The previous day's closing value of Japan's Nikkei Index was 10,933 points.
If, as Seok-won predicted, the index were to break below the 8,000 level, it would mean a plunge of nearly 4,000 points—something that could not help but be shocking.
Landon, unable to hide his flustered expression, unconsciously picked up his teacup and brought it to his lips.
Distracted by what he had just heard, he failed to notice that the espresso was still steaming hot. He took a sip, only to yelp inelegantly as the heat touched his tongue, hurriedly setting the cup back down.
"Khuh!"
Tears even welled up in the corners of Landon's eyes as he coughed repeatedly.
"Are you alright?"
"Y-Yes."
At that moment, Stone approached quietly from the side with soft footsteps and spoke calmly.
"Excuse me."
He quickly wiped away the splashes around the teacup, replaced it with a new one, and bowed his head.
"I apologize for not informing you beforehand that it was hot."
In truth, it had been Landon's carelessness, but Stone had stepped forward first and claimed it was his fault so that Landon would not feel embarrassed.
After finally calming his cough, Landon gave a slight nod of thanks. With a gentle smile, Stone stepped back a few paces and moved aside.
"Ahem… ah. I'm sorry."
Landon composed himself again, his face slightly flushed with embarrassment.
"I didn't expect to be that startled."
"No one would hear what you just said and not be shocked. Anyway, getting back to what we were discussing…"
Landon looked at him with serious eyes and continued speaking.
"If the Nikkei really collapses as you said, that would mean a drop of as much as 27 percent."
Unlike Landon, whose voice had grown stiff, Seok-won responded with a calm demeanor.
"It's a huge drop, which means a huge opportunity to profit, so I'm planning to make a short bet."
"The Nikkei has already collapsed from its bubble-era peak of 38,915 and is now down to about one-third of that level. For it to fall that much again from here, there would have to be some kind of massive shock…"
As a thought suddenly flashed through his mind, Landon frowned slightly and spoke.
"Are you expecting a war between the United States and Iraq to break out, just as the market fears?"
"As I said before, the invasion of Iraq is only a matter of when it begins. The decision to go to war has already practically been made."
Sensing that the overall atmosphere indeed seemed ominous, Landon nodded gravely.
"Secretary of State Christian and Defense Secretary Bret Morris have been criticizing Iraq day after day, haven't they? They claim Iraq secretly developed weapons of mass destruction and supported the terrorist organization Taliban. Anyone can see they're building a justification for war."
"I doubt whether Iraq actually developed weapons of mass destruction or supported the Taliban is all that important to the Bush administration."
"What do you mean by that?"
Seok-won explained the reason in a low, steady voice.
"In the Middle East, where the major oil-producing countries are gathered, Iraq has been openly pursuing an anti-American stance while growing closer to Russia. From the United States' perspective, that must have been a thorn in their side. So after Afghanistan, they likely intend to topple Iraq's dictatorship and establish a pro-American democratic government, putting a full stop to the war on terror."
He added in a flat, expressionless tone.
"On top of that, President Bush likely has another calculation in mind—riding the momentum of having brought the war on terror, launched after the 9/11 attacks, to a complete victory to gain an advantage in the midterm elections this November."
Landon also believed that the likelihood of a war with Iraq was high, so he nodded in agreement with Seok-won's explanation.
However, he spoke with a lingering trace of doubt still on his face.
"If a war does break out, as you say, international oil prices will surge and deliver a major shock to the global economy. But it's not just us—other investors also recognize that the possibility of a war between the United States and Iraq is quite high, don't they?"
In fact, the recent gradual rise in international oil prices and the gains in energy stocks were due to the risk of war.
"If it's a risk that everyone already knows about, there may be some shock when it actually happens, but wouldn't it be difficult for it to have enough destructive power to make the Nikkei plunge by four thousand points at once?"
Contrary to expectations, Seok-won nodded readily in agreement.
"You're right. A war alone wouldn't be enough to shake the Nikkei that much."
"...?"
Seeing Landon frown slightly, he continued speaking.
"But aside from the risk of war, Japan is currently holding a massive time bomb that is on the verge of exploding."
"...?"
"The problem of dealing with the enormous amount of non-performing loans that piled up after the collapse of the bubble economy."
During the bubble economy, land prices soared several times over overnight, and astronomical loans were issued with real estate as collateral.
'There was even a saying that if you sold Tokyo, you could buy all the land in the United States. That alone shows how severe the bubble was.'
When the massively inflated real estate bubble burst, the loans that had been recklessly issued during the bubble period instantly turned into bad debts whose principal could barely be recovered.
"Do you know how large the amount of non-performing loans held by Japanese banks is?"
"It's over 80 trillion yen, as far as I know."
"That was the figure recorded up until last year. Because of the economic slowdown, the scale of non-performing loans has grown even further and has now far exceeded 115 trillion yen."
Hearing this, Landon unconsciously swallowed dryly at the unimaginable scale.
One hundred fifteen trillion yen was an astronomical sum—more than 1,200 trillion won in Korean currency—so his reaction was only natural.
Even that alone was enough to leave someone speechless, but at the next remark, Landon shook his head in disbelief.
