» The Youngest Son of Sunyang
Reborn Rich - Chapter 263
[263] Secret Gallery 1
New York Miracle was operating with ordinary returns, showing no major changes. This was partly due to the management philosophy of Rachel Arieff, who aimed for zero losses rather than high-risk, high-return strategies.
"James, Howard. We try to avoid dabbling in derivatives as much as possible."
"What's the reason? Isn't there really anywhere else to invest on Wall Street right now besides derivatives?"
I asked with a smile, but her stern expression didn't soften.
"Do you know how many hedge funds are out there, operating with high-net-worth investors' money? Ten years ago, there were about 500; now there are over ten thousand. All these guys are messing with derivatives."
She began to get increasingly agitated.
"Private equity funds are, if anything, more respectable. They assess company value, buy undervalued companies, and then resell them. At least there's a tangible business entity involved."
"Even so, derivatives offer high returns. You can't just ignore them completely because of risk aversion, can you?"
Oh Sehyun spoke with a hint of frustration, but Rachel stubbornly shook her head.
"If you twist derivatives just a couple of times, the only person who can truly grasp their underlying nature is the one who created them. Everyone else is just a moth drawn to the flame, chasing a single dividend."
"Then, why don't you try creating a derivative product yourself, Rachel? One whose true nature you understand perfectly."
She seemed a little flustered by the unexpected suggestion, but then she shook her head.
"Miracle can't do that. To create a derivative product directly, we'd need approval from the ISDA (International Swaps and Derivatives Association)."
For a company the size of Miracle, approval wouldn't be particularly difficult. But judging by her rejection, using that as an excuse, it seemed she had no intention of doing it at all.
"Our priority is to protect our clients' money by investing in solid companies, blue-chip stocks, and secure bonds."
As Oh Sehyun was about to open his mouth to say something, I took his hand.
I believed she was making the right judgment. There was no need to shoulder all sorts of risks anyway. Because another powerful blow was coming.
"Rachel. If you trust my judgment, then how about this?"
"Tell me, Howard. I always trust your judgment."
Her eyes sparkled.
"Let's avoid currency, interest rate, and equity derivatives, and instead focus solely on acquiring credit derivatives, especially Collateralized Debt Obligations (CDOs)."
Rachel's sparkling eyes instantly turned ash-grey.
It was understandable, as I had just proposed the riskiest product to someone who prioritized safety above all else.
"Products based on mortgage bonds are hot right now, it's true. But you also know that products whose underlying asset is a bond are the most dangerous, right?"
"Of course. In my judgment, we'll be perfectly fine for the next two years. I'm not confident beyond that, so let's just run it for exactly two years."
She couldn't retract her statement about trusting my judgment, so she readily accepted.
"How much of a percentage?"
"My estimate is about 38% profit over two years. Please make your decision considering Miracle's overall rate of return."
Though reluctant, Rachel's expression brightened considerably once I provided a concrete profit margin and entrusted the investment amount to her.
"Okay. I'll trust the Miracle Boy's judgment one more time. But I don't think you came all this way just to go over something so minor, did you? You check the investment details by email every single day, after all."
"Our Miracle Boy wants to get involved in art this time, so Rachel, you'll need to help him out. Haha."
"What? Art?"
Rachel's expression showed a hundred times more surprise than when I suggested investing in derivatives.
* * *
"Seriously, why complicate things so much? Just buy them. Someone of your caliber, Howard, is more than qualified to be a super collector. Just buy a mansion in New York and fill it with paintings. Why bother acquiring a gallery?"
Rachel wore a bewildered expression after hearing the process for acquiring the paintings.
"The places that hold the paintings I want will never sell them directly to me. So I need to use an agent... Could you find a suitable place? You know a lot of wealthy people, don't you, Rachel? Those wealthy people naturally collect art. It shouldn't be hard to get an introduction to a decent gallery through your network, should it?"
"Well, that's true, but..."
She still didn't drop her suspicious gaze.
"Come on, come on, don't be so curious, just put in some effort. Who knows? What if the paintings Howard buys skyrocket in value? Howard's ability is to turn everything he touches into gold, isn't it? Haha."
Oh Sehyun stopped her from asking any more questions.
"Since we haven't met in a long time, we should have a wild night tonight. Let's drink our fill."
Led by Oh Sehyun, we stepped out into the dazzling night streets of New York.
Enjoying the dinner feast, Oh Sehyun, who had been continuously guzzling expensive Clos de Griffier Cognac like soju, began to nod off at the bar we moved to for the second round.
"Alright, since the retired middle-aged man is asleep, how about we, the active ones, have a proper talk?"
"The gallery?"
"No. That looks like your personal business no matter how I look at it, so there's nothing more to discuss. I'll find you the optimal gallery. What I *really* want to talk about is..."
"CDO (Collateralized Debt Obligation)?"
"Yes. Wall Street is going crazy right now. Everyone is indiscriminately issuing CDOs and credit default swap products based on subprime mortgage loans. You said it would be fine for two years, but, well...?"
"Why do you think it's so dangerous?"
"It's subprime. That means they're clearly bad loans. They bundle them together, create a product, and then rate it AAA. This is fraud."
"Successful fraud isn't fraud. It's only exposed as fraud when it fails."
"So, your guess is it won't be exposed for another two years?"
