[sample translations]hyeondo jang, traders (vol 1,2) eng

Sample Translations

Hyeondo Jang Traders (Vol.1,2) E ng l i s h

Book Information

Traders Vol.1,2 (트레이더 1,2) Saeum Publishing corp. / 2012 / 26 p. / ISBN 9788993964448, 9788993964455 For further information, please visit: http://library.klti.or.kr/node/772

This sample translation was produced with support from LTI Korea.

Please contact the LTI Korea Library for further information. library@klti.or.kr

Traders (Vol.1,2) Written by Hyeondo Jang

Traders Forward Some people say the market is a scam.

Finance is founded on cash, the peculiarity of it being that you can move millions of dollars worth of capital around without touching a single bill. Stocks or bonds stand in for money in the finance world. And now, with the growth of computer systems and online trading, paper stocks have fallen out of use. When you keep trading stocks, oblivious to the number of times they are sold or the amount they are sold for, at some point you become numb. You forget about a stock’s original money value and regard “the trade” as its essence.

There is only a fine distinction between standard financial trading behavior and the art of scamming someone. Stockbrokers have no choice but to tell customers to sell stocks, even when they will obviously incur losses. Fund managers go around giving most of their pitches and trying to attract more customers the month before accounts are settled. To dealers, who trade derivatives by the second, an old-fashioned lecture about the nature and value of money seems removed from reality. If the value of the dollar changes sharply, currency traders have to worry about how they can sell their positions on the won.

Patriotism, morality, company value, a philosophical approach to money…to survivors on the battlefield of finance, these are all just sentimental luxuries. If brokers don’t earn a certain amount in commissions, they’ll be considered nonentities within their companies. Traders view it as unacceptable to lose, or even to break even. And depending on the contents of the profit reports that arrive on their desks at 4:00 every weekday afternoon, fund managers have a higher or lower risk of developing stress-related cancer. In finance, the ultimate goal and prime value is only this: personal gain.

But writing the novel, I didn’t intend to focus on these issues alone because a story about the greed of humans chasing profits is too obvious, and a story over-laden with financial analysis can easily become dull. Instead, I decided to write an interesting story, and

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incorporate finance into the background.

Big finance capital and the conspiracies behind it.

For someone with experience investing, or someone who has even a little interest in the market, it’s worth thinking about this once in a while. But a book about the ways in which enormous sums of money change hands would only be a momentary diversion, little different from others in the hackneyed conspiracy theory genre.

So I decided to focus on relatively insignificant characters that are no more than pawns within the larger conspiracy. There is Dohoo Choi, who once worked at a finance company but is now a fugitive in desperate straits. And there is Ben Hiller, who made his living as a computer hacker but became ambitious and took the plunge deep into the ocean of finance. They have nothing in common, and they’re single-mindedly trying to achieve their own goals. Through the story of these characters clashing in the giant waves, I wanted to give readers a glimpse into the finance world.

International speculative capital, known in respectable terms as “hedge funds” or “investment banks,” is in some ways an unparalleled scam. But I don’t deny the role it plays in society. We can regard financiers’ methodical pursuit of profit as the extension of a basic human impulse. No matter how aloof someone may pretend to be regarding money, if he finds a million dollars on the street one day, he’ll start thinking about how to make more money out of it.

You’ve chosen Traders among the countless books on offer, and you’ve read the first sentence of the first page of my book even though I’m an inexperienced author. I’d like to thank you warmly for giving me your attention.

August 2012 Hyeondo Jang

PROLOGUE The present August 29, 2010 Medieval Times, Schaumburg, Illinois

In Illinois, north of the village of Schaumburg on Roselle Road, there's a castle that seems out of place, both in space and time. Above its enormous gate, the name “Medieval

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Times” is written decoratively in medieval typeface.

Even before entering, guests are overwhelmed by the exotic, fairy-tale like atmosphere. Stretching before them is a large indoor sports field where people dressed as knights re-enact medieval jousting competitions.

Twenty years ago, beginning in Florida, sports fields in the style of medieval castles were built in nine states. Each venue offers so much in the way of colorful pageantry that it resembles the Colosseum re-imagined for contemporary audiences.

With the sharp clash of lances and swords, and the pounding of hooves as the knights ride their horses across the sand, the scene bears such a close resemblance to actual fighting that spectators believe they are witnessing a historic battle site.

It’s six p.m. on a weekday, but tickets for the evening are sold out and the 1000-plus seats are already packed. The arena hums with the excitement of the crowd.

Guests are automatically assigned to one of six separate seating areas upon entering.

It is then, too, that they are issued paper crowns stamped with one knight’s colors and emblems, and they begin supporting him. Spectators feel like they’ve traveled back in time, eating turkey dinner with their fingers and developing passionate attachments to the knights representing their camps.

Finally the tournament begins. The knights ride towards each other at a tremendous gallop, and they clash. The lance of a knight holding the banner of the blue eagle shatters a shield engraved with a yellow lion. The yellow knight, succumbing to the force of the lance, seems to fly up into the air before falling under his horse.

The thud of the heavy armor against the earth carries across the arena. The yellow knight rolls several times over the sand. At this violent spectacle, a roar rises from everyone in the crowd, regardless of allegiance.

“Sir McClellan of the Gryphon Camp passes

to the semi-finals!” Judges pronounce

the victor from the dark chestnut brown platform set up next to the field. Then the sound of a trumpet rings out, further increasing the excitement.

At this time, both the spectators and the knights on their charges seem transfixed by the mood, forgetting about the modern world. Everyone in the blue camp is cheering for the blue knight’s victory except for one brown-haired man who is sitting wearing a frigid expression. He is staring somewhere across from him, at a point somewhere within the seating area of the green camp.

Dressed in an ordinary shirt and blue jeans, the man wears a paper crown like

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everyone else, and drinks a soft drink from the same battered tin cup, but it’s clear from the look in his blue eyes he has no interest whatsoever in the crowd’s fervor or the outcome of the duels.

He speaks into the miniature microphone attached to his ear. “Green cheering section, third row, second man in.”

“Confirmed.”

“Stand by and get him at the exit.”

Following these orders, six agents stationed both inside and outside the arena start moving quickly.

