Empire of Gold
“Using AI Gold, we’ll reassess the credit ratings of the mortgage-backed securities and minimize default rates. Once we finish sorting out the junk bonds hiding behind A-grade labels, we’ll see returns of at least fifty percent.”
The minimum was fifty percent. The baseline was one hundred. That made sense—if the mortgage-backed securities were repaid properly until maturity, the interest income would equal the principal. Borrow a million dollars, and the debtor would repay two million over twenty years. Long-term loan interest rates were that high.
—An AI? Never heard of one that could evaluate credit like that.
Of course not. Yoo Jae-won was unveiling it for the first time. Yet both theoretically and practically, it was entirely feasible. He had built a concrete credit-evaluation algorithm that compared income against spending and cross-referenced a home’s location with GPS data. It was far more intuitive and straightforward than teaching a machine to understand human language or interpret images and video. Because it required access to sensitive personal information, however, the debtor’s prior consent was mandatory.
To obtain that consent, Yoo Jae-won planned to offer an irresistible incentive: extending the principal-repayment grace period by three months at the shortest and up to a full year at the longest. During that window, borrowers would pay only interest, no principal. In the current economic climate, that would provide real relief for household finances. The consent process itself was kept simple—no visits to ID Investment offices, no stacks of paperwork. A few taps on a computer or smartphone to execute an electronic signature, and it was done. Debtors had nothing to lose.
Yoo Jae-won was certain that 99.999 percent of them would agree the moment the policy was announced.
—Still, it doesn’t change the fact that it’s a cesspool.
Frederick had been intrigued by the idea of using AI Gold to re-evaluate credit, yet his fundamental opinion remained unchanged. Understandable—he was the owner of Chevron, the company that rivaled ExxonMobil for the top spot in the global oil industry. Mortgage-backed securities held little appeal for him.
Chevron was one of the seven major oil companies, and after its connection with Yoo Jae-won, it had grown rapidly to secure a firm second place. Previously, competing with ExxonMobil, the undisputed leader, had seemed impossible. Now it was within reach. The reason was simple: Chevron had acquired oil fields boasting enormous economically recoverable reserves. It stood at the forefront of shale gas and shale oil development, and the Irkutsk field was colossal.
Even the apartments of Gangnam in Korea—the so-called “unbeatable real estate”—the ultra-luxury mansions in Manhattan overlooking Central Park, or gold mines that produced thousands of kilograms of pure gold each year paled in comparison to an oil field. Frederick, owner of Chevron, possessed the most valuable real estate on earth. To him, mortgage-backed securities with high default risk and painfully long repayment periods were worth less than scrap paper.
“I have no intention of simply sitting on the bonds like an idiot. I’m launching a new business that will provide total solutions for home management and daily living.”
—Total solutions?
Such service companies existed in the United States, offering everything from maintenance to security, but the cost was astronomical—reserved for the ultra-wealthy. People at Yoo Jae-won’s level didn’t use them; they built their own organizations.
“I haven’t finalized the name yet, but for now I’m calling it ID Total Living Solution.”
It would begin with financial services and expand into comprehensive asset management, maintenance, security, and convenience services for homes.
—Hmm. Planning to become king here as well?
“King? What are you talking about?”
Yoo Jae-won protested, but in a way Frederick wasn’t wrong. He was already acquiring mortgage-backed securities from Lehman Brothers. The debtors whose loans had transferred to him would now pay interest and principal to Yoo Jae-won—almost like taxes. Pay a little extra on top of the basic “tax,” and various convenience services would be added.
The business outlook was solid. Homeownership brought endless needs. Security services alone were a clear example. Though still on paper, the moment Yoo Jae-won decided, he could create a company covering all of North America in an instant—simply by expanding ID Group’s existing security team, already over a thousand strong. Originally formed to protect him, his family, and company executives, the team had outgrown the word “team.” Rebranded and opened to external clients, it would become an outstanding security firm. Combined with ID Group’s signature smart technology, it would possess overwhelming competitiveness no rival could match: smart CCTV capable of interpreting video footage paired with rapid-response security services.
CCTV had been one of ID Electronics’ star products. The company had refined CCD and image-processing technology since the feature-phone era, and that expertise reached its peak in the smartphone age. Demand for CCTV had begun in the public sector with police departments but had since spread widely to corporations and the middle class. First-generation systems merely displayed a fixed view or recorded to analog videotape. Modern systems offered near-lossless digital recording across multiple channels, delivered via web servers to computers or smartphones. Adding the smart capability to interpret moving video already placed competitors far behind. Simply detecting motion and alerting on-duty personnel dramatically improved security efficiency, and customer satisfaction rose accordingly.
Yet innovation never stopped. AI Gold had no fixed form, like water. Through learning, it could recognize normal patterns and flag anomalies, enabling not only intrusion detection but also safety-incident monitoring and fire prevention. When combined with rapid-response security, it created an exceptional residential security service.
“That’s not all. ID Group now supplies electricity as well. Communications, broadcasting, and internet are so established they’re hardly worth mentioning.”
Yoo Jae-won listed the services ID Group provided.
—A terrifying thought—that one can’t escape your company’s shadow even in ordinary daily life.
