The Conglomerate Family Became A Villain [EN]: Chapter 282

282. The Big Short (8)

It was raining in New York.

Some said that the rain in New York felt more depressing than the rain in London.

“Charlie, cheer up. It’s not like your father passed away.”

Peter Lynch placed his hand on Jung Hyun-woo’s shoulder.

“I’m cornered.”

Peter Lynch sighed briefly at his response.

“Hoo… Who would believe that the richest man in America is cornered?”

“Even if others don’t, Peter knows what kind of corner I’m in.”

At those words, Peter Lynch narrowed his brows.

“Charlie, I’ve always been against short selling.”

He had been against short selling since Jung Hyun-woo targeted the Atari Shock and shorted Warner Group.

The reason for his opposition was that overheated investment sentiment lasted longer than rational thinking.

“I don’t think I was wrong.”

Peter Lynch removed his hand from his shoulder and said,

“Failure happens when you think you know everything.”

He was saying that arrogance and complacency lead to failure.

“You mean I might fail this time.”

Peter Lynch slightly tightened his neck.

“Quit if you’re not confident.”

If he withdrew now, he could end the short selling with a slight loss. He believed that knowing when to retreat was also a virtue of a great investor.

‘There’s no investment without stop-loss.’

No matter how great an investor was, they couldn’t succeed every time.

Someday they would fail, and someday they would have to take responsibility for that failure.

Jung Hyun-woo received his words in a dry voice.

“I won’t quit.”

Peter Lynch nodded lightly at his words.

“You won’t quit. If that’s the conclusion you’ve reached, don’t worry and cheer up. If you keep frowning, investors in New York, no, the world, will all run away.”

Victoria Fund was now attracting investors not only in the United States but also in Japan.

“Peter, thank you.”

Peter Lynch smiled brightly.

“It’s always easier to give advice.”

Jung Hyun-woo turned his body.

“It seems the funeral is over.”

The two were standing a step away from the people, watching the funeral of Arthur Morgan, a descendant of JP Morgan.

“I should go say hello.”

Jung Hyun-woo nodded and moved his steps.

“I should.”

The reason he attended the funeral today was not to commemorate Arthur Morgan but to meet his successors.

* * *

Warm coffee.

And even warmer words of comfort.

“Charlie, they say clear days come after the storm passes.”

Tak.

Sarah put down her mug.

“I know.”

The reason she was comforting Jung Hyun-woo was because of those who claimed to be Arthur Morgan’s successors.

Unlike Arthur Morgan, they lacked confidence in investing and showed a defensive attitude.

They wanted to revise JP Morgan’s portfolio more defensively and protect their stake.

That policy included reducing investment in Victoria Fund.

“The Tokyo stock market has exceeded 30,000 points, right?”

“It’s already exceeded it.”

“Then our losses are…”

Jung Hyun-woo took a sip of coffee and said,

“It’ll be about 20 billion dollars?”

Even if they pulled out now, it would be a loss of 20 billion dollars.

That meant that the market capitalization of Heinz Ketchup or Pepsi Group had disappeared in just a few months.

“The speed is a bit fast.”

Jung Hyun-woo had said he could hold out until July 1991, but the limit was likely to come sooner than that.

“I’m going to meet Lyra tomorrow.”

“Another persuasion?”

“I can clearly see that she’s been uneasy since the market exceeded 30,000 points.”

Lyra Marine was strong-willed, but not all members of the Giannini family shared her views.

Among the Giannini family members, there were many who argued that they should get out of Victoria Fund as soon as possible.

“But we’re still making profits.”

Victoria Fund’s withdrawal from Japanese real estate was currently underway, so it was generating high profits every month.

Nevertheless, investors were viewing Victoria Fund negatively.

“There are many stories that we’re pulling out when we should be going in.”

Sarah narrowed her brows slightly.

“Everyone used to say our Japanese investment was risky.”

Jung Hyun-woo took another sip of coffee and smiled.

“It must be because of us.”

Sarah tilted her head and asked.

“Because of us?”

“Everyone rushed to Japan because it looked like we were making big money easily.”

“Charlie?”

“It’s our own fault.”

The wheel of history.

Or the great flow of history.

It did not stop or change with the appearance of one person.

‘Because I triggered the Japanese investment boom, the Japanese stock market rose faster than in history.’

And then Victoria Fund’s short selling.

Since short selling generally had the effect of suppressing stock prices, it could be said that the Japanese stock market had fallen to the same level as in history.

‘If everything continues according to the flow of history, the most important thing is to find out when the Japanese stock market will crash.’

Will it be 1990?

Or 1991?

What if the third option is 1992?

If the third option was the answer, Jung Hyun-woo might go bankrupt.

Sarah grabbed his wrist with her white hand and said.

“Charlie, I’ll help too.”

