The subprime mortgage crisis.
In 2007, it became the worst financial crisis that dragged the global economy into the abyss.
For such a financial crisis to happen, a combination of coincidences and inevitabilities had to overlap.
Even if the banks gave out reckless loans without screening, if the regulatory authorities had properly supervised, it could have been stopped early.
"Even if loans are given out under the names of dead people or dogs, the regulators will just turn a blind eye. As you know, the banks and regulators are closely connected. So it's highly likely that this situation will continue for the next 2 to 3 years."
"If bad loans accumulate over several years and then all burst at once..."
"An economic crisis beyond imagination would arrive."
Dimon trusted my words and prepared for the subprime mortgage crisis.
But today, he must have gained even stronger conviction.
"We need to save more money. During the IT bubble, if only we had more cash, we could have made much more profit."
"It's a very good opportunity to pick up good companies at bargain prices."
"Hm, with the current capital structure, we can only mobilize a few hundred billion dollars by
2007 at best. We probably need several times more than that."
"The more money you have, the more you can do. So here's an idea — why don't we start
subscribing to insurance or derivative products little by little from now?"
We had already made profits several times from insurance and derivatives.
Dimon knew this well and showed great interest.
"I haven't dismissed that idea either, but isn't it too early? According to your plan, it will take at least three years before profits appear."
"It takes three years of investment to avoid suspicion. And the banks need to earn free money for three years before they will let us subscribe to more insurance."
When everyone is mad, the sane person can end up looking abnormal.
That was the case in the U.S. right now.
Since everyone believed the real estate market would keep rising, anyone buying insurance
against a market drop would be mocked.
"Then I'll start subscribing to insurance at several banks from this year. Not a lot of money, just a small amount, so it won't affect the bank's profits."
"Gradually increase the amount. When the crisis hits, it will be a good excuse to acquire the
banks that sold those insurance policies."
"I'm no good at acting stupid, maybe I should take some acting lessons."
Dimon smiled foolishly.
But to me, it looked more like a devil's smile than foolishness.
"Proceed slowly enough so as not to stir the market too much. There's still plenty of time left."
"But what about you, sir? Don't you plan to invest separately? If Taewoo Group or SAVE
Investment also subscribe to insurance products, they could make a big profit too."
"In the case of SAVE Investment Company, they're involved through multiple channels, but at the Taewoo Group level, it's difficult to make a move. It would be troublesome to get on the wrong side of people."
"I'm really glad I came to Korea. Talking with you has completely relieved the stress I'd been carrying for days!"
Dimon had waited a long time to achieve his goal.
His goal was to surpass the success of his former boss, who had discarded him—and the head of the largest financial firm in the U.S.
A goal once thought impossible was now within reach.
***
A month passed.
During that time, South Korea remained noisy with impeachment trials, and finally, the result was announced today.
"The impeachment trial has been dismissed. The president, who had been suspended, is officially returning today!"
"Things are going as expected. Since the pro-impeachment faction was decisively defeated in the general election, this was the natural outcome. Hopefully, our ongoing projects won't suffer any setbacks."
Under the prime minister's leadership, the acquisition of raw material mines was in full swing.
Although the president's return didn't completely erase the prime minister's power, so there was no major reason to worry, it was possible they wouldn't push as hard as before.
"It doesn't seem like there will be any big problems. The president is also viewing the Latin America FTA positively, and I've heard he's satisfied with Taewoo Group's performance."
"Still, make sure nothing goes wrong."
"It will take at least a year to acquire the amount of raw material mines the vice chairman wants. Until then, I'll ensure no problems arise!"
The president's impeachment had come to a close.
From now on, the political power struggle would only intensify.
In this situation, we had to bring up a huge issue to the political sphere.
"How is the IIT (Indian Institute of Technology) Korea campus project going?"
"It's being reviewed very positively. I was informed that the announcement of Korea's hosting could come as soon as this month."
"The progress is faster than I expected."
"That's thanks to the extensive publicity that Taewoo Group is investing 10 trillion won in India. Both Prime Minister Manmohan Singh and the ruling Indian National Congress are eager to show early achievements during their term."
The early term is when power is strongest.
The only thing that could stop initiatives pushed by the prime minister and majority party was
public opinion.
But since that issue had been carefully resolved over a long time, the IIT Korea campus project was advancing quickly.
"So the ball will soon be in our court."
"Even if India announces the IIT Korea campus, it may be difficult to secure the project without agreement from Korean politicians."
"That problem needs to be solved at the National Economic Party level."
"To solve the IIT Korea issue, the National Economic Party needs to reach an agreement with the major parties."
"To gain something, you have to give something. We'll have to agree to the legislation the major parties want passed."
