September 17, 2001. Manhattan, New York.
Standing in front of the panoramic window of the chairman's office, which overlooked the blue East River and Brooklyn beyond it, Seok-won was on the phone with Choi Ho-geun.
[The total profit earned from this put option investment comes to 585 billion won.]
Choi Ho-geun spoke with barely contained excitement at the truly staggering gains.
[Because of President George's threat to bomb Pakistan back into the Stone Age, the stock market failed to recover and collapsed even on the 13th, the expiration date, which greatly increased our profits.]
With one hand tucked into his trouser pocket, Seok-won replied calmly.
"Good work."
The suit, tailored perfectly to his build, gave off an unmistakable sheen of luxury at a glance. The clean lines flowing along his shoulders and down his back wrapped smoothly around firm muscles.
[We merely carried out your instructions, Chairman. There's no need to praise us.]
"Still, it's because you and the asset management team handled everything precisely and without mistakes that we were able to generate this kind of profit."
Plenty of bosses issued orders easily, but few truly acknowledged the hard work of their subordinates on the ground.
[Thank you for saying that.]
As Choi Ho-geun spoke with evident emotion, Seok-won smiled faintly and continued.
"I hear the market showed a late rebound in Friday's session."
[Yes. It fluctuated all day, but with opinions that the drop had been excessive and growing expectations of a U.S. rate cut, the index managed to rebound toward the end.]
"The fact that the New York stock market extended its trading halt by four days, until Friday, instead of reopening on the 13th as scheduled, must have played a big role too."
[If the New York market had crashed, the shockwaves would have circled back and hit the Asian markets. I think so as well.]
Choi Ho-geun let out a soft chuckle.
[If there had been just a few more days left until option expiration, the losses wouldn't have been this severe. At this point, I imagine foreign investors who were forced to liquidate their put options are pounding the ground in frustration.]
"That may be true. But once they see the New York market reopen today, they'll probably feel relieved that their positions were closed early."
Catching the implication immediately, Choi Ho-geun asked in surprise.
[Are you expecting the New York stock market to plunge when it reopens shortly?]
Looking at his own reflection in the glass, Seok-won answered evenly.
"That's right. Closing the market only postponed the shock of the terrorist attack. It didn't make the aftermath disappear."
[But this morning, the Federal Reserve Board held an emergency meeting and cut the benchmark interest rate by a full 0.5 percent, just as the market had hoped.]
As Choi Ho-geun said, the Federal Reserve Board announced a sudden rate cut just hours before the New York stock market was set to reopen.
With that, the U.S. benchmark interest rate dropped sharply to 3 percent, and the dollar, which had surged after the terrorist attacks, was finally showing signs of easing and pulling back.
"The fact that the New York stock market completely halted trading and remained closed for four full days is something that hasn't happened since the Great Depression of 1929. That alone shows how serious this terrorist attack was and how deep the shock ran for the American people."
[....]
"They've taken damage this severe, yet they think everything will be resolved just by cutting the benchmark interest rate by 0.5 percent. That's far too optimistic."
Choi Ho-geun fell silent for a moment, then let out a low murmur.
[Now that you put it that way, I suppose you're right.]
Seok-won continued in a subdued voice.
"Investors who rushed into bargain hunting without imagining that the real crash is only beginning are going to experience hell."
The chilling warning sent a shiver down his spine, and Choi Ho-geun swallowed hard without realizing it.
"Assume that a market collapse on the scale of the dot-com bubble bursting is coming, and until I give the order, do not make a single purchase."
[U-understood.]
Choi Ho-geun replied, muttering under his breath.
[Everyone seems relieved, thinking things have entered the recovery phase, and yet you're talking about a market collapse…. If it really unfolds the way you expect, there'll be wailing everywhere.]
"The deeper the drop, the more it becomes a once-in-a-lifetime opportunity for us, who've already cleared our positions and are sitting on piles of cash."
[Ah!]
Choi Ho-geun let out a small exclamation.
[When the crash sweeps investors away and leaves the market in ruins, we'll be able to scoop up blue-chip stocks at dirt-cheap prices.]
Even in the worst market conditions imaginable, Seok-won was calmly planning how to ride the wave at just the right moment and reap enormous profits. The thought of how big the next jackpot might be made his heart race.
"For now, keep that in mind, and contact me immediately if there are any changes."
[I will.]
After ending the call, Seok-won lowered his phone.
He gazed quietly at a ferry that had departed from the distant pier, cutting through white wake as it headed toward Brooklyn, and murmured to himself.
"If the Fed truly had the will to ease the shock from the terrorist attack, it should have rolled out a measure stronger than a big step, a giant step level move, all at once."
The Federal Reserve Board had hurriedly slashed interest rates again and again in an effort to prevent the stock market from collapsing, but it was far from enough to calm a market gripped by panic and fear.
"Maybe no matter how the Fed responds, a stock market crash is an unavoidable natural disaster, something the country has to endure in order to absorb an unprecedented terrorist attack on U.S. soil that left over a thousand casualties."
A bitter smile touched Seok-won's lips.
At that moment, Han Ji-seong knocked and stepped inside, bowing his head slightly as he spoke.
"Chairman, we have thirty minutes until the market opens."
"Oh, has the time flown by already?"
Seok-won rolled up his sleeve and checked the watch on his wrist.
"The others have already gone down to the trading floor and are waiting."
"Then let's head down as well."
