The Secret Gallery 1
The New York Miracle was chugging along, maintaining a steady profit without any major upheavals. This was largely due to Rachel Arieff’s management philosophy, which prioritized zero losses over high-risk, high-return strategies.
“James, Howard. We’re steering clear of derivatives as much as possible.”
“Why’s that? Isn’t there hardly anything else to invest in on Wall Street right now?”
I asked with a smile, but her expression remained stern.
“Do you know how many hedge funds are operating with high-net-worth investors’ money? Ten years ago, there were about 500. Now, there are over ten thousand. And they’re all dabbling in derivatives.”
Her voice grew more animated.
“Private equity is more respectable. They assess company value, buy undervalued firms, and sell them off. At least there’s a tangible entity involved.”
“But derivatives offer high returns. You can’t just ignore them because of risk aversion.”
O Se-hyun sounded a bit frustrated, but Rachel shook her head firmly.
“Once you twist a derivative product a couple of times, the only person who truly understands it is the one who created it. The rest are just moths drawn to the dividend.”
“Then why not create a derivative yourself, Rachel? One where you know exactly what it entails.”
She seemed momentarily taken aback by the unexpected suggestion but quickly shook her head.
“Miracle can’t do that. To create a derivative, we’d need approval from the ISDA (International Swaps and Derivatives Association).”
Given Miracle’s size, getting approval wouldn’t be too difficult. But her refusal, even with such an excuse, showed she had no intention of pursuing it.
“Our priority is to protect our clients’ money by investing in solid companies, blue-chip stocks, and reliable bonds.”
Just as O Se-hyun was about to speak, I held his hand.
I believed she was making the right decision. There was no need to take on unnecessary risks. A big opportunity would come again.
“Rachel, if you trust my judgment, how about this?”
“Go on, Howard. I always trust your judgment.”
Her eyes sparkled with interest.
“Let’s avoid currency, interest rate, and stock derivatives. Instead, let’s focus on credit derivatives, particularly Collateralized Debt Obligations (CDOs).”
Rachel’s sparkling eyes turned to ash in an instant.
It was understandable, given that I was suggesting the riskiest product to someone who prioritized safety.
“Products based on mortgage-backed securities are hot right now. But you know that products with bonds as their underlying assets are the riskiest, right?”
“Of course. In my judgment, we’ll be fine for the next two years. I can’t guarantee beyond that, so let’s just try it for two years.”
She couldn’t go back on her word about trusting my judgment, so she accepted it.
“How much of a return are we talking?”
“I estimate about a 38% return over two years. Consider that when thinking about Miracle’s overall profitability.”
Though she wasn’t thrilled, the specific return rate and the delegation of investment decisions brightened Rachel’s expression.
“Okay. I’ll trust Miracle Boy’s judgment once more. But I doubt you came all this way just to discuss something so trivial. We check investment details daily via email, don’t we?”
“Our Miracle Boy wants to dabble in art this time, so Rachel, you’ll need to lend a hand. Haha.”
“Art?”
Rachel looked a hundred times more surprised than when I suggested investing in derivatives.
“Why make things so complicated? Just buy the art. You’re more than qualified to be a super collector, Howard. Just buy a mansion in New York and fill it with paintings. Why go through the hassle of acquiring a gallery?”
Rachel looked puzzled when she heard about the art acquisition process.
“The place that owns the paintings I want won’t sell them to me directly. So I need a proxy. Can you find a suitable place? You know a lot of wealthy people, right? They must collect art. It shouldn’t be hard to get an introduction to a decent gallery through your connections.”
“Well, that’s true, but…”
She still looked skeptical.
“Come on, don’t be too curious. Just help me out. Who knows? The paintings Howard buys might skyrocket in value. Everything he touches turns to gold, right? Haha.”
O Se-hyun stopped her from asking further questions.
“It’s been a while since we met, so let’s have a wild night. Let’s drink to our hearts’ content.”
We followed O Se-hyun out into the dazzling New York night.
As we enjoyed our dinner, O Se-hyun downed the expensive Claude Griffe Cognac like it was soju, and by the time we moved to a second bar, he was nodding off.
“Now that the retired middle-aged man is asleep, shall we, the active ones, have a proper conversation?”
“The gallery?”
“No. That seems like your personal business, so there’s nothing more to discuss. I’ll find the perfect gallery for you. What I want to talk about is…”
“CDO (Collateralized Debt Obligation)?”
“Yes. Wall Street is going crazy right now. They’re flooding the market with CDOs and credit default swaps based on subprime mortgage loans. You said we’d be fine for two years, but…?”
“Why do you think it’s so risky?”
“Subprime. It means bad loans, plain and simple. They bundle them into products and slap an AAA rating on them. It’s a scam.”
“A successful scam isn’t a scam. It’s only exposed when it fails.”
