America's No. 1 financial conglomerate

Chapter 615 The Capital of Fanaticism

Ten minutes later, outside Nemo's Cafe, Mars stood with his hands in his coat pockets, his eyes scanning both ends of the street warily, like a thief, before his figure quickly disappeared into the shadows at the street corner.

Elaine then went to the riverbank, walked quickly to Mueller's side, and placed her hands naturally on the cold metal railing.

The two stood side by side, their gazes fixed on the night view across the river.

While not as brightly lit as the skyscrapers of Manhattan, it is still bustling enough.

"Well done," Muller said in a deep, steady voice, offering a word of praise.

Elaine shook her head slightly, a hint of regret curving her lips, her tone carrying a straightforward disappointment, "That's a full five hundred thousand dollars."

"To be honest, if this money were given to our team, my men would be perfectly capable of breaking into Merryweather's office and taking all the documents and computer equipment intact, without having to go through all this trouble."

"Hey." Mueller reached out and patted Elaine on the shoulder. "You're doing a legitimate job now. Don't bring that bandit mentality of the US military here."

After offering his advice, he turned his gaze back to the river and reassured her, "I've already spoken to Austin, and he'll be issuing a special bonus of $50,000. You can take your team members to relax, go on vacation to the South, or choose any other way you like to rest."

The moment Elaine heard about the $50,000 prize, the regret in her eyes vanished instantly, replaced by an undisguised smile.

That's exactly why he likes this job; the boss is very generous.

In addition to a fixed monthly salary, there are generous bonuses for each major task completed.

More importantly, all revenue from Rogers Detective Consulting, which they operate independently, belongs to all of them collectively.

It's like having one job that provides three stable sources of income.

While they might not become extremely wealthy, earning tens of thousands of US dollars a year is still a breeze for everyone.

They are far superior to the white-collar workers in office buildings.

Of course, he also knew the responsibilities they would face behind such high welfare benefits.

Once something is exposed, everyone's actions become their own.

Otherwise, even if Ernst doesn't harm their families, the other members will retaliate against the traitor.

But then he thought of that old man Austin, and his face darkened again. "I hate that stubborn old man. He's making me write all sorts of detailed explanations again."

However, when Austin's image flashed into her mind, Elaine's smile instantly faded, her face darkened, and her tone was full of helplessness: "I really can't stand that stubborn old man. Every time a mission ends, he makes us submit all sorts of extremely detailed reports, it's like he's nitpicking."

Upon hearing this, Muller couldn't help but burst into laughter, the sound carrying on the night breeze.

"To be honest, I don't really admire his meticulousness."

They were all former soldiers, always decisive and efficient, results-oriented, and possessed an innate boldness and straightforwardness.

But that old guy Austin was a complete perfectionist, even a fanatic.

He has an extremely strong sense of responsibility, always getting to the bottom of things and not allowing any ambiguity.

"But there's nothing we can do. The boss trusts him, and that's a fact we can't change. All we can do is follow his instructions."

Austin is the head of the financial audit team at the Garfield family office, an old guy known in the industry for his bad temper and tough personality.

Not to mention his enemies, even his colleagues and family members often had headaches because of his overly serious personality.

Take the funding for this mission for example. When he gets back, he'll have to write a detailed report, down to the exact time he entered the coffee shop, almost including the foot that stepped in first.

Otherwise, this account would not pass his review and would become a bad debt for the finance department.

And in the end, it will definitely be these people who suffer.

"Alright, I should head back now." Muller glanced at his watch. "The boss is still waiting for this document."

Located on the East River, just across the bridge is Queens.

When Muller returned to Monica Bellucci's mansion, the lady of the house was nowhere to be seen in the living room.

Jane Fraser was sitting here with several executives from Ernst Asset Management and Frank Mancuso, the head of the MGM press center.

Müller nodded to them, and they all responded with smiles.

Despite his position as security captain, everyone knows that his responsibilities go far beyond that.

To some extent, Ernst trusted Muller far more than he trusted them.

"Boss, it's been confirmed. The contents of this document should be authentic." Muller walked up to Ernst and handed him the manila document.

Ernst took the leather folder, opened it, and pulled out the files inside to read.

After quickly scanning a few numbers, core terms, and various labeled names, and recalling some rough memories of my past life, I felt there were no problems.

He handed the document to Jane Fraser beside him. "Take a look."

Jane Fraser glanced at Ernst curiously and reached out to take the document.

Prior to this, Ernst had only informed her to bring a few senior executives over, without telling them the specifics of the situation, so everyone was still unaware of what was going on.

Pulling out a stack of documents from the leather folder, it was clear they were photocopies, confirming they were all copies.

