A few days later, Manhattan, New York.
Rodney, the CEO of K Capital, sat at his desk with a report in hand, his brows furrowed. He wore a perfectly tailored dress shirt with a silver tie pin set with a small diamond.
"Hmm."
After finishing the report, Rodney closed the final page and muttered in an uneasy voice.
"This guy has bought put options and taken short positions across the board—GE, Microsoft, ExxonMobil, not to mention Citi, Pfizer, AIG, and even HSBC… He's practically making a short bet on the entire U.S. stock market."
The report Rodney had been reading until just now contained a detailed summary of the recent movements of the Eldorado Fund, which had suddenly begun making massive short bets a few days earlier.
So far, more than thirty-five companies have been identified as targets of the Eldorado Fund's short positions. Every one of them ranked among the top in market capitalization, spanning both the New York Stock Exchange and NASDAQ.
Given that, Rodney's remark that it was essentially a short bet against the entire U.S. stock market wasn't an exaggeration.
"On top of that, companies like Microsoft, ExxonMobil, BP, and Walmart are places where the Eldorado Fund holds significant stakes as a major shareholder."
The moment Rodney realized that the Eldorado Fund—no, Seok-won—was stirring up something again, the lines etched across his forehead deepened even further.
Leaning back against the chair, Rodney tapped the desk lightly with his fingertips as he continued pondering the matter.
Just then, a knock sounded from outside. The female secretary opened the door and spoke.
"Mr. Klein has arrived."
"Send him in."
Not long after, Dale Klein, the CIO of K Capital, entered the room, his brown hair neatly combed back.
Rodney rose from his chair to greet him.
"I was just about to call for you. Good timing."
"Is this about the Eldorado Fund?"
"That's right."
As Rodney nodded, Klein spoke with a serious expression.
"I came because I also have something to report."
"Really? Let's sit down and talk first."
Frowning slightly, Rodney gestured toward the sofa by the window with his chin and took the seat of honor first.
Crossing one leg over the other, he watched as Klein sat on the sofa to his right before speaking.
"Did the Eldorado Fund pull something again in the meantime?"
Klein handed the thin file he had brought over to Rodney and began to explain.
"It's been confirmed that the Eldorado Fund is selling index futures across the board—not only the Nikkei and the Hong Kong Hang Seng Index, but also the major European indices. On top of that, they're selling large volumes of call options as well."
Rodney's face stiffened as he asked again.
"You're saying that buying put options wasn't enough—they're even selling call options now?"
"That's correct."
A call option is, simply put, the right to buy, the opposite concept of a put option.
More specifically, it refers to the right to purchase a particular asset at a predetermined price on the option's expiration date.
If the asset or stock price is higher than the strike price at expiration, the buyer exercises the right and makes a profit from the difference. If the price falls instead, the buyer simply forfeits the option, allowing the seller to pocket the premium as profit.
From the report he had read earlier to the information he had just heard, everything pointed to a single conclusion.
Letting out a low murmur, Rodney said,
"Hmm. It hasn't even been that long since Chairman Park hit the jackpot with the Enron and WorldCom fiascos, and now it looks like he's preparing to stage another big play."
Klein leaned forward in his seat and spoke in a grave voice.
"In addition, we've also detected signs that they're heavily selling the yen in the foreign exchange market."
"They're selling the yen?"
Receiving Rodney's gaze, Klein nodded and answered.
"As rumors spread that the Eldorado Fund has taken short positions, the yen—which had been relatively strong due to the weak dollar—has begun to falter."
Rodney let out a disbelieving chuckle.
"To think that merely taking a short position could shift the movement of the yen in the foreign exchange market. I knew he had influence, but Chairman Park Seok-won's reach is truly remarkable."
A mixture of admiration and bitterness crossed his face.
After all, the only person who had ever been able to create such an impact on the market with just his name was George Soros, the man known as the legend of hedge funds.
'Even that was only possible when he was at the peak of his fame after bringing the Bank of England to its knees.'
The later attacks on the Japanese yen and the Asian financial crisis had followed a different pattern. George Soros would raise the flag first, striking the target and drawing blood, and then other hedge funds and Wall Street investors would swarm in like a pack of sharks to tear it apart.
But even he had never been able to shake the entire market with a single move the way Seok-won was doing now.
At present, Rodney had already left Quantum Fund and was focused on building his own independent fund and accumulating performance.
Yet Seok-won—whom Rodney regarded as a rival—was already wielding a level of influence over Wall Street and the global markets that far surpassed even George Soros, the man Rodney had once idolized.
'For me to fall this far behind… No, it would be more accurate to say the other side has surged too far ahead.'
Rodney felt both admiration for Seok-won's abilities and a fierce sense of rivalry rising within him.
"What do you think is the reason the Eldorado Fund—no, Chairman Park—has launched such a comprehensive short offensive?"
Rodney asked with sharp eyes, not even bothering to open the file lying in front of him.
"The first possibility that comes to mind is that he's factoring in the high likelihood of the Iraq War breaking out soon."
