New York.
Four o'clock in the afternoon. The North American markets closed for the day, the last trading session of the week.
While Wall Street's elite were deciding how to spend their weekend, an announcement from Westeros Company landed like a thunderclap, shattering the leisurely mood that had just settled over the city.
The announcement was brief: for reasons of corporate development, the company would soon reduce its holdings in six technology companies, including Apple.
After liquidating its Motorola position early the previous year, Westeros Company had made no major public moves in the intervening twelve months. The six stocks it now planned to trim were not especially large in aggregate; even a complete sell-off, at that day's closing prices, would yield roughly $500 million, more than half of it from Apple alone.
Yet no one could forget the frenzy the "Westeros Portfolio" had ignited in tech stocks, nor the young man behind the company who, in just two years, had produced one wealth miracle after another.
Selling six tech names at once, did it mean Simon Westeros had lost faith in the sector? Had something changed inside those companies that the public didn't yet know? Or was Simon Westeros raising cash for something else entirely?
A cascade of questions prompted investment banks and brokerage houses to call emergency meetings to assess what the announcement might mean for the week ahead. James Rebould's office at Westeros Company was inundated with calls from the moment the news broke.
Apple and the other five companies instantly became objects of intense scrutiny.
By releasing the statement after Friday's close, Westeros Company had deliberately allowed the market the weekend to digest the news and avoid a panic sell-off in tech.
That same night, Apple, the centerpiece of the reduction convened an emergency executive meeting.
In recent years the company's market share, revenue, and profits had risen steadily. CEO John Sculley was not unduly alarmed by Westeros's move.
Following the meeting, Apple advanced the release of its 1988 annual report to Saturday afternoon.
For the year ended December 31, 1988, total revenue reached $2.661 billion, a 39.9% increase over 1987's $1.901 billion. Net profit was $218 million, up 41.5% from $154 million the prior year.
Market share had also climbed, from 9.3% to 12.1%.
The strong numbers calmed many investors. Influenced by Apple, the other five companies quickly took similar steps to reassure the market.
In a Saturday interview with The Wall Street Journal, James Rebould publicly affirmed his confidence, stating that Westeros remained bullish on these companies' prospects and was reducing holdings only to meet corporate needs.
When pressed on where the proceeds would be redeployed, however, James offered no clear answer.
The evasiveness fueled speculation, and media outlets began digging for the story behind the story.
Monday arrived.
Amid the flood of commentary on the reduction, one front-page article in The Wall Street Journal seized universal attention.
Beware—Westeros Is About to Make a Major Move!
"At this year's farcical Golden Globes, the outstanding films released by Daenerys Entertainment earned only two awards: Best Director for Dead Poets Society and Best Supporting Actress for Steel Magnolias."
"I have no wish to rehash the fierce controversy surrounding the 46th Golden Globe Awards. I am far more curious about one thing: exactly how much money did Daenerys Entertainment make last year?"
"As a private company, Daenerys has no obligation to publish financial statements. Yet public data allow us to arrive at a reasonable estimate."
"Industry sources report that Daenerys has reopened talks with ABC for a second season of Who Wants to Be a Millionaire, the reason being that Daenerys's profits from the breakout quiz show far exceeded those of the network itself."
"Rumor has it that pre-tax profit from the first season alone will reach a staggering $250 million."
"Furthermore, reality programs launched last year by Daenerys's television division—Survivor, Big Brother, The Real Housewives of Beverly Hills, and others, have proven highly lucrative. Major theatrical hits such as When Harry Met Sally, Pulp Fiction, and Basic Instinct have filled the company's coffers."
"Domestic and international box office plus ancillary revenue from films like Dead Poets Society and Rain Man will flow to Daenerys over the next year or two."
"Even limiting the calculation to 1988 alone, after deducting all expenses, maturing debt, and taxes, Daenerys Entertainment's net profit from film and television operations almost certainly exceeds $200 million."
"Readers may wonder why I dwell on these figures."
"They form the crucial foundation for this article's conclusion."
"Daenerys Entertainment alone generated $200 million for Simon Westeros last year. Dividends from Westeros Cooperation's tech holdings were likewise substantial. By any measure, Simon Westeros is not short of cash."
"Yet his recent large-scale investments have been financed primarily through bank loans."
"Sources indicate that in recent months Simon Westeros secured a $200 million facility from Crédit Lyonnais in France, reportedly for European real estate (a rare misstep, though with Westeros one never knows). Then, after Daenerys took a stake in Blockbuster and Melisandre acquired Gucci, he borrowed another $250 million from Citibank."
"After minor scheduled repayments, his personal debt still approaches $900 million."
"Debt of that magnitude carries enormous interest expense. Even if he can service it comfortably, adding leverage when cash is plentiful is hardly prudent."
"Is Simon Westeros imprudent?"
"The answer is self-evident."
"Here, then, is the question."
"Daenerys is sitting on substantial cash reserves. Westeros Company is now liquidating tech holdings, even willing to sell a high-growth name like Apple. Yet for external investments it continues to borrow."
"What, exactly, is Simon Westeros stockpiling cash to do?"
"I am reminded of 1987. As Run Lola Run continued its box-office run, Simon Westeros holder of every right except North American theatrical, chose not to nurture the property but sold everything off cheaply."
