Golden Spoon Investment Portfolio - Chapter 318

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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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318. Is This Really the Right Move?

Thursday, February 13, 1997.
Beneath the thick blanket of darkness, with only the glittering lights of Brooklyn’s skyline twinkling across the distant river, the Trading Floor of Eldorado Fund on the 31st floor of One New York Plaza hummed with relentless activity.

“JP Morgan at 6.7, 100 units sold!”
“Citibank also placed a sell order for 150 units at the same price!”
“BOT at 6.7, 250 units bought!”
“Lehman Brothers, 200 units sold!”
“BO… no, SCB bought 250 units!”

Andrew, dressed in a white dress shirt with suspenders, stood with his arms crossed, watching the frenetic baht chart movements on the massive ticker board—just as chaotic as yesterday—and spoke.

“Finally, SCB is making a move.”

SCB was the abbreviation for Siam Commercial Bank.
Founded in 1912, SCB was Thailand’s oldest bank and also the nation’s largest commercial bank, holding assets exceeding 500 billion baht—over 10 billion dollars in US currency.
Dan, the senior chief trader, picked up his mug of dark coffee and responded with an expressionless face.

“No matter how powerful the Bank of Thailand is, wouldn’t it be insufficient for them to defend alone against the relentless assault of hedge funds?”
“That’s true.”
“Yesterday they were caught off guard and responded haphazardly in disarray. But today, with the central bank acting as the control tower, the commercial banks and securities firms—including SCB—are receiving foreign exchange support and forming a coordinated front like a rugby scrum.”

Andrew nodded slightly, responding in an unperturbed tone as if unsurprised.

“They must have sensed something was amiss. If they hadn’t formulated a response, it would be dereliction of duty.”

Just then, a familiar voice came from behind.

“Andrew. There you are.”

The two men turned to see Seok-won, dressed in a navy suit with a silk ascot tie around his neck, approaching with Landon Shore and Han Ji-sung, his attendant secretary.

“Good evening, sir.”

Seok-won raised one hand in a light acknowledgment of Andrew’s greeting, his gaze fixed on the massive ticker board before him.

“How is the situation progressing?”

Dan set down the mug he’d been holding onto the desk and answered immediately.

“The hedge funds are attacking more aggressively than yesterday, and the Bank of Thailand is actively defending by sweeping up all the baht selling pressure.”

I stood with both hands in my trouser pockets, my eyes quickly scanning the baht selling and buying movements displayed on the large market board.

“How much baht has been sold so far?”

Dan bent forward slightly from his standing position to check the computer before answering.

“Just over 500 million dollars today alone.”
“The Thai foreign exchange market has only been open for a few hours, and if baht selling has reached that volume, they’re definitely pushing harder than yesterday.”
“That’s correct.”

Andrew, standing nearby, naturally interjected.

“But as long as they still have foreign reserves available, the Thai government and central bank won’t back down easily—they’ll hold their ground firmly.”
“That’s likely.”

Just then, one of the staff members stood up and approached.

“Thai Prime Minister Mouan Sai Kittikachorn has been releasing an emergency statement regarding exchange rates just now.”

Dan scanned the wall monitors continuously running along one side of the trading floor, and spotted CNBC broadcasting it live, pointing with his hand.

“There it is. Turn up the volume.”

[… We have confirmed that behind the baht attacks that began yesterday are greedy hedge funds led by George Hamilton. For their own profit, they are employing violent means to steal away the fruits that our Thailand has labored and sweated to achieve over the past decades. The cabinet and central bank will courageously stand against the attacks of these villains without retreating an inch. Let me state once more: there will absolutely be no forced devaluation of the baht against our will!]

Landon Shore turned his head to look at me after reading the real-time subtitles and spoke.

“The Thai government seems to be coming out very strong from the start.”

I watched on the television screen as Prime Minister Kittikachorn, his expression hardened like stone, finished his statement and left the podium without taking questions from reporters before I spoke.

“When a dog raises its fur and barks loudly, it often means it’s feeling fear.”

After a moment of thought, Landon Shore nodded.

“True enough. Hedge funds that have brought down the Bank of England—far stronger than Thailand—and even Japan wouldn’t be trembling if they weren’t afraid. That would be the real anomaly.”

Seok-won let the announcer’s voice analyzing the Thai Prime Minister’s statement wash over him as he responded with measured calm.

“In any case, now that the Prime Minister has declared an all-out defense, the Bank of Thailand will throw everything they have into holding the line.”
“The Prime Minister himself announced he’d protect the baht. If the exchange rate collapses that very day, there’s no greater humiliation. They’ll defend it with everything they’ve got.”

Andrew added his thoughts to Landon Shore’s shrug.

“Meanwhile, the hedge funds will likely intensify their assault just to seize the initiative.”
“Either way, it’s certain that today will see an extremely fierce exchange of blows from both sides.”

Before the words had even finished, Tyler, the head of the foreign exchange trading team, stood up from his desk surrounded by monitors, headset still on, and turned toward Seok-won, shouting loudly.

“Massive baht sell orders flooding the futures market!”

Another employee immediately echoed the cry.

“Spot market selling pressure is surging!”

Shouts erupted from all corners of the floor.
Turning to look at the large price board, Seok-won watched as baht sell orders accumulated rapidly in both the futures and spot markets, the exchange rate collapsing alongside them, threatening to break through 27 baht per dollar at any moment. He muttered as if he’d expected nothing less.

“Just as I thought—the Prime Minister’s statement meant to show the hedge funds Thailand’s resolve to defend the baht only provoked them instead.”
“Indeed. It’s turned out worse than if he’d said nothing at all.”

