Golden Spoon Investment Portfolio - Chapter 384

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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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384. So it’s coming to this after all.

October 7, 1997.

[KOSPI: 427.98 (
−13.42)]

Jung Hwan-yeop shook his head as the KOSPI, which had seemed to be consolidating and bouncing back over the past few days, plummeted sharply once more.

“I had a suspicion, but it really was a dead cat bounce after all.”

Noh Hee-won, who had been diligently studying stocks lately to quickly adapt to the team and pull her weight, turned to Hong Jae-hee—who was organizing documents at the conference table—and asked in a hushed voice.

“Deputy Manager, what is a dead cat bounce?”

Hong Jae-hee, who had elegantly draped a Gucci scarf received from the company as a Chuseok gift not long ago, explained in an easy-to-understand manner while stapling the organized documents together.

“It’s an expression that comes from the saying that even a dead cat will bounce if dropped from a high place. We call it a dead cat bounce when stock prices plummet sharply and then briefly recover.”
“Ah, that’s exactly what’s happening now.”
“Precisely.”

Hong Jae-hee nodded slightly, then turned her gaze toward the large electronic ticker board mounted on one wall of the office, watching the KOSPI index with a worried expression.

“The fact that a dead cat bounce appeared means the decline will deepen further, so I’m concerned.”

Noh Hee-won, startled by what she heard, asked back.

“Really? Then that’s a disaster. The news keeps reporting every day about people who’ve lost all their money and are completely broke.”
“That’s bound to happen. It’s not just individual stocks—the index has fallen below half its value. In a market like this, there’s no one who can survive.”

Watching Noh Hee-won’s sympathetic expression, Hong Jae-hee spoke.

“That’s why the President is so remarkable.”
“How so?”

At the puzzled question, Hong Jae-hee smiled slightly.

“Before Noh Hee-won arrived, I wouldn’t have known, but when the KOSPI was at its peak, the President ordered us to liquidate all our positions and exit completely. At the time, everyone was optimistic that the market would climb higher, so I thought we were being too hasty. But after that, the market started declining like clockwork.”
“Really?”

Noh Hee-won’s eyes widened like a startled rabbit.

“If you ask the other team members, you’ll find out immediately. Why would I lie?”
“I may not know much, but the President seems to have truly remarkable investment instincts.”
“It’s beyond that—he’s an absolute genius. Even Manager Choi Ho-geun, who’s been in Yeouido for over a decade, marvels at it every time.”

Hong Jae-hee recalled what she had directly witnessed and felt in New York, a mysterious smile playing at her lips.

“You’ll gradually come to understand that the President is an even bigger and more formidable figure than what you’re seeing now, Hee-won.”

* * *

At the same moment.
Seok-won, sitting on the sofa in the President’s Office while receiving a market briefing from Manager Choi Ho-geun, suddenly felt an itch and scratched his ear.
Seeing this, Manager Choi Ho-geun smiled slightly and spoke.

“Someone must be talking about you, sir.”
“I suppose so.”

Seok-won removed his hand from his ear and steered the conversation back to its original topic.

“Where were we?”

Manager Choi Ho-geun straightened his posture and answered.

“I was telling you about the rumors regarding the investment trust company that circulated this morning.”
“Continue.”

As Seok-won nodded slightly, Manager Choi Ho-geun opened his mouth with a serious expression.

“Shortly after the market opened, rumors spread through Yeouido that major investors were withdrawing large sums of money they had entrusted to investment trust companies. Due to that influence, massive selling occurred, and the index, which had bounced back slightly, fell below the 430 line again.”
“It’s likely not just a rumor—there’s a high probability that money is actually being withdrawn.”

At Seok-won’s words, spoken while sitting with one leg crossed, Manager Choi Ho-geun’s expression hardened slightly as he responded.

“I’ve also checked through various contacts, and apparently major investors are liquidating all their stocks and withdrawing cash despite significant losses.”
“That makes sense. There’s an old saying that rats abandon a sinking ship before it goes down. They must realize the situation is deteriorating and are willing to take losses just to get out of the market.”

Seok-won watched Manager Choi Ho-geun, who sat with his interlaced fingers resting on his lap, his expression grave and serious.

“Do you know who’s in Seoul right now?”
“I’m not sure…”
“Dan McCathy, the IMF Deputy Director, and Henick, the U.S. Deputy Assistant Secretary of the Treasury, have entered the country discreetly.”
“…!”

Manager Choi Ho-geun’s eyes widened in shock at this unexpected news, and he swallowed hard.

“If the IMF Deputy Director is here…”

Under his gaze, Seok-won spoke calmly.

“The government’s expansion of the exchange rate band has had an effect, but with continued foreign exchange outflows, we’ve now surpassed 1,139 won per dollar.”
“….”
“Moreover, the yield on three-year corporate bonds—which serve as the benchmark for market interest rates—has risen 0.3 percent from the previous day, reaching an annual rate of 14.3 percent.”

Rising market interest rates were a clear sign of how much anxiety gripped the markets.
Seok-won spoke with a bitter expression.

“And considering that our foreign exchange reserves have been nearly depleted defending the won all this time, the only option left is to request IMF assistance.”

As Seok-won spoke with such certainty, Manager Choi Ho-geun’s gaze grew distant, his expression turning somber.

“…So that’s how it ends up.”

Even during Korea’s most difficult periods—the first and second oil shocks—the country had only discussed requesting IMF bailout financing but never actually received it, so the shock was inevitable.

“The announcement will probably come by the end of this week at the latest.”
“That soon?”
“Otherwise, the country could actually face sovereign default.”

