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CH289 | GSI
🕑 Added 2025-04-07 03:34:08 +0000 UTCA Securities Firm Trading Floor in Downtown Tokyo, Japan
Small groups of anxious individual investors huddled together, their eyes fixed on the stock ticker. As soon as the market opened, they watched in shock as Sumimoto Corporation’s stock, highlighted in deep green, plummeted. Their faces filled with despair.
[Sumimoto Corporation 875.4 ▼26.8 JPY]
Sumimoto Corporation’s stock had recently rebounded, recovering to over 1,000 yen per share after hitting rock bottom due to large-scale share buybacks and a wave of bargain hunting. However, yesterday’s announcement of losses from illicit speculative trading triggered a sharp decline.
As the shock continued for a second consecutive day and the psychologically significant 900-yen threshold was effortlessly breached, investors spiraled into panic.
"What the hell? It’s dropping again today?"
"I should’ve sold it yesterday."
"Should I sell it now before it gets worse?"
A man clutching a rolled-up financial newspaper anxiously stomped his feet. Seeing his distress, another investor—someone he had befriended at the trading floor—tried to calm him down.
"It’s already lost nearly half its value. Selling now won’t change much."
"Didn’t you see today’s news? The losses could be even bigger than what Sumimoto announced."
Saying this, the man, unable to contain his anxiety, rushed toward the trading desk.
But he wasn’t alone. A crowd had already gathered, all desperate to unload their Sumimoto shares.
"I placed a sell order—why hasn’t it gone through yet?!"
A frustrated investor in an aloha shirt, printed with palm trees, yelled impatiently.
The overwhelmed securities firm employee at the counter wiped away cold sweat and bowed apologetically.
"There are no buyers at the moment, so the trade hasn’t been executed."
"What do you mean there are no buyers?! Sell it now before the price drops even further!"
The aggressive demand left the employee looking helpless.
"I’d love to process your sale, but without a buyer, there’s nothing I can do."
"So you’re just going to stand there while my money turns into worthless scraps?!"
The man in the aloha shirt ignored the staff’s explanations and continued to berate him.
He went as far as pointing his finger aggressively and shouting, but the employee could only keep apologizing—there was simply nothing he could do.
As panic spread, investors rushed to dump their Sumimoto shares, triggering a vicious cycle: mass sell-offs drove prices even lower, fueling further panic.
A company once considered a blue-chip stock in the Japanese market had, in an instant, become a pariah.
But the fallout from Sumimoto Corporation’s fraudulent trading scandal wasn’t confined to Japan.
The real impact was being felt in the metals and futures markets of London and New York.
At the London Metal Exchange (LME), traders sat around a six-meter-wide red leather circular couch, known as "The Ring," shouting and signaling frantically as they executed commodity trades.
Dressed in formal business suits with their shirt buttons fastened to the top, polished black shoes, and neatly trimmed hair, the traders appeared like refined gentlemen.
But in reality, they were more like gladiators in an arena—locked in a ruthless battle to outmaneuver each other, veins bulging in their necks as they roared orders in a cutthroat competition for profits.
The trading floor, always a hotbed of adrenaline-fueled energy, felt different today.
The reason? The Sumimoto scandal that had erupted just the day before.
Sumimoto, once so dominant in the global copper market that it earned the nickname "Mr. 5%," was rumored to be liquidating its massive copper reserves to cover its illicit trading losses. As a result, international copper prices were in freefall.
Matthew Chamberlain, a senior trader at Goldman Sachs, stood in the back, holding a telephone receiver to one ear while observing the chaos unfolding in The Ring.
Just then, a junior trader rushed over and whispered urgently.
"Copper just broke below $1,900 per ton."
Matthew's face immediately twisted in frustration.
"This is insane."
In just 24 hours, copper prices had plunged nearly $700 per ton.
Worse still, this didn’t seem to be the bottom.
Clenching his lower lip, Matthew stared at the frantic traders. The flurry of hand signals and rapid-fire movements made it nearly impossible to keep up.
Suddenly, he felt a hand grab his arm. Turning his head, he saw the junior trader from earlier, now holding out a black telephone receiver.
"It’s Dane from New York headquarters."
Matthew took the receiver and pressed it to his other ear.
"It’s me."
Crisis Unfolding in the Global Markets
[Matthew, the situation is really bad.]
The grim tone on the other end of the line made Matthew furrow his brows.
"How bad are we talking?"
[If our information is accurate, Sumimoto Corporation’s copper reserves exceed one million tons.]
"What?! That much?"
Matthew instinctively raised his voice at the staggering figure, then quickly lowered it, wary of anyone overhearing.
"Are you sure?"
[That’s just the physical inventory. If you factor in futures contracts, the total holdings are even larger.]
"Damn it."
