The Overly Competent Junior Employee

“How are hedge funds doing these days?”

That night, Seo Yong-won, Part Leader of Yuseong Investment Securities’ Wrap Account Team 1, was meeting someone at a discreet location in Yeouido.

“They’re absolutely miserable, to put it mildly.”

The person sitting across from Seo Yong-won was a college classmate who worked at a foreign hedge fund.

“Well, stock traders like me are managing, but bond players are on the verge of collapse.”

Seo Yong-won smiled at his friend’s words.

“The bond market must be really struggling, huh?”

“Struggling doesn’t even begin to cover it. Among ourselves, we crudely ask why people bother with cryptocurrencies. The volatility is worse than crypto.”

The reason for investing in bonds was stability.

There was an underlying perception that bonds were safe because they had much less fluctuation than stocks or cryptocurrencies, but recently, the volatility of bonds seemed to be proving that perception wrong.

“Anyway. You said you had something to show me?”

His friend asked Seo Yong-won as if he had a headache, and Seo Yong-won pulled out a document from his bag and handed it to him.

“Read this and tell me what you think.”

“What is this?”

“I’ll tell you after you read it. You might be able to make your own judgment beforehand.”

At Seo Yong-won’s words, his friend shrugged as if it were no big deal, picked up the document, and started reading.

After reading for a while, his friend curled up the corners of his mouth as if intrigued.

“Interesting outlook. Is this from your research center?”

“I’ll tell you about that later. What do you think?”

“About what?”

“You’re investing in Europe, right?”

His friend nodded at Seo Yong-won’s words.

“I agree with this document. Recently, European players like us are either maintaining our positions or liquidating them. We’re not making new investments. Especially in the UK…”

“The UK?”

“It’s all written here. There was one phrase that really resonated with me.”

His friend looked at the document again and spoke as if he had found the part he wanted.

“External factors.”

“You mean how the price increases are all due to external factors?”

“That’s right. The pound will depreciate even more than it is now. And when that happens…”

“The UK will be in trouble.”

The UK no longer had any significant manufacturing-based industries left.

The image of the UK that once led the Industrial Revolution was gone, and only its influence in the capital markets showed a glimpse of its glorious past.

The depreciation of the pound, the currency of the financial powerhouse that was the UK, seemed to foretell a bleak future.

“It’s going to be tough for a while. The UK might be the most unstable link. So, who wrote this? Yuseong’s Research Center?”

“No, a new employee in our team wrote it.”

“You have a separate team handling this kind of macro data for wrap account management?”

His friend looked at Seo Yong-won with surprise and asked.

“Wow, I heard that Yuseong has been strengthening its personal asset division since CEO Sim Ju-won took office, but they’re really sharpening their teeth. Wait, did you say a new employee wrote this?”

“You might know him. His name is Yoon Dokyung.”

At the name that came out of Seo Yong-won’s mouth, his friend furrowed his brow, lost in thought.

“Yoon Dokyung… Yoon Dokyung… I’ve heard that name a lot. Ah! Isn’t he the one who had a showdown with Lee Dong-hyuk?”

“That’s right.”

“Isn’t he a PB?”

“He was recently assigned to our department.”

“Wow, just hearing his name makes all the outlooks written here make sense. Even though it’s written down, you can feel how bold and uninhibited it is.”

His friend laughed and spoke as if this was typical of Dokyung’s usual behavior.

“Anyway, although they say we can’t dare to evaluate the market, I agree that now is the time to watch and wait. That’s my overall assessment.”

“I see…”

At his friend’s words, Seo Yong-won fell into deep thought.

Bzzt-

Just then, his friend’s phone started vibrating, and after checking the screen, he looked at Seo Yong-won with surprise.

“Pro Seo.”

[Breaking News] Queen Elizabeth of England passes away at the age of 96.

His friend showed him the news alert, and Seo Yong-won’s expression grew grim.

⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱

The influence of the UK on world history was immense.

There’s a joke that if you trace back the reasons for a country’s twisted history, you’ll inevitably find the UK involved. From past to present, the UK’s influence has been enormous.

‘The empire on which the sun never sets.’

From the mainland of England to North America, Central America, South America, East Asia, Southeast Asia, South Asia, the Middle East, Oceania, and Africa.

During the colonial era, the UK had colonies on every continent, and their sun never set.

And that legacy continues today in the form of the Commonwealth of Nations.

“How empty it feels…”

Meanwhile, Dokyung was watching the news flowing from his home TV.

[Breaking News] Queen Elizabeth of England passes away at the age of 96.

It was the first time the death of someone on the opposite side of the world had provoked so many thoughts.

“I wonder how the gilts are doing?”

After staring blankly at the news headline for a while, Dokyung checked the status of UK government bonds through his phone app.

Gilts (Gilt Edged Securities) referred to government bonds issued by the UK Treasury on behalf of the Queen.

They were issued with gold edges around the paper bond certificate and were considered one of the safest assets.

“Seems stable…”

The glorious British Empire was no more, and the eternal rest of the Queen who once ruled the world had no impact on the financial markets.

The end of an era was approaching with such bitterness.

