Washington’s political scene is in chaos.
The White House and Congress are engaged in intense debates over Big One. There were discussions about bringing in Professor Mohan and Kang Jin-hoo for a hearing, but this idea was dismissed due to the risk of spreading further anxiety.
Academics, led by Professor Josh Brown, again forcefully countered Professor Mohan’s claims.
The possibility of Big One arriving is absolutely nonexistent, and since Mexico is also on the Ring of Fire, earthquake risks have been raised for a long time, but it is far more likely to occur in southern Mexico rather than in the central area where Mexico City is located.
Some journalists published sensational articles suggesting that OTK Company is secretly selling disaster supplies they had previously stockpiled or buying shares in related companies to make profits.
White House spokesperson Catherine Genaro held a press briefing.
“We will conduct evacuation and firefighting training in the San Francisco Bay area in consultation with the California state government.”
In response to subsequent reporters’ questions, she emphasized multiple times that the possibility of Big One is non-existent, but stated that the purpose is to calm residents’ anxieties and prepare for other disaster situations, such as fires.
The fallout reached Mexico as well.
The Mexican government, wary of public opinion, decided to conduct evacuation drills in Mexico City.
***
After the press conference, public sentiment deteriorated severely.
Previously, people worried about rotten tomatoes being thrown in the streets, but now they are concerned about getting shot.
We checked out in secret and moved to a hotel with better security and protection, guided by our bodyguards.
I spoke to Daryl.
[There’s a boycott against buying CarOS’s new cars on the internet, and people are flooding the company with protest calls. Staff morale is quite low.]
“There’s not much we can do for now.”
It’s an issue that will resolve itself over time.
He asked the question he had posed several times before.
[Is Big One really coming?]
“Are you sure? I wouldn’t have bet my entire fortune on it.”
[……I understand.]
The voice still sounded uncertain.
It wasn’t just CarOS; other subsidiaries were also in a state of emergency. At least the B2B companies were faring a bit better, but there was no avoiding immediate revenue hits for the B2C firms.
Faceit, too, saw a decline in subscribers as cancellations surged.
Given the chaos that had unfolded, it was clear I wouldn’t escape unscathed.
Having arrived at the new hotel, we unpacked our bags.
Taek-kyu turned on the TV.
Days had passed since the press conference, yet the confusion was only escalating. News channels featured various experts passionately sharing their views.
Speculation flooded the raw materials market, causing prices to skyrocket once again. Gold, a typical safe haven asset, continuously set new record highs, and oil prices surged significantly.
In the real estate market, properties were launched at prices over 20% lower than their peak. Real estate experts were claiming it was the perfect time to buy, and indeed, major investors and real estate funds began purchasing distressed properties.
While value and price may show temporary discrepancies, they ultimately return to their rightful places.
The drop in prices stemmed from concerns over Big One. Once those fears dissipated, prices would likely recover.
Of course, that holds true only if Big One doesn’t materialize.
Self-proclaimed investment experts joined the fray, criticizing OTK Company’s investment strategies during this turbulent period.
Time magazine published an article comparing me to Nicholas Leeson or John Meriwether.
Taek-kyu blinked in surprise.
“What does that mean?”
“It means something very bad.”
Nicholas Leeson was responsible for the bankruptcy of the 200-year-old British institution Barings Bank, while John Meriwether caused astronomical losses due to mismanagement at Long-Term Capital Management, prompting intervention from the Federal Reserve.
In short, both are infamous financial geniuses who have inflicted harm on the global economy.
I wonder if I should consider it an honor to be compared to these two…
In a CNN interview, Allen Everhart seemed determined to lash out.
“Kang Jin-hoo is completely insane! It’s terrifying that such a lunatic is delving into artificial intelligence and autonomous driving. If I ever run into that bastard, I’ll punch him right in the face!”
Taek-kyu, who was watching the news, asked,
“Why is that guy throwing a fit?”
“Because it’s worth throwing a fit.”
Unlike other car companies gathered in Detroit, Nikola has its headquarters in Silicon Valley and its manufacturing plant nearby. Its battery factory, however, is across the state line in Nevada. As a result, it was seen as the company that would suffer the most if the Big One hit.
