Genius Grandson Of The Loan Shark King

[Lehman Brothers Sells Off Its Major Business Divisions.]

The sale of Lehman Brothers' principal business divisions, which had been thrown into turmoil after the bankruptcy filing, has finally been completed.

The transaction, one of the largest to take place amid the global financial crisis, has drawn tremendous attention from the financial world.

A total of three divisions were sold.

The North American division was acquired for $5.5 billion by a consortium formed by JPMorgan, Dreamhigh, and others. The consortium also pledged an additional $10 billion in investment over the next five years and agreed to guarantee employment for at least two years.

The European and Middle Eastern division was likewise purchased by the Dreamhigh-JPMorgan consortium for $700 million.

With this acquisition, the consortium has established a global financial network.

The Asia-Pacific division was acquired by Taesan Financial of Korea for $400 million. Taesan Financial is expected to significantly strengthen its position in the Asian financial market through this acquisition.

Bankruptcy trustee Brian Marsal stated,

"This sale was not merely a disposal of assets, but a decision made with the future of both the United States and the global financial system in mind."

Meanwhile, Saudi Aramco also participated in the bidding process but ultimately failed to secure the acquisition.

One industry insider commented,

"This wasn't simply a contest of who offered the highest price. The more comprehensive proposal won."

James Han, CEO of Dreamhigh, stated,

"This acquisition will allow us to build a new global financial network. By combining Lehman's expertise with our innovation, we intend to create tremendous synergy."

Financial experts predict that this transaction will mark the beginning of a major restructuring of the financial industry.

An analyst at Goldman Sachs commented,

"This sale may provide the first real breakthrough in overcoming the financial crisis."

Although the completion of the sale of Lehman Brothers' core business divisions has allowed the financial markets to breathe a sigh of relief, uncertainty still remains.

The sale of Lehman's assets is far from over.

A large number of assets—including real estate holdings and financial assets—still remain.

No one knows just how far this turmoil will spread.

[Lehman Brothers Sells Its First Business Division, Passing Into History.]

[Dreamhigh-JPMorgan Acquires Lehman's Core Businesses.]

[Korea's Taesan Financial Acquires Lehman's Asian Operations, Laying the Foundation for a Global Leap.]

[Saudi-Rockefeller Alliance Loses Lehman Bid—A Signal of Generational Change on Wall Street?]

The American media released article after article simultaneously.

The situation in Korea was much the same.

[Taesan Financial's Acquisition of Lehman's Asian Business Signals the Globalization of Korean Finance.]

Koryeo Daily even devoted an entire page to a special feature.

Japan's media, representing Asia's strongest financial power, openly expressed its sense of crisis.

[Lehman's Breakup Signals Changes in Asia's Financial Landscape—Japanese Banks Grow Increasingly Concerned.]

I smiled as I browsed the reactions from media outlets around the world on the Internet.

"This is only the beginning, and they're already making such a fuss."

Just then, Eva entered.

Closing my laptop, I stood up.

"Eva, welcome back. Busy?"

"I'm fine, Boss."

At the moment, Eva was even busier than Han Kyungyeong.

Since she had led the CDS contracts, this was the busiest period of all.

Even so, she looked more energetic than ever.

The two of us sat down on the sofa.

"So? Did you find out?"

After signing the contract, I had asked Eva to investigate why Saudi Arabia had entered this bidding war.

She nodded.

"Yasir led the negotiating team. Rumor has it Prince Muqrin, the intelligence chief, was behind him."

"Muqrin..."

"Fourth in the line of succession."

So that's why Rockefeller had warned them to back off if they didn't want to become enemies of the royal family.

Prince Muqrin would eventually become Crown Prince.

Unfortunately for him, he would also become the ill-fated Crown Prince who would soon be removed.

"What kind of relationship do Prince Muqrin and Baltice have for them to cooperate like this?"

"I couldn't find out that much. But considering he's the intelligence chief, he probably knew a great deal about Baltice. I don't know who approached whom first, but I'm certain they joined forces."

