"Did you just say you're going to short Russian government bonds?"
Unlike Landon, who couldn't hide his shock, Seok-won answered calmly.
"Yes."
"It's true that Russia's situation hasn't been great recently, but considering that, bond prices have already fallen significantly. Even if we entered now, it doesn't seem like there's much to gain…"
Landon continued cautiously, gauging Seok-won's reaction.
"Moreover, Russia's fiscal deficit in Q1 improved to 4.6% of GDP, a 3.5% improvement from the same period last year."
"It has improved, yes, but that doesn't mean the deficit has disappeared."
"..."
Seok-won moved from the floor-to-ceiling windows and crossed one leg as he sat on the living room sofa.
"Since the collapse of the Soviet Union, Russia hasn't been in capitalism for very long, so companies don't have much short-term foreign debt. But the Achilles' heel of the Russian economy lies in its severe fiscal deficit."
"The fiscal deficit is indeed a major problem."
"They cover the annual deficit through issuing government bonds, and by last year, the total exceeded $140 billion."
"That's certainly a large amount, but considering the size of the Russian state, it's not unmanageable, right?"
Seok-won's voice grew slightly firmer as he responded to the continued optimism.
"That's probably how everyone else sees it. But my view is different."
"?"
"Most of these bonds aren't stable long-term ones—they're short-term bonds maturing in one to three years. And over a third of the issued bonds are sold overseas."
"That's because Russia's credit rating is low, so there's little demand for long-term bonds."
"Exactly. As a result, they have no choice but to issue short-term bonds at high interest rates, and when the bonds mature, they issue even more to pay off the debt."
"...!"
"In short, the Russian government is just rolling over its debt. Yet a third of its budget goes straight to paying principal and interest on bonds."
Leaning back against the sofa, Seok-won spoke with a cold, cynical tone.
"In effect, they're relying on Western buyers for their government bonds. What do you think would happen if foreign investors suddenly stopped buying?"
"Are you saying that hedge funds would attack Russia like they did in Asia last time?"
Seok-won, still holding the phone to his ear, answered calmly:
"No, I'm talking about foreign investors, feeling uneasy, fleeing en masse."
"Such an extreme scenario… I'm not sure I follow…"
Seok-won's voice deepened as he continued:
"For example, what if a moratorium were declared?"
Over the phone, Landon could be heard swallowing hard.
"Wouldn't all foreign investors, one after another, start dumping Russian government bonds?"
"A m-moratorium?"
"Exactly. I believe Russia will soon face a moratorium situation."
Landon hastily objected:
"Russia isn't just any country—it has vast territory, enormous natural resources, and even nuclear weapons. Are you seriously saying it would declare a moratorium?"
The disbelief in his voice was clear.
"Even the United Kingdom, another nuclear power, faced severe economic hardship and had to receive IMF bailout funds."
"That's true, but…"
"Exactly. If the UK could face that situation, why would Russia be any different? In fact, compared to the UK, which understands capital markets well, the Russian government—still not fully detached from its communist economic methods—is in an even more dangerous position."
A moment of silence passed, and then Landon spoke in a serious tone.
"So you really believe Russia will declare a moratorium?"
"If I didn't, I wouldn't be betting on it."
As always, Seok-won answered with absolute confidence.
"Russia defaulting on its sovereign debt… wow. If this really happens as you say, the global economy will be hit hard."
"It won't just affect the bond market; stock markets around the world will also see huge turbulence."
Landon, quick to catch on, immediately understood the implication.
"I'll place short positions on major country indices along with the Russian bonds."
"Do that."
"Andrew would be absolutely shocked if he heard this."
"If Russia declares a moratorium, financial stocks that bought government bonds will crash the hardest. It's wise to structure positions with that in mind."
"The financial stocks have surged the most from these consecutive massive mergers… and soon they'll fall into hell. Just thinking about it is terrifying."
Seok-won gave a faint smile and said:
"The bigger they've jumped, the bigger the drop will be. If you short them now, you could make a huge profit, don't you think?"
For a moment, Landon was speechless, then he burst out laughing.
"Hahaha! Once this is over, I wouldn't be surprised if your nickname on Wall Street changes—not the Midas Touch, but the Worst Villain."
"I don't care what they call me, anyway."
Seok-won shrugged casually, replying coolly.
***
APAC Group Headquarters, Seosomun-dong, Jung-gu, Seoul
The air in the room hung heavy as Sang Dae-seop Song sat on the wide sofa in the chairman's office, flanked by Executive Director Baek Jae-woong and APAC Construction President Hong Seung-han.
With a restless expression, Song chain-smoked while frequently checking his wristwatch.
"It's already time for a call… why hasn't anyone contacted us yet?"
