Genius Grandson Of The Loan Shark King

The bailout package was rejected once again in the U.S. House of Representatives.

When the news broke, Wall Street and Washington were thrown into shock.

The Dow Jones Index plunged 777 points in a single day, and financial markets around the world were shaken.

“Senator, what happened?”

“The disagreements over revisions couldn’t be narrowed easily. In that situation, Hillary submitted the original bill to the floor by herself, and Republican lawmakers, angered by that move, voted against it.”

Hillary must really be desperate.

Or perhaps Wall Street lobbyists had been pressuring her.

“Obama, this is your opportunity. Meet directly with the Republican leadership and negotiate. It’s time to make your move.”

“Understood.”

“When you negotiate...”

Following Kim Muhyuk’s advice, Obama contacted the Republican leadership and began negotiations.

At the meeting, Obama made his position perfectly clear.

“The bill must be revised and passed immediately. Otherwise, the American economy may collapse.”

“We think so too. Obama, it’s not that we don’t want to pass it. Do you know who the current president is?”

“Yes. A Republican president.”

“That’s right. Then why do you think we’re holding out? Is it right for the Democrats to unilaterally submit and pass something that should be approved through bipartisan agreement?”

“I apologize for that. That’s why lawmakers who share my views voted against it.”

The Republican leaders nodded.

Thanks to opposition votes from both parties, mud had been splashed all over Hillary’s face.

“Since things have come to this, let’s revise the bill.”

“Revise it?”

“Add tax relief provisions, raise the deposit insurance limit, and strengthen restrictions on executive compensation to prevent moral hazard. Then it should pass smoothly.”

Obama handed over the revised proposal he had brought.

“Please give us a moment.”

The Republican leaders carefully reviewed the amendments.

After some time, they whispered among themselves before speaking.

“Very well. But let’s say this revised bill was drafted together with us.”

“Fine. What matters isn’t who made it.”

After reaching an agreement with the Republican leadership, Obama used it as the basis to persuade the Democratic leadership.

Although Hillary voiced her opposition, she could no longer go against the tide.

“Congressman Obama, strengthening limits on executive compensation violates the principles of the free market.”

“Congresswoman Hillary, when taxpayers’ money is involved, this is no longer a matter of free markets. If they want to throw lavish parties with money, tell them to do it with their own.”

“What did you say?”

Hillary and Obama clashed head-on.

But even the Democratic leadership could not resist the momentum.

In the end, they agreed to pass the revised bill alongside the Republicans.

The major changes were as follows.

First, tax reduction provisions were added.

Second, deposit insurance limits were increased.

Third, restrictions on corporate executive compensation were strengthened.

Other provisions were added or removed, but those three were the core.

At last, the revised bailout package was brought before the House.

The final vote was 263 in favor and 171 against.

Although the leaders of both parties had reached an agreement, lawmakers aligned with Hillary rebelled.

More opposition votes appeared than expected, but the bill ultimately passed.

* * *

“Boss, the package has passed.”

“Good. Let’s move on to the next phase.”

Even after the bailout package passed, the financial markets failed to stabilize.

Small financial companies specializing in mortgage lending began to falter first.

The first beneficiaries of the bailout package were those smaller institutions.

New Century Financial, Amblard Mortgage, Washington Mutual, and Countrywide Financial.

Those four companies simultaneously applied for bailouts.

The government responded with unusual speed.

New Century Financial received $2 billion in liquidity support.

Amblard Mortgage received $3 billion.

Countrywide Financial received $4 billion.

And Washington Mutual received $16 billion.

All four companies were required to use government funds to dispose of mortgage assets, their executives faced compensation restrictions, and they were ordered to improve their corporate governance structures.

But the real bomb had yet to explode.

After confirming that the bailout funds had been released to the four companies, I immediately summoned Eva.

“Eva, notify the ISDA that a credit event has occurred at Lehman Brothers.”

Eva immediately contacted the International Swaps and Derivatives Association.

That meant the CDS contracts would be triggered.

As the news spread, the financial markets staggered once more.

One month later, the ISDA officially announced that a credit event had occurred at Lehman Brothers.

As a result, hundreds of billions of dollars’ worth of CDS contracts had to be settled all at once.

“Boss, the Dow Jones has fallen over a thousand points. The S&P 500 and Nasdaq are in similar shape.”

I nodded while listening to Manager Ma’s report.

Major indexes had begun collapsing, and investors were descending into panic.

“It was expected. Now the dominoes will begin.”

The four institutions that had collapsed first were mainly mortgage lenders.

Fortunately, because they did not deal in derivatives, their bad assets were smaller than expected.

But Lehman Brothers was different.

Most of its investments were subprime mortgage-related products.

Its direct exposure alone amounted to $250 billion in CDOs and approximately $500 billion in CDS-related assets.

“Lehman Brothers has requested government assistance.”

“Still no contact from Ben Bernanke?”

“No. Nothing yet.”

After meeting me, Ben Bernanke had vanished from the public eye.

