“Oof—here we are.”
When I followed Director O inside, a room slightly larger than a studio apartment was waiting for me.
This room, which was closer to a supply room than an office... seemed to be my new home.
“It’s not big, but it has everything you need. Three monitors, a Bloomberg terminal, a copier, a fax machine, an extension phone, and even these blackout blinds you can’t see through from outside. How is it?”
“It’s nice... But why is there only one desk?”
“For the time being, work alone. Your promotion was so unconventional that you’d probably feel uncomfortable working with seniors who rank below you.”
“Ah...”
“Think of it another way. How great is this? It’s responsibility without anything to be responsible for. Honestly, I’d love to quit being a director and work here instead.”
I let out a small laugh.
A manager position at the pension fund was equivalent to at least a section chief at an ordinary company, and originally, you could only be promoted to it after seven or more years of work experience. Of course, this was also one reason the pension fund had such a high resignation rate. In finance, if your returns are high, no one cares whether you show up to work or not, so who would want to work in such a stifling organization?
The fact that there would be fewer people to run into was also a consideration for me.
“Check it out. Anything missing?”
I stroked the Bloomberg terminal I could use all by myself and said,
“No, nothing at all. It’s perfect.”
“Good. Then let’s make the OJT brief. Originally, you’d have to go through a three-night, four-day training course, but I’ll explain it in under three minutes.”
“Yes, sir.”
“Take this. These are the industries you’ll be managing from now on. It’s also your operating amount.”
The paper Director O handed me listed domestic listed companies and the pension fund’s equity stakes in them, and even at a rough estimate, it came to several trillion won.
“In ordinary finance terms, you’re about section chief level now, so you’re management too. That means you must attend meetings chaired by the division head and meetings with the heads. From now on, every report you write will be submitted to director-level staff, and if it looks good, it’ll go directly to the division head as well.”
“Yes. I’ll approach it with a greater sense of responsibility.”
“And while, in principle, we do not interfere in management, when we anticipate massive losses as shareholders or have doubts about financial statements, we can demand explanations from companies as major shareholders. If it really gets to the point where we can’t stand by and watch, then whether it’s a chaebol chairman or whoever, we can replace them.”
The pension fund did not interfere in corporate management, like the noninterference pact between the authorities and the murim in martial arts novels, but when things truly seemed beyond saving, it did replace people.
The so-called Stewardship Code.
In fact, when Korea Air continued to be plagued by the owner family’s “nut rage” abuse of power and suspicions of Chairman Cho’s embezzlement and corruption, the pension fund had the chairman dismissed. Of course, it did not purge him directly, but it subtly lent strength to the demands of minority shareholders and put pressure on the owner.
In that sense, to chaebols, a pension fund holding company shares was more terrifying than the prosecution.
“Good, that’s it. Any questions?”
“No. I’ll learn a lot going forw—”
“We’re not even halfway done, you punk. You think all our staff would be managers if that was all they had to do?”
Director O held out a heavy bomb of documents to me as I lowered my head.
“Take it. It’s an inquiry sent over by the legislative office.”
“...Pardon?”
“The recent hot topics in politics are the Commercial Act amendment and the financial investment income tax. The impact these will have on the domestic stock market... analyzing that and reporting on it is our role.”
“Ah...”
“From now on, don’t even dream of leaving on time. During the day, you respond to the market, and after the market closes, you handle administrative work. And speaking from my experience... answering government inquiries like this is hundreds of times more headache-inducing than writing financial reports. Still, you can do it, right?”
All of a sudden, I wanted to go back to being just an associate.
I answered with an awkward smile.
“Yes. I’ll work hard to learn.”
“I like how spirited your answer is. Then hurry up and unpack, and come up to the Risk Management Team. There’s an all-hands meeting for the investment team today.”
“Today? I haven’t even unpacked my thi—”
“Try to understand. With the real estate crisis coming out of China, global stock markets are in a state of emergency, aren’t they? According to sources on Wall Street, Moody’s and Fitch are apparently on the verge of downgrading China’s credit rating or not. Then what happens to Chinese government bonds... Tsk, tsk.”
