November 4, 2002 — 745 7th Avenue, Manhattan, New York.
The trading center at the Lehman Brothers headquarters, its exterior wall fitted with a massive ticker displaying stock prices from New York and around the world, was in a state of utter chaos.
Ring—ring! Ring—ring!
"Just dump anything you can! Sell everything!"
"No, no! Damn it, no matter how low I set the price, the sell orders won't go through!"
"Shit. It dropped again? How does that even make sense?!"
The shrill ringing of telephones sliced through the air, and the sight of traders shouting at the top of their lungs, veins bulging in their necks as they desperately tried to unload their holdings, was nothing short of harrowing.
"Fourteen dollars and eighteen cents? It broke past fifteen in pre-market on the buyback expansion news—so why the hell is it at that price now?!"
Charlie Dietz, a senior trader, pressed the receiver to his ear as his face twisted in frustration. The stock of Cisco Systems—once leading the network sector and buoyed by positive momentum from Friday's good news—had, in an instant, erased all its gains and was now plunging sharply.
[Look at this—missiles and bombs are raining down on Baghdad! It's total chaos over here too. Everyone's scrambling to dump their stocks—do you really think Cisco can hold up under this?]
"Grr…"
[Sell orders are flooding the market. If you don't sell now, it'll drop even further. Make your decision—fast!]
At the broker's urging, Charlie let out a short curse and, as if he had no other choice, replied.
"Shit! Sell all 19,000 shares at 14 dollars and 18 cents."
[Too late. It dropped another 10 cents in the meantime—it's 14.08 now.]
"Damn it!"
In that brief moment, his losses had already grown by nearly two thousand dollars. Tightening his grip on the receiver, Charlie spoke urgently.
"I don't care about the price—just sell everything immediately!"
[Got it!]
Without even waiting for a reply, the broker hung up. Charlie slammed the receiver down in irritation and dragged a hand over his exhausted face.
It wasn't just Charlie—most of the traders in the vast trading center were gripped by despair and shock.
Some were half out of their chairs, shouting into their headsets; others pounded their keyboards like mad, flooding the system with sell orders. Everyone was desperately struggling, doing whatever they could to defend their returns.
But with war fears spreading, sellers were everywhere while buyers had all but vanished, dragging the stock market down even further.
To make matters worse, this massive negative shock had struck just as companies were reporting strong quarterly earnings. For the first time in a while, buy orders had been coming in force, pushing all three major indices into a sharp rebound—making the impact even more devastating.
"Damn it! Oil prices have surged more than 25%!"
One of the traders ripped off his headset and hurled it onto the desk, shouting as if in despair.
Charlie hurriedly checked one of the six monitors on his desk—the one displaying West Texas Intermediate crude prices—and his eyes widened in shock.
[WTI: 28.58 (↑15.75)]
Just the day before, West Texas Intermediate had been at 22 dollars and 83 cents. Now it had surged by more than five dollars.
"What the hell is this?!"
Even with war breaking out in the Middle East, the spike in oil prices was far too extreme. Startled, he shouted, and Rackman—sitting beside him in a sweat-soaked dress shirt—spoke with a grave expression.
"Breaking news on CNN—fifteen oil wells in the Rumaila oil field in southern Iraq are on fire."
"Oil wells are burning?"
"Yeah."
Rackman jerked his chin toward a television set up off to one side.
On the screen, footage appeared as if captured from a distance through a telephoto lens.
Near the horizon, thick black smoke was rising in multiple plumes, and acrid fumes had swallowed the sky whole, blanketing it in darkness.
Seeing the scene, Charlie's face twisted in shock.
"Damn it."
"They're saying Iraqi forces are setting the wells on fire to slow the coalition's advance."
At that, Charlie wore an incredulous expression.
"So it's not that bombs went astray—they're actually setting fire to their own country's oil fields?"
"It's war."
"Even so, doesn't that sound completely insane?"
There was a reason the word insane had slipped from Charlie's lips—once an oil field caught fire, extinguishing it required an enormous effort.
In fact, during the Gulf War in 1990, as Iraqi forces retreated under attacks from the United States and the multinational coalition, they had done the exact same thing—setting fire to Kuwait's oil fields to hinder the enemy's advance and airstrikes before fleeing.
It had taken years to fully put out those fires, and the costs had been astronomical.
Naturally, while Kuwait's oil fields—ranked sixth in the world by reserves—burned, global oil prices remained high even after the war had ended.
Considering that Iraq ranked fourth in the world in terms of oil reserves, arson at its oil fields was bound to send a massive shock through global oil prices.
And if global oil prices surged like this, it would be a major negative factor for the stock market.
Sure enough, just then, Reford—the head of the trading department, recently promoted—rolled up his shirt sleeves and shouted at the top of his lungs.
"Dump everything right now and buy energy stocks!"
"Yes, sir!"
"Damn it, we're too late! They're already shooting up!"
Watching the frantic scene unfold, Rackman shook his head.
He, too, picked up the receiver to place an order, but his expression suggested he had expected this all along.
"I had a bad feeling when the Eldorado Fund kept holding its short positions even while the market was rebounding. And sure enough, here we are again."
Charlie let out a long breath as he watched the breaking news continue to pour in on the Bloomberg terminal.
[Iraqi forces' oil field destruction fears become reality!] [Global oil prices surge across the board!]
[White House hints at releasing Strategic Petroleum Reserve (SPR) depending on oil price trends]
[Large-scale airstrikes continue near Kirkuk and Mosul in northern Iraq]
[U.S.-UK coalition command on the verge of launching full-scale ground operations]
"Phew! Good thing I dumped everything, even at a loss. I almost got a front-row seat to hell."
