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# Chapter 4. I Can Hear the Sound of Money Being Duplicated
The official work order that had come down from the Vice President’s office was delivered to each team leader.
It was like a bomb had exploded in the once-quiet office.
The first to blow up was Park Yong-jin, the head of the Stock Investment Team.
“Have they lost their minds? An order has come down telling us to buy put options on New Country Financial according to that rookie analyst’s plan!”
A sharp voice erupted from the section where employees from the Ministry of Finance and Economy were gathered.
“A sovereign wealth fund is betting on the bankruptcy of America’s largest lending company? And they’re putting ten billion won on it?”
“This is insane. According to the Korea Investment Corporation Act, any change to medium- and long-term investment policies is a major matter that requires approval from the Steering Committee and the Board of Directors!”
“If the National Assembly finds out, we’ll be hauled into a parliamentary hearing!”
However, the younger employees who had come from securities firms in Yeouido saw things differently.
“Ten billion won is only 0.05% of our total assets under management. It’s within the Vice President’s discretionary authority, isn’t it?”
“That’s true. But that rookie predicted the company would go bankrupt on April 2, right? Even convening the Steering Committee would take several weeks.”
“By then, everything might already be over.”
Amid the chaos, Team Leader Cha Min-jun gave me a meaningful glance.
I handed out copies of the document I had printed to each team member.
“What's this now?”
The office, which had been buzzing with voices, fell quiet except for the sound of pages turning.
One by one, the employees’ expressions stiffened as they flipped through the document.
An employee who had previously worked in the research department of a Yeouido securities firm spoke in a trembling voice.
“...This is insane. The plan is flawless. From capital allocation to broker selection and the timeline, there isn’t a single weakness.”
“Team Leader, when did you prepare all of this?”
Everyone’s eyes turned toward Team Leader Cha Min-jun.
He smirked, shrugged his shoulders, and pointed his chin at me.
“I only reviewed it. Gong Seok-jun, the analyst, put the entire thing together by himself last night.”
“...Excuse me?”
“You’re saying a rookie did this?”
Everyone stared at me in disbelief.
One of them muttered under his breath.
“...Wasn’t he a former lawyer?”
“Who knows? Maybe he’s a genius.”
“Anyone who could predict this situation certainly isn’t normal.”
Korea Investment Corporation’s Risk Management Team.
The team leader let out a deep sigh.
“The Vice President has just issued an order. Effective immediately, we’re designating one of the Investment Strategy Team’s new positions as ‘Code Red.’ It’s now our team’s highest-priority monitoring target.”
“What?”
Everyone stopped what they were doing.
Code Red was the highest risk classification in the history of the Korea Investment Corporation. It had never once been activated since the institution’s establishment.
“What on earth is it? Has there been a terrorist attack or something?”
The team leader sighed and displayed a report on the main screen.
“The project is called ‘Black Swan.’”
The report’s author was a rookie who had been with the company for only a week: Gong Seok-jun.
When Han Yu-ra saw the name, she recalled a man she had seen in the cafeteria a few days earlier.
While everyone else had been laughing and chatting over lunch, he had sat alone, gazing out the window, lost in thought.
He had seemed completely detached from all the noise around him.
An indifferent, chilling gaze.
Back then, she had simply thought, ‘We’ve got a strange new hire,’ and moved on.
‘He’s only been here a week, and he’s already submitting a strategic report out of nowhere?’
The team members began dissecting the report, horrified by the absurd situation.
“This is insane. The VaR, or Value at Risk, exceeds our limit!”
“I ran a stress test. If the US housing market rebounds by just another five percent, the value of those put options will approach zero. We’re practically burning ten billion won!”
Every piece of data pointed toward a single conclusion.
Suicide.
Han Yu-ra read the report as well.
Its insight was chillingly cold and precise.
It overlapped perfectly with the image of the rookie she had seen in the cafeteria, the one with that icy gaze.
“Team Leader.”
Han Yu-ra stood up and stopped the team leader, who was about to rush off to the Vice President.
“The Vice President has already made his decision. Our job now is to prevent the worst from happening.”
She returned to her desk and rapidly tapped away at her keyboard.
Complex simulation graphs appeared on the screen before disappearing again.
Without taking her eyes off the monitor, Han Yu-ra spoke.
“Team Leader, this is what you should propose to the Vice President.”
