MD (Managing Director).
The position second only to the CEO at Alpha Fund. Given the nature of Alpha Fund, where the CEO’s authority wasn’t all that absolute, it was effectively the role of actually running the fund.
One prominent MD was Ha Yeong-il.
Of course, in the beginning, for the most part, it had been just for show—a figurehead to make it seem less suspicious, so it wouldn’t look odd that all the people at the top were Korean.
‘But... as time went by, it turned out that didn’t really matter much.’
After all, whether they were Korean or American, it was the same—they invested based on my orders. Once quite a few of the Korean directors had retired, I put in people with ability (and yes, the ability to listen to me and execute exactly as I say is a kind of ability) into those seats.
And now, I was the one sitting in the MD position.
—Clap clap clap!
The roar of applause filled Alpha Fund’s offices.
“Congratulations.”
“To think the young miss is finally an adult... Time really flies.”
“To the Witch of Wall Street!”
—Fweeeet!
Laughter full of vitality burst out.
I smirked and shrugged my shoulders.
“Oh, so that nickname is official now?”
Alpha Fund would change from here on.
A slightly more competent board, more diversity in race and background, and... an environment where I, Yoo Ha-yeon, could step into the spotlight.
—Ahem.
Clearing my throat, I gave a brief congratulatory speech.
“As I’m sure none of you are unaware, I was recently promoted to MD by unanimous decision at Alpha Fund’s executive meeting. The official reason was my contributions to handling... the Russia situation and the ‘negative oil price’ incident.”
The justification was solid. On top of the $1 billion we’d pulled from Tiger Fund, we’d already made plenty from CDS.
Russia’s moratorium had immediately rippled outward to other nations, triggering financial crises in Ukraine, Moldova, and Argentina. Naturally, the premium on CDS—essentially an insurance policy—soared.
A credit default swap is a financial product where, if the state you’ve bet against defaults, the counterparty takes the hit.
Under normal circumstances, a sovereign default is considered unthinkable, so people often view it as a product tied loosely to national credit ratings. But ◆ Nоvеlіgһt ◆ (Only on Nоvеlіgһt) when such an event actually occurs, the insurers take catastrophic losses.
And if you know in advance that a country will default and lock in a CDS contract, you can make a killing—like I did.
“Of course, my work in popularizing those lovely derivatives called CDS and CDO also played a part.”
Clap, clap.
Ha Yeong-il smiled as he clapped—slow and heavy.
“It’s because I’m so smart.”
When I gave him a sweet smile, he burst out laughing and nodded.
“Hahaha, as expected of the young miss. Yes, it’s all thanks to you.”
When you say it that seriously, it makes me a bit uneasy.
It’s the kind of tone that makes me feel like I’m about to hear, ‘And so... we don’t need you anymore,’ followed by a knife to the gut.
“By the way, the idea of tying CDOs to MBS is truly innovative. For now, it’s overshadowed by all the black swans like the dotcom bubble, but... in my view, this is where your genius really shines. This is a discovery that transcends eras.”
“Haha, there you go flattering me again. Rather than transcending the era... I’m just matching my derivatives to the times. I’m not yet in a position to go against the mainstream current of the world. And it’s not like I was the first to do it, anyway.”
—Rustle.
I looked fondly at the “achievements” I’d built within Alpha Fund.
This wasn’t false modesty. I don’t do modesty. Not me, and honestly, not most Americans either.
It was just... this particular product was already too famous.
MBS stands for mortgage-backed security, and CDO means collateralized debt obligation. If that sounds too complicated, just think “the cause of the 2008 global financial crisis.”
Tracing CDOs back takes you to the 1970s at most, but MBS was a respectable financial product dating back to the Great Depression. When ordinary people took out home loans to buy houses cheaply, those loans were securitized into bonds.
So I didn’t invent it; it’s more accurate to call it a discovery—someone had already thought of it.
I merely standardized it and made it fashionable.
“Of course, it’s true the products already existed. But tearing down every regulation holding them back and building a beautiful golden tower—surely that’s your achievement, young miss?”