"Let's wait a little longer."
"Tsk!"
Song clicked his tongue irritably and puffed at another cigarette. The crystal ashtray on the table was already overflowing with butts.
After some time passed and the cigarette butts had formed a small mound in the ashtray, the silence was suddenly broken by the ringing of the phone.
Hurriedly reaching out while still holding a cigarette, Song picked up the receiver.
"This is Woo Chun-il."
The heavy voice of the Chief Secretary of the Blue House made Song quickly stub out his unlit cigarette and respond with a deferential tone.
"I was just waiting for your call. What's the conclusion?"
Woo Chun-il replied in a dry, businesslike tone:
"As you know, the new government's basic stance is that no particular company should receive special favors. However, considering the difficult situation of APAC Group, we discussed making an exception with the President present."
Sang Dae-seop, listening tensely and swallowing hard, stiffened at the next words.
"There were various opinions, but the consensus was that since the Gimpo landfill was originally developed as farmland, changing its use could potentially trigger unnecessary accusations of special treatment."
"...!"
"Therefore, regretfully, the change of use for the Gimpo landfill is not possible. We hope this issue will not cause further trouble."
Facing a massive debt of 4 trillion won and on the brink of bankruptcy, APAC Group had pinned its last hope on changing the land use of the Gimpo landfill. They planned to attract $4 billion in foreign investment to develop the site.
The Gimpo landfill, spanning 3.7 million pyeong, had been reclaimed with government permission to utilize surplus manpower and equipment after the Middle East construction boom, and APAC Group owned it.
With their survival at stake, pushing for a land-use change was a matter of life and death—but hearing that it was impossible, Song felt darkness closing in.
Unable to back down, he clutched the receiver and pleaded desperately.
"Could you reconsider once more? No, I will go to the Blue House myself and speak directly with the President."
But instead of softening, Woo Chun-il, the Chief Secretary, snapped with irritation in his voice.
"Do you not realize that changing the use of the Gimpo landfill, designated as farmland, directly contradicts the rice self-sufficiency policy and also severely undermines the plan to alleviate concentration in the Seoul metropolitan area?"
"Of course, I understand that, but…"
"During the Agriculture Ministry briefing early in the administration, the President explicitly instructed to strictly limit the conversion of prime farmland and uphold rice self-sufficiency. Yet you ignored that, going straight to the media to announce plans for a foreign investment free zone without any prior consultation. Do you think the Blue House and government are a joke?"
Song Dae-seop's expression grew troubled at the sharp rebuke.
"It's not like that. We were simply trying to resolve the group's difficult situation, and in our haste, mistakes were made."
Even that feeble defense was useless.
"Be aware that the President is extremely displeased with APAC Group's attempts to manipulate the media to sway the Blue House and government."
With that warning, Woo Chun-il hung up without waiting for a response.
Realizing that the last straw—the land-use change for the Gimpo landfill—was completely lost, Song squeezed his eyes shut. He then dropped the receiver weakly.
Hong Seung-han, sensing the gravity of the situation, cautiously asked:
"Did things go wrong?"
Executive Director Baek Jae-woong also looked on with a questioning gaze.
"Damn it!"
Song crumpled his face in frustration and swore aloud.
"This is land where we could build an entire satellite city! And now they want us to plant rice? What kind of nonsense is that!"
As he vented his anger, both men's expressions darkened—they could sense that the outcome was far from what they had hoped for.
"If the Gimpo landfill land-use change fails, it's a huge problem," Baek Jae-woong said, followed by Hong Seung-han with a grim expression:
"The bills due next month alone amount to nearly 100 billion won. If we can't settle them on time, it will immediately mean bankruptcy."
"Ugh…"
Feeling his blood pressure rise, Song Dae-seop pressed one hand firmly against his temple, letting out a low, strained sigh.
"If the land-use change isn't possible, what about selling the Gimpo landfill instead?"
"Selling it now would mean giving it away at a pittance as farmland. That's out of the question!"
Song Dae-seop immediately dismissed Executive Director Baek Jae-woong's suggestion.
Then, as if venting his frustration, he scowled and commanded sharply:
"In any case, we can't just sit here and do nothing. Go to the banks holding our bonds and find a way to secure cooperative financing! If we go bankrupt, the lending banks will suffer losses too."
Although the state bankruptcy crisis had been narrowly avoided, liquidity in the market was still extremely tight, making it far from easy to secure additional loans.
But as Song Dae-seop had said, there was no other choice, and the two men reluctantly nodded.
"Yes."
"We'll do our best."
Hearing their weakened responses, Song Dae-seop's face hardened, and he bit his lower lip tightly.
The creeping sense of being pushed further and further toward the edge made him even more anxious.