At this point Frederick’s tone shifted. He finally understood that the 240-billion-dollar purchase of mortgage-backed securities was not mere caprice but part of a grander design. Was the plan unrealistic? No. If realized, its destructive power would be immense. Even more astonishing was that his granddaughter’s husband possessed the ability to execute it. Everything others had deemed impossible was emerging from this young man’s hands. Smartphones that existed only in imagination in the nineties, an AI straight out of science fiction, and now even thorium reactors commercialized. Was he the typical eccentric genius lacking communication or business skills? Hardly. The thorium reactor was proof. It represented a massive innovation in nuclear power, yet it couldn’t simply overwhelm existing players. It required navigating enormous vested interests to sell. The man who commercialized it seemed unaware of this, leaving Frederick exasperated enough to drop hints. Of course, Frederick had planned to offer more substantial help if asked. But the moment the issue was identified, Yoo Jae-won corrected course and, leveraging his own presence and international dynamics, sold reactors to North Korea. Once the iron-curtain nation purchased them, sales accelerated. China ordered ten units simultaneously; Saudi Arabia bought three plus three more. The sight of nuclear power plants being sold like milk or beer under a “+1” promotion was astonishing, yet the results exceeded imagination. Even after the event ended, thorium-reactor sales continued. Global electricity demand was surging daily, and thorium reactors—free of nuclear-waste problems—were a clear alternative.
Frederick acknowledged that the subprime financial crisis was another opportunity for Yoo Jae-won.
—Hmm. Suddenly I feel my age.
“Pardon? You’re still in excellent health.”
—No. I know my own body best.
Frederick wished he could witness the ultimate outcome Yoo Jae-won would achieve. He was intensely curious what ID Group would look like in ten or twenty years. Yet he knew enduring another decade was no longer realistic.
—I know you’re capable and will handle your affairs well, but take good care of Tiffany too.
“Of course.”
The Chevron succession race was another matter Yoo Jae-won had not overlooked. The resource-exploration rights obtained from North Korea could be exercised at any time. Construction of North Korea’s thorium reactors in Nampo had long since completed its foundation work; reactor installation, large transformers, and transmission facilities were being installed simultaneously. Progress was so rapid that the reactors—named Geumgang Units 1 and 2 by North Korea—were expected to begin operation around this time next year. Resource exploration could commence once reactor construction began rather than after completion, and former T&U Research personnel were already on site conducting preliminary surveys. Full-scale exploration, however, remained on hold because the subprime crisis had forced Chevron into a more conservative management stance. Yoo Jae-won himself had been unable to focus properly due to the crisis. Moreover, he intended to employ a highly specialized method for North Korean resource exploration, requiring prior coordination.
Yet what Frederick was pointing out was something else entirely.
—Think about the second generation as well. Tiffany’s age matters too.
“Ah, yes!”
His parents had often raised the topic of grandchildren. The frequency had dipped during the subprime crisis but had risen sharply again since the beginning of the year. This was the first time Frederick himself had brought up the subject of a baby. Even Yoo Jae-won, usually slow in such matters, could sense that something had changed for Frederick.
After ending the call with Frederick, Yoo Jae-won began to deliberate with great care.
A few days later.
—ID Investment acquires 95% of Lehman Brothers’ MBS holdings!
—Face value: 300 billion dollars!
—Discount rate around 40%; some call it preferential treatment.
—AIG deal nearing final agreement.
—Citibank pushed to the back due to flawed negotiation strategy.
—Citibank board and major shareholders voice growing dissatisfaction with CEO Michael.
Yoo Jae-won’s bold declaration that the entire 240 billion dollars from the put-option proceeds would be used to acquire mortgage-backed securities had become reality—and at astonishing speed. Lehman Brothers’ creditors agreed to offload all their troublesome MBS to Yoo Jae-won in exchange for keeping only S-grade collateral and relatively liquid physical real estate. In return, Yoo Jae-won took everything from already-defaulted junk-grade bonds up to A-class securities. The face value exceeded 300 billion dollars, but Wall Street valued the actual worth at under 160 billion.
Bonds from AIG were acquired at a similar discount to those from Lehman Brothers. Their face value was just under 60 billion dollars, yet they were confirmed to hold 40.6 billion in real value. Only Citibank, having fallen out of favor with Vincent Greenhill, remained sidelined—though negotiations had not completely collapsed. CEO Michael had been tempted to openly sabotage the deal out of spite, but he could not. Even if he wanted to blow up the table, the federal government had already stipulated that public funds would be disbursed only after transparency was secured. In the pre-regression era, Wall Street’s fear tactics would have forced unconditional execution. Now, however, ID Investment served as a living counterexample, and media outlets aligned with the federal government’s stance rendered Wall Street’s brinkmanship ineffective.
—Chairman Yoo Jae-won announces new ID Group subsidiary: ID Total Living Solution!
—A company dedicated to managing mortgage-backed securities while providing diverse solutions for comfortable residential environments!
Amid the frenzy, ID Total Living Solution—previously known only to Frederick and close associates—was officially launched. With capital of 240 billion dollars, it was a massive mortgage company, yet its vision extended far beyond finance. It would deliver every solution needed for a dignified life—security, energy, communications, broadcasting, and more—positioning itself as a true life-care enterprise. Though the vision was grand, its initial operations were predominantly financial, so most personnel were transferred from ID Investment. Consequently, ID Total Living Solution’s headquarters was established inside the ID Investment Building. Until the organization was fully staffed, Vincent Greenhill would serve as president. A recruitment notice was also posted, and in the freezing climate of Wall Street, talented candidates flocked to the openings, creating a minor commotion.
As owner of ID Total Living Solution, Yoo Jae-won was engaged in work only he could perform: using AI Gold to evaluate the credit ratings of the mortgage-backed securities.
> MBS credit rating evaluation commencing.
Along with Gold’s message, the monitoring program on Yoo Jae-won’s screen changed. First, power consumption at the cloud center surged. The MW figures on the monitor climbed at a terrifying rate before instantly switching to GW units. Overall computational power followed, rocketing skyward.