“Sarah?”

“My share is as much as Charlie’s.”

30% of Victoria Fund’s profits were her share. If she gave up her share, they could hold out until 1993 instead of 1991.

“I’m okay with it, but…”

Sarah leaned over and kissed him on the lips, then said.

“All the money I’ve earned was brought to me by Charlie. Even if I give it back to Charlie, nothing changes.”

“Sarah?”

“And if we lose all the money, I’ll ask my father. My beloved daughter is getting married, so he’ll provide a honeymoon home, right?”

Sarah was talking like a naive daughter, but Jung Hyun-woo knew how strong-willed she was.

“Sarah, it’s still okay. The short selling loss is 20 billion dollars, but there are profits from the Japanese stock market and profits from real estate, so the net loss will be less than 10 billion dollars.”

Sarah smiled at his sharp calculation.

“That’s like Charlie.”

Jung Hyun-woo didn’t tell her sweet love stories like men skilled in romance.

‘The Charlie that is visible on the outside is colder than anyone else.’

But she knew that not everything about him was cold.

“Sarah.”

“Yes?”

Jung Hyun-woo grabbed her hands and said.

“Let’s get married when this is over.”

Sarah sighed briefly.

“Ha… When it’s over?”

She knew that it wasn’t that work was more important than marriage.

“Sarah, if this goes wrong…”

Couples are an economic community, so they may have to take responsibility together.

In other words, if they didn’t get married, it would end with Jung Hyun-woo’s responsibility alone, but if they got married, Sarah, the COO [Chief Operating Officer] of Victoria Corporation, might not be able to avoid responsibility.

‘I could say it doesn’t matter, but Charlie won’t be moved by that.’

If Sarah said it didn’t matter, Jung Hyun-woo would worry about her even more than before, rather than being moved.

Sarah brought her lips to his again and said.

“Okay. I’ll wait.”

“Thank you.”

Jung Hyun-woo nodded and hugged her.

* * *

Spring 1989.

The Nikkei index surpassed 35,000.

Finally, one by one, they began to question the unprecedented rise.

– The Japanese stock market is overheated.

– Don’t be swept away by the surrounding atmosphere and invest in the intrinsic value of the company.

In an overheated market, people did not listen to textbook stories.

May 1st.

Japanese Cabinet Meeting.

The faces of those who had given up their holidays and gathered at the Prime Minister’s Office were tense.

“The stock market and real estate are too overheated now.”

“I think the interest rate was too low.”

In 1987, the Bank of Japan’s base interest rate was lowered to 2.5%, which brought huge funds into real estate.

“There is news that Mitsubishi will buy Rockefeller Center.”

“Was that rumor true?”

“After confirming with Victoria Fund, it is true.”

Rockefeller Center was one of the buildings that symbolized America, along with the Empire State Building.

“Hmm, if they take Rockefeller Center, America’s view will not be good.”

If Rockefeller Center was sold to Japan, Americans would surely think that Japan was invading America with money.

“Shouldn’t we put pressure on Mitsubishi?”

“Are you saying we should put pressure on Mitsubishi to give up buying Rockefeller Center?”

“Considering America’s eyes…”

When such stories were exchanged, the Minister of Transportation shook his head.

“It won’t work.”

“What do you mean it won’t work?”

“If this deal is stopped, the side trying to sell Rockefeller Center will definitely raise objections.”

“Hmm, you mean it could escalate into a diplomatic issue.”

“And we have to think about the morale of the Japanese people, don’t we?”

If Japan owned Rockefeller Center, the morale of the Japanese people would be higher than ever, contrary to the United States.

‘They might be able to forget the memory of losing to America.’

Avenging the defeat of World War II with money.

It couldn’t be a pleasant thing for someone.

“But isn’t that not a good thing?”

“It’s already spilled water [the situation cannot be reversed].”

It meant that since spilled water cannot be put back in, we should use it as much as possible.

“Hmm, I understand.”

The Prime Minister raised his voice slightly towards the surroundings.

“Let’s leave the stock market or the Rockefeller Center issue as it is, and real estate is the biggest problem.”

At his words, the ministers nodded.

“Real estate is a problem.”

“That’s right. More than 50% of household capital is tied up in real estate.”

“I think we need to fix it a little.”

Before the 1980s, real estate compared to Japan’s total household assets was quite different from what Koreans commonly know.

Before the real estate bubble, real estate accounted for only 30% of Japan’s total household assets.

In other words, before the real estate bubble, Japanese people’s money was used elsewhere, not in real estate.

“It will continue to rise, right?”

“We need special measures.”

“Special measures.”

The reason why special measures were being mentioned in the Japanese cabinet was because Japanese real estate had risen 250% compared to January 1987.

“There is no time to hesitate. The fact that prices continue to rise even though Victoria Fund is selling real estate means that the situation is serious.”