It occurs to the brown-haired man that he’ll be seeing his target’s face for the first time. Again, he fixes his shiny blue eyes on the man in the green camp. He’s certain he has the right person, even if his facial features are blurry in the dancing light.

“You’ve taken an astonishing level of precautions until now, so it’s ironic that you’ve set a trap for yourself to be caught like this,” he muses.

The tournament soon reaches a climax. After many fierce duels, first place and all its glory go to the knight with the red castle wall for an emblem. Sir William, the champion, mounts the platform holding the red banner, and the king confers upon him the Sword of Victory.

Applause and loud cheering breaks out in the stands. The spectators are stunned by the deafening call of the clarion, and the flashing of colored lights.

Then it happens.

From the violet camp, on the east side, gray smoke rises and there’s a small disturbance. At first it looks like a theatrical effect. A buzz can be heard in places around the stands. The knights sense something funny in the mood too, and turn to look at the violet camp. Presently, an unbelievable sight unfolds before their eyes.

A large bright flame suddenly rises. The people in the stands draw in their breath. A sigh ripples across the arena and in a split second everyone is stricken with horror.

After someone shouts, “Fire! Fire!” within a moment the crowd has gone wild. The whole building sways with the piercing screams of women and desperate maneuvering of people running back to find the exit.

There’s a cacophony of moans from the surprised horses and shouts of people animated by their survival instincts. Everything has suddenly descended into chaos.

A knight in chain mail on the platform to judge the contest fumbles to remove his

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helmet and casts it away. He grabs hold of the mike with one hand and shouts something about the emergency escape procedure, but his voice is buried in screams.

Then, as if in an attempt to stabilize the situation, the white floodlights around the sports field come on all at once. The interior brightens as if it were broad daylight. But thick carbon monoxide fumes are reaching their full intensity, and people can barely open their eyes. The crowd is wracked with frequent loud fits of coughing.

In the sudden turn of events, the blue-eyed man leaps up from his seat. He shouts into his ear mike, “Agents outside, check the exit, and agents inside, check the green seating area.”

As he gives these orders, he leaps down a distance of more than six feet off the cement barrier that dips precipitously onto the sports field, and he’s on his way to the opposite seating area.

The situation is unthinkable.

“I was the only person who knew about this until just before he arrived. Is it possible he actually intended to escape from here? That would be absurd.”

He dashes across the sand, drawing his small Glock pistol from inside its holster. He quickly runs his gaze over the green stands, where the man has been. Unfortunately, he can hardly make out what’s an inch in front of him in the thickening smoke, let alone see his target.

Suddenly from the left he hears whinnying and the rough sound of hooves. He turns his shoulders in surprise, and a black horse brushes against him and passes by.

“Has anyone seen the target? Report! Report back!” He plugs one ear with a finger and shouts.

“Not in the green stands.”

From their voices it was clear they were perplexed.

“No sign of him at the exit!”

The agents outside don’t give him the desired answer either. His eyes stinging with smoke, he keeps rubbing them with his sleeve.

“He can’t have escaped yet! All agents to the exit!”

At that moment, the cell phone in his pocket begins to vibrate. He gets it out and checks it with a quizzical expression.

“Unknown caller.”

With trembling hands, he receives the call and puts the phone to his ear.

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A moment of silence. Then, out flow the gentle tones of a speaker who seems oblivious to the pandemonium in the arena.

“Ben Hiller, you can’t catch me this way. And I will make you regret every day you’ve chased after me like this.”

Click.

After these brief words, the receiver goes dead.

“Just a...shit!”

The man who has just been called Ben Hiller flings his cell phone to the ground.

PART ONE Two men bound together by a cruel fate 1 Four months earlier April 2010 Tsim Sha Tsui, Hong Kong

In Hong Kong, north of the island, there is a shopping area known as Tsim Sha Tsui.

Starting at the pier, where the finance towers can be seen to the south across Victoria Harbour, shopping malls form links between glamorous hotels, making a web across the entire area. Tsim Sha Tsui never sleeps, and tens of millions of tourists visit every year. They come in all seasons, and spend heaps of money. It’s the number one shopping area, not just in Asia, but in the world.

From the main street, though, it’s only ten minutes by car and you’re outside the city in an altogether different kind of place: a dreary, forbidding slum. The ten-story-plus public housing facilities there can hardly be called apartments; they’re like decrepit chicken coops, and dirty clothes hang out every window. In the narrow, winding streets below are foulsmelling homeless people and random pieces of garbage.

The alleys splayed out in all directions are dotted with private casinos operating around the clock, squeezing the poor and destitute of their living expenses. On every dank street corner, there’s a mess of illicit drug deals, robbery, prostitution, and other crimes going on.

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It has been ten years since the Chinese government reclaimed the territory from England, but despite all its efforts, these dark vestiges remain, the flip side of Hong Kong’s image as international trade center and Asian financial hub.

It’s late evening, time for the vile slum to come alive.

On a nameless street, in the basement of a three story hardware supplies center, a man is being brutally beaten. It seems like just an everyday affair. The faint, steady sound of blows is followed by short silences as if recess has been called. This uneasy rhythm is pounded out over several hours.

“Did you think you could go free forever?”

In the dim basement light, a man with pasty skin and long hair like a woman is speaking. In front of him, a man is sitting tied to a chair, his shirt covered in blood.

“I bet you couldn’t imagine we’d catch you like this,” the long-haired man snaps, his tone as cold as his skin is pale. He speaks muddled Korean with a northern Chinese accent.

“Hey, you can’t fall asleep.”

At the signal, one of the two giants standing behind the man drenches him with a large metal pail full of water.

The man bound to the rusty chair cries out as the cold water streams over him with a splash, and he raises his head listlessly. How much time has gone by? He has lost consciousness multiple times, and at this point he can hardly open his eyes properly.

“Dohoo Choi,” the long-haired man comes up close to his upturned face and whispers his name. “For two years, you kept on slipping out of our hands like a mudfish, and I almost came to respect you. But if you keep falling asleep like this, I’ll be disappointed.”

Dohoo sees the long-haired man smiling at him, and blinks. Even in his state of semiconsciousness, questions keep coming to mind.

He always followed the rules he’d set for himself. It was impossible that anyone could have caught him like this.