Looking at the ticker board—now drenched in a blood-red sea except for a handful of defense and energy stocks—Charlie felt his breath catch in his throat.
The charts were plunging like sheer cliffs, and stock prices were falling endlessly.
Every time the red numbers refreshed, screams erupted from the traders.
Suppressing a groan, Charlie glanced down at the watch on his wrist.
It felt like hours had passed, but it wasn't even noon yet.
"Absolutely the worst."
Charlie couldn't even begin to gauge how much further the three major indices would plunge during the remaining trading hours, and he could only let out a deep, heavy sigh.
***
At the same time, Seoul, South Korea.
With darkness settling heavily outside the window, Seok-won stood in the center of the living room.
On the large television screen his gaze was fixed upon, American and British fighter jets flew over downtown Baghdad in broad daylight, dropping bombs as massive explosions erupted and flames shot into the sky.
[As soon as the market opened, it began to collapse, with all three major indices recording steep declines of over 5%. International oil prices have also surged, with West Texas Intermediate jumping by 5 dollars and 75 cents.]
Hearing Landon's report from New York, Seok-won calmly responded, one hand tucked into his pants pocket.
"Even after the war began, oil prices had remained relatively stable without much movement, so the sudden surge must be due to the fire at the Rumaila oil field."
[That's correct. Until then, people had been optimistic—thinking, like in the last Gulf War, that the conflict would end quickly without causing major disruptions to oil supply. But seeing the oil fields burning on broadcast has amplified the fear.]
"Seeing it with your own eyes always has a greater impact than just hearing about it."
[That's absolutely right. Thanks to that, we took long positions in crude oil futures, and with prices surging, we've made significant profits.]
"Our average entry price was 21 dollars and 32 cents, right?"
[Yes. As of now, we're up exactly 34 percent.]
Landon continued speaking, his voice brimming with excitement.
[Even if we liquidate our positions right now, we've made 17 billion dollars!]
It was a staggering profit—enough to make anyone's jaw drop—but he remained calm, showing no particular change in expression.
"Everyone must be expecting oil prices to rise even further."
[If Iraqi forces indiscriminately set oil fields on fire as they did during the last Gulf War, supply will be drastically reduced for a long time, so prices are bound to surge. On top of that, since Iraq is the world's fourth-largest oil producer, there are even pessimistic forecasts suggesting it could exceed 50 dollars per barrel in the worst-case scenario.]
At that, Seok-won's eyes gleamed.
"Then everyone must be desperate to buy even a single drop of crude oil."
[Just look at how prices have jumped nearly six dollars in an instant—that tells you everything about the market sentiment.]
While the surge in global oil prices had thrown everyone into chaos, the Eldorado Fund—having already built up massive long positions in crude futures at Seok-won's direction—only saw its returns grow as prices climbed, allowing them to watch the situation unfold with ease.
Landon, who had been relaxed up to that point, suddenly widened his eyes at Seok-won's next words.
"Right now, anything we put out will sell immediately. Liquidate all our crude futures and close the position."
[What?]
Caught off guard by the unexpected instruction, Landon hurriedly asked again.
[Did you just say to sell all of our crude futures?]
"Yes."
Landon spoke, his voice filled with doubt as if he couldn't understand.
[The fear has only just started spreading, and prices are beginning to surge—yet you want to sell immediately? Isn't that too soon?]
"What did the White House say was the main objective of this war with Iraq?"
[Well, to wrap up the war on terror and create a favorable atmosphere not only for the upcoming midterm elections but also for re-election, isn't it?]
"Exactly. To win the elections. But even if they win the war, if oil prices spike and inflation hits, their approval ratings will drop instead, won't they?"
[…That wouldn't be favorable.]
Adjusting his grip on the phone in his hand, Seok-won continued.
"Given the lessons from the last Gulf War, and since the White House isn't foolish, they'll definitely move to prevent Iraqi forces from setting any more oil fields on fire."
The television screen had changed, now showing oil fields along the Iraq–Kuwait border, where thick black smoke from the fires blanketed the sky even in broad daylight.
"If no further oil fields in Iraq are damaged and the coalition forces push rapidly toward Baghdad, making it look like the war will end early—what do you think will happen to oil prices?"
Realizing the implication at once, Landon let out a low exclamation.
[If supply concerns disappear, the surging oil prices will immediately reverse and crash!]
"So that's why I'm telling you to liquidate the entire position before that happens."
Seok-won gave a small shrug.
"Even if our prediction turns out to be wrong, we've already made more than enough profit, so there's nothing to regret."
[I understand what you mean. It's far better to take reasonable profits and get out than to get greedy and end up losing everything we've already gained.]
"With Iraq's military significantly weakened by prolonged economic sanctions, once the ground war begins, there's a high chance they'll collapse quickly. Make sure to liquidate the position as fast as possible before that happens."
[Understood. As I mentioned earlier, everyone is scrambling to buy crude oil right now, so there won't be any issue selling off our volume. Please don't worry.]
Landon spoke with complete confidence.
"Then call me again once everything is wrapped up."
[Yes, I will.]
After ending the call, Seok-won pulled the phone away from his ear and looked at the television screen.
An expert in the studio was responding to the anchor's question with a grave expression.
[Restoring the oil fields set ablaze by Iraqi forces will take a considerable amount of time. This incident will inevitably cause a global oil supply shock.]
[So are you saying oil prices will fluctuate wildly again, like during the previous Gulf War?]
[Of course. This time, it could become even more severe than back then.]
Listening to the conversation on the television, Seok-won slowly curled one corner of his lips upward.