novelslam Chapter 262 The Battle of Time Difference
Chapter 262 The Battle of Time Difference
(Thanks to "澹台冷" for the two author certifications! Today's chapter is a combined 6400-word post.)
Executive Director Endo stood quietly to the side. He only breathed a sigh of relief when Keigo's footsteps completely disappeared into the depths of the corridor.
He turned his head and looked at Satsuki, who was in the main seat.
Satsuki leaned back in her chair.
The mentally taxing deduction just now clearly put a heavy burden on this body, which was running a high fever.
Her face was even paler than before. A few strands of hair clung to her cheeks from the cold sweat on her forehead.
Her eyes were closed, and the rhythm of her chest rising and falling noticeably increased.
"Young Miss".
Endo's tone was full of worry. He walked quickly to the table and picked up a glass of warm water.
"Your temperature hasn't come down yet. I'll handle the rest for now. You need to go back to your room and rest."
"Put it there."
Satsuki didn't open her eyes, but simply uttered two words. Her voice was somewhat hoarse, but it carried an undeniable coldness and hardness.
Endo's hand froze in mid-air. He knew her temperament well; only at times like this would she act like a capricious young lady. Helpless, he could only place the water glass back on the rosewood table.
"Building a political springboard is just the first step in this game."
Satsuki slowly opened her eyes. Her clear black and white eyes were filled with fine red blood vessels, but her gaze remained sharp.
She reached out her slightly trembling right hand, picked up the glass of warm water, tilted her head back, and drank it all in one gulp.
The world has changed drastically since her arrival, and the start of the war may very well be different from what I remember from my previous life.
In other words, war could break out at any time, and there is no time to lose.
Satsuki put down her water glass and turned her gaze directly to Endo.
Contact Frank.
Endo dared not object any further. He turned and walked to the control panel, picked up the red encrypted phone, and quickly dialed the overseas line.
The dial tone, indicating a wait for connection, echoed throughout the strategy room.
Satsuki leaned back in the leather swivel chair.
The powder keg in the Middle East is on the verge of exploding. Next, Frank needs to use all the dollar liquidity in the offshore fund pool, leveraging high leverage, to go all in on the open market of the New York Mercantile Exchange (NYMEX) and the Chicago Mercantile Exchange (CME) to buy three-month forward call options on WTI crude oil.
To circumvent scrutiny of cross-border funds by U.S. regulators, all open market purchases will not appear under the name of SA Investment. The principal in US dollars will be channeled entirely into Salomon Brothers' internal back pool through an offshore SPV matrix. Legally, these astonishing long positions in crude oil will be disguised as "proprietary trading" purchases by U.S. oligarchs in the open market.
Meanwhile, at the electronic trading execution level, in order to avoid the risk control thresholds of quantitative giants such as Goldman Sachs and Morgan Stanley, Frank's quantitative team will directly use the mature order splitting model that was previously validated in the Nikkei options battle.
Electronic orders are completely fragmented into tiny, secondary and tertiary transactions by the server's algorithm. These fragments are then randomly distributed into the channels of hundreds of brokerage firms worldwide, blending into the background noise of daily trading among retail investors globally.
The scheme involved using bribes to buy out oligarchs as cover, combined with Wall Street's top quantitative trading models.
Is this a flawless transnational operation...?
No, I have to hurry...
She opened her dry lips, ready to give instructions to Frank the moment the call connected.
In that very instant.
A sudden, intense wave of dizziness swept over me from the depths of my brain without warning.
Large black patches instantly appeared at the edge of her retina. Behind the blast-proof glass wall, the massive server matrix that occupied an entire wall began to violently distort and elongate the alternating flashes of eerie green light on its surface, turning into chaotic streaks of light in her vision.
The muscles in the torso lost tension in that second.
She lost the strength to support herself and was forced to fall heavily back into the depths of the leather swivel chair, her eyes involuntarily closing tightly.
"Young Miss?"
Endo, holding the receiver, noticed something amiss behind him and whirled around.