“What’s with this long-haired guy? A little while ago back in the arena he was biding his time as if he was certain he’d catch me. I don’t even know who he is…” Dohoo thinks.

Breathing in the musty smell of cement, he tries to figure out where he went wrong, but can’t come up with anything.

“That’s enough.”

Someone is walking towards them. When they dragged Dohoo into the basement, the door opened with a miserable clank. Since he doesn’t hear it this time, he wonders if his

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hearing has been damaged in the beating.

He frowns and focuses on the newcomer, who is speaking arrogantly. “It’s been a long time, Dohoo Choi.” It isn’t until the man has made himself comfortable in the chair opposite that Dohoo sees his face and shudders.

Jinman Kang! The man he never should have met in the first place. A foul man who always made it his business to torment him, even if he sometimes smiled and sugarcoated his words. Of course. It had to be him.

“I admit it, Dohoo. I never imagined you had it in you. Crossing the borders into Thailand and Cambodia as frequently as if you were visiting your own home. Coming back to Korea without a trace, and then disappearing again.”

Withdrawing a handkerchief from an inner pocket and polishing his glasses vigorously, he says, “You’re amazing. I thought you were some nerd only capable of reading charts on a computer screen.”

Jinman looks the same as he did two years ago, when he was Dohoo’s biggest client.

He looks relaxed, but it’s just a mask, hiding the smile of contempt he has for everyone.

“How I liked you then! You were my goose that laid a golden egg. Even when I sat doing nothing, it was astonishing. You made money for me. I thought highly of you. You were one smart fellow. And I never imagined you’d change like you did.”

Dohoo is a bloody mess. Jinman looks him over and clucks his tongue.

“Do you want to know something interesting? When you ran off like you did, I felt worse about losing the money you were going to earn for me than losing money I actually had.”

Feigning a look of sadness, he continues on in a friendly tone, “So I prayed for your return.”

“You’re still full of the same crap,” Dohoo says, vomiting a mouthful of blood. He tries to speak but his head throbs. He’s in such pain, maybe the mucous membrane inside his mouth has burst. Standing a step back, the long-haired man stares at Dohoo. It’s hard to tell whether he is smiling or frowning.

“At that time our dealings ended according to our agreement. You were crazy about making a profit, but when you were losing, you wouldn’t get out. You kept harassing me,” Dohoo says.

Jinman, smiling as before, waves his index finger back and forth.

“Look, you can’t say that. Harassing you! I kept giving you the chance to recover

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everything. But you were so cold to me, running away. It just wasn’t right, was it?”

Two years ago, it hadn’t been an easy decision to spurn Jinman’s proposals and embark on a new life. But he has no regrets. He grits his teeth, just as he did then. Blood is streaming from between his lips.

Snarling like an animal, Dohoo says, “Even if I could go back, my answer would be the same.”

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2 The same time A small meeting room, Smith and Steele Headquarters, New York “Your resume is very unusual. MIT graduates generally prefer to go to Pennsylvania, but you went to Zil Corporation, a security company in Shanghai. Was there any special reason for this?”

Of the three interviewers, it is the relatively casually dressed man in black hornrimmed glasses asking this. The blue-eyed applicant in front of them differs from the other applicants in numerous ways.

“I had a Chinese roommate in university. He was not only a character, but a skilled hacker. He was always making comparisons between China and America. His country was a spear and America was a shield, and it would only take three red spears to pierce the eagle’s defenses and rip its feathers out. He said this all the time. I didn’t agree with him, so one day he called two of his friends over and they hacked the admin pages of American intelligence agencies right before my eyes.”

He’s a self-possessed speaker, leavening his words with the right amount of wit, and the panel interviewers are strangely drawn to him.

“Our shields were no match for their spears, and I still think that’s true. When we graduated, my roommate suggested we apply together to work for Zil Corporation, since it was China’s number one security firm. As luck would have it, they were a multinational company, open to hiring foreigners.”

“So tell us about the state of security at Zil Corporation,” says an interviewer, his curiosity piqued. He is sitting in the center of the panel wearing a gray suit. It looks like he has seniority.

“To say it in a word, I’d say the place is paranoid. They don’t even trust themselves.

They have a very tight security system, which they describe as being ‘blocked from within.’

Even if some hacker infiltrates with the intent of getting into the database, it seems there’s no connection to the inside.”

Ready with answers and brimming with confidence, he seems to be having fun with the interview.

“So are you saying there’s no intranet connecting the departments?” the interviewer in the gray suit asks in disbelief. “Then to authorize something, or work collaboratively, the people in charge must have to meet directly, and that’s an inconvenience.”

“Yes, exactly so. I can’t explain everything about the place, but most business there is conducted in the old-fashioned way. The proof of this is that even though it’s not a government agency, it has many meeting rooms, stuffy as interrogation cells. If there’s a security breach and some information is leaked, the department responsible is broken up, and the other departments just continue functioning as usual because they’re all independent operations. In a way, the system is perfect for a security firm. Security firms in general tend to exaggerate the magnitude of threats,” the applicant replies, smiling.

Observing his laidback demeanor, the third interviewer asks an ordinary question.

“You had high grades in university, and you have a stellar work record at your previous places of employment. Smith and Steele is not a security firm, but since you’ve applied to the security department, can you tell us what you think about the state of our defenses?”

“Oh. I’ve specially prepared something on that.”

Still smiling, the applicant gingerly withdraws something small from his inner suit pocket. Rectangular, about the size of a finger, it looks like some hi-tech gadget.

“What’s that?”

“A mobile network device. You can look at it as a miniature wireless server that connects to smart phones or laptops and uploads or downloads data,” the applicant says, his eyes glowing with a strange light. “If you take a look at this, you’ll know for certain whether you want to hire me or not.”

He’s overconfident, and these words do not sit well with the interviewers. The man in the horn-rimmed glasses, however, is unable to bring himself to dislike his strangely composed speaking voice and manner, and says, “Whatever that device may be, what you’re saying is interesting. We’ve never had this happen at an interview before. Can we see, even if it’s just for curiosity’s sake?”

The applicant takes a Blackberry out of his pocket. When he tries to connect to the

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wireless network, he smiles meaningfully and says, “All I have to do is make the remote connection. Oh, pay careful attention to the seventh clause…”

It connects.

