, the UK had already collapsed. Sweden, clinging with 1 HP, was just a flailing mob to them—a few same-level mob funds took damage, but the big ones unscathedly devoured the krona.
But things were different now, thanks to my changes.
The UK hadn't fallen yet, and the speculators creeping in were startled by Sweden's self-immolation sideshow next door and pulled out.
And... now was the time.
The moment to strike the UK.
"Short the pound against the UK now."
It was 2 p.m. Lee Si-hyeon and Seo Joo-eun were busy directing their teams below, so the lower-ranked Choi Yeon-ha was stuck by my side, assisting.
"R-right now?"
I nodded.
"Yeah, right now."
The UK was proud. True to its days as the empire where the sun never set, it had been stubbornly resistant even to exiting the ERM.
If Sweden had collapsed too, the Bank of England would have dropped its stubbornness and swiftly exited the ERM... but right now, Sweden was carving flesh from its own body to annihilate the speculators.
'Grateful for that.'
I hadn't targeted Sweden for nothing. Among easy marks, others might just meekly exit the ERM, while heavyweights like France were too big to dent at all.
But seeing Sweden—far smaller economically—hold out to some degree would make the Bank of England think something like this now:
-Hey, maybe this is more manageable than we thought?
These guys aren't that big a deal, right? If we hike rates a bit and prepare ahead, we could make those arrogant Americans eat dirt...
Such a delusion.
Choi Yeon-ha, flustered and momentarily questioning but not suspicious enough to outright fear me, obeyed obediently. The Daeha Securities staff had been the same lately...
'Am I that scary?'
I glanced at Yoo Seon-jun beside me and added one more thing.
"And... now that Oppa Seon-jun's here, prep to topple Barings Bank too. Send a few Daeha investment bank staff to Berlin Bank to get acquisition procedures ready."
Nick Leeson's losses were now at 800 million dollars (up 100 million in days).
Time to pour oil on the fire.
◇◇◇◆◇◇◇ 📰 Breaking News Alpha Fund Declares $10 Billion Pound Short-Sell Against UK! Sweden Endures Through Painful Sacrifices... $100 Million Economic Losses Projected Bank of England: "If Sweden Can Do It, So Can We"... Hikes Rates to 15%, Vows Pound Defense UK PM John Major: "Invaders Will Pay the Price..." Ha Young-il calmly directed the fund while dumping massive shorts on the pound.
"...Will other funds join the attack? If they side with the UK, we're in deep shit."
A tall, handsome white youth—the fund's public face—asked. Ha Young-il half-agreed deep down, but the deed was done.
He recited his prepared response like a machine.
"We've got it covered. We already pulled almost everything out of Spain, right? The other funds that attacked Spain are recovering their cash too, and the latecomers will need a target."
"Sure, but... unlike us, the others need more time. We've... been prepped for ages."
This was the difference between Alpha Fund and the rest.
Having prepared long ago, they'd mostly liquidated stocks and sat on ample cash. Months earlier, Ha Young-il had slowly converted most assets to liquid cash for 100% utilization.
That's how they survived shorting 1 billion dollars on the krona despite the reverse position in Sweden.
Low leverage on the krona.
'Just when did she...?'
Ha Young-il harbored doubts. When exactly had Yoo Ha-yeon planned this?
He knew she'd traveled Europe multiple times before. He'd handled shifting massive funds to Eastern Europe and Germany, acquiring Berlin Bank back then.
She must have scoped Swedish financial policies then too... but how?
No answer forthcoming, Ha Young-il shook his head to clear it. She was the world's most inscrutable being, after all.
Better to focus on the more comprehensible reality at hand.
Ha Young-il let out a faint sigh and prepped for the afternoon meetings.
The UK government judging pound defense feasible meant the converse: other funds saw short-selling success odds as relatively low.
Unlike Spain, the cowering speculators needed reigniting.
...
"Sweden took too big a hit. UK's a no-go, right?"
"Who knows. Heard rumors they reverse-positioned in Sweden..."
"Hmm, they'll attempt the pound short, but bail if it smells off. Understand that much."
Reactions were mostly negative. It wasn't in the original plan, this impromptu meeting...
'If the plan's even a bit delayed... massive losses.'
That's why he'd gone around pitching, but it felt futile.
Feeling drained, Ha Young-il gazed at the sunset and readied to head back to the office.
"Whew, not easy. What'd George Soros say?"
Having bounced around and reunited with a friend at Alpha Fund, Ha Young-il casually probed about Quantum Fund—the next biggest player eyeing this short.
The white youth sighed.
"...Gonna watch and jump in. 'Should've hit UK first,' he gripes... Got a plan or something? Eh?"
Ha Young-il recalled the plan Yoo Ha-yeon had shared.
Bankrupt Barings Bank to scatter Bank of England funds. He didn't know exact figures, but... at least 100 million in hidden losses.
"We got... something. But how effective...?"
Tough to say.
"Whew... Let's call it here for today, reconvene tomorrow. Gotta revisit leverage banks too..."
Too much to handle. Ha Young-il slumped on the office sofa, consciousness fading instantly.
Yoo Ha-yeon said not to worry... but how could he not?
...
"—!"
"Ugh..."
His head throbbed.
'How long did I sleep?'
Morning sunlight streamed through the window.
Ha Young-il adjusted his glasses and peered at the slightly ajar door. Alpha Fund managers' ecstatic cheers had woken him.
"If it's nothing big, time for a scolding..."
Forcing fatigue aside, he tidied his disheveled hair. Sensing movement, nearby glances turned his way.
"Ah! You're up!"
-Creak.
With that sound, a few from the next office rushed in waving newspapers, faces beaming.
"S-sorry. Really, really big news..."
"Ahahaha!! Jackpot! Jackpot! Check this out, man!"
"What is it?"
No way?
-Rustle.
A crisp, freshly printed Wall Street Journal greeted him.
📰 Breaking News Major Financial Scandal! Barings Bank Singapore Office Uncovers $1 Billion Loss! Barings Bank's Nick Leeson a Fraud After All? Fall of the Award-Winning Genius Shock! 230-Year-Old Barings Bank on Brink of Bankruptcy! Bank of England Steps in with Bailout... Pound in Crisis! Bank of England's Dilemma: Barings or ERM! One night's sleep, and everything was resolved.