Satsuki raised her left hand and made a downward pressing gesture with her palm in mid-air.
Endo froze on the spot, forcing back the exclamation that was about to come out, and tightly gripped the microphone that was still ringing with a dial tone.
in the dark.
There were no more constantly fluctuating betting odds on the retina, and no more glaring screen light.
The only sounds in the strategic room were the low hum of the exhaust fan and the monotonous dial tone from the encrypted phone in Endo's hand.
"Beep—beep—"
The regular electronic mechanical sounds gradually overlapped with the slightly disordered heartbeat caused by her high fever in the quiet, enclosed room.
Attack, attack, and attack again.
This is the principle she has followed since she was reborn into this world.
But now, extreme physical discomfort forcibly severed her thoughts, which were originally racing along the offensive momentum. In those brief few seconds of losing external information input, the one-way deduction that had been stretched to its limit came to a temporary halt.
When the brain is no longer processing the attack details about leverage ratios and entry channels at full speed.
A strange sense of disorientation surfaced in the dark and quiet depths of my consciousness.
Wait... what did I forget to calculate...?
Satsuki forced herself to steady herself amidst the deep dizziness and darkness.
The flow of funds, the offshore fund pool in the Cayman Islands, the New York clearing center... this part is basically fine.
The funds will then be channeled entirely into Salomon Brothers' internal black pool, bypassing the Securities and Exchange Commission's (SEC) bottom-level penetration process through their proprietary trading desk.
On the execution side, Frank's team is already proficient, the order splitting model has been validated, and the concealment has reached the physical limits.
Is there no problem with the original plan?
No, something's wrong... but I didn't expect that.
But... where exactly is the problem?
Satsuki's consciousness repeatedly traversed those intertwined data nodes.
We cannot only consider theoretical feasibility; we must also consider practical considerations…
……
correct.
The Solomon brothers.
John Goodfred.
This is the "strongest" compliance umbrella, acquired at a cost of seven billion US dollars.
They will die.
Moreover, if this continues, it will lead to the death of the Saionji family.
Damn it, how could I forget? Weren't we always having SIS monitor them?
Satsuki clutched her hair, using the stinging sensation to force herself to stay awake.
They submitted false instructions in the bidding for government bonds.
They were illegally hoarding two-year U.S. Treasury bonds.
They attempted to force a short squeeze on the U.S. Treasury in the secondary market.
An indescribable chill crept up the darkness, following this chain of logic.
That's it. That fatal sense of dislocation comes from this.
At this critical juncture, if the Saionji family were to place all of their long positions in crude oil call options in Salomon Brothers' proprietary trading desk...
Once Washington regulators begin to act, once the Federal Reserve (FED) and the U.S. Department of Justice intervene in this Treasury manipulation scandal.
The Solomon brothers will face a devastating reckoning by the state apparatus.
At that time, the U.S. Department of Justice will directly block all their external channels and freeze all their trading accounts for a thorough asset investigation.
The crude oil options with a notional principal of several hundred billion dollars injected by the Saionji family through the illicit scheme are legally owned by Salomon Brothers' proprietary trading desk. These assets, crucial to the group's future, will inevitably become collateral damage in this massive purge.
They will be locked in the dock of federal court, awaiting trial. They might even be confiscated as illegal profits from Salomon Brothers' market manipulation.
This time bomb, buried right under the nose of the Federal Reserve, could explode at any moment.
Following this crack, the foundation of the entire crude oil buying spree began to crumble. Another extremely fatal blind spot was then exposed.
The New York Mercantile Exchange (NYMEX).
In the public trading halls of Wall Street, there are extremely strict "position limits" for any commodity futures and options contracts.
Once the first shot of August echoes through the Middle Eastern desert, one-fifth of the world's oil supply will be cut off. Oil prices will inevitably surge exponentially, triggering a global energy panic.
This directly touches on the bottom line of U.S. national security.