The interviewer groans, his eyes so big it looks like they’ll pop through his glasses.

“There’s no way…” His face turns pale, he can’t finish the sentence, and the other two interviewers stare at him.

“Why? What’s wrong?”

The other interviewers sense something strange is happening too and look at the Blackberry screen. In a moment they react; their expressions are strained and they can’t seem to breathe.

“How in the…Who the hell are you?”

Unruffled, the applicant folds his hands together and answers, “I’m merely a candidate for a position at your company. I have a clear goal, a goal to build my future and achieve my dreams here.”

At this, the man in the gray suit rises, his entire face contorted in anger. With an air of desperation he calls someone and bolts out the door. The man in the horn-rimmed glasses gets up and follows.

He shouts in confusion, “Who are you, you bastard? How do you know all of this about our company? Even inside information known only to our directors?”

The interviewer raves as if he is looking at a ticking time bomb. By contrast, the applicant seems nonchalant. “Well, the Smith and Steele defense system is lacking. I don’t intend any harm. It’s just that I’m applying for the security department job, and for interest’s sake I wanted to find out your security level. But if I were to offer my opinion about clause number seven…”

As he is trying to finish, a crowd of people comes rushing into the conference room.

From office workers to uniformed guards, from bodyguards in black suits to attractive blonde apprentice secretaries, all kinds of employees are represented there.

“Get him!”

The man in the gray suit hurries in and yells to the guards from the doorway. Two well-built guards slowly approach him, their eyes wary. They look like police officers closing in, ready to make an arrest.

“Wait just a minute!” The command comes from the back of the crowd, and is spoken with authority.

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A man in his late 50s, with silver, slicked-back hair and wearing an expensive suit, walks forward. Judging from his demeanor, which does not fit the urgency of the situation, he is a civilized man, able to always maintain his calm.

“Allow me to talk to this man. Would the rest of you be so kind as to leave?” He speaks in bold, frank tones.

“But Mr. Henderson, this man…” A bewildered interviewer tries to object. But the silver-haired man gives him a nod of dismissal, and he backs off. Following suit, the others also quietly withdraw from the conference room.

When only the two men remain, the noisy room becomes peaceful and quiet, as if nothing has happened. The Blackberry is clenched in the silver-haired man’s left hand, still displaying the confidential information.

He suddenly offers his right hand in greeting. “My name’s Jim Henderson, and I’m, shall we say, in charge of security.”

His hand is heavier than usual for someone his age. The applicant takes it, his eyes flashing with intelligence.

“I’m Ben Hiller.”

3 Judging from the fact that the shutters are drawn on most of the shops in the Tsim Sha Tsui slum, it’s probably sometime after 10 pm. Sprawling out in a dark, secluded alley, Dohoo breathes in the turbid air, a medley of sewage and cigarette smells, and the humidity peculiar to Hong Kong.

He keeps tasting blood and he aches all over, but he doesn’t have the energy left to find out which body parts hurt. The distant sound of a car alarm breaks the stillness, and sounds of people shouting come intermittently, as if a fight has broken out at the entrance to the alley. It doesn’t seem like any bones are broken, but he keeps fading in and out of consciousness as if he has a concussion.

Dohoo closes his heavy eyelids and leans his head against the wall. At that moment, he thinks of something, so he lifts his right arm and feels it. Inside, near the elbow, there’s an egg-shaped protrusion like a blister. Looking at it in the light of the street lamp, he sees it is deeply bruised. It tingles and burns when he presses on it with his hand.

“However hard you try to escape, we’ll just catch you again. Here, this is a gift for you.” Echoing in his ear were these words whispered by the long-haired man, holding a

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stainless steel injector in the shape of a gun.

“Damn it.”

Blood is pooling in his mouth, and Dohoo spits it to the ground in a burst of anger.

“Even if you could go back, your answer would be the same? That may be so, but you’ve already come too far to go back, Dohoo Choi.”

In the dim basement light, Jinman’s malicious smile fades, and he speaks coldly.

“But I’m telling you, my friend here takes pleasure in flaying people and exposing the muscles below, layer by layer. Do you know why the hell he just didn’t kill you outright, and arranged for me to see you alive and breathing?”

As he speaks, Jinman gestures to the long-haired man, who responds by lifting the corners of his mouth in a ghostly, ill-tempered smile.

“I know I just said this, but I value your ability. Thanks to guys like you, the small, weak nation of Korea can’t easily be destroyed. That’s what the guy who introduced us told me. You’d be a gem.”

There was one simple reason Dohoo met Jinman three years earlier, and that was money.

Aside from institutions people generally recognize, such as securities and insurance firms and banks, there are other players in the Korean financial market. These are the socalled “boutiques,” finance companies operating outside of the law.

Unlike a standard boutique, which sells expensive clothes or gifts, a financial boutique refers to an institution, small or large, which follows the motto, “high risk, high return,” gathering investment capital from a small group of wealthy customers and pursuing profits for both parties. That is to say, it is a professional organization that deals in the same kinds of business as legitimate financial firms, but seeks greater earnings potential at the expense of higher risk, working illegally.

There are many kinds of boutiques. As often seen in movies, four or five people sitting together in a small conference room engaged in stock manipulation; consulting firms that haven’t registered as a business but which manage assets safely just as official fund managers do; private companies that drive up the price of their stocks through futures and options trading and then share the profits secretly with investors; and brokers mediating trades in penny stocks and unissued stocks, or selling them directly.

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Beyond these, if you dig a little deeper into the world of finance, you’ll discover many more kinds of boutiques, which differ according to the investment vehicles offered, or the size of the asset portfolio.

Boutiques are very different in character from private or public lending companies.

Instead of lending money and collecting interest on it, they do the opposite. That is, they acquire money from investors and invest it to make a profit. In terms of form, they’re no different from hedge funds or asset management companies.

Unlike public financial institutions, boutiques operate illegally. The reason for this is that the accounts they’re using to manage funds are not transparent, and they don’t pay corporate tax. They don’t manage accounts for which statements are publically released, like regular mutual funds or securities accounts. Instead, they invest under the table, using the personal accounts of wealthy investors or perhaps designated third parties.