Buttoning his jacket with both hands, Seok-won set off in long strides.
The Eldorado Fund trading floor, large enough to occupy nearly half an entire floor of the building, was steeped in tension ahead of the stock market reopening for the first time in four days after all trading had been halted by the terrorist attack.
When Seok-won entered with Han Ji-seong, Landon, who had arrived earlier and was speaking with two others with grave expressions, looked up.
"You're right on time."
After briefly glancing at the massive market board, frozen exactly as it had been before the 9/11 attacks, Seok-won turned to the three of them and asked,
"How's the market mood?"
Andrew, the CIO, answered immediately.
"Since the Fed announced the rate cut just moments ago, there's a broadly positive sentiment that the market has fully shaken off the shock of the attack and that there won't be a major plunge."
"On top of that, rumors are circulating that the White House will soon announce a large-scale stimulus package to prevent a recession, which is further fueling expectations."
Seok-won gave a small nod as he listened to Dan add his comments from the side.
Seeing that, Landon, who stood to the right, subtly gauged Seok-won's reaction before speaking cautiously.
"If the decline turns out to be limited, as the market expects, shouldn't we reconsider maintaining our short positions?"
Andrew agreed and added,
"If rate cuts and massive government stimulus are implemented together, a huge amount of liquidity will be injected into the market, and stock prices will rebound sharply."
"Volatility could remain high for a while, so wouldn't it be safer to reduce our positions slightly for now?"
Dan shared the same view, but Seok-won shook his head without hesitation.
"To prevent a market crash, major investment banks have voluntarily refused hedge funds' short-selling orders, and the Fed has announced it will inject 189.7 billion dollars in liquidity into the market over three days. But that alone won't be enough to completely erase investors' fear."
The three of them thought that with the White House, the Fed, and even major Wall Street investment banks all joining forces in an all-out effort to prevent a market collapse, there was no way the market would truly fall apart.
Still, Seok-won's confidence was unwavering, and more importantly, the prevailing view on Wall Street was that a drop of around 3 to 5 percent in the indices would be unavoidable. In the end, they decided to wait and see how things unfolded after the opening.
Honestly, given that the Twin Towers had collapsed and the Pentagon had been attacked in an unprecedented act of terror, a decline of only that magnitude would be considered an extraordinary show of resilience.
"It looks like they're about to start the reopening ceremony."
At Dan's words, Seok-won turned his head with the other two and fixed his gaze on the large television installed on one side of the trading floor.
On the stage at the New York Stock Exchange, where the reopening ceremony was being held, Treasury Secretary Dan Kit and the mayor of New York were in attendance alongside Amanda, a New York State senator and former First Lady, together with representatives of the fire department, police, and emergency medical services.
[The reason the stock market has been able to reopen normally today is thanks to the heroic actions of the firefighters, police officers, and volunteer workers who have been shedding blood and sweat at the site of the World Trade Center collapse. We thank them for their dedication, and before the opening, we will observe a moment of silence in remembrance of those who lost their lives in this terrorist attack.]
At the words of the exchange's CEO shown on screen, everyone bowed their heads in solemn silence.
The Eldorado Fund traders on the trading floor also rose from their seats without being prompted, lowering their heads with somber expressions.
Seok-won, along with Landon and the others, observed the moment of silence for the victims.
This terrorist attack had delivered a tremendous shock to the American people, but at the same time, it became a catalyst that brought together a society divided by the controversy surrounding the previous presidential election recount and rekindled a sense of patriotism.
As if to prove that point, a massive American flag hung inside the New York Stock Exchange, and small flags were placed on each of the Eldorado Fund traders' desks.
When the brief moment of silence ended, the traders pushed their grief to the back of their minds, sat down at their stations with tense expressions, and fixed their eyes on their monitors.
9:30 a.m.
At the same moment, representatives of the New York fire department and police rang the opening bell, stock trading, which had been halted for four days, resumed.
The instant the doors opened, a flood of sell orders poured in, and the massive market board was drenched in red, as if stained with blood.
"The Nasdaq is opening down 6 percent!"
"Tech stocks are getting crushed, even Intel and Microsoft!"
"Thirty-year Treasury bonds are down 0.5 percent as well!"
Contrary to expectations that the shock of the terrorist attack would be absorbed and the market would hold its ground, major indices such as the S&P 500 and the Nasdaq went into a vertical free fall, drawing groans from all across the trading floor.
It also meant that the Fed's rate cut announced just before the opening had failed to have any effect at all.
Faced with a situation that had completely defied expectations from the very start, the three of them could not hide their shock as they watched the index charts plunge, carving out long bearish candles.
The hope that investors, having had ample time to regain their composure, would not panic was utterly shattered. Fear spread rapidly through the market, and the wave of indiscriminate selling grew even more intense.
As things deteriorated this way, major Wall Street investment banks and hedge funds that had loudly proclaimed they would aggressively buy stocks in the name of a so-called patriotic rally hesitated in an instant.
"My God. Where on earth is all this volume coming from?"
"If we try to catch this, we'll go down with it!"
"This is impossible. It's beyond anything we can handle."
After cautiously sizing up the situation, they stepped back instead of taking the promised action.
With no buyers left to absorb the selling pressure, stock prices plunged even further, sinking deeper and deeper into the abyss.
Standing with his arms crossed, Seok-won watched the live television broadcast of the exchange descending into chaos and spoke in a low voice.
"Now, the real hell has begun."