May 12, 1997.

Ten days after Russia’s moratorium declaration.

Peter Fisher, Vice Chairman of the Federal Reserve, concluded that LTCM had no capacity to survive this crisis on its own.

Everything moved swiftly after that. Unfortunately, due to the bubble bursting far earlier than in the original timeline, LTCM’s money was vanishing faster than anticipated. Fortunately, Wall Street’s sense of alarm was also rising much sooner.

[U.S. Financial Crisis! Another “Panic” on the Horizon...]

[White House Responds Directly to Bank Run Threat... “U.S. Economic Fundamentals Are Strong”]

[Financial Crisis Spreads from Russian Moratorium... IMF Under Fire as Dotcom Bubble Comes into Question]

Rustle.

“Haa...”

William MacDonald, President of the New York Fed, exhaled deeply as he stood up from his desk after reading the newspaper before guests arrived.

He’d sighed so much in the past few days that his chest felt hollow.

Maybe it was because he’d been inhaling too much smoke laced with nicotine lately. If something comes in, something has to go out—it’s only natural.

“Sir, it’s time for the meeting.”

“...Alright. Let’s go.”

.

.

.

Creaaak.

7:30 AM.

An emergency breakfast meeting was held in the situation room on the 10th floor of Wall Street.

The chairman’s face bore the clear marks of an all-nighter.

Vice Chairman Fisher opened the meeting with a voice that was frail yet firm.

“If we let LTCM collapse as is, the entire financial market could spiral into an uncontrollable disaster. The Wall Street banks must form a consortium and offer a bailout.”

His eyes were filled with urgency.

“What kind of position size are we talking about here? Let us in on the details.”

“...If LTCM collapses, the shock to the market is estimated to exceed one trillion dollars. And that’s assuming there’s no chain of defaults... In short, we don’t have a choice.”

“You’ve gotta be kidding me...”

Only then did the gathered bankers truly grasp the desperation of the New York Fed.

This was a shock that made Black Monday look like child’s play.

Tch... I didn’t think the Fed would actually intervene like this.

Meanwhile, John Corzine, chairman of Goldman Sachs, silently swallowed his discontent at the Fed’s bailout proposal.

He had already planned to team up with Alpha Fund to take over LTCM in full.

Becoming just one of seventeen banks providing support didn’t sit well with his ambitions.

Glance.

So they don’t think the time is right yet?

Alpha Fund’s CEO, Erin Collins, joined the breakfast meeting leisurely, busy networking with the other bank representatives.

Even though they had reviewed their plan during a prior conversation before the breakfast, his current posture made it clear: for now, they’d play along.

After all, this was all being done with full transparency reported to the Fed—there was no shame in it.

“Well..., this is a bit sudden.”

William Harrison Jr., representative of JP Morgan Chase, rubbed his chin as he spoke gently.

Since the merger between JP Morgan and Chase Bank had just wrapped up, they were still scrambling to steady their massive operation.

“I agree with the bailout in principle, but wouldn’t it be better to allow more time? Money doesn’t just materialize..., and it’ll take time to prepare the funds without overlapping positions.”

“...That’s a fair point. Very well. We’ll reconvene this evening—please organize your thoughts by then.”

The Fed couldn’t afford to say no.

The seventeen institutions gathered here—sixteen banks and one hedge fund—were financial behemoths.

But the idea that none of them had overlapping positions was laughable.

In order to secure liquidity, some would need to sell off assets—and if those sales overlapped, the already jittery market could take another blow.

Fisher postponed the meeting, unwilling to witness the market collapse in the very process of trying to save it.

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.

.

6:00 PM.

The New York Fed reconvened the 17 representatives from the bondholding banks and hedge fund who had loaned money to LTCM.

“If LTCM goes bankrupt, Wall Street—no, the entire U.S. financial system—will plunge into chaos.

We could all go down with it. So, I ask for your cooperation, difficult as I know it may be.”

Vice Chairman Fisher handed out sheets of paper to each attendee.

The proposal was to raise $4.5 billion to bail out LTCM.

Each of the 16 banks would contribute $250 million, and Alpha Fund would put in $500 million to complete the total.

Immediate outcry followed.

“What?! We each lent different amounts to LTCM, so how can we be asked to contribute the same? This is unfair!”

The indignant voice of one banker ramped up the tension in the room.