With a phone pressed to each ear, Matthew scowled as Dane’s steady voice continued.
[Listen carefully. If the market finds out Sumimoto is holding this much, the panic will only get worse. Dump all remaining positions now and switch to shorts.]
"Got it."
Feeling the urgency, Matthew slammed the receiver down and swiftly raised his arm, signaling a trade.
A Goldman Sachs trader seated on the circular couch saw the command, raised both arms, and shouted:
"Sell 1,000 contracts at 1,850!"
Even though the offer was below the current market price, there were no takers.
Matthew’s stomach churned.
Are we already too late?
There was no telling how far prices would drop.
Grinding his teeth, he struggled to keep his expression neutral.
While Japan’s stock market and the global copper industry were in turmoil, Seok-won was enjoying the chaos from a distance.
Seated at his home trading desk, he swirled a whiskey glass filled with ice in one hand.
Multiple monitors displayed the crashing copper prices and Sumimoto Corporation’s plummeting stock graph. As he watched, he spoke on the phone with Landon in New York.
[With reports confirming Sumimoto’s copper inventory exceeds 1.4 million tons, the price has now fallen below $1,500 per ton.]
Observing the downward freefall of the price graph, Seok-won replied calmly.
"Dumping an amount equivalent to 10% of the world’s annual copper production was bound to create fear."
[Exactly. To minimize their losses, Sumimoto will have no choice but to liquidate their holdings.]
The ice clinked as Seok-won tilted his glass and took a sip of whiskey.
"They’ve probably already started selling off before making an official announcement."
[Makes sense. Once the fraud scandal is public, the price will crash even further. I’d have done the same in their position.]
Landon agreed without hesitation.
"We don’t know Sumimoto’s average purchase price, but it’s definitely above $2,000 per ton. The more prices fall, the greater their losses."
[Based on our estimates, the losses could surpass $3 billion—far beyond the $2 billion they reported.]
Considering how much worse the price drop had been compared to historical events, Seok-won found this entirely plausible and nodded slightly.
[Financial regulators in the UK and US are expected to launch fraud investigations into Sumimoto soon.]
Seok-won remained unfazed.
"The impact of this scandal is too big to be ignored."
[If they face severe penalties, it will undoubtedly further damage their stock price.]
Landon spoke with a hint of anticipation in his voice.
Glancing briefly at Sumimoto’s stock price, which had barely managed to hold at 800 yen per share after repeated plunges, Seok-won responded calmly.
"Investor sentiment is already severely shaken, so another wave of panic selling could happen. But I doubt it’ll drop much further from here."
[Still, wouldn’t 700 yen be a reasonable expectation?]
"It’d be nice, but Sumimoto won’t just sit back and watch. Despite their massive losses, they still hold $7 billion worth of marketable securities. If necessary, they can secure emergency support from their affiliate, Sumimoto Bank, to stabilize the situation. The market fear won’t last too long."
Recalling Sumimoto’s financial statements, Landon conceded with a hint of disappointment.
[Now that you mention it, that makes sense.]
"Even at this level, we've already made nearly a 30% return on our short positions. Not bad, wouldn’t you say?"
[Hahaha, you’re right.]
Landon quickly regained his good spirits and laughed.
"Now that we’re at knee level, let’s start unwinding our positions."
[Should we also begin liquidating our copper trades?]
Seok-won glanced at the copper price graph on his phone and briefly considered before making his decision.
"Yes, let’s do it."
[Understood.]
Since they had already secured significant profits, Landon had no reason to get greedy.
Just then, another thought crossed Seok-won’s mind, prompting him to add,
"Ah, and short U.S. Treasuries as well."
[U.S. Treasuries?] Landon asked, puzzled.
"Among Sumimoto’s holdings, the largest portion of their securities is U.S. Treasuries."
As one of the most liquid and widely trusted safe-haven assets, U.S. Treasuries were favored by governments, banks, and corporations worldwide.
"To cover their losses, Sumimoto will likely dump a large portion of their Treasury holdings. That’s bound to create short-term market shock."
Realizing Seok-won’s intent, Landon let out an impressed sigh.
[Ah, I see! I should’ve known you’d be ahead of the curve, boss.]
"With a daily trading volume of around $200 billion, the Treasury market is too large for Sumimoto’s liquidation to make a major impact. But markets are ruled by emotions more than logic. Fear will drive a short-term dip, so we’ll keep our trades tight and scalp the volatility."
[Understood.]
After issuing a few more instructions, Seok-won ended the call.
He then sat back, observing the long red candlesticks on his two monitors, showing Sumimoto’s plummeting stock price and the tumbling copper market.
Murmuring to himself, he mused,
"Not a bad warm-up before the real game begins."
With that, he brought his whiskey glass to his lips.
Comments
Wither Kingzz
Please update ch290+
