The Bomb Necklace (1)
Conrad Salcher studied the young grand duke seated across from him. A man who differed from him in nearly every way. Conrad himself was as short as any dwarf, yet his frame lacked their characteristic sturdiness. Slender and sleek, he gave off a distinctly agile impression. Add in the hooked nose, the piercing golden eyes that seemed to gleam even in shadow, and ears that were broad and large rather than long and pointed like an elf’s, and anyone could tell at a glance he was of goblin blood.
Born into a fallen goblin noble house of the long-ago “Alliance”—brought low by shifting herring habitats and other misfortunes—he had taken the meager assets left by his parents, bought a decrepit ship, and built a fortune hunting whales and sea monsters. Using that as seed money, he purchased information, invested in bonds and securities, founded a bank, and ultimately accumulated staggering wealth. He was a self-made legend. To speak of the Empire’s foremost investor was now to speak of Conrad Salcher.
And that same Conrad Salcher was currently sitting across from two people: Laura Valeriano and Grand Duke Mikhail. Frankly, he hated every second of it.
Even though the invitation had come under the polite guise of “tea time,” the young imperial’s truly leisurely demeanor grated on him like nothing else. Watching him delicately transfer madeleines to his plate with silver tongs, then sip black tea while savoring its aroma—Conrad clicked his tongue inwardly.
“Any good at card games?” Mikhail asked in a languid drawl. “The pathetic ones only look at their own hand before charging in and getting wrecked. It’s hilarious how stupid they look.”
The remark carried hidden meaning, but to Conrad it sounded like nothing more than childish bluster.
“I play for enjoyment, nothing more,” he replied politely, his voice carrying not a trace of emotion.
“How do you find the Tourism Special Zone? The facilities are excellent, the drinks aren’t bad either. Come to think of it, I hear the wines from your Chateau are quite decent… Though I’ll admit, once they reach a certain level I can’t really tell the difference. Honestly, it all feels like name value to me.”
The questions were blatant probes. Conrad hid his boredom and gave the expected safe answers.
“The facilities are superb. As for the reputation of fine wine, I believe it reflects both the effort invested in maintaining quality and the value of its scarcity.”
His gaze slid past Mikhail to land on Laura Valeriano. In truth, he would have preferred speaking with her alone. The Seventh Prince Mikhail was surely nothing more than a rubber stamp in this enormous venture, a puppet meant to lend imperial prestige. The young man didn’t even bother hiding the curiosity and boredom written across his face. It was immaturity unfit for the negotiating table.
Laura, by contrast, was different. She wore a soft smile calculated to win favor while revealing nothing of her true thoughts. As expected of a daughter from one of the “Union’s” distinguished families, fallen though it was. Indeed, only someone with that level of skill and courage could have sold her youth and beauty to the notorious debauched, mad drunkard Mikhail and secured the position of his “mistress.” She had probably brought the prince along merely to borrow the authority of his status.
Conrad perfectly concealed his inner contempt. For a merchant, hiding one’s cards was as natural as breathing. A family maxim flashed through his mind: Time is gold.
He could no longer afford to waste time on this meaningless reconnaissance.
“Shall we get to the main topic?” Conrad said quietly. He kept his eyes fixed on Laura, a courtesy to both of them. It was his way of saying he understood their intentions and would handle the tedious practical discussion himself.
“Lady Laura Valeriano, chairwoman of the coalition. I must say I was astonished. That Collateralized Debt Obligation of yours.” His golden eyes sharpened. “You take high-quality bonds, junk bonds, and ordinary bonds, mix them together, then divide the package into three tranches—senior, mezzanine, and equity—separating risk and return before selling them as securities…”
He was genuinely impressed. “Truly an ingenious idea! At first glance it resembles a mortgage brokerage, but… they say the devil is in the details. You went a step further and sliced it into even finer securities?”
Yet this, too, was a calculated move. If the Empire’s top investor praised it this highly, some reaction was bound to slip out.
“Bonds have always been large in denomination, limiting buyers to the wealthy or high nobility. But with this structure, you can sell them to any citizen of the Empire. Remarkable. Truly remarkable!” His voice grew more animated. “And to turn ‘risk’ itself into a tradable commodity! I never would have imagined it! As expected of House Valeriano! A distinguished family of the ‘Union’ that once rivaled our ‘Alliance’!”
He deliberately lavished praise on Laura. “Is it because you’re young? I never even considered such a concept!”
Laura offered an elegant smile in response to his compliments.
Until now Mikhail had simply been drinking tea without joining the conversation. Suddenly he cut in.
“What do you mean, I?” He set his teacup down and continued in the same lazy tone. “Though now that I think about it, I guess I really am pretty damn impressive.”
Mikhail nodded with an expression of extreme satisfaction.
Conrad’s face stiffened for the briefest instant. What was this young imperial even saying? The entire conversation had been directed at Laura Valeriano, praising her business acumen and family legacy. Yet this debauched prince was acting as if he were the one who had come up with the idea. Was he trying to steal credit from his subordinate? Like any other noble? So shamelessly?
