Breaking Up Is Better Than Divorce

total return swap

“There was talk of increasing oil production in oil-producing countries because of shale gas. In fact, the shale gas revolution means an entirely new number of suppliers, right? Demand is limited, but if supply increases, it is natural that the price will inevitably fall.”

Eugene told Gabriel what motivated him to invest in oil futures.

Anyone can explain the cause of an event after it has happened.

“In June of last year, the price of oil started crashing at $110. This was definitely an opportunity. It was a matter of who gets the good seats first.”

“Not everyone bets $100 million so boldly.”

Larry, who sits next to him, occasionally floats Eugene up.

“I got $3.4 billion in futures revenue alone, and that’s what I got from options and hedging.”

Eugene outlines not only his earnings, but also how he used his leverage.

“It’s amazing. After only six months, you have joined the ranks of international wealthy people.”

“I will easily be in the top 100 richest people in America. If you evaluate it in terms of cash assets, excluding corporate equity or real estate, it will easily fit within your ten fingers.”

Larry Pink helped again.

“I do. There are only a few individuals in my memory who manage $7 billion in cash equivalents alone. It’s a traditional family office.”

After that, for a while, the interview was conducted in the form of discourse.

“Is it okay to use the conversation we had today as an article?”

“Sure.”

That was the purpose from the beginning, and Gabriel knew it well.

“Wow! A real giant has come.”

After the party, Yoosung said while checking the photos he took that day.

“okay. It’s a giant. In the future, I will become a great person.”

Larry Pink is still a giant of influence, but by the time Trump’s administration comes, he’ll be the real Wall Street representative who will wield his influence without hesitation.

Yoosung posted several intimate photos of Eugene and Larry Pink taken at the party that day on social media.

#Gifts and options organized

#Larry Pink #BlackRock CEO #Wall Street Giant

– uh? Is this the BlackRock boss? So are you the richest person in the world?

– BlackRock has a lot of wealth, it doesn’t matter how rich this guy is.

– He’s still very rich.

Initially, the story of Larry Pink’s wealth was predominant.

– But he said he broke down, what happened?

– Wasn’t it full of shit while giving a present?

– They say it’s over.

For some reason, rumors that Eugene failed to invest in futures seem to have been floating around in the community.

Perhaps it was the words that were spread from the ocean side, I thought.

– An acquaintance said that he works on Wall Street, and that this hyung’s investment caused a stir. I heard they made billions of dollars in oil futures.

– What are billions of dollars? ’cause I’m a beggar I must have uploaded a picture I took before to unfurl.

– A photo of Larry Pink and Lee Hyung shaking hands appeared on BlackRock’s official SNS page.

– uh? Really? Is this guy a real tycoon now?

– Are you a tycoon for shaking hands and taking a picture?

– This older brother is richer than Larry Pink. Larry Pink is only worth $500 million.

– You’re kidding. Why is the owner of Black Rock so poor?

For some time there was a debate about Larry Pink’s fortune.

– The article appeared in the Wall Street Focus. He really made seven billion dollars.

– Nonsense. that would be fake

– Larry Pink confirmed it.

– really? 7 billion dollars? crazy

– So, is this hyung the richest person in Korea?

– No more than the chairman of Cheil Group.

– Chairman Han is rich in stocks, and this hyung is cash.

– Group stocks are much more valuable than cash. It’s enough to spend money, but the best group is forever.

– What is eternity, damn it.

The story goes as expected.

In a few days, most Koreans will hear about Eugene’s success story at least once.

On Monday, I went to Black Rock and talked to William.

“This is a director promotion gift.”

As soon as he saw William, he held out the paper bag he was carrying.

“Even if you don’t have to give me a present like this… uh!”

A bewildered expression appeared on William’s face as he opened the paper bag with a smile.

“This is an excessive gift.”

“You don’t like it?”

“Of course I like it. It’s the first edition of The Great Gatsby…”

William took the book out of the envelope and gently touched the cover.

“When it went up for auction last year, it sold for around $150,000. If I had time, I’d love to go to that auction too.”

“Did you say that it was William’s favorite novel? As a commemoration of becoming a director, I wanted to make a meaningful gift, and that came to mind.”

“What a wonderful gift. To be honest, I like it so much that I can’t say no.”