"Subsequent rights reportedly brought him only $80 million. Warner Bros. paid $35 million for international distribution and doubled its money on $200 million in overseas ticket sales alone. The outright sale looked foolish."
"Yet."
"We all know what happened next."
"Today Simon Westeros's actions bear striking resemblance to those of two years ago."
"Meanwhile, across the Pacific, the Nikkei 225 has surpassed 31,000, up 138% in three short years. Japan's market mania mirrors North America's in 1987."
"I venture a bold prediction: Simon Westeros's next target is Japan."
"By the time this article appears, he may already have begun positioning himself in Japanese markets."
"We shall see."
The immediate effect of the Journal's front-page piece was to divert most attention away from the tech-stock reduction. When markets opened Monday, the technology sector did not suffer the sharp decline many had feared.
Bolstered by Saturday's strong earnings release, Apple shares rose 1.7% that day.
The Journal had clearly implied Simon Westeros was shorting Japan; most readers took the same view. In reality he was long.
Thanks to the time difference, Tokyo was already Monday evening when the article hit, sparing it an immediate reaction.
If the bearish narrative had been left unchallenged, however, the sizable Nikkei 225 futures long positions Simon had built would have suffered heavy losses the following day.
Simon suspected the piece had been quietly encouraged by hedge funds already short Japan.
After the brief 1987 correction, Japanese equities had roared higher for more than a year; the bubble now dwarfed anything seen in North America. Short sellers had long since piled in.
Simon had no intention of becoming the trigger that finally burst the bubble.
Shorts would keep their profits; none would trickle down to him.
After a hurried phone consultation with James Rebould, several major North American evening papers carried insider leaks that afternoon: Simon Westeros had indeed entered the Japanese market but on the long side.
To Simon's surprise, beyond their own efforts, a prominent Lehman Brothers analyst appeared on a CNN financial program that same afternoon and, citing reliable sources, confirmed that Westeros was long.
Clearly Simon's initial moves had already leaked.
Until now, others had quietly followed him in, even helping contain the news. Absent the Journal's bombshell, they would have continued riding his coattails in silence.
Plans, however, rarely survive contact with reality.
At this pivotal moment, those with heavy long exposure of their own, fearing Simon might react too slowly had evidently decided to "clarify" matters on his behalf.
Lehman.
Simon could only give a wry smile when he heard it.
After the events of that earlier period he had cut off contact with Lehman Brothers. Yet having witnessed his near-miraculous index-futures campaign in 1987, the firm had plainly never stopped looking for another chance to profit from him.
With matters now public, further secrecy was pointless.
James Rebold contacted NBC's financial channel and gave an evening interview in which he declared that "Westeros Company remains extremely optimistic about Japanese market growth potential," effectively confirming the long position.
In Japan itself, the Journal article had sent political and business circles into a tailspin.
Bearish commentary on Japanese stocks had never ceased; the government was well aware of the dangerous bubble and had spent the past year issuing measures to cool speculative fervor.
Coming from lesser sources, such commentary would have been ignored or routinely rebutted.
But this was Simon Westeros.
True, the Journal estimated he could deploy only a few hundred million dollars—trivial against Japan's vast market capitalization. Still, his record in both entertainment and finance over recent years could only be called miraculous.
No one dared treat this sudden, uncanny star lightly.
In emergency government meetings, some officials even urged major keiretsu to ready bailout funds.
Then, within hours, the narrative flipped.
Simon Westeros was not shorting Japan; he was long.
Relief swept through the corridors of power.
A group of exhausted, bleary-eyed officials and tycoons who had endured a sleepless night finally exhaled as they watched James Rebould's live interview.
Yet perhaps more could be done.
If Simon Westeros was bullish on Japan, now was the perfect moment to cultivate him.
Tokyo was only one hour ahead of Melbourne.
Monday night meant another eight-hour night shoot. Simon had barely risen when Jennifer informed him that the Japanese ambassador to Melbourne had arrived at the Kendall Hotel before eight and was waiting in the restaurant, hoping for a conversation.
Simon understood: they wanted a personal statement of support from him. That was fine; he would switch to short when the time was right anyway.
Downstairs, Ambassador Takagi Tsuyoshi introduced himself. With him were two others: a middle-aged male reporter from Asahi Shimbun and an attractive young woman with remarkably even teeth named Yoko Kosugi, the interpreter.
Simon knew enough conversational Japanese. Thus they proceed to converse in Japanese.
Miss Kosugi thus seemed superfluous, yet she took the seat beside Simon at breakfast and attended to him with conspicuous eagerness.
He answered a few routine questions from the reporter and posed for a photo with the ambassador—clearly the main purpose of the visit.
As Takagi prepared to leave, he casually suggested that Miss Kosugi might remain to assist Simon with daily matters. She was, he added, a Japanese student at the University of Melbourne; Simon could consider it a work-study opportunity for her.
Simon had wondered why the famously etiquette-conscious Japanese would arrive empty-handed when they clearly wanted something.
Now he understood: they had brought a "gift."
Jennifer sat nearby wearing an expression of perfect nonchalance, but the gift was obviously unacceptable.
Simon politely declined. Moments after seeing the trio off, Anthony Johnston—Janet's older brother—called to invite him to the Johnston home for lunch. Simon accepted at once.
With the news now public, such invitations were inevitable.