The tax authorities have no choice but to regard this as wealthy people investing their money wisely and clearing profits. But even if boutiques manage the accounts behind the scenes and take a cut of the profits tax-free, there is no way of exposing it. Their dealings, namely their investment profits, go completely unreported.

Wealthy investors with large sums of investment capital, a hundred thousand dollars at minimum, seek out boutiques for one reason, and that is high returns.

Boutiques do not need to observe financial laws or the strict regulations set by their company risk management departments regarding the extent of allowable losses or the kinds of financial products that may be sold. This way they can manage their investments more freely. Because of this, at the risk of great loss, larger profits are possible.

For example, it’s worth forgoing legal protection and regulations if instead of depositing a million dollars in a savings account and earning three percent interest a year, you can join in trading the bonds of a company that is being taken over and earn over twenty percent, or invest everything in risky derivatives and double the principal in a few months.

Dohoo was the representative for one such operation. It was a snowy December day when Jinman visited his boutique, Options and Co. A longtime customer, Mr. Yun, a director at Samil Electronics who had already invested about two million dollars and been making huge profits for over a year, brought Jinman along. Despite the cold temperature and whirling snow, Jinman wore only a suit and an expensive cashmere coat. He didn’t have on a scarf or gloves.

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“This is Jinman Kang, a friend of mine from university. I told him about you, and brought him along at his request.”

“My name is Dohoo Choi, and I’m pleased to make your acquaintance.”

Jinman gave Dohoo a friendly look and shook his outstretched hand.

“I’m Jinman Kang. I’m in charge of a small telecommunications company called Trine Security. Mr. Choi, you’re much younger than I expected.”

Looking at Jinman, whose eyes were snake-like under the small lenses of his glasses, Dohoo tried to guess what kind of customer he’d be.

“I’m 33 this year. I’ve been in the business for a little over five years now.”

“I see. So do you manipulate stocks here? Even though there are only six employees, it looks like you have a lot of work going on.”

Jinman was peering through the office window at the employees’ workspace.

On one desk there were five or six LCD monitors, and documents piled haphazardly.

Around it, each dealer was busily pounding away at their mouse and keyboards. To someone who didn’t work at a stock company, it would seem like a strange and foreign environment.

“We don’t do anything grandiose,” Dohoo said, laughing freely. “We trade in derivatives, commonly known as stock index futures and options. We look for opportunities to generate a profit margin on sales when the market rises and purchases when it falls. Stocks are tied to the market, but futures and options are composed in various ways so you can earn a fixed amount of profits every month. Our business is to share these profits with our customers according to agreed upon terms.”

“If it’s futures and options, then isn’t that as risky as gambling? And are you really telling me you can make monthly profits?” Jinman asked, looking doubtful.

“Most people don’t know this, but derivatives require an elaborate management method involving the use of tactics known only to professionals. Those people you see in the paper or on TV who either earn a windfall or go bankrupt, it’s true, they’re betting their fortune on whether the market rises or falls the next day, just like people calling black or red on a roulette wheel. People become familiar with these images, and get the impression that trading derivatives is just gambling.”

Jinman wore a look of contentment, as if he were impressed by Dohoo’s ready explanation.

“In Korea, the system is set up so that amateurs believing only in blind luck can easily get their foot in the door and try out the derivatives market as if it were the lottery or a

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horse race. So regular people with insufficient market experience think nothing of these risky deals. They think that’s how derivatives are supposed to be traded.”

As he spoke, Dohoo opened a brochure that described the nature of Option and Co and outlined its asset management policies.

“Our methods for managing assets have no relationship to that kind of gambling. If we took someone’s money and bet it like that, we’d be ruined within ten days, no, within a few hours. We don’t need to gamble, and because it’s so dangerous we’re on guard against it.

It may sound paradoxical but it’s because of these other people always looking for a windfall that we can maintain a steady stream of profits.”

Mr. Yun had just been standing next to Dohoo listening to this quiet, unwavering speech, but here he interrupted. “There are times when I see the accounts Mr. Choi manages for me. It’s wonderful. Every day he earns a small profit, and these accumulate until ultimately he reaches his monthly goal. It doesn’t seem like he’s much concerned with making big money.”

“That’s an overstatement, but you did get a clear sense of what we are doing. We don’t try to earn profits beyond the goal that we’ve set with our customers. And on the flip side, if we lose more than the amount allowed by a customer, we cut off trading to limit further loss. That way, we’ve been able to stay in business.”

How crisply he spoke, and what an air of certainty he had about his work!

In Jinman’s view, this Dohoo Choi fellow was the perfect example of someone on the road to success. More than anything else, Dohoo’s steady gaze inspired a stranger with trust.

He was in an entirely different class than the man Jinman had met recently in a fancy office overlooking the Han River in Gangnam, who had bragged about buying and selling corporations.

“Recently an acquaintance said he knew of a promising company listed on the KOSDAQ exchange, and recommended investing in its acquisition. Compared with this, what kind of profits can you expect?”

Jinman was asking Dohoo’s opinion on the questionable venture the fellow had tried to propose to him.

“One of the most attractive fields in finance is that of buying and selling companies.

It’s interesting enough to have become the subject matter of movies and television shows. But that’s just the image. In fact, there are a lot of obstacles you have to overcome in that business.”

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Dohoo paused for a moment. There was no need to provoke Jinman, a potential customer. He took care choosing his words.

“For one thing, it’s not easy to buy a whole company. The experts from a stock firm’s investment banking arm get together and review the company information and any other issues and it takes another six months to see any progress, so it’s the kind of work that takes a lot of patience. And even if you succeed in making the acquisition, there’s no guarantee the company will keep making profits. And you’ll have to wait a long time if you intend to resell it at a higher price.”

Dohoo looked into Jinman’s eyes and continued, “It may seem presumptuous of me to say this. Private investors participating in the short-term funding of mergers and acquisitions, well, they’re primarily interested in capitalizing on price differential, buying company stocks before they skyrocket. Doing this requires qualifications: connections to major stockholders, inside information, and professional experience manipulating stock prices. So I’m skeptical that promises of high profits outweigh the risks of such ventures.”

In cases too numerous to count, boutiques will lure in investors with the promise of high returns from participating in mergers and acquisitions. It is common for people to be under the illusion that M&As involve either manipulating the market, buying penny stocks that are about to be delisted and turning them into strong stocks, or pouring money into stocks regardless of the result.

