The Youngest Son of Sunyang

Will Emerson, executive vice president, Risk Management at Goldman Sachs, was staring into the agreement he signed last Friday.

The red-headed man, who was just standing beside him waiting for the vice president to open his mouth, finally couldn't bear it, and opened his mouth first.

“Let's contact Miracle Investments first. ”

“Wait a minute. You need to know the exact amount first. ”

Will Emerson crooked his chin and still remained under contract.

He said as if his phone was waiting for him to ring.

“Sing it. ”

He quickly writes down the number he hears from his phone.

“Are you sure about this? ”

He taps the numbered sheet with a pen, double-checks and closes the call. Will Emerson is already in mind.

He told the red-headed man beside him.

“The whole conference room. Now!"

The red-headed man runs out in fear of dropping his horse.

Will Emerson reaffirmed the numbers.

The number of seven billion rounded with a pen struck my chest horribly.

As Emerson entered the conference room, a dozen people looked at him.

Emerson asked a question to a man without saying anything else.

“Michael, what is your current default? ”

“Yes?”

“Subprime mortgage loan! Debt repayment status after variable rate application! ”

“I'm guessing three percent. ”

Michael's arrogant reply frowned.

“Are you sure about that? Give me a precise number, not a guess. ”

Michael starts banging his laptop keyboard like crazy.

“Last Friday Miracle placed a $2.8 billion wager for the mortgage-backed securities to rest. Their plan was $3.5 billion, but they lowered their stakes a little. We can assume that the terms of the contract are no different from ours, so if they win... they take almost 56 billion dollars. ”

Everyone in the conference room was speechless.

Miracle's work was the talk of the whole weekend, so no one knew about it, but I first heard of the entire wager.

Starting with F, the insulting amazement was supposed to explode, but the Vice President's firm expression kept everyone close to it.

They also wondered if the vice president was that angry because Miracle had spent 2.8 billion dollars and Goldman Sachs had only spent 48 million dollars.

“There were others like Miracle before. But it wasn't much, was it? ”

According to the vice president, someone nodded their head and someone looked at it unfamiliar.

“Miracle is a place where stability comes first. Isn't it weird that you've spent 2.8 billion dollars in a place that's extremely reluctant to lose money? ”

“Emerson, the $500 billion a year in mortgage securities, although 2.8 billion is money, is relatively small. ”

When someone raised an objection, someone else gained the courage to be optimistic.

“At the Las Vegas Securitization Forum, we announced that the loss rate for subprime mortgage-related securities was only five percent. ”

“Who?”

“In the keynote address of Bruce Miller in Bearston…. ”

Emerson hung up on him and asked.

“What is the basis for 5%? Did you check?”

When the optimist couldn't answer and hesitated, Michael saved his life.

However, the numbers he identified made everyone in the conference room a sinner.

“Emerson, starting this year... ”

“How much? Just give me the numbers! ”

“8% ……. ”

The crisis began to feel most strongly about the man named Michael. He saw the graph of default rising steeply.

“With this trend, the next month will be more than 9%, with 10% lines in front of you. ”

Michael also revealed important things he shouldn't hide.

“The rate of fluctuation is already more than four times the fixed rate. Every mortgaged house that goes on like this... ”

Will Emerson's eyebrows trembled.

The numbers from the keynote address of the Securitization Forum are not justified. The forum is just a gathering of merchants selling more derivatives.

Rosy future, safe investments, money banquet.... What a massive mess, aren't they?

Will Emerson rose to Vice President solely for Risk Management because of his careful insight. It was meticulous and meticulous enough to find a very small hole in the giant dam and prevent the dam from collapsing.

But he seemed to have to write his resignation today.

There is already a big crack, not an ant hole, and water is leaking. The dam seemed to be collapsing soon.

It was too late to blame myself for not doing anything because I was blinded by the fancy money banquet.

He knew exactly what to do from now on.

I did not detect the risks beforehand, but I have to minimize the risks I have already faced.

Now we pack up and climb the escape route before the dam collapses.

Vice President Will Emerson answered the conference room table.

“Send up five guards immediately. ”

All of a sudden, the people gathered in the conference room were puzzled, but could not talk. It was because the Vice President's firm expression was not unusual.

Emerson said as soon as the guard arrived.

“Everyone stay here while I'm gone. Put your phone on the table. ”

Just looking at each other, he yells.

“Hurry, or you're fired from this job! ”

People quickly took out their phones and put them on the table.

Vice President said to the guard:

“Turn off all cell phones and disable them. The same goes for laptops, and pull the phone lines, and keep these people out of the conference room. It'll be over in a minute.”

As the guard began to collect his cell phone, Will Emerson ran towards Goldman Sachs' presidential office.