"That's only the amount accumulated in first-tier financial institutions. If you add the non-performing loans held by second-tier financial institutions such as credit cooperatives and mutual credit banks, the figure will grow much larger."
"Good heavens."
Landon asked, feeling not only astonished but also incredulous.
"Are you saying that even though the Japanese government hasn't just been sitting idle and has spent the past several years dealing with non-performing loans, such an enormous amount still remains?"
"No matter how much tax money is poured in to clean up bad debts, if the chronic recession and the slump in the real estate market keep producing even more non-performing loans, the total can only continue to grow."
Seok-won said this with a bitter smile.
"Unlike during the bubble era, property prices are falling every time you wake up in the morning, and with so many companies going bankrupt due to the recession, it becomes an endless vicious cycle where loans that were perfectly fine last year inevitably turn into bad debts this year."
"It has already surpassed the level that banks can resolve on their own. And no matter how much public funds are poured in, unless the vicious cycle itself is broken, it will be nothing more than pouring water into a bottomless jar."
"If more than 115 trillion yen in non-performing loans were to explode all at once… just thinking about it is terrifying."
Landon rubbed the corner of his mouth with a grave expression.
"If you consider the influence Japan has on the global economy, it would deliver a shock comparable to a depression."
Although Japan had been severely shaken by the collapse of the bubble economy, it was still the world's second-largest economic power after the United States, with a nominal GDP of 4.18 trillion dollars.
If a megaton-level time bomb in the form of non-performing loans were to explode in such a country, it would be nothing short of a disaster for the stock market.
"Each one on its own is already a major negative factor. But if the Iraq War and Japan's non-performing loan crisis erupt at the same time, wouldn't the shock to the market be far greater?"
"Do you really expect something like that to happen?"
Landon leaned forward with his eyes wide open and asked.
He met his gaze directly and replied without the slightest hesitation.
"As I said earlier, to win the midterm elections in November, President Bush will start a war with Iraq no later than October."
"..."
"Likewise, the Japanese government has been pouring tens of trillions of yen in massive tax funds every year since the bubble collapsed in 1996. But instead of shrinking, the problem of non-performing loans has only grown to a level that is becoming impossible to handle. They are now in a situation where they must deal with it before the crisis becomes even worse."
Realizing the implication of his words, Landon narrowed his eyes.
"So what you're saying is that there's a high possibility that bombs could go off one after another within the next month or two."
"Neither side intended it deliberately, but they both knew the risks and kept postponing and ignoring them. In the end, overlapping circumstances have created a 'gray rhino'—a major shock waiting to happen."
"A gray rhino… that's a very fitting analogy."
"If the time bomb in Japan explodes, the shockwave won't just shake the Nikkei—it will rattle stock markets around the world and trigger a massive plunge."
"That's certainly true. There's hardly any place, including the United States, where yen capital hasn't flowed."
At that moment, Seok-won leaned back against the chair and smiled, revealing his white teeth.
"It may be a disaster for the stock market, but if you can predict the crash, it's a perfect opportunity to make a fortune."
Realizing what he was getting at, Landon slightly curled the corner of his mouth upward.
"That's true. Just thinking about how much profit we might make this time already has my heart racing."
"Once the non-performing loan problem surfaces, not only Japanese banks but also companies that may end up being restructured will see their stock prices collapse in droves."
"If the stock market collapses, the yen will weaken along with it."
Landon licked his lips with the eyes of a hunter stalking his prey.
"The New York stock market won't be able to avoid the fallout either and will likely take a major hit."
"So you're planning to make short bets not only on the Nikkei but everywhere else as well."
"Opportunities like this big event don't come around often. Of course we should."
"Heh heh heh. Of course. When there's money to be made, you have to take as big a bite as possible."
Landon rubbed his palms together expectantly.
Unlike a moment ago, when his expression had been tinged with concern, he now looked visibly excited and energized.
Watching him, Seok-won smiled briefly before quickly turning serious again.
"Let's assume a global market crash will arrive by October and design betting positions that can generate the maximum possible profit."
"I understand. It looks like we're about to get extremely busy."
Landon's eyes gleamed with excitement.
He leisurely lifted his teacup and finished the rest of his espresso, then set it down before speaking as if he had just remembered something.
"Oh, and let's coordinate with Director Choi in Korea and move together."
"Of course. If we left him out of something this big, Director Choi would be terribly disappointed."
Director Choi Ho-geun might have grown accustomed to playing the role of a manager, but he was, at heart, a born securities man with the temperament of a fierce gambler.
Imagining how he would become flushed with excitement after hearing this, Seok-won let out a faint chuckle and nodded.
"How much leverage should we use?"
At Landon's question, Seok-won thought for a moment before replying casually.
"Let's not overdo it—just use about five times leverage."
"Hahaha. Understood."
Considering the scale of the funds managed by the Eldorado Fund, using five times leverage meant placing a single bet worth hundreds of billions of dollars.
Yet even with such an enormous stake, Seok-won showed not the slightest hesitation. Instead, he issued his instructions with a faint smile, as if he were actually looking forward to the coming wager. Watching this display of composure and confidence, Landon could not help but feel a renewed sense of admiration.