Golden Spoon Investor

Chapter 556 556: CH557

News that major Wall Street heavyweights had suddenly entered the country was immediately reported to the Blue House.

"So you're telling me that the heads and senior executives of large Wall Street investment banks like Bear Stearns, Merrill Lynch, JP Morgan, and Lehman Brothers all boarded private jets and flew into Seoul at the same time?"

President Kim Jae-chun asked the question from behind his desk in the Blue House office, its window offering a clear view of the rugged rock cliffs of Inwang Mountain. Standing before him in a gray suit, Chief of Staff Woo Chun-il answered at once.

"Yes, sir. And not just Wall Street investment banks. Senior executives from major global financial institutions like Deutsche Bank and AIG have also arrived."

President Kim's heart dropped. He spoke in a hurried voice.

"Why would they suddenly come to Korea? Has something happened that I don't know about?"

Even though the country had narrowly escaped the worst thanks to the nationwide gold-donation campaign and strong export performance, South Korea was still under the IMF management program. The president tensed up, wondering if some unforeseen, catastrophic event had occurred.

It wasn't unreasonable. Even during the outbreak of the foreign-exchange crisis, Wall Street and global financial giants hadn't bothered to come. And now they were suddenly pouring into Korea all at once.

Chief of Staff Woo quickly explained what he had learned, clearing up the misunderstanding.

"That's not the case. They all came to meet Chairman Park Seok-won."

The unexpected answer made President Kim narrow his eyes as he looked at Woo standing in front of him.

"They came to see Chairman Park?"

"Yes, sir."

Still unable to hide his confusion, President Kim asked again.

"You're telling me they all got on private jets and flew all the way to Korea just to meet Chairman Park?"

"Yes."

President Kim leaned forward, wearing a look of utter disbelief.

"What on earth is going on?"

Receiving the president's gaze, Chief of Staff Woo opened his mouth and gave a direct explanation.

"Sir, you're aware that the U.S. stock market, which had been hitting record highs day after day, has been experiencing a steep decline since the beginning of the year."

President Kim frowned slightly and continued the conversation.

"Of course I know. The fallout hit our own market, and the KOSDAQ is getting smashed to pieces."

"Exactly."

As part of his strategy to overcome the foreign exchange crisis, President Kim Jae-chun had pushed an aggressive venture-promotion agenda from the start of his term. He created more than one trillion won in support funds and implemented major corporate tax cuts.

Thanks to his policies lining up with the global dot-com frenzy, the year 1999 alone saw more than ten thousand new venture companies established. It was a major success.

As a result, a KOSDAQ boom—similar to the U.S. NASDAQ and centered on small and mid-sized tech stocks—swept through the country. In just two years, its total market capitalization skyrocketed to eleven times its previous size.

This achievement, along with his administration's North Korea initiatives, became one of the major accomplishments President Kim proudly touted.

But once the dot-com bubble burst in the United States, the heat that had fueled the KOSDAQ vanished overnight. Over the past few months, the market's total capitalization had collapsed by ninety percent.

An astronomical ninety trillion won had evaporated in an instant.

It was as if the nation had just barely recovered from the foreign exchange crisis—considered the greatest national disaster since the Korean War—only to suddenly take a devastating punch without warning.

And there was an even more painful truth.

After being laid off or forced into early retirement during the IMF crisis, many in their forties and fifties had poured their severance money into the KOSDAQ, convinced that "you can make money in stocks." They ended up losing everything overnight.

Middle-class families who had lived respectable, hardworking lives were suddenly pushed into the lower class. Social polarization deepened, once again becoming a major problem in Korea.

For the Korean government and President Kim, it was a disaster they had never anticipated.

"I also found out something else. Chairman Park predicted the dot-com bubble would burst and sold off all his stocks before the market crashed."

"Really? I heard even Bill Gates, the founder of Microsoft, took a hit of over ten billion dollars in this downturn. His instincts are truly something."

Hearing that Park Seok-won had exited the market alone while everyone else suffered huge losses made President Kim marvel once again at his remarkable foresight.

"But he didn't stop there. He reportedly entered into massive index futures and put option contracts as well."

"Index futures and put options?"

President Kim tilted his head at the unfamiliar terms, and Chief of Staff Woo quickly stepped in to explain.

"Index futures are, simply put, a type of derivative that lets you trade on the expected value of a specific index. For example, if you think the index will rise, you buy futures. If you expect it to fall, you sell them and earn a profit from the difference."

"I see."

"A put option is the right to sell a designated underlying asset at a predetermined price. It also generates profit when the asset's price falls below that level."

President Kim Jae-chun nodded, signaling that he understood, and gave Woo Chun-il a curious look.

"You know quite a bit about trading."

"To be honest, sir, these are terms I only learned recently myself."

Woo Chun-il continued, watching the president leaning back in his chair.

"The Wall Street investment banks and global financial institutions that came in recently all signed option contracts with Chairman Park. The contracts were tied to the three major U.S. indices and major IT tech stocks. When the stock market crashed and their losses grew, they panicked and rushed here to terminate the contracts."

