Golden Spoon Investment Portfolio - Chapter 89

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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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89. If you like it, just go ahead and pull the trigger.

Manhattan, New York.
Inside the Executive Office of Eldorado Fund, beyond the expansive floor-to-ceiling windows stretched an unobstructed view of the East River.
With me seated in the center, Landon Shore and Andrew occupied the sofa on either side, engaged in a serious conversation.

“It was neck-and-neck until the very end, but ultimately the ruling party emerged victorious.”

Landon Shore, adorned with a blue luxury necktie, responded while looking at me.

“Sedillo did win the election, but it was a narrow victory with only a 2% margin in the vote share.”
“If sympathy for the assassinated candidate Colosio hadn’t surfaced, the ruling party would likely have lost the election.”

I shared the same sentiment and nodded slightly.

“How’s the sentiment on Wall Street?”

I asked while picking up the teacup placed before me, and Landon Shore answered immediately.

“Overall, they’re evaluating it positively.”
“They’re focusing on the fact that he holds a doctorate in economics from Yale and comes from an economic bureaucratic background, having worked at the Bank of Mexico and the Budget Planning Ministry.”
“That’s correct.”

Andrew, seated across from Landon Shore, added to the conversation.

“Objectively speaking, he’s the most qualified person to normalize Mexico, which is facing a foreign exchange crisis. Perhaps because of that, once his election was confirmed, the exchange rate that had fallen to 4 pesos per dollar rebounded and recovered to 3.5 pesos.”
“In the bond market too, Mexican bonds, which had been hitting bottom, are showing slight signs of recovery.”

From Eldorado’s perspective—having shorted the peso and Mexican government bonds—this wasn’t particularly good news.
But I set down my teacup without concern and spoke.

“If this were March or April when the crisis first erupted, it would be different, but now it’s far too late to reverse the tide.”
“….”
“There may be a temporary improvement due to expectations surrounding Sedillo’s election, but it won’t last long.”

Landon Shore, gauging my reaction, carefully offered a counterargument.

“Now that the election is over, won’t the Mexican government actively step in to stabilize the exchange rate without worrying about appearances?”

Andrew nodded in agreement with the sentiment.
But Seok-won leaned back in his chair and shook his head.

“Will they, though?”
“…?”

As both men regarded him with puzzled expressions, Seok-won shared his thoughts.

“If President Salinas announces a peso devaluation now, he’ll bear all the responsibility for the foreign exchange crisis. Do you really think he’d do that?”
“…!”
“He’ll probably patch things up however he can until the inauguration, then pass this time bomb to President-elect Sedillo.”

Andrew pushed his glasses up with his middle finger and countered.

“It would certainly be disgraceful, but the government isn’t changing hands, and they’re from the same ruling party. Surely he wouldn’t do something like that?”

Landon Shore leaned forward as well, appearing to agree.

“Exactly. If he did that, the problem would only grow worse, and besides, he couldn’t completely escape responsibility anyway, could he?”

It was a reasonably sound argument, but Seok-won thought differently.

“That’s rational, but sometimes emotion overrides reason.”
“….”
“Everyone knows that President Salinas’s greatest achievement is achieving a high real GDP growth rate of 4-5% during his tenure while simultaneously stabilizing prices and revitalizing the Mexican economy.”

Seok-won shrugged and continued.

“Of course, all of that wasn’t because the Mexican government was particularly competent—it was thanks to joining NAFTA and the flood of dollars from low interest rates—but President Salinas won’t see it that way.”

Indeed, the massive influx of dollars had allowed the Mexican stock market to triple over the past three years, a boom of extraordinary proportions.
Had the Mexican government wisely deployed that liquidity to expand industrial productivity and increase employment, the situation would look vastly different now. Unfortunately, they did not.

‘The Federal Reserve raising rates so suddenly and so persistently—he never could have anticipated that.’

In any case, Mexico was paying a harsh price for its complacency and reckless optimism.