Dohoo hated the wild swings of these stocks and the boutiques that attracted investors this way. To him, this went beyond earning profits. It was using the market structure to gamble.

“Mr. Choi, you seem to have a clear perspective and your own philosophy about what you’re doing, and I like that. Let’s discuss the terms if I were to entrust my money to you.”

A smile played on Jinman’s lips as he spoke.

4 “But Mr. Hiller, have you had breakfast? I can’t believe your interview was scheduled so early. I believe in hard work, but there’s such a thing as too much. I know a pretty good restaurant around here. Could I take you there for brunch?”

As he speaks, Jim Henderson tosses the Blackberry he’s been holding into a wastebasket in the corner.

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“That would be great. And please, call me Ben.” Downtown New York is a hive of activity during the morning rush hour. The bustle and energy are enough to take your breath away. The streets are overflowing with cars, and the business people hurry along as if they’re on the run from something. All the noise and chaos comes together, however, in a strange kind of harmony.

On William Street, there’s a small restaurant with a view of the Federal Reserve Building across the street, identifiable by its distinctive architectural style. A curvy waitress with her blonde hair tied back approaches the table to take their order.

“The pancakes here are wonderful, Ben.” Jim’s eyes shine as he speaks. After greeting the server cheerfully, he orders. “I’ll have two pancakes with eggs and bacon, everything well cooked. And a cup of coffee too, of course, with cream and sugar.”

The server scribbles Jim’s order on a pad and turns her sweet smile on Ben. From her exaggerated expressions and gestures, it looks like she’s training to become a model or actress.

“I’d like two pancakes, and a sausage and grilled vegetables. And I’ll have a coffee, black.”

There are about ten tables in the restaurants, all of them occupied. Just as you might expect in America’s largest city, there are all kinds of workers represented, from men in suits reading newspapers to construction workers in overalls.

When the waitress heads towards the kitchen, Jim immediately returns to the topic at hand.

“Well, Ben, I don’t like beating around the bush, so I’m just going to ask you straight out. Did you access that information working alone?”

Despite being over 50, Jim has eyes like a hunter, tenacious and cold. But strangely enough, he knows how to mask his hostility and make someone feel comfortable.

“Yes, Mr. Henderson. Smith and Steele has the image of being a powerful company, but its defenses are very weak. A few days ago, in the guise of an employee, I paid a visit to the department in charge of network security. No one stopped me; in fact, no one even seemed to suspect anything. What’s more, I inserted a memory stick into the manager’s computer with my own hands, and from the look of things, it’s still there.”

Jim is disconcerted watching Ben tell this shocking story in such an offhand manner.

Young hackers like Ben are known to be geniuses on the one hand, but many of them are also freaks, lacking the ability to carry a conversation and social skills. After breaching a

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security network or stealing information, they often try threatening a company directly. Jim has encountered many of these types.

It’s easy for Jim to inspire fear in some socially inept computer nerd. But this fellow sitting across from him is different. Not only is he too cool, but he downplays his own hacking abilities.

Thoughts are racing through Jim’s mind: “There’s got to be something. What did he say? He wasn’t operating from a remote location, he just marched right in and paid us a visit?”

Of all the kinds of hacking a security consulting firm may use in evaluating a company’s security level, “physical trespass” is the most forceful and direct. The company undergoing the security tests can feel demeaned, like they’ve been stripped naked. That means that only a company that is very certain of its security system will agree to be tested this way, viewing it as a kind of challenge.

From the time Jim first laid eyes on the blue-eyed man, he has felt the presence of some quality he is unable to read.

“I should issue an order that that security manager be fired immediately. So, going back to what you were saying. What happened after you got to the computer? Here’s what I think. You acquired a manager’s right of access and went through the information regarding the directors of the board. Then, using the directors’ rights you went through the top-secret confidential database.”

“Yes, that’s more or less correct,” Ben replies, unflappable.

At that moment, the waitress comes with their food. She calmly sets out the platters and tells them to enjoy their meal. After she puts the bill on the table and leaves, Jim takes a bite of his pancake and savors it, resuming the conversation.

“Why Smith and Steele? What is it you want from us?”

“As I said just now in the interview room, my intent is to work for you,” Ben replies, demonstrating equal enjoyment of the pancakes.

Jim picks up his coffee and leans back in his chair. “You’re an unusual fellow. You have experience at an IT company, but you’re eyeing a job in the manufacturing sector, and in steel at that. And you’ve made trouble for the company you’re applying to before you’ve even started the job. It doesn’t make sense, does it?” Jim cross-examines him. Whether he’ll be faced with threats or bribery, Jim just wants to settle the tiresome affair and get it over with. “All right. Let’s have it out. Did you do this for money? Who set you up to it? Was it Zil

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Corporation, that Chinese company? How much will you get, selling them our information?”

His blue eyes shining, Ben gives an unexpected answer. “I want to work for Green Iron. That’s all I want.”

At that moment, Jim almost drops his coffee. His hunter-like eyes flash with panic.

But he quickly collects himself, and stares hard at the young man in front of him.

“You’re a disrespectful kid. I can’t believe you have the gall to mention Green Iron.”

5

20 After they met the first time, Dohoo and Jinman met two more times to discuss the

contract terms in detail, and gradually they became close. But the relationship never exceeded that of a customer with a lot of investment money and a professional who offers a service regular financial institutions do not.

Jinman entrusted Dohoo with a million dollars, and he added two million more at one-month intervals until the total reached five million. This was the most money a single customer had invested. Before Dohoo began managing this money, he was suspicious as to its source because he didn’t know much about Trinity Security, an unlisted company.

But Mr. Yun, the man who’d introduced Jinman, told him, “Mr. Kang has inherited a lot of property. His father had a field in an area that’s now a suburb of Seoul. He’s lucky too.

His wife’s father runs a shipping container company in Busan.”

Dohoo just accepted this information at face value.

Actually, Dohoo was pleased with Jinman’s business. After signing the contract, he earned Jinman the target profits for ten months running. Unable to hide his surprise, Jinman took the initiative to bring in new clients.

Owing to Dohoo’s consistent results and thorough way of doing business, many people invested their money with the boutique. In under less than a year, Jinman Kang, together with his connections, had brought in over ten million dollars of investment money.