“It would have been difficult to dispose of if I refused, so that’s good.”

Eugene remembers William’s delighted face when he got the book about 10 years from now.

At that time, the price was five times higher than it is now.

“But I don’t know if I really can accept such a gift.”

“Thanks to William and everyone else, we were able to make a lot of money this time around. I wish you all the best in the future. So this is a token of appreciation.”

This time I opened a slightly larger envelope.

Inside, there was a small box with luxurious gift wrapping left over.

“It’s Patek Philippe. You are really big.”

William said as he received the second gift.

“Everything was unified under the same model. I hope you like it.”

“haha. Who would hate Patek Philippe?”

When I presented the same Patek Philippe watch to everyone who was in charge of Eugene’s investment at BlackRock, everyone was delighted.

Although the minimum salary was over $100,000, no one was offended by an expensive gift.

I know that they each received a hefty bonus while in charge of their own investments, but if you give them a gift, they tend to care even a little more.

Of course, the real purpose was different. If you buy a favorable impression now, why not think more positively when scouting later?

Eugene never thought a $100,000 watch was expensive.

The wrists of two bodyguards, John Westwind and Roger Burton, who followed Eugene to BlackRock, also had a flashing Richard Mille watch.

Of course, it’s Eugene’s gift.

If you have made a lot of money, and if the people around you know it, you should also know how to give it moderately.

At least he had to be generous with the bodyguards who would protect his life and the managers and dealers who would increase his fortune.

“Now I have to continue investing again.”

I don’t want to play around with $7.6 billion of money.

“What sport do you want this time?”

“For the time being, I don’t want to touch a gift. It was pretty tough for six months.”

it’s not just saying

Even if he knew the future, he had to be concerned all the time because there was so much money at stake.

“right. You have had many nightmares too.”

“It did······.”

It’s not the first time I’ve woken up in a cold sweat.

“So for the time being, I plan to keep it in stocks.”

“Then, do you have any ideas in mind?”

“I’d like to get William’s recommendation first.”

“All right. please wait for a moment. I will prepare it right away.”

Naturally, preparations for the briefing on stock investment were quickly over.

William Yoon quickly started a presentation with various materials.

“IT companies such as Google, Microsoft, Apple, Facebook and Amazon are expected to show moderate growth this year. And Netflix, a content service company, looks promising.”

First of all, we recommend the IT giants who have been leading the global economy as well as the NASDAQ since the 2000s.

“Hardware like NVIDIA and Broadcom would not be bad either.”

“How about AMD?”

Yoosung asked.

“Honestly, investing in AMD is risky. It has been lively since Lisa Su took over as CEO last year, but it is questionable how much, not just one or two, things AMD shoveled.”

“okay.”

It’s definitely going to take a little longer for AMD to start rising.

“For retail, Starbucks, Home Depot, and Nike are promising. In the pharmaceutical industry, Pfizer and Align Technology also look good.”

A brief description of each company followed.

I’ve already thought about which companies to invest in, but listen carefully to the experts’ explanations.

The stock selection wasn’t too difficult. That’s why I came to finish the rough idea from the beginning.

“This time, I want to do a Total Return Swap transaction.”

In fact, this is the reason why we continue to do business with BlackRock.

Leverage.

If you know the future, of course you should increase your investment even by taking out debt.

For ordinary funds, you can use leverage provided by ordinary investment institutions or brokerage firms, but at the level of billions of dollars, it is a completely different story.

In order to satisfy Eugene’s desire for tens of billions of dollars in borrowing, a large investment bank must obtain a prime brokerage (PBS) service that provides various conveniences, including providing credit to other investment institutions.

In addition, institutions that provide leverage also carry large amounts of risk, so they had to individually adjust how much leverage they can supply.

And that coordination also requires a network.

In that regard, BlackRock, with its reputation as the world’s number one wealth management company, is the perfect place to be.

“All $7.63 billion?”

“It’s only 7.5 billion dollars. I have to go shopping for $130 million.”

“It’s going to be a great shopping experience.”

William laughed.

“All right. Then we will see how much leverage we can use. Since we focus on blue-chip stocks, we think we can get quite a bit of leverage.”

“If it’s a total return swap, isn’t the stock your brother owns?”

