Golden Spoon Investment Portfolio - Chapter 316

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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316. Do whatever it takes to stop them.

Wednesday, February 12, 1997, Manhattan, New York.
Though it was well past midnight, the Trading Floor of Eldorado Fund on the 31st floor of One New York Plaza Building blazed with light.
When Ho-geun, the Manager, and his team arrived after rushing over by taxi in response to the emergency call, most of the traders were already out and bustling about.
With telephones ringing from every direction and the floor operating in frantic motion, Seok-hyun spoke with a tense voice.

“Whatever it is, something massive has just happened.”

Manager Choi Ho-geun nodded heavily, and as he stood up from his seat, he approached Mason, who was on a loud phone call with someone.

“Yeah, got it. Check on the Hong Kong situation too and let me know.”

As Mason hung up the phone, Manager Ho-geun called out to him.

“Mason. What on earth is happening?”

Mason turned to see Ho-geun and his team standing with bewildered expressions. He brushed his brown hair back with one hand and spoke.

“You’re all here.”

Then he turned his head and gestured with his chin toward the four monitors set up on the desk.

“As you can see, the Thai baht is under attack right now.”

As Manager Ho-geun and his team looked at the monitors, baht sell orders were indeed pouring in like a flood from the Bangkok and Tokyo Foreign Exchange Markets.

“How much is all that?!”
“Did something happen in Thailand?”

As everyone gasped in shock, Manager Ho-geun realized something and stared at Mason with a hardened expression.

“Could this be…?”
“Exactly as I’d expect from you, Mr. Ho-geun. The hedge funds are hammering the baht.”
“I see.”

Ho-geun lowered his voice with a quiet hum.

“So you’re trying to devalue the baht the way you brought the Bank of England and Japan to their knees.”

Mason nodded and spoke.

“Exactly right. With the current account deficit widening and the economy struggling, wasn’t it only a matter of time before the baht fell? Yet the Thai government continues to maintain a de facto fixed exchange rate, so the hedge funds found their opening.”

Mason flashed his white teeth in a smile, his expression tinged with excitement.

“You four are really fortunate, you know.”
“Pardon?”

Ho-geun and his team exchanged puzzled glances, and Mason’s smile widened even further.

“Before you return home, you get to witness the big game that’s about to unfold right before your eyes. That’s luck.”
“Now that you mention it, that’s true.”

Ho-geun nodded in agreement, finally grasping Mason’s meaning.
Had I not been on Wall Street, it would have been difficult to witness firsthand the showdown between the hedge funds and the Thai government.
Ho-geun suddenly realized that simply being here at this moment was an extraordinary opportunity not granted to ordinary people.
Jung Hwan-yeop and the team members gazed at the bustling Trading Floor, their expressions brightening with enthusiasm despite themselves.
Ho-geun glanced at his wide-eyed subordinates before turning back to Mason with another question.

“Is the Eldorado Fund participating in this game as well?”

Mason shrugged and pointed upward with his thumb.

“That’s for the boss to decide.”

At the word “boss,” Ho-geun’s mind conjured the image of Seok-won.

“But the boss isn’t the type to miss a game this big.”

Mason spoke with a deep smile playing at the corners of his mouth.

* * *

At the same moment.
In the Executive Office, Seok-won sat in the center of the sofa with Landon Shore, Andrew, and Dan flanking him on either side as they discussed the situation.

“It’s been confirmed that not only the Hedge Funds, but also JP Morgan, Citibank, and Goldman Sachs have joined in this baht currency sell-off.”

Dan, who had recently been appointed Chief, delivered his report, and Seok-won uncrossed his legs and spoke.

“Has the Quantum Fund made any moves?”
“We haven’t detected anything so far, but it’s possible they’ve launched their attack indirectly through JP Morgan or Goldman Sachs.”

Both the Thai government and Wall Street would be watching the Quantum Fund’s actions closely, so there was a reasonable chance they’d employed tricks to conceal their position.

“How much baht currency has been sold off?”
“The amount we’ve confirmed before arriving here is just over 400 million dollars.”

Hearing the answer, Seok-won folded his arms and spoke.

“That’s an ambiguous figure to call it a full-scale attack on the baht by the Hedge Funds.”

Seok-won turned his head and directed his gaze toward Andrew, who had become the Chief Investment Officer.

“What do you think?”

Andrew responded with a notably serious expression.

“We’ll need to observe a bit longer to be certain, but based on the movements we’ve seen so far, it doesn’t appear to be a full-scale attack.”
“From my perspective as well, that seems to be the case. You can tell just from the fact that the Quantum Fund hasn’t made a move yet, can’t you?”

Landon Shore interjected and added his thoughts.
After hearing both men’s opinions, Seok-won nodded slightly in agreement.

“If they’d intended to collapse the baht in one fell swoop, they would have dumped far more sell orders all at once.”
“Exactly.”

Seok-won leaned back and asked.

“How is the Thai government responding?”

Dan answered immediately.

“The attack has begun, and the Bank of Thailand is actively defending the baht’s exchange rate by purchasing baht in the foreign exchange market.”
“To maintain Thailand’s basket-peg system—which is essentially a fixed exchange rate—they have no choice but to take losses, even though they know it’s a losing battle.”

Andrew then pushed his gold-rimmed glasses up with his finger and responded.

“The critical question is whether Thailand’s foreign exchange reserves can hold out until the attacking hedge funds throw in the towel, wouldn’t you say?”