Even more surprising, that same year the crash of the U.S. housing market had brought about the subprime mortgage crisis. The KOSPI index had sunk precipitously, from 2000 to 1400 points, but Options and Co. had managed to maintain its steady profits without wavering.

There are some mistakes that stocks or derivatives trading managers are prone to making. They tend to lose their flexibility after proving themselves and being put in charge of large sums. Taking a defensive position and guarding their holdings, they can’t maintain their

returns. For example, if a manager’s fund records higher profits than other available funds, news of this spreads through advertisements or word of mouth, and a vast amount of investment money is attracted. Then when the fund becomes a behemoth with over one billion dollars of original investment money, customers are disappointed by the manager’s conservatism as described above.

As if immune to this mistake, Dohoo followed his policy and kept on making the same profits every month. By sometimes adopting layers of security measures, and sometimes striking to take advantage of market variations, he created profits continuously.

His investors would point to him and sing his praises, “He’s got the Midas touch, turning everything to gold.”

Trading went smoothly. That is, until Lehman Brothers’ went bankrupt and global markets collapsed in 2008. At this time, the boutique suffered its first loss.

In the meeting room at Options and Co. before the market opened that morning, the traders expressed various opinions, half of them worried and half expectant. On the stock market, profits or losses are limited to 15 percent a day, but the derivates market is not required to maintain reserve holdings, so a hundred times this amount may be earned or lost.

The accounts Dohoo managed weren’t like stock accounts. They could be subject to losses of more than 15 percent, and in a worst-case scenario, the loss could even exceed the original investment. But on the other hand, owing to the special character of derivatives trading, there would be good opportunities to bet on the chaos and potential collapse of the market caused by the Lehman Brothers’ bankruptcy. Enormous profits could be made, and this meant the traders were standing at a crossroads.

Sitting across the table was Mr. Kim, about seven years’ Dohoo’s senior, a man who’d weathered all the storms of the market. Looking more or less enthusiastic, he said, “After the initial crash, how about waiting for a momentary rebound and then closing out all our positions? We can take about 20 percent of our holdings and invest the money in a naked put option. Giving ourselves a wide margin, we can expect our loss to be about 18 percent when we sell, and if the decline continues we’ll not only cover our losses but make incredible profits.”

Sitting to Mr. Kim’s right was Mr. Jeong, who seemed to be more alarmed.

“Don’t you feel uneasy about that strategy? First of all, it’s not in line with company policy. We don’t bet on stock fluctuations. And what’s more, I’ve heard rumors of defensive buying on the part of pension foundations and government organizations. After the early

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phase of the crash, it might bounce right back, and the market might unexpectedly finish up for the day. In that case, it would be best to just hold our positions.”

Mr. Park, at 31 years old the company’s youngest employee and most recent hire, distributed a simulation chart he’d made and said, “We can’t predict what the options prices will be when the market opens. Fortunately, our futures are in selling position and we’ve got enough put options and purchase positions. I can’t help worrying, though. What if we never hit the strike price? Then we’ll be out of the money, and stuck paying the premiums.”

Dohoo raised his head to look at the clock and saw that it was 8:40. Although everyone had come early and begun discussing matters at 7:30, the meeting seemed very short compared to the usual.

The time had come to make a decision. As of that moment, they were within 0.5 percent of making their target profits, but an enormous tidal wave that no one could have expected was about to wash over them. Dohoo was rueful.

After careful deliberation, he spoke quietly.

“I’ve heard you all out. It’s a terrible crisis that concerns us all, but at the same time, from a different angle, it’s a golden opportunity. You’ll all understand, however, that we’re not just talking about today. After today, tomorrow and then on into the future, everything will just become more difficult. The decision I make has to be in accordance with our policy.”

He took a deep breath and continued on.

“Close all positions before your total losses reach 20 percent. That’s the loss limit that we’ve agreed upon with our customers. If possible, send out orders the moment the market opens. Let’s consider ourselves lucky we won’t lose more.”

“Then you’re saying you don’t want us to take advantage of the fluctuations in the market today?” Mr. Kim asked, his voice incredulous.

“No, I don’t. Once you’ve closed out all positions and everything is square, do not make any more trades today. Even if the market recovers or continues to fall and the fastchanging prices tempt you to come back in, I’m telling you, do not trade.” Dohoo was adamant.

The traders all stared quietly at the manager, feeling quite overcome with emotion. It was a heartless decision, tough for them to take. If they hit the loss limit arranged with the customers, trade would be suspended and there would be no more contracts and no more money management. It would mean the end of their employment, and of Option and Co. as a

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company.

They’d known it from the start, but when the manager said it out loud, the situation seemed surreal. Had it always already been decided? That day, there’d be the kind of opportunities to make big money that only come along once in a blue moon. Was Dohoo a wimp, or just too prudent? Unspoken words of protest were swirling around in the office.

“Once we’ve closed out our positions, I’ll speak with our customers and let you know how we’ll proceed. Be ready for the worst.”

The market was almost ready to open. Looking at his employees hurrying from the meeting room, Dohoo smiled wryly. His mind had already been made up. “They still have a lot to say. But now is not the time to speak. It’s the time to act. Convincing them can come later,” he thought.

That day the composite stock index fell more than 150 points, and an unprecedented level of fear and confusion broke out. Most of the trade managers and dealers in the Yeouido financial district skipped meals to sit in front of their desks and navigate their way through the storm. There was incredible trading volume, and the index kept falling. As they’d feared, everyone was selling and no one was buying. There was absolute panic.

The traders at Option and Co followed Dohoo’s orders and from the time right after the market opened until before 10 a.m. they closed out all their positions. After that they just stared at their computer screens like zombies. The whole day passed in silence. Fortunately their losses reached no more than 17 percent. All trading had ceased and there were no additional losses.

It was 3:15.

The market closed after a day of hell. Dohoo checked all the accounts again, and lifted the telephone receiver with a heavy heart.

Customer responses varied. He’d earned them so much that this was okay; it was hard to accept, but they understood he was following the terms of the agreement; they were happy the loss was less than anticipated; they asked when he’d be back to manage their money again sometime. And on and on. Most of the customers accepted the mutually binding terms of the contract: When the loss limit is reached, trades are suspended.