At Seok-won’s grave words, Manager Choi Ho-geun’s face grew even darker.
Though he had already received several warnings and was somewhat prepared, now that IMF intervention was imminent, it was difficult to hide the weight pressing down on his heart.
Understanding his feelings completely, Seok-won continued speaking in a measured tone.

“Even if the IMF bailout is announced, it won’t be the end—it’ll be the beginning.”

Choi Ho-geun, hearing those words, asked with a puzzled expression.

“If the bailout is executed, won’t the shortage of foreign currency be filled and the exchange rate stabilize?”
“Of course it will. But it takes time for the actual bailout to be implemented and dollars to flow in. During that interval, we’ll see significant volatility.”
“I see. Now that you mention it, that makes sense.”

Choi Ho-geun grasped the meaning and nodded slightly.

“And in exchange for providing the bailout, the IMF will make various demands, including large-scale restructuring, so the stock market will remain weak for quite some time.”
“Nothing in this world comes free, after all.”

I understood it intellectually, but I couldn’t help feeling a sense of frustration.

“Let’s formulate countermeasures taking all of this into account.”
“Understood.”

For a considerable time afterward, the two of us engaged in a deep discussion about the situation that lay ahead.

* * *

Four days later, at Government Complex 1 in Gwanghwamun.
It was well past 9 p.m., yet the floor housing the Ministry of Finance and Economy was brightly lit, a testament to the precarious economic situation.
The grand conference hall on the nineteenth floor was packed with domestic and foreign journalists, all gathered for the hastily arranged emergency press conference by Lee Eun-hyung, the Deputy Prime Minister for Economic Affairs.
Word had spread yesterday that Dan McCathy, the IMF Deputy Managing Director, had arrived in Seoul, and the atmosphere was tense with the possibility that the long-rumored IMF bailout might actually come to pass.
Ju Chi-do, a global economics correspondent, glanced at the visibly strained Ministry of Finance and Economy staff before leaning in and whispering softly to Go Dae-hong beside him.

“The atmosphere here feels ominous.”

Go Dae-hong, a photographer for Hansung Daily News, removed a fresh roll of film and loaded it into his camera, his expression grave as he replied.

“Holding an unscheduled press conference at this hour—that itself suggests something’s happened.”
“Do you think they’re really going to request IMF bailout funds?”

Go Dae-hong secured his camera onto the tripod he’d set up in advance and spoke.

“We’ll find out soon enough.”

Though I tried to appear composed, even Go Dae-hong, who had worked as a journalist for nearly a decade, couldn’t hide the trembling at his fingertips as he faced this unprecedented national crisis—the foreign exchange crisis.
Ju Chi-do, equally anxious, repeatedly wiped his clammy hands on his trousers, unable to stand still.

“Surely South Korea isn’t actually going to default, is it?”
“Don’t say such inauspicious things.”

Go Dae-hong’s brow furrowed sharply as he glared at him.
The economic situation had become so dire that even journalists were more concerned about South Korea’s future than chasing exclusive stories.

“Damn. I should’ve gone out for a cigarette earlier.”

Having finished setting up the cameras, Go Dae-hong muttered wistfully as he habitually patted the pocket containing his cigarettes.
The anxiety gnawed at him, making him crave nicotine, but with the press conference imminent, he had no choice but to suppress the urge.
Just then, murmuring erupted from the entrance, and Lee Eun-hyung, the Deputy Prime Minister for Economics and Minister of Finance and Economy, appeared.
The moment Go Dae-hong saw him, he rose from his seat, grabbed the camera hanging around his neck, and began photographing Lee Eun-hyung as he walked in, his shutter clicking rapidly.

Click-click-click! Snap!

Bathed in the loud shutter sounds and the brilliant flashes of camera lights, Deputy Prime Minister Lee Eun-hyung approached the prepared podium with a stiffened expression.
The large conference room was packed with domestic and foreign journalists, leaving not a single empty seat, as the Broadcasting Station cameras rolled live before Deputy Prime Minister Lee Eun-hyung.
Dressed in a neat suit with a wine-colored tie, he couldn’t entirely conceal the haggard appearance that came from the emotional toll of recent events.
As if determined not to miss this historic moment, the camera shutters erupted once more in a cacophony while Deputy Prime Minister Lee Eun-hyung stood before the podium lined with multiple microphones, his heart heavy.
As the noise subsided, a Ministry of Finance and Economy official standing to the left picked up a microphone and calmly addressed the room.

“We will now begin an emergency press conference. Those in attendance, please remain quiet.”

With roughly two hundred people gathered, the room fell silent as a tomb save for the occasional cough, all eyes fixed on Deputy Prime Minister Lee Eun-hyung’s lips.
After briefly surveying the journalists filling the space before him, Deputy Prime Minister Lee Eun-hyung turned his gaze directly toward the Broadcasting Station camera with its red light indicating live broadcast and spoke with grave solemnity.

“My fellow citizens, the government has decided, through consultations with the International Monetary Fund, to receive liquidity adjustment funds to overcome the difficulties currently facing our financial and foreign exchange markets.”

As expected, murmurs rippled through the room at the announcement of the IMF bailout, and everyone was seized by profound shock.

“The government has been in close consultation with the IMF through various channels to resolve Korea’s foreign exchange crisis, and we have received assurances from the IMF that they will actively support us should Korea request assistance. If the rescue financing is implemented as anticipated, Korea’s external credibility will be enhanced and our foreign currency shortage will be resolved. Based on this, I am confident that if all economic actors—the government, corporations, financial institutions, and workers—unite in their efforts, our economy will return to normal operations in the near future.”

As all citizens watched the emergency press conference amid shock and worry, this was the moment when the IMF crisis—one of the most painful chapters in South Korean history—was officially announced.

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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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