"Yes. A balloon won't easily burst unless you prick it with a needle. To inflate it to the point of bursting, America would have to keep blowing for two straight years."
"The problem is, if that balloon bursts, the U.S. economy will be a mess."
I looked directly at her, speaking with concern, and said,
"So what?"
"What?"
"Rachel. You are an American citizen, but you are also the head of our company. Shouldn't you be more concerned about the company's profitability than the U.S. economy? Leave the U.S. economy to the Treasury Department."
"They're all in on it too!"
"If you're so worried about America, then step down from your CEO position at Miracle right now and jump into politics. I'll back your campaign finances with unlimited funds. If you have no intention of doing that, then focus solely on the company's profitability."
Perhaps because of my chillingly cold voice, she looked flustered.
"I-I'm sorry. I wasn't professional. You're right. I'm a New York citizen, not a Washington one."
"If you can't stop the tide, then ride it. Money and justice are parallel lines that never meet."
"Alright. So how are you so sure about these two years?"
It was actually three years, but I said two years just in case. Since I couldn't tell the truth anyway, it was easiest to leave the question as a homework assignment.
"Calculate it yourself. It'll come out to two or three years."
"Calculations, huh..."
"Or did you think I consulted a crystal ball?"
I raised my whiskey glass, where the ice had melted.
Would I look like some mysterious East Asian?
* * *
"I'm Elizabeth Porter. My friends call me Bette. It's a pleasure to meet you, Mr. Jin."
"Please, just call me Howard."
"Shall I?"
With her dark skin and extremely curly hair, she was a tall beauty who seemed to have a bit of Black ancestry.
"Howard. Bette is a brilliant talent who majored in History at Yale and Art History at NYU. She's currently the director of the Wentworth Art Gallery."
Rachel subtly praised her.
"I'm a director, but I'm not doing my job well enough; we're on the verge of closing."
I looked at her bitter smile and spoke.
"How much debt do you have?"
"...?"
"I mean, how much do you need to keep from closing?"
"Ah, about 1.2 million dollars would give us some breathing room."
"And your annual budget?"
"It's 2.5 million dollars. But the income from exhibition programs also..."
I raised a hand to stop her from speaking.
"I'll support you with 3 million dollars annually, so transform into a great gallery. Agreed?"
"...!"
Bette Porter stood with her mouth agape, only blinking her eyes.
"What did I tell you? I said today was jackpot day, didn't I? Hoho."
Rachel let out a hearty laugh and lightly nudged the dazed Bette Porter.
"W-wait a minute. What is all this...?"
Snapping out of her stupor, she frantically rummaged through her bag and pulled out a stack of files.
"These are the current conditions of our gallery. I think the proper procedure would be to review them first?"
I took the files she offered and tossed them onto the seat beside me.
"Do I really need to look at them?"
"Do you perhaps know much about our gallery or me...?"
"No, not at all. In fact, I'm practically an outsider when it comes to art."
"Then, am I strange for not finding it odd that you're offering 3 million dollars in annual support without even reviewing the gallery?"
"Does that mean you refuse favors without strings attached?"
"Because there's no such thing as a free lunch."
She wasn't some unrealistic woman completely lost in art. She understood the fundamentals of business.
For a gallery run by such a woman to be struggling with deficits was clearly a matter of scale. Then again, where was the art that wasn't plagued by red ink?
"Who said anything about free? My promise is only valid if you bring me what I want."
I held out a piece of paper covered with a long list of artworks.
"Take a look first."
Bette Porter snatched the list and hastily read through it.
Her face grew redder and redder, until finally, an exclamation burst from her.
"Holy Shit! WOW!"
"Is it really that amazing?"
"No, you don't know about this? Mark Rothko, Paul Cézanne, Jan van Eyck, Titian... And even Damien Hirst. These are all human heritage!"
"Do you know what these artworks have in common?"
"I just told you. They're all immense masterpieces."
She couldn't calm her excitement. So much so that she didn't even notice the name "Sunyang Gallery" clearly printed beneath the list.
"Acquire all of them. Of course, they won't sell everything, but try to buy as many as possible. That's my condition."
It seemed to be an enormous shock to her. Indeed, buying all those artworks would easily cost 300 to 400 billion won.
"Oh, and I'll cover the full cost of acquiring those artworks, so you don't have to worry about money."
"B-but more than that, who owns these works...?"
She looked at the paper again, her eyes sparkling.
"Sunyang Gallery! So all these artworks are at Sunyang Gallery!"
"Yes."
Disappointment filled Bette Porter's face after confirming the name.
"Give up. Artworks that enter that gallery are famous for never seeing the light of day again. They just sleep forever in the storage vault."
Now, beyond disappointment, she even showed anger.
"It's an infamous gallery that never exhibits its masterpieces. Even if it's not a permanent exhibition, they should at least display them once a year. Hiding artworks away and merely storing them is a dereliction of a gallery's duty."
"Even if they don't exhibit them, they will sell them. Not all of them, of course."
"What do you mean by that? Sunyang Gallery isn't a dealership."
"Trust my words and proceed. There's nothing to lose, right?"
It seemed she was still confused, as only unbelievable things had been exchanged during this short time we'd met.
But Bette Porter had seized the opportunity of a lifetime.
Like this, opportunities appear suddenly, without warning. There isn't much time to ponder whether to seize them or not.
Because opportunity is a cruel fellow that waits only for a very brief moment.