Their stock price had already been falling as CarOS emerged as a competitor, and warnings about the Big One were like pouring gasoline on a fire.
Nikola’s stock plummeted repeatedly, and the yield on three-year bonds soared to 12 percent. At this rate, it was at junk bond levels.
Currently, the Model TH can’t escape production hell, and their cash reserves are running low, necessitating additional funding, making stock sales or bond issuance incredibly difficult.
Naturally, frustration was bound to spill over.
I’m just sorry for unintentionally causing harm.
However, the real place that suffered serious damage was elsewhere.
Typically, when a crisis erupts, countries see their currencies depreciate. However, the United States, as a hegemonic and reserve currency country, is an exception.
Even during the financial crisis, it was the U.S. that caused the mess, but the actual damage was borne by emerging countries.
This time it was the same. When a crisis was predicted in the U.S., the dollar strengthened while the currencies of emerging countries plummeted.
However, currencies like the yen and the pound, considered quasi-reserve currencies and safe assets, showed strength against the dollar. Compared to the weakness of emerging currencies, they were extremely strong.
Naturally, exports couldn’t fare well.
Japan and the UK, both hit by the aftermath of Brexit, were furious. Their media treated me like a complete villain.
When compared to the costs arising from the confusion, my pledged shares in OTK Company seemed laughably insignificant.
***
In contrast to Japan, which is groaning under the yen’s rise, South Korea is in turmoil due to the high exchange rate.
With an export-led economy and a high proportion of foreign capital, South Korea had long been known as a global ATM.
As the global market teetered, foreign investors began pulling their money out of the Korean market.
Stock prices fell, and the exchange rate skyrocketed.
The exchange rate, which was 1,090 won for 1 dollar, soared to 1,280 won in just a few days. Some predicted it could rise to 1,500 won, and screams of panic erupted in forex dealer rooms.
President Park Si-hyeong convened an emergency meeting. The heads of economic ministries, along with the Bank of Korea governor and the head of the foreign exchange bank, gathered at the Blue House.
OTK Company’s headquarters was overwhelmed with complaints pouring in from around the world, nearly paralyzing operations.
This was a decision made arbitrarily by the CEO, and until the press conference, no one in the company knew about it. While the CEO initiated the crisis, it was up to the employees to manage the fallout.
The head of PR, Jung Gi-hong, frantically asked as he hung up the phone.
“What’s going on? What is CEO Kang Jin-hoo thinking?”
If things go wrong, the CEO and major shareholder of OTK Company could end up as the state government of California.
Park Sang-yeop shouted in despair.
“I don’t know, damn it!”
His lifestyle of driving supercars and dating women was over. For the time being, he would have to run around to resolve the crisis.
Henry checked and implemented Kang Jin-hoo’s directives.
He received real-time updates on production from the factories in China, Vietnam, and Thailand, and monitored the departure and arrival dates of container ships.
In the midst of the chaos, a customer approached him.
***
Grand Dayton Hotel, top floor.
In a separately designated VIP room, an elderly man in a suit was sitting. He kindly spoke as he looked at Henry.
“It’s been a while, Henry.”
Henry greeted him and replied.
“What brings you here?”
“Haha, a grandfather has no special reason to visit his grandson, does he?”
The financial markets were in turmoil, and global investment banks were in a state of emergency. Yet, in such a situation, the CEO of Golden Gate secretly came to Korea.
“How is Korea? Are you managing well?”
“Yes, I’ve adapted now.”
James poured whiskey over ice and slowly got to the point.
“The financial market is in chaos due to CEO Kang Jin-hoo. Out of nowhere, a big one is coming. The market’s rapid fluctuations present both a crisis and an opportunity. We need to start moving at Golden Gate, but first, I’d like to hear your opinion. What do you think about this matter?”
Henry struggled to respond.
If it were merely a question for opinions, a phone call would suffice. There must be a reason for him to ask in person.
Henry was James’s direct grandson. However, if he knew his grandfather, he would never pass on the family legacy to someone incompetent.
The Goldman family had maintained wealth and power for hundreds of years. This was possible not because of blood but because they continued the family name.