“...”
“In any case, we’ll be in emergency management mode for the time being, so adapt to the work at your own discretion. Oh, and if you have anything to say, report directly to me, not Director Gim. See you in ten minutes.”
It really did seem to be an emergency. Considering they were making a guy who had returned from a business trip yesterday attend a meeting today.
I calmly unpacked while reading through the domestic team portfolio.
*
Risk Management Department.
The pension fund was managed through three main pillars—the Strategy Department, the Investment Team, and the Risk Management Department—and true to its name, meetings chaired by the Risk Management Team were always full of nothing but bleak talk.
“It’s a crisis. Truly, an unprecedented crisis unlike anything we’ve ever seen.”
“...”
“High interest rates from the U.S., bad real estate news from China—how they’ll affect global stock markets going forward, how we should respond with our portfolio. Everyone, give me your best opinions.”
From the start, Division Head Choe of Risk emphasized the word “crisis” more than five times, his face grim.
In truth, he was the kind of person who said “crisis” whenever he opened his mouth, but the executives’ attitude toward it felt quite different today.
Everyone gathered here had experienced the subprime crisis at least once. That horrific sight of global sovereign wealth funds being smashed by an average of thirty percent.
Back then, fortunately, China’s economy was growing by ten percent, and Korea managed to weather the crisis well thanks to that special demand, but now that very China was floundering. That was why everyone’s faces were dark.
While everyone was merely watching one another, Team Leader Yu of the Alternative Investment Team raised his hand.
“Division Head. For now, I think it would be better to respond conservatively. The U.S. is reeling from inflation, and China from real estate.”
“Right, Team Leader Yu. Conservatively how?”
“Our alternative team believes Moody’s and Fitch will ultimately downgrade China’s credit rating. Accordingly, we’re considering gradually reducing our proportion of Chinese government bonds and assets.”
“Good. And the assets secured that way?”
“At present, cash seems the safest. We’re considering liquidating not only Chinese assets, but other assets as well.”
Once the alternative team’s report ended, Overseas Team Leader Choe Gukhan raised his hand.
“Division Head. Of course, it is a crisis, but isn’t that too excessive a concern?”
“Concern?”
“To call it an unprecedented crisis, the Nasdaq is holding up better than expected. Of course, it did fall by around ten percent after Fengda’s bankruptcy, but considering that the Nasdaq recently rose thirty percent, it’s not so much a decline as simply a correction.”
“Hmm...”
“In particular, big tech and AI-related stocks are hitting new highs every day. And if you look at the recent U.S. CPI figures, inflation appears to be coming under control to some extent. The possibility of the Fed raising rates again seems extremely low. In a situation like this, holding cash does not seem like a good investment.”
The United States was a strange country.
Clearly, every global indicator pointed to a recession, yet it alone soared without knowing how high the sky was.
After Pavel’s announcement of the final rate hike, the Nasdaq underwent a strong correction. But once the CPI settled in the six-percent range, the Nasdaq surged at a frightening pace. It was a bizarre phenomenon in which every global stock market was flashing red, yet only the United States was rising.
The biggest reason supporting this was, as expected, technological prowess.
Just as MS seized complete control of the market when the information age arrived in the 1990s, many experts predicted that AI would take up the baton and become the core axis of the Fourth Industrial Revolution.
And the United States firmly held that hegemony. American big tech companies, including Nvidi, possessed such overwhelming technological power that debating who was in second place was meaningless, and many experts projected that they had now reached a level of “super-gap” that latecomers would find difficult to catch up to.
“Team Leader Choe, then doesn’t that mean we should sell quickly now? It’s overheated, overheated. No matter how I look at it, the U.S. stock market is a bubble.”
“It is not a bubble. It’s the expectation that American AI technology has reached that much of a super-gap and will monopolize the Fourth Industrial Revolution.”