Moreover, Baltice had become strangely quiet.

The silence itself was suspicious.

“What about Baltice?”

“The last news we received was that Lorenze had succeeded in persuading Marx.”

Lorenze had succeeded in persuading his longtime enemy.

Two of the five families at the very top of Baltice had already begun thinking differently.

“Unlike the Rockefellers and Rothschilds, they probably haven’t invested that much directly in America.”

If Marx stirred things from the inside, it would make my own moves much easier.

The Wallenberg family was one that could never be ignored.

Yet few people knew about them.

The reason was simple.

“Esse, Non videri.”

To exist, but not be seen.

That was their family motto.

Within Sweden, the Wallenberg family ranked second only to the royal family.

No, they might wield more influence than the royal family, which possessed no real power.

“Still, they’re too quiet. That makes me uneasy.”

“We’ve deployed most of our European intelligence teams to investigate them. But we haven’t obtained anything meaningful yet.”

There was nothing to be done.

If their internal information were that easy to uncover, they could never have remained in the shadows for nearly a century.

“We’ll just have to trust Marx.”

I gazed out the window, lost in thought.

These people weren’t the type to sit quietly and take a beating.

What exactly were they plotting?

* * *

At the Federal Reserve headquarters in Washington, the key figures who would determine the fate of the American economy began arriving one by one.

Heavy silence hung over the conference room.

Federal Reserve Chairman Ben Bernanke, Treasury Secretary Henry Paulson, New York Fed President Tim Geithner, and other senior officials took their seats.

Bernanke spoke first.

“Ladies and gentlemen, the situation is serious. Lehman Brothers has requested a bailout. We must make a decision today.”

Paulson nodded.

“Lehman’s condition is far worse than we expected. Their toxic assets are larger than our estimates.”

Geithner continued.

“And Lehman isn’t the only problem. Merrill Lynch, and even AIG, are showing signs of liquidity trouble.”

Everyone contributed as they discussed the gravity of the situation.

After a lengthy debate, one of the Fed governors asked,

“Then what are our options?”

Bernanke let out a deep sigh.

“We have two choices. Either we rescue Lehman, or we allow it to fail.”

As Bernanke carefully chose his words, everyone swallowed nervously.

In a low voice, he continued.

“I’ll give you my personal opinion first. I believe we should not rescue Lehman. We’ve already faced heavy criticism after Bear Stearns. If we provide support again for the same problem, the backlash will be even greater.”

As Bernanke opened the discussion, people began voicing their opinions.

Geithner was the first to agree.

“That’s right. There’s also the issue of moral hazard. We’ve supported numerous institutions since Bear Stearns. If they become convinced the government will save them whenever trouble arises, they’ll take even greater risks.”

“But if we don’t support them, bankruptcy is inevitable, isn’t it?”

One of the Fed governors cautiously raised his concerns.

Paulson spoke.

“Can we really handle the consequences of Lehman’s collapse?”

Everyone merely let out heavy sighs.

Breaking the silence, Bernanke answered.

“Lehman’s collapse will undoubtedly deliver a major shock to the markets. We need measures to minimize that impact.”

The meeting continued throughout the night.

They discussed every scenario that might unfold after Lehman’s bankruptcy and debated responses to each possibility.

At dawn, a conclusion was finally reached.

Lehman Brothers would receive no rescue and would be allowed to fail.

“Ladies and gentlemen, this is not an easy decision.”

At Bernanke’s firm words, deathly silence filled the room.

Even amid the heavy atmosphere, he continued.

“But we have made this decision with the overall system and the long term in mind. The next few days will be critical. Until then, maintain strict secrecy.”

Paulson added,

“Lehman’s bankruptcy process must proceed in an orderly manner. We must do everything possible to minimize panic.”

Geithner spoke.

“We need to instruct each financial institution to prepare for Lehman’s collapse. Make them sign confidentiality agreements and inform them in advance.”

“That...”

“If Lehman collapses without anyone preparing, the shock could be twice as severe. No, even worse.”

Bernanke nodded.

“Very well. We’ll do that. President Geithner, I’ll leave it to you.”

“Yes. I’ll meet them one by one and inform them.”

Finally, Bernanke said,

“We must prepare liquidity supply plans for additional crises.”

After the meeting ended, the attendees departed with heavy expressions.

Only Bernanke, Paulson, and Geithner remained behind.

“We need a scapegoat who can take responsibility.”

At Paulson’s words, Geithner nodded.

“Someone must have profited enormously from this crisis. Let’s make that person the scapegoat.”

“But what if it was simply legitimate investment?”

“Chairman, that’s a matter for later. Right now, we need to disperse the criticism that will be directed at us.”

“...”

Paulson looked at Geithner.

“Do you have someone in mind?”

“There’s someone who has been buying CDS contracts for a long time.”

“Who is it?”

“Michael Burry. And behind him, we suspect Dreamhigh Investment. Wouldn’t that be enough?”

At Geithner’s words, the eyes of both Bernanke and Paulson widened.