Andrew, who had his hand on a subordinate’s chair while staring at the monitors, quickly added.

“The Bank of Thailand is beginning its defense.”

Seok-won’s eyes dropped to the monitor.
Just as Andrew said, massive buy orders appeared, executing all the sell orders the attackers had unleashed, forcibly grabbing the baht by the collar as it plummeted and dragging it back up to the 26 baht per dollar range.
But it was only temporary.
The hedge funds sold baht in massive volume again, and the exchange rate swung sharply.
After watching the fierce back-and-forth battle over the 27 baht per dollar level for a moment, Seok-won’s eyes gleamed as he spoke.

“It looks like the Bank of Thailand has set 27 baht as their line in the sand.”
“That’s what I’m seeing as well.”

Seok-won flashed a subtle smile toward Dan, the senior chief trader.

“The timing doesn’t look bad, so let’s go ahead and place our bet.”
“Understood.”

Dan gestured toward Tyler, who was watching us.
Tyler nodded and brought the headset microphone close to his mouth with one hand, speaking tersely.

“Start.”

The moment the order came down, the foreign exchange traders who had been waiting with itchy fingers all sprang into action simultaneously.

“6.9, no, 7.0 at 15 boats!”
“Okay. Done!”
“Futures at 7.1, 21 sold!”

Tyler, his white shirt sleeves rolled up, shouted in a sharp voice, apparently not hearing clearly.

“Again!”
“Futures 21 units sold at 7.1!”
“Done!”

Tyler stood up and spoke into his headset microphone without taking his eyes off the six monitors in front of him.

“More volume is coming in on the futures side. Leave the spot market alone and buy the futures!”

Watching Tyler subtly ride the waves, buying and selling without drawing attention while steadily building long positions according to plan, Seok-won smiled with satisfaction.
Meanwhile, Jung Hwan-yeop, who had been watching the frenzied trading unfold on one side of the Trading Floor with bated breath, confirmed through the monitor that the baht long position was accumulating steadily, then whispered in a low voice to Manager Choi Ho-geun.

“It really does look like they’re betting on a long baht position. Is this really the right call?”
“You heard everything in the meeting earlier. So why are you asking again?”

Jung Hwan-yeop scratched his head and sighed.

“That said, no matter how I think about it, this seems like a complete upset, doesn’t it?”
“From what I can see, the hedge funds appear to have a stronger position than Thailand.”
“I agree.”

Hong Jae-hee, her hair tied back tightly with a cord, also nodded in agreement with the two of them.
In truth, Manager Choi Ho-geun harbored the same thoughts internally.
That’s why I was genuinely shocked when, in the meeting held before the Sydney Foreign Exchange Market—the first to open in Asia—opened, he announced we would take a long position rather than a short one.
I carefully reviewed the relevant materials again, wondering if I’d missed something, but Thailand’s economic situation was indeed too dire; the baht’s devaluation was inevitable, merely a matter of timing.

‘The Thai government has accumulated considerable foreign reserves, but it will be difficult for them to withstand the assault of hedge funds….’

Thirty-eight billion dollars was no small sum, yet considering that over one trillion dollars in foreign exchange trades hands daily in international financial markets, it could evaporate in an instant.
Without looking elsewhere, just two years ago when hedge funds including the Quantum Fund attacked Japan, they poured in hundreds of billions of dollars with ease.
That’s why they were executing a strategy of gradually eroding Thailand’s foreign exchange reserves while applying pressure, waiting until the Thai government raised the white flag in surrender.
It was an utterly simple and obvious tactic, yet because they couldn’t abandon currency defense, the opponent knew but had no choice but to fall into the trap.

‘The boss… no, the chairman must know this too.’

I was even more puzzled because Mason had told me that the Eldorado Fund had led the previous attack on the Japanese yen.
Manager Choi Ho-geun’s eyes unconsciously followed Seok-won, searching for answers.
Then, the moment I saw Seok-won standing with both hands casually thrust into his trouser pockets, surrounded by fund executives and gazing at the large market board, I felt the doubts and concerns that had accumulated within me vanish in an instant.

“Has the chairman ever made a wrong decision even once so far?”

At Manager Choi Ho-geun’s question, Jung Hwan-yeop and the team members all shook their heads in unison.

“Never.”
“A perfect 100% win rate.”
“Our chairman is the one called the Investment Deity, the Midas Touch, even on Wall Street.”

Manager Choi Ho-geun settled back in his chair, speaking with a voice full of conviction.

“Then what’s there to worry about? There must certainly be some reason behind this decision as well.”

Then Jung Hwan-yeop also let out a small chuckle.

“True. How could we mere sparrows ever comprehend the will of the phoenix?”
“Aren’t you accepting this a bit too readily?”

If he had been his usual talkative self, I would have felt more at ease. His sudden silence only made me anxious.

“He’s our chairman, after all. A perfect batter with a thousand percent home run rate—how could we not trust him?”
“Exactly.”
“I’ve never seen anyone as remarkable as our chairman in all my years.”

Yu Seok-hyun and Hong Jae-hee, who had witnessed Seok-won’s abilities countless times over the years, nodded enthusiastically in agreement.
Jung Hwan-yeop rubbed his hands together with newfound composure, his tone brimming with anticipation.

“Thinking about it that way, I’m actually curious to see just how impressive his performance will be.”

The three men exchanged glances, then refocused on their monitors with unwavering determination not to miss a single moment of the coming confrontation.

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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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