“...What?”
“A cumulative loss limit of minus ten percent of the total investment principal.”
Her fingertips pointed toward the graph on the monitor.
“The moment losses exceed that limit, we’ll use the authority of the Risk Management Team to forcibly liquidate all positions. That’s the best safeguard we can put in place.”
The team leader quietly studied Han Yu-ra’s face before slowly exhaling.
It was a perfectly sound argument, one that remained faithful to the Risk Management Team’s fundamental duty of controlling risk.
“...All right. I’ll report it personally.”
He grabbed his jacket and hurried out of the office.
Han Yu-ra picked up her phone as well.
“Where are you going?” a colleague beside her asked.
“To put a leash on a monster.”
Project Black Swan became a storm that swept through the Korea Investment Corporation.
As a result, the office had been noisy every single day lately.
Shouting erupted from the Stock Investment Team’s office.
A furious trader looked ready to smash his fist into the monitor as he yelled.
“Team Leader, how does this make any sense? Every time we buy put options on New Country Financial, we can practically hear Wall Street laughing at us! They’re asking which sucker from Korea came over to throw his money away!”
Team Leader Park Yong-jin answered with a stern expression.
“Just do as you’re told. It’s the Vice President’s order.”
The trader let out a bitter laugh and added,
“This is the craziest investment I’ve ever seen in my entire life.”
The atmosphere in the Bond Investment Team was even heavier.
For people who regarded stability as a matter of principle, this operation felt like a direct denial of everything they stood for.
“We’ve shorted New Country Financial’s corporate bonds. We borrowed the bonds through reverse repos. We’re attacking something that’s supposed to be one of the safest investments in the world. Does this even make sense?”
Complaints drifted through the room from all directions.
A senior employee sighed.
“If this project fails, won’t all of us get fired together?”
“Before that happens, Gong Seok-jun from the Investment Strategy Team will probably be the first one out.”
Several days passed like that.
Following Gong Seok-jun’s plan, all the positions were successfully established.
Ten billion won had been deployed into the market through Gold Moon Sachs’ New York headquarters.
Young employees from various teams gathered in the break room.
Their faces were filled with exhaustion and dissatisfaction.
“I’m dying here. Have you guys been working overtime every day lately, too?”
“Yeah. For the first time in our lives, we’ve shorted AAA-rated bonds. What about you guys?”
“We’ve thrown two billion won into put options as insurance against a stock market crash. It’s insane.”
At that moment, a derivatives specialist from the Alternative Investment Team quietly joined the conversation.
“We’ve been purchasing credit default swaps, or CDS, on that company’s CDOs.”
“What?”
Everyone turned toward him at once.
Put options and short selling were, in simple terms, bets that your own house would collapse.
A CDS, on the other hand, was a bet that your neighbor’s house would burn down.
It didn’t matter whether the Korea Investment Corporation owned even a single share of New Country’s bonds, or CDOs.
You simply went to an insurance company and said something like this:
‘That house next door, New Country, looks like it’s going to catch fire soon. Sell me a fire insurance policy that pays me ten billion won if it burns down. I’ll make sure to pay the premiums every month.’
That was a CDS.
Stocks, bonds, and derivatives.
An employee who had heard about all three areas at once turned deathly pale.
He was a talented recruit who had transferred from a Wall Street hedge fund.
“Wait a second. Fine, put options and shorting bonds are one thing, but you’re buying CDS, too? Then we’re going all in on the scenario where that company collapses.”
The employee from the Alternative Investment Team nodded and added,
“Exactly. That rookie calculated all the ripple effects that would occur if the collapse spread from one area to another. Then he built a structure that allowed us to bet on every possible scenario.”
An employee from the Stock Investment Team spoke sarcastically.
“Does Gong Seok-jun have some kind of personal grudge against New Country’s CEO? He’s determined to destroy the entire company.”
“Tell me about it. Aren’t we going to end up as innocent shrimp caught between two fighting whales?”
“Hey, but... who exactly are the whales here?”
“...What?”
“Gong Seok-jun and New Country? Then does that make the Korea Investment Corporation the shrimp? Doesn’t something seem strange about that?”
Question marks appeared in everyone’s minds.
Someone gave a bitter smile and said,
“There’s only one whale.”
He looked toward the Investment Strategy Team.
“Gong Seok-jun.”