“So you’re saying that because President Salinas has been praised as the man who revitalized Mexico’s economy, he’ll want to preserve his honor until the very end.”

Seok-won nodded at Landon Shore’s words.

“That’s an emotion anyone would have, isn’t it? Especially for a politician like President Salinas—he’d be even more reluctant to have such filth dumped on him.”

The two men paused to digest what they’d heard, and soon their eyes brightened with understanding.

“You’re right, that’s quite possible.”
“Even I would want to shift responsibility if I could.”

Seok-won, sitting on the sofa with one leg crossed, spoke in a grave tone.

“While President Salinas drags out time until his term ends, whatever foreign reserves remain will be completely depleted.”
“So he’ll have become president only to inherit a company on the brink of bankruptcy.”

Seok-won interlaced his fingers and nodded in agreement at Landon Shore’s words.

“When that happens, President-elect Sedillo will have only one choice.”

Andrew’s eyes gleamed as he immediately spoke the word that came to mind.

“He’ll declare a moratorium.”

A moratorium meant that when a nation faced difficulties in debt repayment for various reasons, the government would suspend principal and interest payments on all debts for a certain period.
Seok-won nodded and spoke.

“If a moratorium is declared, the nation’s credit rating will plummet and financial transactions will be paralyzed, but if he doesn’t, Mexico will truly face bankruptcy, so there won’t be any other choice.”

In fact, Mexico was already in a state where it would be difficult to overcome the crisis alone.
And if President Salinas truly tried to buy time and shift responsibility as I predicted, the situation would inevitably spiral into catastrophe.

“And since a moratorium has already been declared once before, the second time will be an easier decision to make than the first.”

Andrew recalled the memory and spoke.

“You’re referring to what happened in ’82.”
“That’s right.”

In 1982, the Mexican government, which had been borrowing heavily in foreign debt to cover its reckless fiscal deficits, suddenly found itself in a foreign exchange crisis when crude oil prices—its primary source of foreign currency—plummeted.
Backed into a corner, the Mexican government was forced to declare a moratorium and seek bailout financing from the International Monetary Fund.

“Well, the first time is always the hardest. After that, it becomes routine.”

Andrew picked up immediately on Landon Shore’s murmur.

“If our estimates are correct, Mexico’s reserves should have dropped below half by now. If they squander what’s left defending the exchange rate until year-end, even President-elect Sedillo won’t have any clever options left.”

Seok-won picked up his teacup, only to find the coffee had gone cold, and set it back down before speaking.

“Since President-elect Sedillo himself holds a doctorate in economics, he might make his decision faster without hesitation.”
“He’ll know better than anyone that dragging things out will only make the situation worse. It’ll probably happen soon.”

Landon Shore’s expression showed he agreed with Andrew’s assessment.
Seok-won looked at both men, a meaningful smile playing at the corners of his mouth.

“Once a moratorium is declared, the peso and Mexican bonds will take the killing blow and collapse to the bottom.”
“I’m already curious to see how much profit we’ll make this time.”

Landon Shore laughed lightly, a glimmer of anticipation crossing his eyes.
Andrew regarded him with fresh admiration in his gaze.

“Both the peso and bonds are still within our profit range, correct?”
“Yes, they are.”

At Andrew’s confirmation, he spoke with unhurried certainty.

“The real crash will come in December when the presidency changes. Until then, we maintain our position as is.”
“Understood.”

With the important discussion concluded, Landon Shore shifted the mood by bringing up a lighter topic.

“By the way, boss—the owner of the building we’re currently in might be changing.”
“Wasn’t Chase Manhattan Bank the current owner?”

I asked, recalling what I’d heard before, and Landon Shore answered immediately.

“That’s correct.”
“So they’re putting the building up for sale?”
“We originally used this as our bank’s headquarters, but as you know, we relocated everything to our new headquarters in Brooklyn a few years ago.”

Landon Shore continued his explanation as Seok-won nodded.