Relieved that the crisis wasn't tied to the Korean economy, President Kim let out a long breath. Then, looking far more at ease, he asked with genuine curiosity:

"How much do they owe Chairman Park that these arrogant men are frantic enough to fly all the way to Korea?"

Woo Chun-il answered carefully.

"We don't have the exact figure yet, but based on what we've gathered so far, it seems to be in the hundreds of billions of dollars."

"…Not won, but dollars?"

President Kim nearly shot out of his seat, asking again in disbelief.

"Yes, sir. I also found it hard to believe when I first heard it, but it appears to be true."

"My goodness. Hundreds of billions of dollars… No wonder those stubborn men scrambled over here. I see."

President Kim let out a hollow laugh and clicked his tongue.

"At this rate, Chairman Park might be the only person who made money in this crash."

"Most likely. While everyone else was drunk on the bull market and celebrating, he alone sensed something strange and moved quickly enough to generate a profit like this. Truly remarkable. It's exactly what you'd expect from him."

"I was impressed all over again by Chairman Park's investment skills."

Still looking dazed, Woo Chun-il spoke with a lingering sense of disbelief, and even he bowed his head slightly as he continued.

"Haha! Just imagining those men—who strutted around with their shoulders squared when the foreign exchange crisis hit—now begging Chairman Park for mercy… It feels like a weight I've carried for ten years has finally lifted. Don't you agree?"

President Kim Jae-chun laughed heartily, and Woo Chun-il, standing nearby, smiled and nodded.

"That's exactly how I feel."

During the foreign exchange crisis, senior government officials had been forced to bow their heads and plead with Wall Street and major global financial institutions to secure the dollars the country desperately needed.

The humiliation from that time was still vivid in their memories.

Now, the very people who had acted so superior back then were the ones rushing to Korea, desperate to negotiate. It was impossible not to feel a sense of satisfaction.

A sudden thought flashed across President Kim's mind, making his eyes brighten.

"Then Chairman Park must have made an enormous amount of money this time."

"According to a recent article in the Wall Street Journal, excluding the option contracts, he earned nearly one hundred billion dollars just from selling the stocks he previously held."

"Wow. A hundred billion dollars… That's about the size of this year's government budget, isn't it?"

"The 2000 national budget was 129.3 trillion won, so yes, it's quite close."

President Kim slapped his desk in admiration.

"They say a single genius can feed a hundred thousand people. Chairman Park fits that description perfectly."

Woo Chun-il looked as if he completely agreed.

"In that case, what do you think about letting Chairman Park acquire the three financial subsidiaries of the Hyunwoo Group that we're planning to sell?"

"You mean offering them to Chairman Park?"

Woo Chun-il widened his eyes at the suggestion. President Kim nodded.

"Yes."

To help restructure the chaebol sector and resolve the Hyunwoo Group's liquidity crisis, the government was moving to sell its three financial subsidiaries—Hyunwoo Securities, Hyunwoo Investment Trust Securities, and Hyunwoo Investment Trust Management—to a third party.

Woo Chun-il frowned slightly, looking skeptical.

"But Chairman Park already acquired WB Bank, Bluehole Life, and recently Daegwang Securities. If we hand over three more Hyunwoo financial subsidiaries, it may spark allegations of favoritism."

President Kim snorted.

"Are we supposed to let fear of criticism stop us from doing what's needed? I've done nothing improper."

But with the administration entering its latter half, Woo Chun-il had to think about the president's post-retirement image as well. He replied cautiously, choosing his words.

"Still, sir, creating unnecessary controversy won't do us any good."

"You know as well as I do that the government doesn't have the capacity to bail out any more companies. And because of the IMF, we have no choice but to sell to a third party. Foreign investors know this, and instead of paying a premium for management rights, they're demanding that we sell the shares at a discount of more than ten percent. You're aware of that, aren't you?"

As he continued speaking, President Kim Jae-chun's irritation seemed to rise; he suddenly scowled.

"If we're going to be accused of selling domestic companies to foreign capital at bargain prices, wouldn't it be far better to hand them over to Chairman Park?"

It was, without doubt, a difficult situation.

The government couldn't accept every unreasonable demand made by foreign investors who sensed its vulnerability. But it also couldn't keep Hyunwoo Group afloat with taxpayer-funded bailouts.

"If Chairman Park took over, we could avoid the criticism of a fire sale to foreign buyers. But the problem is that, aside from Hyunwoo Securities, the other subsidiaries are drowning in debt. I'm not sure he'll be eager to take on that burden."

"That's why I need you to meet him and persuade him. And if he has requests, tell him we'll grant them—as long as they don't cross any serious lines."

The task wouldn't be easy, but even from Woo Chun-il's perspective, Chairman Park Seok-won was the only realistic candidate. He had the capital, and his involvement would avoid public backlash over selling national assets cheaply to overseas investors.

"I understand. I'll meet with Chairman Park and discuss it."

President Kim nodded with a satisfied expression.

"Do everything you can to make the acquisition happen."

"Yes, sir. I'll take care of it."