“You pass,” Mikhail said, looking straight at Conrad. His tone was arrogant, like a master evaluating a pupil. “Though I’d give it about… sixty points? Still, you seem to have grasped the basics, so I’ll explain it to you myself.”
Conrad’s eyebrow twitched. Bewilderment overrode any sense of insult.
“Your Highness… will explain personally?” The question spilled from his lips, thick with confusion.
“As you said, it is indeed a product that sells risk, but it has several other advantages as well.” Mikhail used the delicate silver tongs to transfer another madeleine to his plate as he continued. “It also allows short-term bonds to function as long-term ones.”
Conrad snorted inwardly. Of course that was true. By bundling multiple short-term debts and repackaging them into securities with varying maturities, the junior tranches would effectively take on the character of long-term bonds. But compared to the revolutionary concept of turning “risk” itself into a tradable product, it was a trivial technical detail. That was why he hadn’t mentioned it. It wasn’t the core of the discussion.
…He must have been tipped off in advance.
Conrad thought the young grand duke was now showing off his intellectual superiority. Pointing out the minor detail Conrad had missed was a childish ploy to remind everyone who held the initiative in this conversation. Yet not a flicker of his true thoughts showed on his face. Instead, he decided to play along. After all, the real master of this venture was Laura Valeriano. If she had gone this far to bolster her lord’s dignity, it was only proper to indulge her.
“Indeed, I hadn’t considered that far. How insightful,” Conrad said, nodding as if truly impressed.
“But, you know…” Mikhail took a bite of the madeleine and asked as though it were the most obvious thing in the world. “Who exactly decides and measures this so-called ‘risk’?”
For a moment, Conrad’s mind went completely blank. It felt like being struck in the back of the head with a giant hammer. His hand, reaching for the teacup, froze in midair.
He looked at Mikhail. There was still no pretense there. Just a pleasant smile—perhaps mockery at Conrad’s inability to hide his shock. Whatever it was, one thing was clear: the prince had not been secretly coached by Laura Valeriano and was not simply parroting knowledge he didn’t understand.
He was right. Risk. Who exactly was supposed to measure it? And how could it be proven? Who?
Until now, Conrad had been captivated solely by the brilliant notion of commodifying risk itself. Drunk on that innovative concept, he had overlooked the most fundamental and fatal flaw.
Of course, information about which companies were sound and which were failing still circulated privately. Magazines that gathered and analyzed such data were published and distributed. But those relied on personal judgment and implicit reputation; they were ultimately subjective.
This new security was different. To sell it to an unspecified general public, the “risk” contained within had to be presented through objective, credible indicators. Without that, the entire structure lost all meaning.
Conrad felt a cold sweat trickle down his spine. This was the moment his reputation as the Empire’s greatest investor became meaningless. He had been dazzled by the product’s glamorous exterior and failed to see its structural defect. Trapped by his own preconceptions, he had dismissed Mikhail as nothing more than a debauched figurehead.
It was a blunder.
“Your Highness…” Conrad’s voice came out hoarse without his permission. He swallowed dryly and spoke again. “What is it you want from me?”
The situation had completely reversed.
“If you require financial support, I will mobilize everything I possess to secure as much as possible.” It was the best offer he could make. Money. The only weapon he had spent his entire life forging.
But Mikhail simply chuckled.
“I already have plenty of money. You know that, right?”
It was true. The Mikhail brand of liquor, this enormous Tourism Special Zone, the slot machines and pachinko machines now spreading across the Empire, plus the massive pension he received as a member of the imperial family. He didn’t even indulge much in banquets or hunting despite being a noble. He had more than enough money.
Mikhail set down his teacup and leaned deeply into the sofa.
“There’s not much I need you to do… Just lend me your name and your credibility.”
His voice remained low, but its implications were enough to freeze Conrad’s heart.
“Laura and the Valeriano Merchant Coalition will handle issuance of the securities. I’ll provide the guarantee. But the measurement of the risk contained within them—in other words, the credit evaluation—will be done under your name.”
Mikhail’s gaze pierced straight through Conrad’s golden eyes.
“Conrad Salcher, the Empire’s greatest investor. You will, to put it simply, operate a ‘credit rating agency.’”
Credit rating agency. He had never heard the term before, yet its meaning lodged itself in his mind instantly. A company that literally evaluated credit—risk.
Conrad swallowed involuntarily. If he were to launch such an agency, countless competitors would surely rush into this new industry. But if he could succeed and reach its peak—or even secure a place among its top three—then the reward would not be mere money.
The reward would be eternity and immortality. As long as “economy” existed in this Empire, in this world, the institution known as a credit rating agency would endure forever. It could build a history far longer than that of the “Alliance,” which had vanished into the annals of history centuries ago.
Conrad’s hand began to tremble faintly. He lifted the teacup with that shaking hand. The sound of it rattling against the saucer rang unusually loud. He barely managed to bring it to his lips and drained the black tea in one gulp. Yet the thirst remained.
“So, any questions?” Mikhail asked.
Conrad could not form a single question. His thoughts refused to coalesce into language; they shattered into fragments with every heartbeat and scattered into the void.