The casual jokes being thrown around so freely froze at those words.
“And New Country Financial... isn’t a shrimp caught between fighting whales. It’s simply the prey.”
Someone else added in a trembling voice,
“Gong Seok-jun is planning to erase everything associated with that company from the map. He’s going to carpet-bomb it.”
Everything was peaceful.
The office?
No. The stock screen.
I silently watched the charts turning a deep, bruised blue in real time.
The time value of my put options was melting away by hundreds of millions of won every day.
Meanwhile, the mark-to-market losses kept snowballing, growing larger with each passing day.
Just then, the office door opened, and I heard Team Leader Park Yong-jin’s cheerful voice.
“Team Leader Cha! I heard the government has already lost nine hundred million won! Gong, you’re quite the patriot, aren’t you? A real patriot.”
Team Leader Cha Min-jun’s face was stiff.
The other team members, overwhelmed by anxiety, kept glancing at me from a distance.
Just then, the sound of high heels approached from afar.
These days, hardly anyone spoke to me, but there were still a few people who visited almost every day.
Han Yu-ra from the Risk Management Team.
“Mr. Gong Seok-jun, you’re watching the charts, aren’t you?”
She checked the losses displayed on my monitor and spoke.
“Our current cumulative loss rate is minus 9.5 percent. We have only another 0.5 percentage points left before the forced liquidation rule takes effect.”
[Current Cumulative Loss: 950 Million Won]
0.5 percent.
At this point, even a single sneeze from the market could make our ten-billion-won operation disintegrate into thin air.
Team Leader Park Yong-jin thumped his chest and shouted,
“Did you hear that, Team Leader Cha? Liquidate everything immediately! Before that insane rookie drags the entire company into the abyss!”
Team Leader Cha Min-jun bit his lip and looked at me.
His eyes seemed to ask a single question.
‘Are you really sure about this?’
There was only one week left until April 2.
Something would definitely happen before then.
It had to happen.
What if the vision I had seen was nothing but a lie?
The government’s ten billion won would vanish.
There would be a parliamentary hearing, and I would obviously have to pack my things and leave.
And Team Leader Cha and the Vice President, who had trusted me and staked everything on my prediction, would suffer the consequences as well.
But I had something to fall back on.
That smell from 1997.
It had never deceived me before.
It had started with a smell and hallucinations, but as I continued writing the report, even I had gradually grown more certain of my conclusions.
I asked Han Yu-ra a question in return.
“Do you want to see my head roll? Or would you rather retrieve the guillotine without anything happening?”
Han Yu-ra said nothing.
Instead, her gaze wavered with complicated emotions.
That was when it happened.
“Hey, breaking news!”
Someone’s shout sent a wave of commotion through the office.
“[Breaking News] New Country Financial Delays Fourth-Quarter 2006 Earnings Report. ‘Accounting Irregularities Discovered.’”
“What does this mean?”
“Why are they delaying their earnings report?”
“This is insane. Isn’t this basically an admission that they’ve been cooking the books?”
The office instantly descended into chaos, and at the same time, everyone turned to look at me.
I leaned back deeply into my chair and gave a sly grin.
Just then, someone from the Stock Investment Team shouted.
“Whoa! Look at this! All the blue has disappeared from the Black Swan account! The put options are skyrocketing!”
People crowded around the monitors.
The stock price hadn’t crashed yet.
But the breaking news about the delayed earnings report had ignited fear in the market.
The put options I had bought were like fire alarms.
When nothing happened, they seemed useless, and as time passed, their value declined.
That was the time-value loss I had been suffering from just moments ago.
But suddenly, smoke began rising from the announcement that there were problems with the company’s accounting books.
Even though no flames were visible yet, people instinctively sensed it.
‘This house is going to burn down soon.’
The market was gripped by fear, and everyone began scrambling to buy fire alarms.
Naturally, their prices started shooting up like crazy.
As a result, the loss graph that had been turning a deep, bruised blue began transforming into a sea of red.
[Projected Profit: +370 Million Won]
“Whoa! This is insane!”
“The rookie was right!”
“This is only the beginning, isn’t it?”
I loosened the tie that had been choking me.
Then, turning toward Han Yu-ra, who stood beside me staring blankly at the screen, I spoke in a quiet voice.
“I suppose I can breathe a little easier now. At least for the time being.”