The Crown Prince In Hiding

The numbers on boards that changed themselves through magic technology showed stock prices, securities, mineral prices. Every type of financial product that opened for trading simultaneously.

People sent telegrams and debated with investors who lined up with stock ownership documents.

Cash counting machines rang and the scent of money hovered in the air. 90% of the area was men. All of this summarized the atmosphere of Blackwood bank's office concisely.

Dan and Nora sat on a guest sofa in the Blackwood bank lounge.

Everton sat cross-legged reading a newspaper with the most relaxed expression.

When the appointment time hit exactly,

Blackwood's reception staff came. Everyone was dressed neatly, with professional perfume drifting faintly. Their manner and speech were impeccable.

Even though there were only 3 of them, each one held the authority to conduct Blackwood's transactions.

"Good morning, Mr. Randy Moss."

Everton nodded in greeting and stood up to shake hands with them, with a smiling expression that Nora recognized as a performance.

They sat down. Documents were prepared. A secretary took notes on the contents of the negotiation. Premium quality coffee was served.

They pampered an investor like Everton very well. Because for people like this, they needed to pull Everton's money into the organization as much as possible.

It was a game.

"I hope you don't mind that I brought some interns to observe the work beside me."

Everton turned to introduce the two of them,

"This is Nadia. And that's Don—my own interns."

"No problem at all, Mr. Everton."

A neatly dressed housemaid brought coffee to serve Dan and Nora. Both nodded in acceptance.

"Well then, let me get straight to the point."

Everton patted both knees, took a breath, and smiled widely.

"I want to make a Credit Default Swap contract with your Mortgage-backed securities."

Dan's eyes wandered from Everton to the bank executives. They had expressions that froze instantly.

He swallowed saliva, turned to look at his subordinates as if he couldn't believe what he'd just heard, and then asked back, repeating:

"... You want to bet against the real estate market?"

"Yes~"

Everton clasped his hands and nodded with a wide smile.

"Why????"

"Those securities will only default if millions of Mathema residents band together and don't pay their debts, Mr. Everton. Do you really think that will happen?"

"I think it's possible~"

"But something like that has never happened since this country was founded."

"Excuse me, but I think this might be an investment with excessively high risk, Mr. Randy."

They were looking at Everton like he was doing something very stupid... only expressed it in eloquent language. But the second-born prince knew exactly what they were thinking.

His smile grew wider than before.

"It's definitely risky. Hahaha~ But the thing is, high risk means high returns. And I think everyone is thinking wrong. I'm determined to make this contract regardless of the circumstances."

"..."

The bank's lawyers, the bank executive, and his secretary all stood stunned by the straightforward confidence of this new 'wolf' of Vault Street.

But for his older brother, Dan was sitting confused, scratching his head.

It was as if they were speaking some language he didn't understand. Dan had no idea whatsoever. He swiveled his chair toward Nora.

The princess glanced back at him as if she sensed what he wanted.

The young man nudged Nora's foot with his own, made a face like his head was about to explode, made a face and pointed at his younger brother asking what the hell is he talking about?

"Do you know what a Credit Default Swap is?"

"No."

Princess Nora moved her chair closer and leaned toward him.

"What's happening now is that Mr. Everton is about to short Blackwood's Mortgage-backed securities."

"... What is that?"

The princess scratched her head, but then happened to see Everton's candy bag containing lollipops from his own factory. She took the liberty of picking it up and placing it between herself and Dan.

"Mr. Fury, imagine you're a bank that likes eating candy."

Nora pulled out one blue lollipop.

"When lots of people borrow money to buy a house, it's like 1 piece of candy. When many people borrow, the number of candies becomes as many as in your factory. Some pieces are delicious, like rich people who borrowed and pay on time... but some pieces are rotten."

"... Like poor borrowers who might default on the debt?"

"Yes. So the bank doesn't want to hold the candy and worry about it one piece at a time, because the bank itself is afraid of finding rotten pieces."

"If it were me, I wouldn't hold them either."

"So the bank takes candy from thousands of people who bought houses, 'throws them all together in one big bag,' shakes them around so they mix well, then sells them as debt securities to investors to buy. This bag of candy is what's called Mortgage-backed securities."

"So the bank is in a hurry to sell that candy bag to someone else so it can get the money back and recover its capital immediately?"