James C. Goldman.
Originally, his name was Clark, and his father was a distant relative of the Goldman family. However, the head of the Goldman family, recognizing him, adopted him despite having three sons. The name James was given to him at that time.
In the end, James inherited the Goldman family and Golden Gate, surpassing his three biological sons.
Those who lost in the competition for succession had to leave the family with only five million dollars each.
Considering the value of money at the time, it was still a considerable amount. Of course, compared to the Goldman family’s assets, it was merely a drop in the bucket.
Two lived fairly wealthy lives, while one lost all his fortune during the dot-com bubble and ended his life. Meanwhile, James grew Golden Gate into the world’s largest IB, multiplying the family’s wealth several times.
“I…”
Henry had reviewed all related papers and academic claims after being instructed by Kang Jin-hoo. Almost everyone denied the possibility of Big One.
If one thinks logically and rationally, it’s merely a concern.
Even with supercomputers and artificial intelligence, nothing can predict tomorrow’s weather with 100% accuracy. Just as the flapping of a butterfly in Brazil can cause a tornado in Texas, everything can change with a single minor variable.
Disaster prediction is ultimately a matter of probability. Nothing can be 100%.
So what did Kang Jin-hoo believe in to gamble everything on Big One coming in September?
As Henry pondered, James muttered.
“You’re smart and rational. But the market doesn’t move solely on reason. To deal with the market, something more is required.”
While he followed his grandfather’s commands, he couldn’t easily understand when he first heard about going to OTK Company.
It was true that Kang Jin-hoo had achieved great success. However, he was just a young man in his early twenties who hadn’t even graduated from college.
What was it that he expected to learn from him?
Henry recalled the images of Kang Jin-hoo he had seen. This was not only a question of whether Big One would come but also whether Kang Jin-hoo was right or wrong.
As he contemplated, the answer became clear.
‘If that’s the case…’
Henry raised his head and said.
“Big One will come. Golden Gate must prepare.”
“Do you really think so?”
“Yes.”
A moment later, James smiled broadly.
“What you lack is the intuition that goes beyond reason and the guts to trust it. Seeing you now, I think sending you to Korea was the right choice.”
James handed a glass to his grandson.
“Of course, whether that’s right or not is a completely different question. Let’s watch and see if you’re worthy of inheriting the family legacy.”
***
Financial firms have reduced their trading in derivatives and issuing options on their own. This is a precaution against extreme situations like the 9/11 terrorist attacks or Brexit.
However, most famous investment banks such as JP Morgan, Morgan Stanley, and Merrill Lynch have bet that the “big one” will not come.
They sold off commodity futures and purchased plummeting tech stocks and real estate in the San Francisco area.
In contrast, Golden Gate moved very differently. They took short positions in the stock and bond markets while increasing their holdings in gold and cash. They sold off tech, consumer goods, and financial stocks and bought shares in construction, steel, heavy machinery, and infrastructure.
They were essentially aligning themselves with OTK Company.
Warren Buffet, arguably the biggest player in the market, remained quiet without any significant movements. He refrained from buying or selling immediately and did not respond to media interviews.
In the San Francisco Bay Area, evacuation drills and firefighting rescue training based on disaster scenarios were conducted. Sirens sounded in the city center, police controlled the traffic, and people working in high-rise buildings orderly exited to evacuation centers.
Firefighting and rescue helicopters loudly flew overhead.
Meanwhile, time continued to pass.
***
September 8, 4:50 AM.
An M8.1 earthquake struck Mexico.
However, the earthquake’s epicenter was not in central Mexico City but in the southern state of Chiapas, specifically Pijijiapan.
The ground split, and buildings collapsed. Reports indicate nearly 100 confirmed fatalities.
U.S. media immediately reported the earthquake, flooding news outlets with breaking news.
[Magnitude 8.1 earthquake strikes Pijijiapan, Mexico!]
[Professor Mohan’s prediction goes awry!]
[MIT’s Professor Josh Brown, who claimed the big one would never come, accurately predicted the southern Mexico earthquake!]
[Post-quake claims disproven…]