I nodded.

"The fact that they appeared at exactly the right moment is proof enough."

Prince Muqrin would eventually lose power on his own.

But if I left him alone now, he could become an obstacle every step of the way.

"What about Governor Salman? The one I told you to build a relationship with?"

"I've established a connection. But Boss... why Prince Salman, who's third in line, instead of Crown Prince Sultan or Prince Nayef, who's second?"

Eva tilted her head, clearly puzzled.

Smiling, I answered,

"Both Crown Prince Sultan and Prince Nayef have heart problems. Sultan, in particular, is elderly and even has colon cancer."

"What?"

"He's received treatment in the United States multiple times. That's a certainty. Nayef's the same. He's being treated in Switzerland. They might even die before the current king."

Salman had been appointed Governor of Riyadh at the relatively young age of twenty-eight and had spent more than forty years developing the province that contained the Saudi capital.

He was still keeping a relatively low profile, but in just a few years he would become one of the central figures in Saudi politics.

"How close have you gotten?"

"If we go to Saudi Arabia, I can arrange a private audience."

"Oh?"

I couldn't help letting out a sound of admiration.

She was close to the Qatari royal family, and apparently she had connections within the Saudi royal family as well.

"As expected of you, Eva. I was right to leave it to you."

Saudi Arabia was never a country that could be underestimated.

With the immense wealth generated by oil, there was no telling what they might do.

"Boss, should I pass this information on to Prince Salman?"

"Yes. Give it to Prince Salman. There's probably already a fierce power struggle taking place behind the scenes."

Prince Salman was one of the powerful Sudairi Seven, who wielded enormous political influence within the royal family.

The fifth king was his full brother.

The sixth king was his half-brother.

Even the current Crown Prince Sultan and the second-in-line Nayef were both his full brothers.

Prince Muqrin, on the other hand, had no full brothers and lacked a solid political base.

He had probably joined hands with Baltice to compensate for that weakness.

"Understood."

"Even if you're busy, keep watching developments in Saudi Arabia. This may not be the end."

"Of course, Boss. Anything else?"

I shook my head.

"You're already doing an excellent job. Just keep it up a little longer. You can go."

Just then, something occurred to me, and I called Eva back before she could leave.

"Oh, Eva. Have you met Prince Salman's son, Mohammed bin Salman?"

"Mohammed? Ah, Prince Salman's seventh son?"

I nodded, and Eva continued.

"He graduated from university last year and is currently serving as Prince Salman's special adviser. Other than that, he doesn't hold any official positions. Rather than politics, he's mostly involved with Saudi companies and various investment projects."

"Keep a close eye on him."

"Why? As far as the succession goes, he has practically no chance."

I smiled inwardly.

His father, Prince Salman, would eventually become king.

But the one who would truly wield power would be Mohammed bin Salman.

Naturally, Eva couldn't understand my reasoning.

"Prince Salman favors him greatly. Pay attention to him. I think he's someone with whom we can maintain a good relationship."

"If you say so, Boss, then I trust your judgment. I'll make sure to build a relationship."

Once all of this was over, I planned to meet him myself.

Building a friendship before he firmly secured power would benefit us in many ways.

* * *

Time passed quickly.

The liquidation of Lehman's assets continued.

Meanwhile, other financial institutions also began to falter.

Stock prices kept falling, and both the government and the Federal Reserve supplied liquidity to numerous financial institutions in an effort to prevent an even greater crisis.

But it was little different from pouring water into a bottomless bucket.

More and more bad assets kept being discovered.

Then AIG's credit rating was downgraded.

AIG was one of the largest insurance companies in the United States.

The downgrade triggered additional collateral requirements on a wide range of derivative products, further worsening the company's liquidity crisis.

The Federal Reserve took the extraordinary step of providing an emergency bailout.

A total of $85 billion was injected, and the government acquired 79.9% of AIG's shares, effectively nationalizing the company.