"Maybe with a little profit added on top. Yes."

"So doing it this way means the banks can rest assured? Because they took these debts and sold them to other investors, and the bank itself already has the money?"

"Yes. Because the bank sold the debts to someone else, it switched roles to become a middle man-debt collector. When people pay their house payments, the bank takes a cut and sends that money to the investors. And even if the debt is twisted however, they just seize the house and sell it on the market—someone will still come buy it. That's how the market situation is right now."

"That's clever... I understand now... so what's the problem?"

"Mr. Everton believes that those candy bags don't contain good candies mixed with rotten candies. They contain nothing but rotten candy mixed with more rotten candy."

Rotten candy waiting for investors to eat it and get diarrhea across the board.

"Okay... so if the candy turns out to be rotten, it means the borrower defaults, and the investor gets nothing back?"

"And if millions of pieces are rotten at the same time... the damage would be...enormous"

"I see..."

Dan nodded.

"Okay, my younger brother thinks millions of pieces will rot. The world will go dark. Everyone will default. What happens then?"

"Mr. Everton sees that Blackwood issued those candy bags to buy and sell on the market in large quantities. So he came to make a contract with Blackwood saying that if one day all these candy bags turn into completely rotten candy, Blackwood has to pay him a huge sum of money back."

"How much is this huge sum?"

"We have to wait and hear..."

Nora and Dan went back to listening to Everton's negotiations.

"We're not refusing or anything. If you're going to bring money to us, Mr. Randy, how much do you want the contract value to be?"

"100 million."

"100 million?"

The bank executives gasped in shock.

100 million in that world was equivalent to 1 billion in ours.

It was no wonder that with this deal, Everton was risking a lot—to the point where his fund might completely collapse if he was wrong.

The bank executives turned and whispered to each other anxiously. Everton sat cross-legged, smiling with a poker face in his style.

Meanwhile, Dan turned back to chat with Nora.

"The bank has to pay it 100 million... and it doesn't have to do anything?"

"It does have to do something, Mr. Fury."

At the same moment, the bank executive turned back after conferring. His expression was bright, smiling widely like a mouse that had fallen into a rice barrel.

"We'll prepare the documents and notify you shortly, Mr. Randy. Your fund will need to provide us with a Premium of 1% of the contract value every month."

"Yes, I accept."

Everton nodded gracefully.

Galatasaray nodded and proceeded to complete all documents.

Nora turned back to Dan.

"From now on, Mr. Everton will have to pay Blackwood bank a fee of 1 million credits every month, Mr. Fury. 1% of 100 million is 1 million."

"So Everton is burning 1 million credits every month. Every month... without anyone knowing whether your mortgage or whatever will become 0 as he thinks???"

"I think it's crazy too. It's no wonder Blackwood accepted the offer. It's free money, Mr. Fury."

Nora rested her chin on her hand.

"Mr. Everton must already have a number in his head about when the system will collapse... otherwise he wouldn't go short on this scale."

"What does 'short' mean?"

"Normally we buy cheap hoping to sell expensive and make profit. But short is borrowing and selling now hoping the price drops cheap so we can buy it back."

"Okay."

Everton opened his watch to check the time.

"Next we're going to 2-3 more banks."

"2-3 more banks? Don't tell me you're going to make Credit Default Swaps with other banks too?"

"That's correct, Your Highness"

"Mr. Everton, I really want to know what evidence makes you this confident..."

"That's a secret~."

The tall young man made a zipping motion across his lips.

They all stood up and walked out saying goodbye to the bank executive.

Out into the outside world.

Dan straightened his chest, his eyes thoughtful. He looked at Everton.

"100 million isn't small change either. That means you really strongly believe it will actually collapse."

"A matter of conviction like this, brother."

"You're prepared to burn through 36 million just like that?"

"Huh~"

"36 million... where does that number come from, Nora?"

"Let's say 3 years, 12 months x 3 years = 36 months. You need to pay premium 1 million per month x 36 months = 36 million, right?"

"Oh."

"Brother why are you this slow?"

Everton shook his head.

"If it weren't for Princess Nora, you wouldn't survive this place for sure. And will your budget meeting tomorrow survive?"

"I'm trying. Thank you."

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