Jinman, however, was the problem. His voice came coldly over the receiver. “Look, I can’t accept this. According to our agreement, the maximum loss is 20 percent, but you say you’ve gone ahead and sold at just 17 percent. Someone with your ability can make that up and then just resume earning profits. That’s what I think.”

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“I think that it’s fortunate we cut off trading when we did. If we’d stumbled at all, we could have lost more than half of the original investment. And starting from tomorrow, as each day goes on, that possibility will only become more likely. The swings in the market are so unpredictable that it’s almost meaningless to use our normal trading strategies. We can’t risk trying to make good your losses. That’s why I made the difficult decision to close all of our positions.”

After Dohoo had stated his opinion clearly, an ominous silence came over the phone.

About a minute passed.

Then Jinman spoke. It was difficult to tell whether he was furious or just teasing.

“You seem to take this so lightly. Seventeen per cent of five million dollars is a cool $850,000. Is this a game to you? Do you think of my money as pawns in a chess match? I’m asking you, how can you just dismiss the loss of $850,000?”

Of course, it wasn’t untrue. But Jinman hadn’t taken into account that over the past 18 months Dohoo had earned him three million dollars in profits.

Tension welled up in Dohoo’s throat, but he kept calm and said, “Then what would you have me do?”

“My proposal is simple. There are ten days left in this month’s contract, so let’s keep trading. After reviewing the results we’ll talk again. You never know, we might be able to recoup the losses and then go on to make even more.”

His voice, mean like a snake, seemed to come slithering through the receiver into Dohoo’s ear.

“Then after ten days, let’s terminate the contract, regardless of how much we’ve earned or lost,” Dohoo replied with equanimity.

“All right.”

Dohoo put down the receiver and let out a heavy sigh. Thoughts raced through his mind. And for some reason, he was hit by a wave of anxiety. In his whole time running the boutique, he’d never had this feeling before. It was like his ankles were shackled together.

Even if a miracle occurred, and he converted the losses to profits, Jinman Kang would stick to him and suck his blood like a leech.

His heart in turmoil, he got up and walked over to the window. Presently the sun went down between the buildings, and the sky glowed red. It was then that things began to get absurd. The phone rang, and Dohoo was shaken out of his thoughts.

He picked up the receiver, and it was Mr. Kim, a man who managed three or four

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café franchises. A year ago Jinman had introduced him as one of his friends. Dohoo had talked with him earlier that day and everything had been settled, but here he was calling again, his voice tinged with excitement.

“I heard what you told Jinman. Would it be possible for you to keep managing my account too? Come to think of it, it would be to our mutual advantage. When losses reach 20 percent, then you can cut off trading. If after ten days we’ve lost money, let’s call it quits.”

“Damn it.” Dohoo swore inwardly. According to the contract, Dohoo would bear the burden of any losses evenly with his customers. And they could use these terms that were meant for their benefit to tie him down.

One of the reasons clients trusted Dohoo was that he specified in his contracts that the boutique would share any losses 50-50 with investors. In other words, since the boutique managed the investment money, it would take responsibility for half of all losses. It was rare for a boutique to voluntarily include a provision like this.

So it was true. It would be in Dohoo’s best interests to lessen the loss. At the current level, 17 percent, he’d have to shoulder 8.5 percent of the loss. If he could reduce the total loss by 10 percent, then that would mean he and his investors would only be responsible for 5 percent each. But he had to keep in mind that he could make matters worse by reopening the accounts.

When he’d finished talking to Mr. Kim, the other investors Jinman had introduced called one after the next, as if by arrangement. They all said the same thing: Could he try to mitigate some of the losses?

They spoke as if they were doing him a favor, but their true motives were obvious: “We don’t want to take a hit. Make our money back so we at least break even.”

They had sunk their teeth in, and they wouldn’t let go. By the time he’d finished taking all of their calls, it was after 11 p.m. Physically and mentally exhausted, Dohoo sat at his desk and hung his head.

“You never seemed more wonderful than you did then, when you were hell-bent on lessening our losses. Seeing that, we knew you were the real thing.”

Jinman pokes Dohoo hard on his blood-covered chest, as if ridiculing him. He looks like a beast bearing down on his prey, baring his needle-sharp teeth.

“Why did you stop when you could have had so much more?”

There’s a heavy silence. The mere sound of water dripping from the basement ceiling

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fills the dark space.

The long-haired man looks down to find that Dohoo’s eyes are closed, as if he has fainted again. He’s so quiet they need to check if he’s breathing.

Then, at that moment, “Ha ha ha ha ha!” Dohoo, who has seemed to be unconscious, suddenly starts cackling. The loud sound echoes off the dreary basement walls. The longhaired man and the enforcers behind him are startled by the deranged-sounding laughter.

“You’re asking why? Jinman Kang, you’re stupider than I thought!” Dohoo narrows his eyes in a sneer and shouts, “You really don’t know? The reason is money, money! Did you forget how much I earned thanks to you? I didn’t need money anymore. If you add up all the profits I made for you, you’ll realize how much I earned too,” he says, spitting a mixture of saliva and blood onto the floor. “Did you think I was running away to save my life, without making sure I had something put away? Ha ha ha.”

As soon as these words were discharged from his exhausted body, he suffers a fit of coughing. He’s gasping for breath.

“And your men are really a piece of work. The guy with the BMW, what’s his name again? Is it Kim? He told me to try again, promising he’d invest more money. Ha ha ha. Such a sweet man. And there was that pig, Lim, who was running a hostess bar with some of his goons. He called those assholes to my office and threatened my life. In hindsight, they were a pathetic lot.”

Dohoo went on, shaking his head as if it was all very unfortunate.

“They say men are equal before the almighty dollar, but I don’t know about that. You sure managed to introduce me to some scum. Ho ho, Jinman Kang, do you know how much I despised you then?”

Having said his piece, Dohoo seems to find some enjoyment in the current situation.

“So, tell me. Do you need money? You were born into wealth. Surely you wouldn’t chase after me for the loss of a few pennies. So what is it? Why did you catch me and beat the shit out of me? I’m dying to know.”

Jinman watches this outburst with indifference. He has expected it. Dohoo is not just your average guy.

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