Now that he has accumulated some knowledge about investment finance, Yoosung immediately understood the meaning of the words he was talking about.

“uh. Stocks are held by financial institutions that lend money, and we only bear the profit or loss. Instead, when the stock price falls below a certain level, the stock is sold there to prevent losses.”

“Is leverage to make big money?”

“Finally, you too have realized the essence of investing.”

“uh. So I’m never going to do that. Just seeing it from the side makes me nervous, but if I did it myself, I wouldn’t be able to sleep at all.”

That’s right. Total return swaps are quite problematic derivatives.

In the next six years or so, a Korean hedge fund manager with a capital of 10 billion dollars will run five times as many stocks, and then it will be blown away in one shot.

The stocks they invested in fell by 30% overnight, and the investment banks that provided the service sold their stocks at the same time, causing disaster.

As a result of this incident, Swiss Credit Suisse (CS) suffered an astronomical loss of a whopping $5.5 billion.

It is also known that the total loss of investment banks that lent money to Korean managers is approximately $10 billion or more.

This incident led the US government to recognize the risk of a total return swap and take measures to prevent the increase in instability in the financial system.

Suddenly, Eugene thought that if he hit the jackpot again with this investment, the man might explode a bigger bomb later than he knew.

But what… I don’t know.

Wall Street is a growing monster devouring human desires. Eugene’s actions could cause a bigger bomb to explode in the future, but it wasn’t Eugene’s responsibility up to that point.

Two days later, I received a reply that 5x leverage is possible on 11 stocks Eugene picked with $7.5 billion as collateral.

Such high leverage was possible because such large stocks would not fall as much as 20% within a few days if a situation like the IT bubble of 2000 did not burst.

“$5 billion each for Google, Amazon, Facebook and Netflix. $2.5 billion each for NVIDIA, Broadcom, EA, Ectavision Blizzard, Nike, Starbucks and Home Depot. All of them are $37.5 billion contracts.”

It is a transaction of over 40 trillion won. If there was any problem, any bank would have collapsed.

Therefore, they decided to borrow from eight large investment banks. Surprisingly, Black Rock didn’t have a huge stake in it. He seemed to think that the revenue he earned from managing $37.5 billion was enough.

After confirming the stock investment, Eugene visited a Private Detective Agency in the Bronx.

“I would like to request an investigation into a private equity fund called DL Capital. We need data, especially about a man named Richard Hahn.”

“How much research do you want?”

“We want all available information within the legal limits of things like the members of the fund or the source of the funds.”

“Of course, we are only providing services within the legal scope.”

The private detective replied with a smile.

“You’re a detective, isn’t it just like a novel?”

As he left the detective office, Yooseong said with a funny expression.

“For Koreans, it’s a job that can only be seen in novels or movies. But here, it’s just an ordinary service provider.”

Unlike in Korea, where the detective business is illegal, private detective business is a legal business in most developed countries.

In the United States alone, 30,000 private detectives provide services that meet the interests of their clients in various fields.

It’s not just ordinary people who want evidence of their husband’s or wife’s affair using these detective offices.

Private detectives were often used by companies to obtain information necessary for their work.

Mostly, they request to investigate the trustworthiness of their trading partners or to collect evidence about the illegal activities of competitors.

Unlike in South Korea, US detectives can legally identify the property of an investigation target and monitor their behavior by following them.

There are even cases where a detective’s follow-up report is presented as evidence in court.

In particular, it is very common for law firms to hire detectives to gather data and evidence to win in court.

In this case, not only lawyers, but prosecutors or judges often entrust a detective to the case.

Even the Korean government often hires local detectives to catch tax evaders abroad.

“But isn’t it dangerous to ask a detective like that?”

As a detective, it seems that the shadow of a crime is somehow flickering.

“Private detectives, like doctors and lawyers, have a fiduciary duty to their clients.”

“What is it?”

“It means putting the interests of our customers first. For example, it is forbidden to divulge secrets or engage in harmful actions to the client. Of course, I can’t say that all of those obligations apply, but I found out that the detective is a pretty reliable person.”

Before returning to the past, when Eugene was working in New York, it was impossible to say that it was because she was a detective who often used her for work.

Even in the United States, it can be seen that it can be trusted enough if it is trusted by a global developer that is within a few fingers.