At that point, the White House and the Pentagon will be in a state of extreme strategic passivity. CFTC (Commodity Futures Trading Commission) regulators will pounce on the trading data pools like mad dogs, searching for any masterminds attempting to profit from the national energy crisis.
Even with the cover of models, and even if funds are fragmented, the final settlement will still aggregate into an extremely large total long position. Such a massive holding by a single interest group cannot escape the CFTC's bottom-level data penetration under extreme circumstances.
If the Saionji family is implicated because of the Solomon brothers, Washington politicians will not hesitate to tear off the mask of the free market.
原油。
This is America's lifeline.
Using national emergency powers to force liquidation is the bare minimum. They might even launch transnational sanctions against the Saionji family, who actually control the funds, on charges of "manipulating national energy security."
They used tens of billions to snap up shares on the open market, entrusting their lifeline to an oligarch on the verge of collapse.
The original plan was riddled with flaws.
No matter how confident Satsuki was, she would never believe that she was capable of confronting the entire United States.
This is America in the 90s!
A feeling of dizziness surged through my mind like ocean waves.
Damn it, the original plan must be overturned.
The entire foundation for aggressive buying must be completely restructured before the first order is placed.
But in the darkness with her eyes closed, a heavy weariness stemming from high fever and mental exhaustion was frantically tugging at her central nervous system, attempting to drag her consciousness completely into the abyss. The speed of her thoughts began to slow down drastically, as if each logical step required several times more energy than usual.
Simply succumb to this fatigue and let your brain shut down, and all the heavy pressure will immediately disappear.
But in the deepest recesses of that consciousness, the rationality belonging to the capitalist, like a cold reef, remains firmly rooted to the spot, stubbornly resisting the physiological inertia that wants to abandon thought amidst the raging storms.
Time is passing. Wall Street on the other side of the world is about to open.
She forcibly gathered the fragments of her scattered thoughts and, with extremely limited mental processing power, began to reconstruct the collapsed ruins.
Since the open market (NYMEX) position limit is an insurmountable barrier.
If you can't get through inside the arena, then turn to outside.
A financial term emerges from the depths of my silent consciousness: OTC (over-the-counter derivatives market).
By abandoning electronic trading and utilizing the institutional identity of an offshore SPV, they directly and manually sign ISDA master agreements with major Wall Street investment banks to conduct customized total return swaps. This opaque operation, lacking a centralized clearing mechanism, completely circumvents the CFTC's bottom-level penetration.
With the issue of concealing underlying positions resolved, the next concern is the potential risks associated with the delivery channel.
The Salomon Brothers ship is already leaking and could sink at any moment. Giving billions of dollars in tolls to just one company not only fails to diversify risk but also makes them a prime target for criticism.
If you're going to buy a protective umbrella, why not just buy the whole of Wall Street?
The commission from the betting deals is broken down and evenly distributed among the top oligopolies such as Goldman Sachs, Morgan Stanley, Merrill Lynch, and Lehman Brothers. Once these giants are all on the same side, if Washington attempts to launch an investigation, the top lobbying teams of each investment bank will automatically form a defensive network to block the bill on Capitol Hill in order to protect their own profits.
They would probably be very happy to do this kind of risk-free, high-return business.
(This is because the actuaries of investment banks' proprietary trading desks would never allow hundreds of billions of dollars to bet unilaterally on a "potentially breaking" war, which gave the Saionji family room to maneuver, rather than kicking the Saionji family out and doing it themselves.)
A security network has been established along the corridor, but geopolitical hostility remains high.
The passageways and cover have been secured. But political animosity remains. If war breaks out in the Middle East, and Japanese capital leads the way in profiting from the war, it will undoubtedly provoke hostility from the White House.
In their view, Japan was just a dog they had raised, daring to act on its own in front of its ancestors who profited from war.
Therefore, you must never be the first to stick your neck out. You must find someone to take the lead.
So, who is the most likely to profit from such a major national crisis?
The answer is actually their "insiders"—US-based macro hedge funds.