The $85 billion was used to resolve its liquidity shortage and meet the additional collateral requirements.

The government also announced plans to sell off assets to repay AIG's debts.

It attempted to sell major subsidiaries and non-core businesses, but no buyers emerged.

"Charlie, it's been a while."

A restaurant in Washington, D.C.

Chairman Ben Bernanke entered the restaurant and greeted me.

I stood and shook his hand.

"Yes, Chairman. I know you're busy. Thank you for making the time."

"This is about Lehman Brothers, I assume?"

"Yes. The acquisition is almost complete."

"I heard. Congratulations. Thanks to you, we managed to prevent an even greater crisis. We especially appreciate your commitment to preserving jobs and making additional investments."

After exchanging greetings, we sat down across from one another.

"I've heard AIG is in trouble."

Bernanke shrugged before nodding.

"That's right. As you already know, it isn't an easy situation. It's practically nationalized at this point, but we have no idea how much money this is ultimately going to cost."

"There'll have to be aggressive restructuring."

Bernanke let out a deep sigh.

"Exactly. We're trying to sell off most of its subsidiaries and assets. But there aren't any buyers."

Insurance companies were directly tied to the everyday lives of ordinary people.

They had allowed Lehman Brothers to go bankrupt, but if an insurance company collapsed, the consequences would be incomparable.

"As you already know, the total value of the CDS contracts between AIG and our affiliated investment firms exceeds $200 billion."

"...Yes, I'm aware."

"The credit event has already occurred. The moment we execute those contracts, AIG will have to pay us over $200 billion. But they obviously don't have the ability to do that."

AIG was already paying out insurance claims under numerous CDS contracts.

Meanwhile, we still hadn't filed our own claim.

"Charlie... what exactly do you want?"

"We'll acquire AIG."

"What?"

"We'll acquire every asset and every business, including all of its liabilities."

Bernanke opened his mouth in disbelief before finally speaking.

"...Do you even realize how much money that would require?"

"Around one trillion dollars, wouldn't you say?"

"Does Dreamhigh actually have that kind of financial capacity?"

Of course, not even I could produce one trillion dollars in cash.

"I'd like the Federal Reserve to grant us a loan."

"Hahaha."

Bernanke burst into laughter.

"So in the end, you're planning to swallow AIG using someone else's money."

The corners of my mouth curled upward.

"If you activate an emergency lending program, it's entirely possible. Nationalization is never viewed favorably in the United States. Are you really prepared to spend taxpayers' money for years on restructuring and rehabilitation?"

I had struck directly at the Federal Reserve's and the Treasury Department's greatest concern.

It would require an endless stream of taxpayers' money.

"I'll carry out a thorough restructuring. I'll completely transform the company so this never happens again. My intention is to focus exclusively on its core businesses. After all, AIG's crisis was ultimately caused by its financial services operations."

"So you're saying you'll focus solely on insurance?"

Bernanke immediately grasped the essence of my proposal.

I nodded.

"Yes. I intend to merge the financial services division with Lehman's North American business that we just acquired."

"..."

"AIG will focus exclusively on insurance and asset management. Everything else—including the aircraft leasing business and other non-core assets—will be sold to secure liquidity."

Even after laying out the entire plan, Bernanke couldn't answer immediately.

After thinking in silence for a while, he finally asked,

"If everything proceeds according to your plan, how much financing would you need?"

"I'd like the Federal Reserve to finance 70% of the total acquisition cost. The loan would be repaid over the long term."

"So you're asking for a $700 billion loan?"

"Yes. We intend to repay all outstanding liabilities first and then proceed with the asset sales."

AIG had to be acquired differently from Lehman.

Unlike Lehman, AIG's liabilities were smaller than its assets.

However, the amount of debt that had to be repaid immediately was so enormous that government intervention had become unavoidable.

"If you reject this proposal, then we have no choice."

I looked directly at Bernanke.

"We'll have to begin filing claims on our CDS contracts."