“Victoria Fund’s real estate sales will end by the end of the year. At that time…”

“There will be no way to stop the rise in real estate.”

The fact that real estate was rising even though America’s huge capital was selling real estate meant that if the sale ended, real estate would rebound again due to the spring effect.

“I understand. Let’s raise the interest rate.”

Raising the interest rate.

It was the easiest method, but it was the most shocking method.

“Your Excellency, if we raise the interest rate in this situation…”

“A recession won’t happen right away.”

“A soft landing?”

“Maybe it will be.”

The boom in the Japanese economy was too much, so no one could have predicted Japan’s long-term recession.

“Then, by what percentage should we raise the interest rate?”

If the interest rate increase was low, the market would not react, and if it was too high, it could shock the market.

“The market won’t even react to about 0.25%.”

The surrounding ministers nodded.

“That’s right.”

“Then how about 0.5%?”

It was a somewhat gentle interest rate increase.

“Since the market is overheated, I think it would be better to do 0.75%.”

“Isn’t 0.75% a bit strong?”

“I think that’s what we need to do to give the market a clear message.”

The Japanese cabinet wanted to give the market the message that the era of real estate was over.

“We have to make a difficult decision.”

“Your Excellency, we must take action before the real estate bubble occurs.”

The bubble was already serious, but the Japanese cabinet thought it could fix it.

“What about the Bank of Japan’s story?”

The Bank of Japan was initially negative about lowering interest rates.

“They’ll say the more we raise it, the better.”

After listening to everyone’s opinions, the Prime Minister said in a heavy voice.

“Let’s do 0.75%.”

May 1989.

The Bank of Japan officially announced that it would raise the base interest rate from 2.5% to 3.25%.

* * *

“It’s done!”

Jung Hyun-woo, who ran over with a bright voice, hugged Sarah tightly.

“Ch, Charlie?”

Jung Hyun-woo raised his voice without letting her go.

“It’s done!”

Sarah asked him in a soft voice.

“What’s done?”

“The Japanese bubble will collapse.”

“I already knew that.”

Sarah knew that something had happened, but she wasn’t very interested in what it was. However, she thought it was fortunate that Jung Hyun-woo’s voice and face had brightened.

‘That’s really fortunate.’

Instead of pushing him away, she hugged him tightly with both arms.

“Sarah, thank you.”

“For believing in you? I always said I believe in Charlie.”

Tuk. Tuk.

Even though someone knocked on the door, the two did not let go of each other.

“Ms. Hilton?”

Jung Hyun-woo tried to let her go gently.

“It looks like someone’s here.”

Sarah smiled and tightened her grip as if not to let go.

“It’s Keron.”

Keron Usher was in charge of finance with Anne. She raised her voice towards the back of Jung Hyun-woo.

“Keron, is it urgent?”

“Ms. Hilton, there are documents that need to be approved by today.”

“Then leave them. I’ll approve them before lunch.”

“I understand.”

As Keron disappeared, Sarah leaned her face against Jung Hyun-woo’s chest.

“The little one has grown up so much.”

“Little one.”

“Even if Charlie becomes an old man, he’s still a little one to me.”

Jung Hyun-woo had a slightly awkward expression, but she couldn’t see that expression.

“Are you Peter Pan?”

Peter Pan, who never ages.

“If Charlie is Peter Pan, am I Tinkerbell?”

The person who broke the sweet atmosphere between the two was Robert. He opened the door without knocking and raised his voice.

“Charlie! You were here!”

Jung Hyun-woo shrugged his shoulders and replied.

“Didn’t you ask before coming in?”

“I did.”

Robert had asked the secretary if Charlie was inside and opened the door.

“What if we were having an affair?”

At his question, Robert shrugged his shoulders.

“It looks like you’re having enough of it.”

Sarah quietly let go of his hand and smoothed her hair.

“Robert, it looks like there’s something urgent?”

Robert changed his voice and replied.

“It’s great news! Japan has raised its base interest rate.”

Sarah received his words in a bright voice.

“That must have been what Charlie was trying to say.”

Robert’s gaze turned to Jung Hyun-woo.

“Charlie, have you already heard?”

Jung Hyun-woo nodded and replied.

“I received a call from Japan as soon as I got to work.”

Japan had raised interest rates when Americans were fast asleep.

“So that’s why so intensely…”

“It was just a hug of joy.”

“I see.”

Robert said.

“Now we have to get out of Japan for sure.”

Jung Hyun-woo nodded and received his words.

“Of course.”

Now that Japan’s interest rate hike had been decided, it was only a matter of time before the bubble burst.

But the Japanese real estate and stock markets did not move as they wished.

In July 1986, the Nikkei index surpassed 36,000, rewriting its historical high.