The intelligence intercepted by SIS was shared free of charge with George Soros' Quantum Fund and Paul Tudor Jones' Tudor Investments as a pledge of loyalty. Let those bloodthirsty American giants be the "villains" who dominate market trends. The Saionji family's funds simply need to closely follow their charge, hidden amidst the massive trading noise, and safely share in the profits.
Once the exorbitant profits are pocketed, the ultimate dilemma is the laundering and repatriation of funds.
The huge profits from crude oil were realized after the war, and if this huge amount of US dollars were directly remitted back to Japan, it would inevitably be intercepted by CFIUS (Committee on Foreign Investment in the United States) on the grounds of national security.
Therefore, this money must never leave the territory of the United States. It must be transformed on the spot into a "political investment" in the United States.
Directly acquiring US-based military industrial companies would be tantamount to touching the absolute sore spot of a superpower. But the undercurrents of capital always have the most secretive parasitic channels.
By utilizing an offshore SPV matrix in the Cayman Islands, the identities of the Japanese zaibatsu were completely concealed. Presented as dozens of anonymous multinational funds, they heavily invested in Carlyle Group, a military-industrial private equity fund with deep Pentagon ties.
In terms of legal structure, they also have to proactively sign extremely stringent subscription terms. This means that the Saionji family will completely relinquish all voting rights and access to classified technologies, willingly becoming a limited partner (LP) who merely provides funds and shares profits.
For private equity giants controlled by former White House aides and retired Pentagon generals, the greed of capital can be overwhelming when a multi-billion dollar, voluntarily relinquished control and posing no security threat, comes knocking. To earn the exorbitant management fees and performance bonuses, these politicians will readily use their privileges to circumvent all compliance scrutiny in Washington for this money.
Taking advantage of the outbreak of the Gulf War, the hot money earned from the oil crisis was turned into the capital for the US military-industrial complex to make war profits and into the military expenses for the US government to maintain its fiscal operations.
The highest level of capital defense is built upon deep parasitic relationships. Once the Saionji family's dollars are fully integrated into the Pentagon's arms procurement chain and the US Treasury's deficit cycle, any attempt by Washington politicians to use executive power to seize these assets would be tantamount to forcibly cutting off the financial lifeline of the US military-industrial giant and smashing their own money bags used to maintain the war effort and political elections.
There's absolutely no need for any defense in court. To protect their immediate war profits and government budget, members of Congress and generals at the Pentagon will automatically form a united front, using their political privileges to nip any regulatory bills that attempt to scrutinize the Saionji family's funds in the bud.
Hiding at the grassroots level, sharing the spoils through all channels, sacrificing oneself for others, and political whitewashing.
In the darkness and silence, a brand new, grand sand table was reconstructed.
The black patches at the visual periphery gradually faded. The nauseating dizziness disappeared like the receding tide.
Satsuki slowly opened her eyes.
It took her a full ten minutes to regain some of her energy.
His eyes regained focus and clarity.
"Connected."
Satsuki stared ahead and uttered two words.
Endo breathed a sigh of relief and immediately pressed the speakerphone button.
The hissing sound of transoceanic radio waves filled the sealed room.
"Boss. This is Frank." The radio waves carried the muffled noise of New York's late-night rain.
"Frank. Halt all open order book trading plans on the New York Mercantile Exchange and the Chicago Mercantile Exchange. Abandon algorithmic order splitting for buying."
There was a two-second silence on the other end of the phone.
Frank didn't ask why she suddenly abandoned the previously agreed-upon plan. Since Satsuki chose to do this, she must have her reasons.
"Understood. Please indicate the new execution path."
"Shift to the over-the-counter (OTC) derivatives market."
Satsuki's voice was weak, yet still clear.
"Using the institutional identities of offshore SPVs, we directly signed ISDA master agreements with major Wall Street investment banks. We then used total return swap contracts to hedge our bets on crude oil call options. We aim to completely circumvent the CFTC's position limit penetration."