Rodney nodded at Klein's answer.
"Iraq may have been severely battered in the Gulf War by President George Bush's father and shrunk considerably under economic sanctions, but it's still one of the top five oil-producing countries in the world. If a war breaks out there, the stock market is bound to take a significant hit."
However, Rodney's expression remained uneasy.
"But that's a risk everyone already knows about. It feels strange for Chairman Park to make such a big fuss over just the Iraq War."
Klein immediately responded, as if the question were perfectly natural.
"I think the same. So I gave it some more thought, and it seems the key lies in the fact that the Eldorado Fund is placing considerable weight on the yen and the Nikkei while making these short bets."
"Explain in detail."
Rodney showed interest and urged him to continue.
"Because of President George's 'Axis of Evil' remark, investors are focusing entirely on the possibility of a war in Iraq. But isn't there another ticking time bomb in Japan that could shake the global economy at any moment?"
At that, Rodney gave the correct answer in a low voice.
"You're talking about the massive volume of non-performing loans burdening Japanese banks."
"That's right."
Seeing Rodney immediately grasp the core of the issue, Klein leaned forward and continued speaking.
"Since the bubble burst, the Japanese government has been pouring enormous amounts of taxpayer money into trying to resolve the issue, but instead of being cleaned up, the amount of non-performing loans has actually continued to grow. I'm sure you're aware of that as well, sir."
"With the bubble collapsing, Japan's economy fell into a prolonged recession, and real estate prices have been declining endlessly. Naturally, the scale of non-performing loans could only grow larger."
"The problem is that the burden of those bad loans has now grown too large to keep sweeping under the rug."
Klein spoke almost decisively as he addressed Rodney, who was listening with his arms folded.
"If things continue like this, Japan's major banks could start collapsing one after another under the weight of their non-performing loans, potentially leading to the worst-case scenario where the entire financial sector crumbles."
"So Chairman Park is betting on a decline, expecting that the Japanese government will eventually wave the white flag and begin a full-scale cleanup of the bad loans it has been desperately trying to conceal."
"That's correct. The moment the government makes its move, the Nikkei will plunge and the exchange rate will surge. Doesn't that align perfectly with the direction the Eldorado Fund is currently betting on?"
Rodney stroked his chin as he thought it over.
"With investor sentiment already weakened by fears of a war in Iraq, if a major crisis erupts in Japan—the world's second-largest economy—the shock will spread not only to the United States but across the entire world. That would explain why they're shorting stock markets everywhere, from New York to Hong Kong and Europe."
"If things really unfold the way Chairman Park expects, this will be an opportunity we can't afford to miss."
"Indeed."
Rodney nodded in agreement.
"Funds that usually engage in follow-on trades by mirroring the Eldorado Fund have already begun making the same short bets, and major investment banks like JPMorgan and Goldman Sachs are also showing signs of hurriedly shifting their positions."
"To see through something everyone knows but hasn't fully realized—and then boldly place the bet first. Truly remarkable."
Rodney muttered with a bitter smile at the corner of his lips.
He now felt certain why George Soros had always regretted not managing to recruit Seok-won into Quantum Fund when they first met.
The realization left an even more bitter taste in Rodney's mouth as he clenched his fist tightly.
'I admit his insight surpasses mine, but that doesn't mean I can just stand back here admiring him.'
A fierce spark of rivalry ignited deep within his chest.
"Sir?"
Noticing Rodney's silence, Klein called out to him again, cautiously watching his expression.
"It's frustrating that we're a step behind Chairman Park, but as you said, we can't simply let such a perfect opportunity to make a fortune slip away."
"Then…"
Klein looked at him with gleaming eyes.
"Then if our prediction is correct, the places that will crash the hardest will be the Nikkei and the yen. Commit all available cash to those two."
"You're not planning to touch the other markets?"
"Unfortunately, we don't have as much capital as the Eldorado Fund. Rather than spreading our funds across multiple places, concentrating everything on Japan will yield far better returns."
"Now that you mention it, that makes sense."
Klein pondered for a moment before nodding in agreement.
"And if the New York stock market drops sharply, we'll take losses. So move quickly and liquidate all the stocks we're currently holding."
"I'll take care of it."
"You said others have already started noticing the situation and are beginning to move. If we want to minimize our losses, we'll have to hurry."
"Yes, sir."
After giving a short reply, Klein immediately stood up and left the room.
Once the wooden door closed and Rodney was alone, he finally picked up the file lying in front of him and opened it.
After quickly scanning through the contents, he swallowed a sigh and slowly shook his head.
"Just the confirmed short positions alone exceed five hundred billion dollars. The scale is truly on a different level."
The enormous amount of capital being moved by the Eldorado Fund made Rodney feel bitter, as if it were revealing the vast, nearly unbridgeable gap between himself and Seok-won.
As a result, not only Rodney's K Capital but also major investment banks on Wall Street and countless hedge funds began placing short bets by following the Eldorado Fund's lead, causing stock markets around the world to start shaking violently.