At this moment, except for the Fed, Goldman Sachs, and Alpha Fund, the remaining 15 bondholder banks had no idea that a separate strategy was already in play.

John Corzine sat calmly among them, fully aware, yet pretending ignorance.

Then, with a measured voice, Corzine spoke.

“Gentlemen, do we really have time to comb through LTCM’s books and determine exactly how much each of us lent?

This isn’t the time to nitpick. We need to put out the fire first.

Besides... isn’t Alpha Fund here, even though they’re not a bank?”

His statement artfully redirected the discussion while also carrying a strange persuasiveness.

Reluctantly, major banks like Merrill Lynch, JP Morgan Chase, and Lehman Brothers agreed to contribute $250 million each.

“...But seriously, Mr. Collins, why are you even here?

I mean, putting up $500 million alone—that’s no small thing.”

The representative from UBS, visiting from Switzerland, tilted his head, visibly confused.

The Fed hadn’t just invited random institutions.

They had gathered banks that had directly or indirectly lent to LTCM, which is why not only American but Swiss, German, and British banks were also present.

“Haha, well, we’re pretty entangled too. If LTCM collapses, the losses won’t be minor.”

Erin Collins smiled smoothly and approached the representatives from UBS and Credit Suisse.

Due to its nature, Alpha Fund had a very narrow personal network—but they did maintain cordial ties with Swiss banks.

This is something no other director can do.

Only I can do this.

Feeling satisfied at being a truly irreplaceable asset to her, Collins recited his prepared excuse.

“We’re also preparing to launch an investment bank, you see.

Ethically and strategically, the collapse of the U.S. financial sector would be a massive blow.

I mean, we poured a fortune into launching a bank—what happens if all our future clients disappear?”

That composed, magnanimous attitude made people realize the truth.

“Five hundred million dollars, just for that...?”

“Hoho, you’re really something. I envy how you managed to have that much cash ready at a time like this.”

Ten billion dollars.

So the rumor wasn’t nonsense after all.

Even though Alpha Fund had announced it in an official interview, it had always ◆ Nоvеlіgһt ◆ (Only on Nоvеlіgһt) felt abstract—until now, when the entire financial system was teetering.

Why don’t they just use that money to buy LTCM...?

Vice Chairman Fisher grumbled to himself, but then bit his lip, recalling that LTCM’s debt likely exceeded $5 billion, making acquisition alone insufficient.

Sure, $10 billion was a huge sum, but it couldn’t all be cash.

And as Collins had said, Alpha Fund was trying to establish an investment bank—losing $500 million in liquid assets would be a major risk.

The fact that they were secretly planning an acquisition while publicly participating in the bailout felt mildly irritating—but forgivable.

After all, they were putting in $500 million. Add Goldman Sachs, and it totaled $750 million.

Other banks might feel a deep sense of betrayal, but at least the Fed didn’t.

Because they understood:

This wasn’t the time to talk about morality.

Better to shake hands with a snake like Goldman Sachs than listen to the sound of the market collapsing.

Was it Goldman Sachs behind this...?

Fisher mulled it over with a twinge of doubt.

Logically, it had to be Goldman. The signs pointed to them—so did their track record.

It made sense. Hedge funds and investment banks were fundamentally different in scale.

Alpha Fund might have more cash now, but when it came to capability, the difference was clear.

A U.S. president might be poorer than a Wall Street financier—but they can do far more.

More importantly, Alpha Fund had no reason to acquire LTCM.

They were already outperforming them and had just pulled off a massive gamble that elevated them above Wall Street.

What would they gain from acquiring a “loser”?

So yes, it had to be Goldman’s plan—they just dragged Alpha Fund in for muscle.

But I can’t stop noticing it...

Fisher glanced around.

Erin Collins, CEO of Alpha Fund, was smiling calmly and exchanging greetings with those around him.

It was then that Fisher realized what had been bothering him.

Too relaxed.

As if he had seen this coming.

The rumors that Alpha Fund had withdrawn before the bubble burst...

The nearly supernatural precision they showed during the East Asian crisis...

It couldn’t be true.

His rational mind rejected it.

But rumor upon rumor, myth upon myth—Alpha Fund had become something more.

“Well then..., it’s late. Let’s reconvene tomorrow.”

Deciding that he needed to meet Alpha Fund directly, not Goldman Sachs, Vice Chairman Fisher adjourned the meeting, stepping out into the haze of the night sky.