"Furthermore, we absolutely cannot let this round of crude oil trading go through Salomon Brothers' channels again. As for the 300 billion yen worth of Nikkei index put options we previously established... we'll hold off for now and leave them in their hidden pool."
"The total notional principal and betting commission originally intended for oil price speculation were divided up and evenly distributed among the top ten oligopolies, including Goldman Sachs, Morgan Stanley, Merrill Lynch, and Lehman Brothers."
"at last."
Satsuki leaned back in her chair.
"SIS has just intercepted satellite intelligence (Soviet-made) of the Iraqi Republican Guard's buildup toward the Kuwaiti border. They shared this intelligence with Soros and Paul Tudor Jones free of charge."
"We'll have people keep a close eye on their preferred prime brokerage channels. Once these local giants start buying up shares based on intelligence, we'll immediately activate our OTC betting agreement."
"Split your capital. Buy precisely in sync with their entry frequency and trading volume peaks. Don't lead the price movement, and don't create any independent data anomalies that belong to us."
"We only act when they act. We fill all our purchases with the trading noise they create."
Satsuki struggled to get up and earnestly gave her instructions.
"Frank. This window of opportunity for buying is extremely short. Once the Pentagon completely blocks the news, and once oil prices start to surge, we must immediately close out our options positions, inject the funds into private equity funds in the defense industry such as Carlyle Group, and subscribe to a large amount of U.S. short-term Treasury bills."
"Absolutely no funds will be allowed to flow back across borders directly."
"Do you understand?"
Frank flipped through the notes rapidly on the other end of the phone, the rustling sound of the paper carrying clearly through the airwaves.
"Phew... Boss, did you come up with this on the spur of the moment? This is really..." Frank's voice was somewhat surprised. "I know what to do."
"Very good, go and carry it out."
Satsuki leaned back in her chair. Endo, who was standing nearby, pressed the cut-off button on the control panel at the right moment.
"Click".
The transoceanic radio broadcast came to an abrupt halt.
Satsuki leaned back weakly in her chair, tilting her head slightly as she looked at Endo.
"Endo. We need to hurry up with things back home too."
Her voice became extremely weak, as if every last bit of strength had been completely drained away by that intense overseas phone call. The rise and fall of her chest became very short, even with a barely perceptible tremor.
"The Ministry of Justice obtained evidence that those bank executives used 'enclave accounts' to balance accounts. We're going to intercept them."
Satsuki's eyes were half-closed, her vision beginning to blur. An unnatural flush rose uncontrollably across her originally pale cheeks.
"We forced them to... divest their non-performing loans from underlying semiconductor companies to our offshore trust at a low price."
"As long as we control the technological debt... we can complete the final loop of the puzzle."
The broken syllables echoed in the empty strategy room. She didn't even have the energy to explain the specific interception location and pressure tactics in detail; she merely squeezed out the core strategic objective from the depths of her throat, relying on the last remaining shred of obsession in her subconscious.
Endo stood beside the control panel.
He looked at Satsuki's bloodless lips and the dense cold sweat seeping from her forehead and temples.
His thick eyebrows were tightly knitted into a knot as he tried his best to control the speed at which he spoke due to worry.
"I understand. I will personally oversee the domestic affairs." Endo nodded heavily. "Young Miss, you really need to rest. Please stop thinking immediately."
Satsuki did not respond. She tried to reach out her slightly trembling right hand to pick up the half-empty glass on the rosewood table.
Endo felt increasingly uneasy. He quickly turned around and grabbed the internal emergency communicator on the control panel.
"Medical team, immediately take your resuscitation equipment and stand by at the entrance of the strategic room on the fourth basement level. Immediately!"
He spoke rapidly into the communicator, his veins bulging on the back of his hand, before slamming the walkie-talkie back onto its base.
Just as Endo turned his head...
"Clang!"
The water glass tipped over. The remaining warm water spilled onto the rosewood table, dripping along the edges onto the anti-static carpet.
Immediately following was a dull thud.
The girl's body slid down the edge of the large leather seat and fell heavily onto the carpet.
"Young Miss!!!"