But this didn't stop her from exclaiming, "This is LTCM's internal risk control report, and it even includes detailed position data?"

"What?" O'Shea Ricardo jumped up from the sofa and hurriedly walked behind Jane Fraser, his eyes fixed on the documents in her hands.

With just one glance, O'Shea Ricardo spotted the photocopy of the seal bearing the name of Long-Term Capital Management at the end of the document.

The contents of the document made him increasingly alarmed as he read on. A chill instantly spread from the soles of his feet to his entire body, and he even began to tremble uncontrollably.

It wasn't excitement, it was fear.

If this bomb explodes, it won't be handled properly.

Then a financial disaster even more terrible than the Great Depression of 1929 will sweep across America in an instant, and then affect the whole world.

At that time, it's truly unimaginable what will happen around the world.

Although Ernst had previously informed them that Long-Term Capital Management might go bankrupt due to this debt crisis.

Despite Rob Mario's questions, he firmly believed Ernst's words.

But when the document appeared in front of him, he was still shocked and broke out in a cold sweat.

This isn't just a long-term capital bankruptcy; it's dragging America down with it!

This clearly records some of Long-Term Capital's operations, with the highest leverage reaching 248 times.

Now it's no longer a minor issue; the Russian debt default is a classic black swan event.

Jane Fraser glanced at Ernst with a complicated expression.

He recalled the scene when Ernst borrowed money from major banks to short Russian debt.

She was using Long-Term Capital Management as an example at the time, because it was one of the largest buyers in the market.

But she never expected that the other party would play such a big game, such a wild game.

This document shows that Long-Term Capital Management's risk exposure has exceeded $1.2 million, and it details the list of counterparties and transaction amounts in derivatives transactions with major investment banks.

She lowered her voice, her face so grave it was almost dripping with emotion. "Morgan Stanley, Goldman Sachs, Merrill Lynch, Bear Stearns—almost all the financial giants on Wall Street are involved. They are both investors and counterparties. Once LTCM goes bankrupt, the entire derivatives market will collapse like dominoes."

"Citigroup, Sandy Weir." She remembered Ernst's suggestion a month ago about Salomon Brothers' bond arbitrage positions.

Long-Term Capital Management and Salomon Brothers are essentially from the same school, with almost identical arbitrage trading models and even similar holdings.

Salomon Brothers was acquired by Travellers Group and later merged into Citibank, with Sandy Weir in charge of managing that part of the business.

He recalled the news he had received some time ago that Citibank was gradually reducing all of Salomon Brothers' bond arbitrage positions.

This is like stabbing someone in the back; with Salomon Brothers selling off their shares, Long-Term Capital Management will inevitably come under pressure.

To stabilize the position, one needs to add to the position and absorb the selling pressure from Salomon Brothers.

This led to a further increase in their leverage, with some positions reaching a terrifying 248 times.

"I've said it before: Long-Term Capital Management has been blinded by the mathematical formulas of Nobel laureates. The models are rational, but finance is not a rational industry."

Ernst recalled a phrase often used by John Meliweather, the founding partner of Long-Term Capital Management.

"The market will always return to rationality; we just need to wait patiently."

But that's the traditional market, the financial market, which is always like an 18-year-old girl, unpredictable and hard to fathom.

"This document clearly states that Long-Term Capital Management holds a large amount of Russian government bonds denominated in rubles, which are Russian domestic debts."

"In order to hedge against the risks of Russian debt, they signed huge forward contracts with several major Russian banks to short the ruble."

"Their idea is good: if there are problems with Russian bonds, the ruble exchange rate will plummet, and the investment in Russian bonds will result in losses, but shorting the ruble will allow them to make a lot of profits."

"But what about now?" Ernst asked sarcastically.

O'Shea Ricardo had already returned to his seat and said, "But the interest rates on Russian bonds are too high. Russian banks are taking in large amounts of deposits and investing in government bonds."

"Now that Russia has defaulted on its debt, Russian banks are the first to be affected and will suffer the greatest losses."

"According to our internal data models, this Russian debt default may put half of Russia's banks on the verge of bankruptcy."

"Long-term Capital not only faces huge losses on its Russian bond investments, but also has no one to redeem its hedged ruble short positions."

Taking the documents from Jane Fraser, O'Shea flipped through them as he continued, "And the national debt."

"The Russian debt default triggered a surge in global safe-haven demand, with investors selling off illiquid bonds and buying highly liquid ones. The price spread between new and old US bonds has not only failed to narrow but has actually widened."

"They're engaging in collusion, and that will drag them down to hell."

Ernst smiled and nodded, looking at Frank Mancuso, who had been sitting there without saying a word. "I want this news to spread throughout America tonight."