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🕑 Added 2025-09-05 14:34:18 +0000 UTCWhen interest rates fall, housing prices rise.
When interest rates rise, housing prices fall.
It was a simple formula that everyone knew, but Wall Street chose to ignore it.
Did they ignore it because they didn’t know?
More likely, they ignored it precisely because they knew it all too well.
In their frenzy to scoop up money blinded by madness, they themselves became consumed by that very madness.
“If the real estate bubble causes the expected shockwaves, more than half of Wall Street’s
investment firms are likely to go bankrupt. Especially 'Lehman Brothers,' which created and sold the most synthetic bonds—they're the most at risk.”
“Lehman Brothers has been one of Wall Street’s leading investment firms for nearly 150 years. Would it really collapse? The U.S. government wouldn’t let Lehman Brothers fail—not with its symbolic importance.”
Even Rajan, who harbored resentment toward Wall Street, said this.
Anyone who had experienced Wall Street firsthand knew just how massive the influence and
symbolism of Lehman Brothers was. It was hard to think otherwise.
In Korea, they called it “A big horse doesn't die.”
In English: TOO BIG TO FAIL.
A massive corporation, tangled in countless vested interests, was bound to create devastating ripple effects—and for that reason, it was believed such giants would never be allowed to go under. That was the term used in American economics.
“Someone has to take responsibility for the fraud committed in unison by all of Wall Street’s
investment firms. And because of its symbolic weight, Lehman Brothers will not be able to
escape that responsibility.”
“Hmm… It seems we’re about to witness a series of events that current economic theories can’t fully explain. I’ll reset everything and begin a fresh line of research.”
Rajan and six other scholars.
The seven of them didn’t leave the SAVE Investment Company’s conference room for two
straight days.
Faced with an unprecedented economic crisis, their passion for research and academia burned brighter than ever.
“Research is important, but unless we raise our voices outside, no one will recognize our
findings, don’t you think?”
“We’ve tried to speak out several times in the past, but every time, we were blocked by resistance from Wall Street investment firms. We couldn’t get our voices heard properly.”
“Then allow me to create a proper platform for your voice. To do that, we’ll need to establish a separate organization.”
An organization was needed to speak on behalf of SAVE Investment Company.
If SAVE Investment stepped forward directly, it would inevitably stir up numerous issues.
But if those already branded as outsiders created a group and raised their voices, SAVE could
remain free from the consequences.
One might say they were being used as shields.
But there was no intention of using them as sacrificial pawns—on the contrary, this was a step toward making them into heroes.
“Are you suggesting we create a new organization separate from everything else?”
“Think of it as a special task force affiliated with SAVE Investment. If we speak out while still within Wall Street, it’ll be hard to gain public trust.”
“As long as we can continue our research like we have, I don’t mind. But have you decided on a name for the organization?”
“I’m planning to name it in connection with the current real estate crisis.”
Rajan and the other scholars didn’t oppose the idea of forming an organization.
In fact, some preferred the freedom and flexibility of operating through an independent group
over being tied to a Wall Street investment firm.
“If it’s to be connected with the real estate crisis, how about something like the 'Subprime
Mortgage Group'? The subprime loans are the main reason for the housing bubble, after all.”
“If we’re talking about the root cause, wouldn’t it be Wall Street’s moral hazard?”
“That’s true. They knowingly turned a blind eye, manufactured synthetic bonds, and sold them just to profit.”
“Exactly. That’s why I’m thinking of naming the group Moral Hazard .”
Moral Hazard.
A term describing the act of exploiting legal and institutional loopholes to avoid responsibility and pursue gain.
It was the perfect name for a group aiming to challenge the financial sector, including Wall Street.
“Then let’s go with Moral Hazard as the organization’s name. We’ll gather like-minded
individuals and expand the group.”
“If we want the organization to have impact, we’ll need to come out strong from the beginning. Why not kick things off by publishing the research we've been working on?”
“We’d like to do that too, but as I mentioned, we don’t have a platform to speak from.”
“Don’t worry about that. While Wall Street may control the traditional media, we’re living in an age where you can have influence without relying on news outlets or newspapers.”
In the past, controlling the media meant controlling the world.
But with the emergence of the internet, that era had come to an end.
The age of media domination was over.
The founding ceremony of the Moral Hazard organization was held.
It was broadcast live not only on YouTube but also across various internet platforms like Google and Facebook.
Rajan, as the group’s representative, gave an unfiltered presentation of the current situation.
He openly criticized Wall Street and the Federal Reserve.
Even without sensational editing, the video was already provocative enough on its own.
Team Leader Han was monitoring the response in real time and provided updates.
“The Moral Hazard founding ceremony has hit #1 on the trending search rankings on social
media.”
“What about reactions on search portals?”
“Same there. Google seems to be pushing the content, and it’s drawing a lot of attention.”
“No movement from the mainstream media yet?”
“A few internet news outlets have put out some stories, but the major media houses are still
quiet.”
Once the issue grew big enough, the major news outlets would have no choice but to report it.
If the topic gained traction across social media and portals—enough that Wall Street’s influence couldn’t suppress it—then even the mainstream press would have to act.
“The major outlets will start moving soon.”
“We’re closely monitoring media outlets known to have tense relations with Wall Street.”
They weren’t just sitting and waiting.
They leveraged social media algorithms to amplify the founding ceremony’s visibility.