The conference room has been turned into an isolated island completely sealed off from the outside.

* * *

“John, it's an emergency. ”

“Just sit down. Have a glass of water. ”

John Rogers, president of Goldman Sachs, calmed Will Emerson down in a hurry.

“Is this about Miracle? ”

“Yes, but the real problem is somewhere else.... ”

Chairman Rogers raises his hand to point at the TV and closes Emerson's mouth.

“Look at that rejection. ”

On TV, there was a CNN breaking news story.

New Century Financial, the second subprime company, filed for bankruptcy protection at a court in Willington, Delaware on the second day. On this day, the company announced restructuring adjustments such as reducing 54% of its employees by 3,200, and selling its affiliates.

Recently, subprime mortgages rose in interest rates, housing prices dropped, poor grew and struggled, and provided nearly $60 billion in loans last year, but stopped loans since last month.

He also explained that CIT group and Greenwich Capital agreed to fund $150 million, but the stock price had already fallen 97% compared to last year.

Will Emerson squinted.

Oh, my God!

It's already exploded.

“Do you know who New Century's largest creditor is? ”

Emerson nods at the president's question. Goldman Sachs. And all the top 10 financial institutions in the world are major creditors.

“Miracle signed a billion dollar swap? ”

“That's right.”

“Rachel, does she have good instincts? Or are you a mathematician? You hit and left just one day ago. ”

“John, Miracle's billion dollars is nothing, we need to clear out our CDOs quickly. ”

Unlike an urgent vice president, Rogers was still free.

“What if we start cleaning up CDOs? Do you think I'll see you anywhere else? All the securities in Mortgage Loan Base will spill out in no time. ”

“You can't just sit here and watch, can you? ”

“Will.”

“Yes.”

“Do you know why Miracle only signed one billion dollars? ”

Emerson is feeling overwhelmed by the Chairman, relaxing and quietly asking questions.

“It's not a billion dollars less. ”

“No, you said 60 billion dollars in total. ”

“56 billion dollars. ”

“56 billion is less than two percent anyway. Miracle knows exactly what we're paying for. We've already signed quite a few credit default swaps. ”

“How long...? ”

“$25 billion. ”

Emerson realized that his relaxation comes from giving up, and that there was nothing he could do about it.

Seeing Emerson in a daze, Rogers chuckles.

“Don't be so mean. Ten billion of them are ours. ”

“Yes? What is it...? ”

“We got insurance just in case. You know the Gary Trust that sprayed out of our company? ”

“Yes, isn't this an investment team of a unique nature? It is composed of outstanding talent.... ”

“Yes, the company and our Goldman Sachs have signed a credit default swap. His subsidiary made 10 billion dollars, so he's a little short of breath. ”

I don't understand a word.

Headquartered that the housing market would win, the subsidiary wagered that the housing market would collapse.

What would the shareholders of Goldman Sachs think? This is clearly treason of corporate ethics.

If Emerson knew that $10 million out of 10 billion was personally contracted by Chairman John Rogers, he would be devastated.

John Rogers gets up touching the couch.

“You're late, but we're right to play, right? I order you to dispose of these paper towels as soon as possible. You have to stop this from spreading. ”

I would try inside the company, but the outside is already gone.

Other companies are not fools. We will analyze why Miracle has been swept away, and they will come to the same conclusion as themselves.

Wall Street has already exploded.

We just have to make sure that private investors know about it as late as possible.

As always, isn't the biggest victim a common investor?

* * *

“Goldman Sachs is the fastest. You're running out of juice to digest it. ”

Rachael takes a deep breath while drinking coffee on the incoming phone all day.

“Tomorrow I'll throw it everywhere. They'll come out of some stupid place that wants to buy it. ”

“Now it's only a matter of time before everyone knows that U.S. mortgage loans are impossible to recover. ”

The dark shadow does not fade from Rachel's face.

“Howard, from what I understand, mortgage securities are just handguns. ”

“You mean derivatives. ”

Do you know the size of the synthetic derivatives that bind CDOs like composite CDOs, square CDOs, double CDOs, etc.? ”

“Yes, more than 20 times. ”

Rachel shakes her head as she looks at me speaking boldly.

“Why? Because I hear the collapse of the world economy, do I have to make a fuss? ”

“No. The world economy is collapsing, and you've scraped up a lot of money. But I don't think you're feeling much of an emotion. ”

“Joy and sorrow collided against each other, making 56 billion dollars, but millions of good citizens will spread the word because of the American wealth that will evaporate. You can't always be happy. ”

In fact, earning money is not a pleasant thing. The real joy is that this economic crisis is a bullet that will bring down the Vice President of the Oscillator.