I began reading the materials on Ben Bernanke.

It was a thick document that laid out his entire life in chronological order.

After reading the attached files about people close to him, I let out a faint chuckle.

“So he’s close with David Rockefeller of the Rockefeller family...”

That explained why he had been so hostile toward me. The Rockefeller family was part of Baltice.

As long as he maintained such a close relationship with them, there was no way Ben Bernanke could like me.

But that wasn’t the part that interested me.

The Ben Bernanke I knew was the quintessential scholar. He had published countless papers and was highly respected in academic circles.

As I slowly read through his past, I began to understand how he had managed to walk the path of such a lofty academic.

“So that’s why Ben Bernanke fought so hard to save Wall Street.”

Most of Wall Street’s major figures were Jewish.

If Wall Street’s banks collapsed, the Jewish community tied to them would collapse as well.

That was why Bernanke and the Federal Reserve had desperately tried to stop the crisis by printing dollars without limit.

“But it won’t be so easy this time.”

Because I had intervened, the scale of the bomb waiting to explode was far larger than before.

If the bomb that exploded in my previous life had been a conventional explosive, this one would have the force of a nuclear weapon.

“No matter how much money they print, they won’t be able to save everyone.”

The two institutions I was targeting were Lehman and AIG.

They were also the two entities with which my various investment companies had signed the largest number of CDS contracts.

I continued reading through the materials related to Ben Bernanke.

How much time had passed?

A knock came from the door.

I set the documents down and turned my head.

“Come in.”

The door opened, and Chief Ma entered alongside Eva.

The moment Eva saw my face, her eyes widened.

“Goodness, Boss. Are you exhausted?”

I had apparently spent so many hours focused on the documents that my eyes had become bloodshot.

As I rubbed at my stiff eyes, Eva looked at me with concern.

“No. I’m fine. Have a seat. Chief Ma, please sit as well.”

Eva and Chief Ma sat down.

Eva pointed at the mountain of documents.

“Boss, what kind of material has you so focused?”

“Information on the Chairman of the Federal Reserve.”

“Ben Bernanke? Why him?”

“I met him recently, and I heard he was pretty aggressive. So I had someone investigate him. The report finally arrived, and I’ve been reviewing it.”

“Hmmm... I actually attended one of Bernanke’s lectures before.”

Her casual remark caught my interest.

“Really? What was it like?”

“It was fascinating. Very informative, too. The man’s a genius.”

Not a single person in economics dismissed Ben Bernanke.

He graduated first in his class from Harvard’s economics department at twenty-one.

At twenty-five, he earned his doctorate from MIT with research on the Great Depression.

Then, at twenty-nine, he published a paper that instantly made him a star.

Its title was The Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression.

In that paper, he proposed a new explanation for why the Great Depression had been so deep and so prolonged.

Before Bernanke’s paper, the dominant view in economics belonged to Milton Friedman, often called the godfather of the field.

According to monetarism, severe economic disruptions such as hyperinflation or depressions were largely caused by dramatic expansions or contractions in the money supply.

But Bernanke argued that this alone could not explain such a prolonged crisis.

He demonstrated that the primary causes of the Great Depression were bank runs and the chain reactions that followed.

You could tell he was directly challenging Friedman just from the word “nonmonetary” in the title.

“It really is impressive. Decades have passed since that paper was published, and nobody has managed to completely refute it.”

“Do you agree with his view?”

“It was the first major case where people lost faith in the idea that banks couldn’t fail. That loss of confidence triggered bank runs, which caused institutions to collapse one after another. So to some extent, yes.”

“I see. Then what do you think will happen this time?”

“Won’t the government step in and stop it, Boss? And with Bernanke as Fed Chairman—the very man who wrote that paper—I’d imagine the pressure will lean even more heavily in that direction.”

Just like Han Kyungyeong and the wolves of Wall Street, Eva believed the same thing.

“No. They’ll let a few fall as examples.”

“Even if that throws the market into chaos?”

“If you don’t lance an infection, it only festers further.”

“If that’s what you think, Boss, then that’s what it is. I trust you more than I trust Ben Bernanke.”

The trust in her voice was unmistakable.

I smiled faintly.

“More importantly, did you finish the CDS contracts? That’s why I called you here.”

Eva nodded and pulled a document envelope from the briefcase she had brought.

“It’s all in here, Boss. They’re not selling any new products anymore.”

I nodded, opened the envelope, and reviewed the documents inside.

I had created twenty investment companies around the world and spread my positions among them.

Then I bought CDS products sold by most investment banks and insurance companies.

“What are these companies?”

“Commercial banks that don’t have investment banking divisions. They set up special-purpose vehicles and actually approached us first, offering to sell CDS products. I guess they thought they’d found easy prey.”

“Those lunatics.”

I had never intended to bring down commercial banks.

My primary targets were investment banks and insurance companies.

Yet commercial banks had walked right into the trap themselves.

And the list was impressive.

JP Morgan, Bank of America, Wells Fargo, Citigroup, and four others.

The total guaranteed value of the CDS contracts we had purchased from these commercial banks alone was nearly five hundred billion dollars.

Including all the contracts they had sold elsewhere, the total insured value was probably over a trillion dollars.

“In that case, I’ll have to shake the board even harder.”

“Good lord. Even more?”

“If commercial banks are willingly jumping into the fire, then I might as well stir things up there too.”

The Glass-Steagall Act, which had clearly separated commercial banking from investment banking, had been repealed in 1999.

But by then, commercial and investment banks had already become highly specialized in their own areas.

That was why they generally avoided stepping into each other’s territory.

Of course, that didn’t mean commercial banks stayed completely away from investment banking.