They also submitted exposure requests to portals like Google to ensure the event appeared more prominently.
Around three hours later...
The major news outlets finally began flooding in with articles.
“News and opinion pieces are pouring in. But most of the columns are criticizing Moral Hazard.”
“That’s fine. Whether they support us or oppose us, as long as the issue is dragged into the
spotlight, it’s a win.”
They weren’t aiming for immediate public support.
In fact, the more heated the opposition, the more dramatic the impact could be.
Just as they were feeling satisfied with the media storm, David suddenly rushed in.
“Boss! The Fed just announced an emergency press conference. Chairman Bernanke himself is going to speak.”
“So the second most powerful man in America is stepping up. We can say we’ve achieved our first objective.”
There were many reasons for creating the Moral Hazard organization.
One of them was to provoke a reaction from the U.S. government—and with the Fed chairman taking action, Moral Hazard had already proven its worth.
I smiled at how things were unfolding.
But Team Leader Han, wearing a much more serious expression, cautiously spoke up.
“Depending on what the Fed Chair says, we’ll get a glimpse into the U.S. government’s stance. If he criticizes Moral Hazard 's arguments, it would mean the government doesn’t fully grasp the gravity of the current situation.”
“Let’s wait and see what he has to say.”
Not long after, the Federal Reserve’s emergency press conference began.
Chair Bernanke didn’t seem to have had much time to prepare, but still, he delivered a speech that lasted over ten minutes.
Team Leader Han summed up the ten-minute speech in a single sentence.
“The housing market is solid. The Fed Chair has officially declared the stability of the U.S. real estate market.”
“So he’s confident that the housing system in America is functioning properly.”
“He even went as far as saying that there’s very little chance of the housing market collapsing. At this point, it seems they’re not ignoring the warning signs—they truly don’t see them.”
The Fed Chair’s words carried tremendous weight.
His remarks reflected the official stance of the U.S. government and could be interpreted as a
green light encouraging continued investment in the housing market.
“David, the White House must know that Moral Hazard is backed by us, right?”
“Since you said there’s no need to hide it, we’ve left enough breadcrumbs for them to easily make the connection.”
“Then it won’t be long before someone from the White House reaches out. I’d like to meet
someone important—ideally a VVIP—but who knows if that’ll be possible.”
“Would the President of the United States really get involved directly? More likely, someone
from the Treasury Department or perhaps someone from Bush’s campaign team will be
dispatched.”
“It depends on how seriously the U.S. government views the current situation. The more critical they consider it, the higher the rank of the person they’ll send.”
All of this was being done to force the U.S. government to come knocking.
In negotiations, the side that makes the first offer usually ends up at a disadvantage.
To gain the upper hand, it was better to wait until the U.S. government made the first move.
The final day of my business trip to the United States.
Contrary to my expectations, no one from the U.S. government had come to see me.
In the end, I had only partially achieved my intended goal as I headed toward the airport.
Just before arriving at the airport—
Screeech!
The driver slammed on the brakes.
Two large SUVs had suddenly blocked the road ahead.
From the vehicles emerged men in black suits, clearly security personnel. They quickly
surrounded our car and draped it entirely in black fabric, obscuring it from view.
Knock, knock, knock!
A man in a gray suit, who looked like a government official, tapped on the window.
“Mr. Kim, could you please step out for a moment? This is an urgent matter.”
It was a situation where my safety could very well be in jeopardy.
Guns were legal in America, after all—it could have been an armed robbery.
But then again, what kind of criminal would attempt something this reckless?
Only one type of organization could pull off something like this. Smiling, I opened the car door.
“If you’d simply told me the meeting place, I would’ve found my way there just fine. This is a bit excessive, don’t you think?”
“The person you’re meeting doesn’t operate on scheduled appointments. He’s waiting for you
now, somewhere quiet near the airport. Please, join us in our vehicle.”
“I never thought I’d get to ride in an official U.S. government car. Let’s not keep such an
important person waiting.”
Feigning nonchalance, I stepped into the SUV.
They were likely putting on this show to intimidate me—to make a statement.
Since my actions were going against the official stance of the U.S. government, this was probably their way of applying subtle pressure.
“We’ve arrived. Please wait a moment.”
Click.
The door opened, and the security team exited all at once.
They pulled out an enormous sheet and not only covered the entire vehicle again, but also
blocked the entrance to the building.
It was a measure to ensure that no one could see who was entering the premises from outside.
“We’ll need to perform a brief body check. We’ll be holding on to your phone and any electronic devices.”
After going through all the tedious procedures, I was finally allowed inside.
As expected, President Bush was waiting for me.
“Welcome, my strongest supporter—Mr. Kim!”
With a broad smile, President Bush reached out to shake my hand.
It was hard to believe this was the same man who had someone practically abduct me by blocking the road with SUVs.
Not that it mattered.
After all, meeting President Bush had been the main goal of my trip to the U.S.
Right now, he might be playing the role of the one in power.
But how long could he really keep playing that part?
TL/n -
Lower interest rates mean cheaper home loans (mortgages).
Monthly mortgage payments become more affordable, so more people can buy homes.
Increased demand leads to higher competition for available homes.
As a result, home prices go up.
#
Higher interest rates mean more expensive home loans.
Monthly mortgage payments become less affordable, so fewer people can buy.
Demand drops, and sellers may have to lower prices to attract buyers.
So, home prices fall.