Andrew was right—that was indeed the crux of the matter.
I clasped my hands together on my lap and asked in a low voice.

“You mentioned Thailand’s foreign exchange reserves were around 38 billion dollars, correct?”
“Considering that figure was announced at the end of last year, they’ve likely depleted it further by now.”

The gradual appreciation of the baht despite the ongoing current account deficit would have been impossible without the Bank of Thailand’s intervention.
Without it, the baht would have collapsed dramatically long ago.

“Once the hedge funds launch a full-scale selling offensive, the foreign exchange reserves will evaporate in an instant.”
“If they drop below 20 billion dollars, they’ll likely surrender and have no choice but to capitulate.”
“If their reserves are completely exhausted, an even greater catastrophe would follow, so that makes sense.”

Landon Shore leaned forward and asked seriously.

“Will you proceed with the long bet as planned?”

I nodded without hesitation.

“Yes. The Thai government won’t back down so easily, and the hedge funds still appear to be throwing light jabs rather than committing fully, so in round one, we’ll place our money on Thailand’s side. However, if the Thai government’s response proves weaker than expected, the hedge funds could shift tactics and attack all at once, so let’s hold our position and observe for now.”
“Understood.”

I turned my head and issued instructions to Andrew as well.

“The movements of the Quantum Fund are paramount. Monitor their actions closely, and report to me immediately if you detect any signs of escalation.”
“Yes.”

The moment Andrew gave his brief reply, the keyphone on the side table next to the sofa rang.
I immediately reached out and pressed the speakerphone button.

[Boss. Large volumes of baht sell orders have been flooding the futures market since just a moment ago!]

Hearing Tyler’s voice from the speaker—the head of the Foreign Exchange Trading Team—Seok-won showed no particular surprise, merely nodding as if he’d anticipated this development.

“Now that the front has expanded to two locations, we can gauge just how strongly the Bank of Thailand is willing to defend the baht based on their response from this point forward.”

The futures market was precisely where trades were executed based on predictions of future prices.
So if we drove down the baht’s price here, we could not only capture the arbitrage profit but also shake the spot market itself.
Seok-won’s expression grew intrigued as he contemplated whether the Bank of Thailand would indeed mount a full-strength defense as anticipated, or whether they would fumble and lose the initiative to the hedge funds.
In the next hour or two.
The Bank of Thailand’s actions during that window would determine where Seok-won would place his bets.

* * *

Chatchai, who had become Finance Minister last December, was a man of bold reformist inclinations.
Aware that Thailand’s economy was festering dangerously from within, he sought to revitalize financial institutions through massive government budget cuts in the billions of dollars, stringent lending regulations, and the consolidation of troubled banks.
Additionally, he attempted to introduce a consumption tax to increase government revenue, but faced opposition not only from the opposition party but also from within the ruling coalition, encountering considerable difficulties.
In this context, the hedge funds’ assault on the baht was nothing short of catastrophic.
Finance Minister Chatchai, dressed in a gray suit, bit his lower lip hard upon hearing that baht selling had commenced even in the futures market.

“How much selling volume are we seeing?”

Bank of Thailand Governor Warit responded with an urgent tone.

[We’ve already exceeded 2 billion baht, and sell orders continue to pour in relentlessly!]

Finance Minister Chatchai, seated at his office desk with the receiver pressed to his ear, contorted his face in distress.

“Of all times, why must this happen now?”

If the economic reform measures he was pushing through succeeded completely, Thailand’s deteriorated economy could be revitalized, yet the attack had come at the most vulnerable moment—frustration was entirely justified.
Conversely, this was precisely the optimal timing to destabilize Thailand’s economy, so it was inevitable that the vulture-like hedge funds would seize the opportunity and descend with ravenous intent.
Finance Minister Chatchai, his expression grave, tightened his grip on the receiver and issued a firm directive.

“Listen carefully. If we yield here, the hedge funds will gain momentum and tear us apart. You must defend the baht at all costs!”

Through the receiver, one could sense Governor Warit’s distress.

[To defend the exchange rate, we have no choice but to draw down our foreign exchange reserves. But doing so could result in catastrophic losses.]
“I’m aware of that. But right now, defending the exchange rate takes priority over exchange losses. If the baht depreciates, Thailand’s economy will plummet into the abyss that very day!”

Finance Minister Chatchai pressed forward with force, his voice carrying weight and determination.
Central Bank Governor Warit, who understood better than anyone the magnitude of the shock a baht devaluation would bring, exhaled a deep sigh of resignation.

[Sigh. I understand. Then how much foreign currency will you authorize me to use?]

After a brief moment of consideration, Finance Minister Chatchai reached his decision and responded.

“I’ll grant you discretionary authority up to 8 billion dollars for now. Do whatever it takes to hold the line with that.”

Eight billion dollars represented nearly a quarter of Thailand’s total foreign exchange reserves—a staggering sum.
This alone made it abundantly clear how seriously Finance Minister Chatchai viewed the current crisis.

[… Understood.]
“Let me be clear: deploy dollars without restraint and make those hedge fund bastards so terrified they’ll back off.”
[I’ll do my absolute best.]

After ending the call, Finance Minister Chatchai muttered under his breath, his face flushed crimson.

“We can’t end up like the Bank of England or Japan. We have to break their offensive from the start, no matter what.”

Then, to secure retroactive approval from the Prime Minister for using foreign exchange reserves to defend the exchange rate, he pressed the keypad button and spoke in a firm voice.

“Connect me to the Prime Minister’s office immediately.”

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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