“Currently, Chase Manhattan Bank doesn’t occupy any space here, and we’ve only been using it to generate rental income. It seems that during this round of internal restructuring, they decided to liquidate idle real estate holdings, which is why One New York Plaza Building is being put on the market.”
“It’s a shame to sell such a landmark building—it has an excellent location overlooking the East River and considerable historical significance. This is quite surprising.”
“It’s certainly a well-known building in Manhattan, but since it was constructed in 1959, it’s already thirty-five years old and has become quite deteriorated with many inconveniences. Moreover, the maintenance costs are substantial, so they’ve apparently decided to simply dispose of it.”

Andrew added his own explanation, sharing what he had heard.

“I heard that just a few years ago, they spent fifty million dollars alone on renovating the lobby, replacing the outdated elevators, and removing asbestos from inside the building.”

Still, Seok-won tilted his head with a puzzled expression.

“After spending all that money on renovations, isn’t it wasteful to sell it now?”
“Precisely because they’ve already done one round of renovations, they’re probably looking to sell it at a higher price before additional repairs become necessary.”

It made sense—selling a freshly renovated building would fetch a higher price than selling it in its deteriorated state.
A thought suddenly occurred to Seok-won, and he looked at Landon Shore.

“If I’m not mistaken, there’s almost no vacant space in this building, right?”
“That’s correct. Beyond its excellent location, the building has a major advantage—it has dedicated lines directly connected to the exchange.”

When buying and selling stocks or bonds, prices could shift in a heartbeat.
For this reason, the existence of dedicated lines that allowed orders to be placed faster and more efficiently than competitors was crucial.
One New York Plaza Building housed not only Chase Manhattan Bank as its owner but also numerous financial companies and hedge funds, which is why it had dedicated communication lines directly connected to the exchange.

‘That’s precisely why we chose our office here, despite the high rental rates.’

Because of these advantages, major investment banks like Goldman Sachs and Prudential Securities also maintained offices in this building, leasing multiple floors.
Seok-won stroked his cleanly shaved chin with one hand while organizing his thoughts, then spoke again.

“How much is Chase asking for the building?”
“I heard it’s three hundred million dollars.”
“It’s a substantial sum, but not unreasonably expensive. We should acquire this building.”
“Pardon?”

The two men’s eyes widened in shock at how casually the words had been uttered.

“Did you just say you’re purchasing this building?”
“That’s right. Since the fund’s assets have grown considerably, acquiring a building in Manhattan wouldn’t be unreasonable, would it?”

Landon Shore stammered, his expression betraying his uncertainty about how to respond.

“W-well, that may be true, but this isn’t just any property—it’s a 50-story ultra-high-rise building. Wouldn’t it be better to think this through more carefully?”

This was hardly the sort of decision to be tossed out casually, like choosing what to have for lunch today.
Andrew nodded in agreement, his head bobbing as he looked at Seok-won.
But Seok-won had already made up his mind and showed no sign of changing his decision.

“There’s a saying that deliberation only wastes time. The location is already top-tier, so its value will obviously increase further. Besides, there are no vacant units, so we can generate stable rental income—what reason is there to hesitate?”

Seok-won spoke with composure as he observed the bewildered expressions on both men’s faces.

“And since we have the money, if I like something, I just go ahead and buy it.”

It was a decision so bold and decisive that it was hard to know whether to call it audacious or simply reckless.
Faced with the sight of Seok-won impulsively purchasing a 50-story ultra-high-rise building worth 300 million dollars—not 300 million won—Landon Shore and Andrew could not hide their bewilderment.
Yet even if the decision seemed hasty, as Seok-won had said, there was no shortage of funds, and the real estate itself held excellent value, so there was no risk of loss in acquiring the building.
Both men understood this fact well enough that they could not dissuade him; they could only wear expressions of disbelief at what was unfolding.

“Strike while the iron is hot, as they say—let’s call right now and lock in the contract before someone else snatches it up.”
“Yes, of course.”

Landon Shore nodded, still unable to shake off his bewilderment.

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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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