Dokyung couldn’t decide whether to feel relieved or disappointed.

“Let’s update the data a bit more for now.”

Dokyung had no time to feel bitter.

He slapped his cheeks to regain focus and started supplementing his data on the UK situation.

⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱⊰⋆⋅⭑⋅⋆⊱

“Didn’t you see? Even though the Queen’s death is a major event, the UK’s fundamentals remain unshaken.”

A few days later, the same topic was still being discussed in Part Leader Seo Yong-won’s office at Yuseong Investment Securities’ Wrap Account Team 1.

The manager from the trading team was visiting Part Leader Seo Yong-won daily, repeating the same words.

“I understand your point, Manager Kim. I agree that we need hedging measures. However, our research center also judges that there are continuous unsettling signals.”

Seo Yong-won was the type to test the waters thoroughly before diving in.

Having started his career in securities by managing client assets, it had become a habit ingrained in him.

After all, the assets he handled weren’t his own.

“The research center, you say…?”

When Seo Yong-won mentioned the research center, the manager fell silent as if he had swallowed honey.

“Yes. I’ve also asked for opinions from the bond management team, and they say they’re not increasing their UK assets at the moment.”

Over the past few days, Seo Yong-won had met with various people within his network and heard different opinions.

While everyone’s insights varied, there was one common warning:

‘Don’t enter new positions.’

“The Queen had no political or policy influence. Of course, the passing of such a symbolic figure is sad… but that doesn’t mean gilts are safe.”

From the research center to the bond management headquarters.

When these names were mentioned, the manager felt he had nothing more to add.

“For now, we’ll keep watching. We haven’t completely withdrawn the idea.”

“I understand. I’ll follow your decision, Part Leader.”

“Thank you.”

As the manager bowed and left the room, Seo Yong-won sighed and loosened his tie a bit.

They couldn’t just let the clients’ capital sit idle. Seo Yong-won rubbed his face for a moment before starting to type on his keyboard.

He called someone through the company messenger, and shortly after, the person arrived.

“Part Leader, you called for me?”

“Ah, Manager Hong.”

The person who entered the room was Manager Hong Se-jun.

“Is there any update on the UK situation?”

“Yoon Dokyung-ssi has been checking daily. It’s almost time for him to arrive…”

As Hong Se-jun said this, he looked through the glass wall towards the office, and just then, Dokyung was entering.

“Shall I call him?”

At Hong Se-jun’s question, Seo Yong-won nodded, and Hong Se-jun opened the Part Leader’s office door and called out to Dokyung.

“Dokyung-ssi, please bring the updated gilt data.”

Dokyung, who had just entered the office and was taking out documents from his bag, heard Hong Se-jun’s call and immediately gathered the materials and headed towards the Part Leader’s office.

“You’re a bit late today?”

“I’m sorry. The traffic was a bit heavy.”

“Well, it’s still before work hours. No need to apologize. Let’s meet the Part Leader first.”

Entering the Part Leader’s office with Hong Se-jun, Dokyung bowed to Seo Yong-won.

“Good morning.”

Seo Yong-won greeted Dokyung with a smile.

“Have you been following the gilt data daily?”

“Yes, since investment talks came up… and because covering Europe is my responsibility, I’ve been checking the situation daily.”

“Good. Let’s take a look at the data.”

At Seo Yong-won’s words, Dokyung handed him the documents. As Seo Yong-won read through the materials Dokyung had given him, he sighed.

“It’s gradually worsening.”

“Yes, gilt yields are rising almost daily. The daily increase in government bond yields is minimal, but over the past week, they’ve risen by a total of 50bp (0.5%).”

Excluding complex calculations and looking at simple bond yields alone, a 50bp rise in bond yields indicated a tremendous loss in returns.

The reason government bonds are called safe assets is because of their low volatility.

A 50bp rise in government bond yields, which are usually almost fixed in the market, suggested that something was happening.

“The biggest problem seems to be the depreciation of the pound due to the ‘King Dollar’.”

The U.S. was raising interest rates by 0.75% every month to curb its domestic inflation. As a result, dollar strength was sweeping across the world.

The appreciation of the dollar, as the world’s reserve currency, inevitably led to the depreciation of other currencies.

“Another issue seems to be that the new cabinet’s policies are coming out too late.”

The U.S. was implementing aggressive monetary policies considering only its own inflation, as if other countries didn’t matter.

The U.S.’s aggressive federal funds rate hike policy was turning into a fierce wave threatening the precarious island nation of the UK.

In an era of every country for itself, as the UK’s new cabinet delayed its monetary policy, capital in the UK market began to rapidly flow out.

“Several factors have overlapped, but the situation is very unfavorable…”

Bzzt-

At that moment, the mobile phones of all three people in the Part Leader’s office started vibrating simultaneously, as if on cue.

The three reflexively took out their phones and checked the screens.

Then they looked at each other’s faces.

“We’ll consider the investment discussion regarding the UK as if it never happened.”

The sound of the unstable link in the UK financial market, which had been maintaining the lifeline of the British Empire that once ruled the world, began to break.

Just as the character in the novel had said:

Gradually, and then suddenly.