"But I'm not sure if Representative Choi Jae-seok, who has a strong will, will side with the major parties. Although we helped a lot in the recent general election, he's not someone who will easily move as we wish."
That was why we had supported Representative Choi.
We didn't need a puppet who would follow our every whim, but a partner to move forward with.
"I'll have to meet Representative Choi. I'll arrange the meeting place myself, so please just give me a heads-up."
"I'll arrange the meeting to take place today."
I called Captain Kang and instructed him to scout a meeting location.
By evening, I quietly moved near Captain Kang's office, switched cars, and headed to the
arranged meeting place.
"There's a place like this near Seoul?"
"It's an abandoned factory that went bankrupt during the foreign exchange crisis. Our company acquired it, and now we use it as a training center for our staff."
The rundown factory looked shabby from the outside.
But inside, it was fairly well arranged, and all the windows were covered with black blackout
tape so no one could see inside.
Further in, there was a small room set up like a conference room.
"Vice Chairman, Representative Choi Jae-seok has arrived."
"Sorry to bring you to such a humble place. We had no choice but to avoid misunderstandings about collusion between politics and business."
"I understand completely. It's not as remote as before, so it didn't take too long."
Like me, Representative Choi must have switched cars during transit.
Captain Kang likely had a trusted employee drive him here.
"How are you finding life as the leader of the negotiating group in Yeouido?"
"The treatment is better than before, but it's ten times more exhausting. Many people want to
meet, and many pressure me to line up with one of the major parties quickly. It's quite difficult."
"To my ears, that sounds like a favourable situation."
Persuasion and coercion.
Those are tactics used when you can't outright control the other side.
If you had confidence in recruiting them, you'd offer sweet incentives. If you had the power to crush them, you'd resort to threats rather than persuasion.
"The current situation isn't too bad, ha ha ha."
"On a positive note, I have to spoil the mood. As I mentioned earlier, there's one matter we need to convince and get agreement on."
"If we can't convince them, will you still keep the promise to abandon the plan?"
"Of course. But this matter will greatly benefit South Korea, so I'm confident we can convince them."
IIT Korea campus.
I paused for a moment before bringing up the topic.
Representative Choi took a sip from the bottled water on the table, and only then did I get to the main point.
"Are you familiar with the Indian Institutes of Technology?"
"I don't know much, but I've heard of it. It's a university every Indian student wants to get into, and I've heard that once you graduate, Silicon Valley is eager to recruit the alumni."
"You know quite well. The IIT is like a military academy that trains engineering experts. How would it be if such a university were established in Korea?"
Representative Choi pressed his lips tightly.
Education was one of the sensitive topics in South Korea that politicians dared not touch lightly.
Universities naturally fall under the category of education, and founding a new university was a difficult matter politically.
"It's not bad to have a university similar to the Indian Institutes of Technology, but don't we
already have several? I believe there are ones in Daejeon, Pohang, and Gumi."
"This is not about a university similar to IIT, but about hosting the IIT Korean campus. Bringing IIT directly from India to Korea."
"You mean not creating a new university but bringing the Indian university itself to Korea?"
Representative Choi was stunned.
While sister-school relationships with foreign universities existed, hosting an actual campus
abroad was unprecedented.
"The talks with Indian political circles are already finalised. If we get the green light from the Korean political side, we can proceed even this year."
"The IIT is India's pride, isn't it? How could they agree to establish a campus in Korea?"
"I have some acquaintance with Prime Minister Manmohan Singh. Also, there's currently a
Korean Wave sweeping India, so public opinion there is favourable, which made this possible."
"As expected from the Vice Chairman of Taewoo Group — you have global connections. But
bringing a foreign university campus to Korea could stir public sentiment. The major parties
might also exaggerate this issue."
"That's why I need your help, Representative Choi, and the National Economic Party."
I took a sip of water.
Representative Choi seemed deep in thought, pressing his temples gently with his thumb.
"Please explain how hosting the Indian Institute of Technology Korean campus relates to South Korea's economic development."
"If we succeed in hosting the campus, we can train various IT developers and have them settle in Korea."
"Even if it's a Korean campus, more than half the students will be Indian. Is it really possible for them to settle here?"
"We won't be able to have all of them settle here, but about 30% of them are planned to be
employed by Taewoo Group."
"That could actually spark even more public opposition. It would seem like jobs are being taken away by foreigners."
The employment crisis was worsening every year.
Job seekers were struggling desperately to get into the top ten companies, so they weren't
welcoming new competitors.
But what if the increase in competitors also meant that the doors to employment would open wider?
Especially if Taewoo Group—the company every job seeker dreams of joining—expanded its
hiring