Ben Bernanke let out a deep sigh and leaned back in his chair.
Exhaustion was written all over his face.
“David, Nace. I fully understand your concerns. But to pressure me like this...”
“What are you talking about? It was your role to consider our position. Yet judging by your recent actions, it seems you've stopped thinking about us entirely.”
“Believe it or not, I've already shown considerable consideration to the two of you. Otherwise, neither of you would even be sitting here.”
David and Nace called out Bernanke's name at the same time.
“Ben!”
“Ben Bernanke!”
Instead of answering, Bernanke rose from his seat and walked over to the window.
Staring down at the lights of Washington below, he fell into thought.
Countless thoughts drifted through his mind.
Unable to endure the silence any longer, David called out again.
“Ben!”
“Please give me a moment to think.”
Bernanke spoke firmly and spent a long while silently gazing at the night view, organizing his thoughts.
When he finally returned to his seat and sat down, he spoke.
“David, Nace. You both know how dangerous our situation is.”
“We know that.”
“No, you don't. Bear Stearns collapsing won't end with the downfall of one company. It could lead to the collapse of the entire financial system. We're sitting on top of a ticking time bomb right now.”
David nodded.
“I understand that. But handing everything over to JP Morgan isn't necessarily the best option.”
He insisted to the very end that JP Morgan's acquisition should somehow be stopped.
Bernanke let out another deep sigh.
“The government and the Fed have examined every alternative. Unfortunately, we don't have time. If Bear Stearns isn't sold, panic will hit the stock market immediately. If that happens, other investment banks like Lehman Brothers and Merrill Lynch will be in danger as well.”
The moment the names of investment banks connected to them were mentioned, David and Nace's expressions changed.
“...Those are in danger too?”
“You know that already, don't you? I believe both of you have quite a bit of money invested there.”
“We know, but... are things really so bad that even you consider them dangerous?”
“Bear Stearns is only a light breeze. Lehman is in the most serious condition. If it finds itself in the same situation as Bear Stearns, Lehman will go bankrupt immediately.”
Nace's face hardened.
“So what's the plan? How does the Fed intend to solve this?”
“First, we'll get through the Bear Stearns crisis. Then we'll persuade Congress to approve a bailout package. It contains comprehensive support measures to deal with this crisis.”
“So you've decided to accept Charlie's mediation proposal? Just to put out the immediate fire?”
Bernanke's eyes widened at David's question.
“What are you talking about? Charlie was involved in this?”
“That's right. I heard he brought Jamie Dimon and Alan Schwartz together and mediated between them. They say he's the one who got them to agree to four dollars a share.”
Bernanke fell into thought.
His involvement had been an unexpected variable.
That man has that much influence? Enough to pull off a deal of this scale?
Still, it wasn't bad news for now.
If his mediation allowed the transaction to proceed quickly.
After choosing his words carefully, Bernanke spoke.
“Charlie's involvement is unexpected. But right now, this deal is the best option. JP Morgan is the only institution willing to acquire Bear Stearns. They're the only ones capable of handling this crisis.”
“And the conditions? What conditions were imposed?”
Walking over to his desk, Bernanke picked up a stack of documents and returned.
Placing the thick pile on the table, he spoke.
“First, JP Morgan will be granted a fifty-billion-dollar credit line. However, this will be a loan secured by Bear Stearns' liquid assets. JP Morgan will still have to bear substantial risk.”
David and Nace quickly skimmed through the documents.
“Furthermore, after this acquisition, JP Morgan's ability to engage in additional major mergers and acquisitions will be restricted for two years.”
They continued reading while listening to Bernanke.
Soon, they put down the papers simultaneously and exchanged glances.
“This is acceptable.”
Nace nodded in agreement with David.
“Fine. But we'll be watching every step closely. We won't tolerate a single mistake.”
Bernanke nodded.
“I promise you. This crisis will become an opportunity to fundamentally reform the financial system. And I'll keep a close eye on Charlie.”
The two men approved JP Morgan's acquisition of Bear Stearns.
However, there was still another matter.
The merger had never been the true purpose of today's visit.
David and Nace exchanged glances.
“And...”
After a brief pause, David continued.
“If Congress approves the bailout package, the institutions we designate must receive assistance first.”
“Excuse me?”
“Exactly what I said. The financial institutions we specify should receive support before anyone else.”
“Don't be ridiculous. The Treasury Department is watching everything. How am I supposed to decide such things on my own—”
“That is your problem. If you reject our request, then we have no choice. We'll all go to hell together.”
Bernanke opened his mouth but failed to answer.
Nace issued his warning.
“This is as far as we're willing to compromise. From now on, you'll do as we ask.”
Without waiting for a reply, the two men stood and left the chairman's office.
Bernanke sat there blankly for a long time.
“Chairman.”
His secretary's voice brought him back to reality.
“Do you have any further instructions?”
“No... Actually, yes. Summon the Treasury Secretary and the President of the New York Fed immediately. And gather every piece of information you can on someone named Charlie.”