Some, like JPMorgan Chase, had combined both through major mergers.

Others used off-balance-sheet transactions or special-purpose entities to conduct investment banking activities indirectly.

They did this because, even after Glass-Steagall’s repeal, customers still disliked the idea of banks gambling with their ✧ NоvеIight ✧ (Original source) deposits through derivatives.

“I think we can stop commercial banks from buying investment banks at bargain prices under government pressure.”

In fact, this was perfect.

It would prevent the government from resolving the crisis by having commercial banks absorb failing investment banks.

“Eva, find everyone who signed CDS contracts through those special-purpose entities set up by commercial banks. Buy every contract they have. Don’t worry about the price.”

“Boss, we don’t have enough cash for that.”

“Wait a moment.”

I stood up and opened the safe in the back room.

From among several USB drives stored inside, I pulled out one and locked the safe again.

Returning to my seat, I handed it to Eva.

“These are the accounts for five shell companies. There should be around fifty billion dollars in them.”

The slush funds I had scattered across shell companies were finally starting to run dry.

“This should be enough.”

CDS contracts required only premium payments rather than full principal. 𝒇𝙧𝙚𝓮𝙬𝙚𝓫𝒏𝓸𝓿𝓮𝒍.𝓬𝙤𝓶

For example, buying one hundred billion dollars’ worth of CDS protection had once required only a three percent premium—just three billion dollars.

As default risks increased, however, those premiums continued to rise.

To buy contracts from current holders, we’d probably have to offer ten percent or more.

The exact figure would depend on what Eva found in negotiations.

That was the terrifying nature of derivatives.

They could generate returns dozens of times larger than the initial investment.

Of course, losses could be just as catastrophic.

“Boss, to be honest, trading these CDS contracts scared me a little.”

Eva’s face had become stiff.

“It feels like those people genuinely believe American real estate can never collapse...”

“Who knows? Maybe they really don’t know. Or maybe they do. Human greed has no end. Wall Street employees don’t earn most of their money from salary. Their bonuses depend on performance. Whether something is risky or not doesn’t matter to them. All they care about is the incentive.”

I didn’t believe everyone on Wall Street was unaware of the danger.

No.

Most of them probably knew exactly how dangerous it was.

After all, no asset rises forever.

Real estate was certainly an asset that tended to appreciate over the long term.

But this crisis was the result of giving mortgages to people who couldn’t even afford the interest payments.

“They all know. They’re just pretending they don’t.”

I patted Eva’s shoulder.

“We’re going to win. So don’t carry too much pressure. Just do exactly as I say. I’ll take responsibility for everything.”

“Understood, Boss.”

“Go. Move quickly. The longer we wait, the higher the premiums will climb.”

“Okay. I’ll keep reporting in by phone.”

“Good. Thanks for your hard work.”

Eva greeted me and left.

“Chief Ma. Please inspect the lending companies as well.”

“Yes, sir.”

“Reduce new loans and focus on collecting existing debts.”

I continued issuing instructions.

The storm coming from America would be violent.

South Korea wouldn’t escape unscathed.

At times like this, preparation was everything.

No matter how much preparation we made, we wouldn’t be able to stop all the damage.

But we could at least reduce it.

“Move immediately. I’ll continue reviewing the reports.”

After Chief Ma left, I spent hours reading through the materials on Ben Bernanke.

* * *

“Everyone has heard about the Bear Stearns situation, correct?”

At Ben Bernanke’s question, everyone nodded grimly.

“The level of bad assets is severe, Chairman. Even we were shocked.”

The speaker was Tim Geithner, President of the Federal Reserve Bank of New York.

Treasury Secretary Henry Paulson followed.

“Jimmy Cayne came to see us. He begged us to save them. Said they’ll go bankrupt at this rate.”

Kenneth Henry, Chairman of the President’s Economic Advisory Council, raised his voice.

“It’s not like they deposited money with the government. Why are they acting so entitled?”

Finally, Lawrence Summers, Chairman of the National Economic Council, spoke calmly.

“This isn’t just a Bear Stearns problem. It could become a problem for Wall Street—no, for financial institutions across the globe.”

The five people gathered in the Treasury conference room were among the most influential figures in the American economy.

Each led an independent institution.

Yet together, these five men shaped not only America’s economic policies, but those of the entire world.

“Chairman Bernanke. What do you propose?”

At Lawrence’s question, Bernanke answered.

“If Bear Stearns collapses, other financial institutions will collapse in a chain reaction.”

“So you’re proposing a bailout?”

“Rather than having the government provide direct rescue funding, what about encouraging another bank to acquire them?”

“And what fool would agree to buy them?”

“What about JPMorgan Chase?”

Tim Geithner immediately shook his head.

“JPMorgan’s problems are considerable as well. According to our New York Fed analysis, they may actually be in worse shape than Bear Stearns.”

“What?”

“Not just JPMorgan. The top five investment banks on Wall Street are probably in no better condition than Bear Stearns. If anything, they may be worse.”

The room filled with groans.

After lengthy discussions, they reached only one conclusion.

The only way to save Bear Stearns was emergency financial assistance.

“Even if we save Bear Stearns, can we really stop a dam that’s already full of holes?”

No one answered Lawrence’s question.

He squeezed his eyes shut in frustration before opening them again.

“Let’s begin audits of every investment bank. If all of them are as troubled as we suspect, there’s no way we’ll be able to save them all.”

A heavy silence settled over the room.

Everyone present already knew the truth.

The other investment banks would not be any different.

The meeting continued through the night.

But in the end, they failed to reach any meaningful decision before it finally adjourned.