“Ehh, I said it’s not.”
Don’t praise me too much.
That invention might just be what destroys the United States.
I don’t want to be remembered as the witch who caused the Great Recession.
***
In truth, Ha Yeong-il was mostly right. From the perspective of someone without knowledge of the future, it would seem like I had personally orchestrated it all.
The direct reason MBS and CDO had grown to crisis-inducing proportions was this:
The Gramm–Leach–Bliley Act.
Passed a few years ago, it effectively repealed Roosevelt’s Glass–Steagall Act. Not only did it break down the barriers between commercial and investment banking, but it also swept away many of the obstacles that had regulated Wall Street.
Originally, only public institutions could issue mortgage-backed securities under various restrictions. This law allowed ordinary banks to issue them freely in-house.
I had lobbied alongside Wall Street banks, but even I wasn’t sure why this had passed so easily.
Sure, MBS had become a tidy revenue stream for Gamma Bank—our investment bank created under Alpha Fund—but it was still dangerously risky.
At present, Wall Street’s banks were like... wizards in a fantasy world ignoring the warning carved into an ancient seal that should never be broken, poking at the magic circle holding a demon.
—‘Wow, there’s amazing treasure here! If you poke the circle, mana just pours out of it!’
That “mana” is the demon’s power.
Of course, I had the confidence to toss another “golden wizard” (also known as a bank) into the demon’s jaws and slip away myself... but most get eaten alive.
There was one difference from fantasy demon seals, though.
At least in those worlds, the wizards waited centuries before breaking an ancient seal. Wall Street had shredded the one the White House wheelchair-man painstakingly built in less than a century.
And we all know the result was catastrophic.
The legendary demon “Great Depression,” foretold by the archmage Karl Marx in his maddening grimoire Das Kapital and which had burned through the 20th century, returned.
Fortunately, Roosevelt’s decades-long seal still had some effect, so this one ended as a “small” depression.
“...So, that’s why we need to take full advantage of this negative oil price situation.”
“Ah, to prevent a financial crisis in the United States?”
“No? I can run if I need to. Financial crises aren’t to be stopped—they’re to be managed.”
“....”
What?
Honestly, I think someone like me can get away with causing a financial crisis. Of the two twin demons Marx prophesied—Great Depression and Communism—I already killed Communism.
Marx himself might even agree from his grave. If you take the “proletariat” out of his dream “dictatorship of the proletariat,” you get the world I want.
And no, I won’t listen to anyone saying that’s like North Korea. I don’t do hereditary succession.
“Ahem, for now, let’s handle what’s right in front of us first.”
“Yes, ma’am...”
—Rustle.
[Russian government reaches secret agreement in production cut meeting—output to be halved...]
Mhm, that’s more like it.
Wall Street didn’t know yet, but Russia had already decided on a production cut. Sure, they called it “secret,” but with Lee Si-hyun around, nothing was secret from me.
And the Russian government had even said:
—‘Any chance you could... do something with oil futures? With the right production cut deal, we might be able to stretch this further.’
Amazingly, these guys had handed Alpha Fund inside information while asking us to handle their slush fund. They’d realized the derivatives market would go wild depending on when they cut production—and they wanted in.
I agreed, of course. I wanted the Russian government’s money too. When they delivered government secrets worth more than gold straight to me, it was only fair to oblige.
But that was something that could never be revealed publicly.
I continued speaking as if I’d simply predicted the future.
“Now that they’ve been hit hard, oil producers will all trend toward production cuts. And... that naturally strengthens U.S. power.”
Because now America had shale gas. The bald eagle holding oil would realize it no longer needed to fly all the way to the Middle East to bother with messy fights.
“Ah, I see. I’ll assemble a think tank and draft a future strategy. We’ll never match the young miss, of course... but we’ll try.”
I smiled and approved.
“Good. I’ll give you all the support you need. With this much, you should be able to make a meal of it, right?”
“Ah, yes.”
I also needed other people’s help.
Because, at the moment, a significant portion of my mental storage... was occupied elsewhere.