“Charlie? You mean the one causing all the commotion in Korea right now?”
“Yes. Him.”
“Understood. I'll mobilize everyone.”
After the secretary left, Bernanke returned to the window.
He had risen to this position with the backing of David and Nace's families.
Their request.
No, their order.
Refusing it was difficult.
But neither could he continue being led around forever.
Once the hunt ended, the hunting dogs were always the first to be devoured.
‘You think I'll just take this? Do you know how hard I fought to get here?’
Bernanke gritted his teeth.
The sky above Washington remained dark.
Like the night itself, Bernanke's heart was slowly being consumed by black flames.
* * *
Sunday afternoon.
In contrast to the scenery outside the window, tension filled the interior of the building.
Inside the conference room sat Jamie Dimon, Alan Schwartz, and me.
“Now then, before the announcement, let's review the final terms once more.”
Jamie Dimon nodded and opened the documents.
“We agreed to acquire the ten percent stake held by management at two dollars per share. The remaining ninety percent held by the market will be purchased at four dollars per share, subject to Fed approval.”
“The market's going to be thrown into chaos.”
“Still better than the stock becoming worthless.”
Thanks to government bailout support and the acquisition talks, the share price had once climbed back to thirty dollars.
But rumors that the actual negotiation price was two dollars per share caused Bear Stearns stock to crash again.
Officially, the media reported four dollars.
But on Wall Street, the rumor was two.
JP Morgan and Bear Stearns remained silent, refusing to quash the rumors.
As a result, the stock fell below twenty dollars in a single day.
And by Friday, it had dropped below ten.
“In exchange, we'll guarantee all of Bear Stearns' transactions and receive fifty billion dollars in loan guarantees from the Fed.”
Alan Schwartz let out a deep sigh.
“So it's fallen below the original four-dollar agreement.”
Smiling, I comforted him.
“The worsening market conditions made it unavoidable. But Alan, you know this is the best choice for Bear Stearns and its employees, don't you?”
“I know. I know, but... ninety-three years of history ending in my hands like this. Still, for the sake of our employees, I have to accept this deal.”
Jamie continued.
“We'll retain as many key Bear Stearns employees as possible according to the agreement. So you don't have to worry.”
It was an extremely satisfying deal.
I stood up and wrapped things up.
“Good. Then let's sign the contracts. It's almost time for the announcement.”
The two men nodded, signed the prepared contracts, and passed them over.
In the end, Bear Stearns fell into JP Morgan's hands.
Originally, Bear Stearns would have been sold to JP Morgan for ten dollars a share.
Under my mediation, it was sold for four dollars.
Which meant it was beneficial both for JP Morgan and for me.
The two left the conference room and headed toward the press hall.
I entered separately, keeping some distance between us.
Countless reporters had already gathered.
Standing at the back, I watched Jamie and Alan.
As camera flashes exploded around them, Jamie stepped up to the podium.
“Today, JP Morgan Chase has agreed to acquire Bear Stearns.”
His voice echoed throughout the room.
I watched the reporters while waiting for what came next.
Jamie continued.
“The acquisition terms are as follows. The ten percent of shares held by Bear Stearns management will be purchased at two dollars per share. The remaining ninety percent will be acquired at four dollars per share.”
A commotion erupted among the reporters.
This complicated structure had been my proposal.
It held management accountable while minimizing losses for ordinary shareholders.
Not that I could erase their losses entirely.
But I had done everything possible to reduce them.
Otherwise, their shares would have become completely worthless.
Naturally, the Fed knew that too, which was why it approved the deal.
“This decision reflects Bear Stearns' current circumstances, future value, and the interests of shareholders. The total acquisition amount is expected to be two hundred thirty-six million dollars.”
I nodded.
The figure might appear small.
But considering Bear Stearns' debts and risks, it was still a heavy burden for JP Morgan.
Alan took over and stepped up to the podium.
I could read the complicated emotions in his eyes.
“Bear Stearns has made a difficult decision. But I believe this is the best choice for our company, our employees, and the financial markets as a whole. I apologize.”
After finishing, Alan bowed deeply.
It was an uncommon form of apology in America.
Camera flashes erupted from every direction.
After the press conference ended and Alan departed, Jamie and I headed to my penthouse.
Standing by the window, I looked out over the New York twilight and reviewed my plans.
“Charlie.”
I turned toward Jamie.
He was holding a bottle of champagne.
“Now explain to me why you proposed such a complicated structure.”
Taking the glass he offered, I smiled.
“The purpose of this merger isn't simply to save Bear Stearns. We're creating a new financial order right now. This merger will be the starting point.”
He still didn't know the full extent of my plans.
But that didn't matter in the slightest.
What mattered was that the gears had finally begun to turn.
There was no way to stop this chain of events now.
I raised my champagne glass.
“Now the real game begins. Jamie, watch closely. Let's see what happens next.”