“In the 1990s, MS monopolized the computer market too. Even so, stock prices collapsed during the dot-com bubble.”
“The recently announced corporate earnings of the big tech companies were all earnings surprises. This is a rise with grounds behind it.”
Starting with that, the boom faction and the recession faction clashed fiercely.
Division Head Choe did not add a single word and simply let them fight.
Amid high interest rates, inflation, and instability in global stock markets, only the U.S. stock market was rising on its own. Even if they had to bicker, there was a need to determine whether this was a bubble or not.
When the chaotic debate, in which they had loosened their ties and even pointed fingers at one another, finally ended, Division Head Choe opened his mouth.
“Everyone, stop. From here on, the same arguments are just being repeated. If we’ve gone this far, you’ve all said what you wanted to say, haven’t you?”
He brought order to the room and picked up his pen.
“I don’t know whether the U.S. stock market is a bubble or not either, but approaching the current market conditions by country seems meaningless. Let’s organize it by sector.”
He turned his eyes to Team Leader Choe.
“You think big tech-related stocks will continue to rise?”
“Yes. This correction is actually an opportunity to buy cheaply. We need to increase our purchase ratio.”
“Are there any other promising sectors?”
“Airline stocks and biotech stocks look likely to continue their upward trend.”
“What else?”
“Energy-related stocks, especially renewable energy-related businesses, are also expected to grow. This isn’t limited to the United States; if there are promising technologies among European companies, we should actively purchase them as well.”
Division Head Choe turned his head.
“Team Leader Yu, then tell me which businesses you think we should clear out.”
“Construction. By any indicator, the construction industry does not seem to have any momentum for growth for the time being. Not only China, but U.S. and European construction stocks should be cleared out as well.”
“What else?”
“The shipbuilding sector also has a poor outlook. Recently, the rise in crude oil prices has been slowing, while other raw materials are still soaring. China may at least manage to keep going with cheap labor costs, but I think we should sell shipbuilding stocks in major countries.”
“Anything else?”
“Beyond that, it would be better to reduce our stakes in all manufacturing-related stocks. And I think it would also be good to clear out domestic steel stocks, including Pasco.”
“Steel stocks... haven’t they been rising recently?”
“The future is uncertain. The steel currently being produced in China is in oversupply. With the construction industry in recession, there’s nowhere to use it. Then in the end, I suspect China will launch the dumping attacks it always does.”
Sitting at the very foot of the table, I wrote down the contents of the meeting with a bitter smile.
As expected, predicting the economy was as difficult as the Korea Meteorological Administration predicting the weather.
Their theoretically flawless forecasts were flowing in completely unpredictable directions due to the Ukraine-Russia war and U.S.-China tensions.
“Okay, that’s enough.”
Division Head Choe put down his pen.
“As expected, when we hold an all-out debate, we arrive at a point of agreement like this. Very good opinions. No matter how bad the recession is, there are companies that will survive and businesses with promising futures. Today isn’t the end, it’s the beginning. Each team should analyze by sector and continue reporting promising fields. Also report businesses that should be cleared out.”
As the meeting came to an end, I carefully raised my hand.
“Um... Division Head.”
“Oh—Manager Lee. Ah, things were so hectic we didn’t even congratulate you. Everyone knows him, right? Manager Lee Sejun, who was promoted this time?”
Everyone applauded and offered words of congratulations.
I gave a small bow and said,
“...It’s just that I also wanted to mention one business with a promising future.”
“Oh dear. We were only talking among old people, weren’t we? This is probably your first risk management meeting, but this is an equal forum for discussion where rank and age don’t matter. From now on, if you have something you want to say, speak freely. So, what is it?”
“Looking at the current domestic portfolio, I think the proportion of defense industry stocks is far too low. I think this sector will be promising... How about increasing our weighting a little?”
At that moment.
The faces of the boom and recession factions who had been fighting back and forth, Director O who had always trusted me, and the division head who had been looking at me full of expectation all crumpled like deflated balloons.
“The defense industry... Are you serious?”