“So, you’re guessing it won’t be exposed for two years?”
“Yes. A balloon doesn’t burst easily unless you prick it with a needle. To burst it by inflating, the U.S. would have to keep blowing air into it non-stop for two years.”
“The problem is, if that balloon bursts, the U.S. economy will be a mess.”
I looked her straight in the eye and said,
“So what?”
“What?”
“Rachel, you’re a U.S. citizen, but you’re also the head of our company. Shouldn’t you be more concerned about the company’s profitability than the U.S. economy? Leave the U.S. economy to the Treasury Department.”
“They’re all in cahoots!”
“If you’re so worried about the U.S., step down as Miracle’s CEO and enter politics. I’ll fund your campaign indefinitely. If not, focus solely on the company’s profitability.”
Perhaps it was my cold tone that startled her.
“S-sorry. I wasn’t being professional. You’re right. I’m a New Yorker, not a Washingtonian.”
“If you can’t stop the flow, ride it. Money and justice are parallel lines that never meet.”
“Alright. So how are you so sure about the two years?”
In truth, it’s three years, but I said two just in case. Since I can’t tell the truth, leaving the question as homework is the easiest way.
“Do the math. It’ll come out to two or three years.”
“Math, huh…”
“Do you think I consulted a crystal ball?”
I lifted my whiskey glass, the ice melting away.
Do I seem like a mysterious Asian now?
“Elizabeth Porter. My friends call me Bette. Nice to meet you, Mr. Jin.”
“Please, call me Howard.”
“Shall I?”
She was a tall beauty with a hint of African descent, judging by her dark skin and tightly curled hair.
“Howard, Bette is a prodigy who studied history at Yale and art history at NYU. She’s currently the director of the Wentworth Art Gallery.”
Rachel praised her lightly.
“I’m a director in name only. We’re on the brink of closing.”
I looked at her with a wry smile.
“How much debt do you have?”
”…?”
“How much do you need to avoid closing?”
“Ah, about $1.2 million would give us some breathing room.”
“And your annual budget?”
“$2.5 million. But we do have income from exhibition programs…”
I raised a hand to stop her.
“I’ll provide $3 million annually. Make it a great gallery. Deal?”
”…!”
Bette Porter stood there, mouth agape, blinking in disbelief.
“Didn’t I tell you? Today’s your lucky day! Haha.”
Rachel laughed heartily, giving the stunned Bette Porter a nudge.
“Wait a minute. What’s going on here…?”
Regaining her composure, she hurriedly rummaged through her bag, pulling out a stack of files.
“This is the current status of our gallery. I think reviewing it first is the right step.”
I took the file she handed me and tossed it onto the seat beside me.
“Do I have to?”
“Do you know much about our gallery or me?”
“No, not at all. I’m practically an art novice.”
“Then isn’t it strange that I’m not questioning your offer to support us with $3 million annually without any review?”
“Are you saying you refuse favors without strings attached?”
“There’s no such thing as a free lunch.”
She’s not some dreamy artist lost in her own world. She understands the basics of business.
For a gallery run by someone like her to be struggling, it must be a matter of scale. Then again, what art isn’t plagued by deficits?
“Who said it was free? My promise stands if you bring me what I want.”
I handed her a sheet filled with a list of artworks.
“Take a look.”
Bette Porter snatched the list and quickly scanned it.
Her face grew increasingly flushed until she finally exclaimed.
“Holy Shit! WOW!”
“Is it that impressive?”
“Do you not know? Mark Rothko, Paul Cézanne, Jan van Eyck, Titian… And even Damien Hirst. These are all treasures of humanity!”
“Do you know what all these works have in common?”
“I told you, they’re incredible masterpieces.”
She couldn’t contain her excitement, so much so that she didn’t even notice the bold print of “Sunyang Gallery” at the bottom of the paper listing the artworks.
“Buy them all. We might not sell every piece, but get as many as you can. That’s my condition.”
It must have been a huge shock for her. After all, acquiring those pieces would cost at least three to four hundred billion won.
“Oh, and don’t worry about the cost. I’ll cover it entirely.”
“But, who exactly owns these pieces…?”
She glanced back at the paper, her eyes lighting up.
“Sunyang Gallery! All these works are housed there.”
“Yes.”
Disappointment washed over Beth Potter’s face as she confirmed the name.
“Give it up. Once a piece enters that gallery, it never sees the light of day again. They’re known for keeping masterpieces locked away forever.”
Her disappointment quickly turned to anger.
“They’re infamous for never displaying their masterpieces. Even if it’s not a permanent exhibit, they should at least show them once a year. Hiding them away is a betrayal of a gallery’s duty.”
“They might not exhibit them, but they will sell. Not everything, of course.”
“What do you mean? Sunyang Gallery isn’t a dealer.”
“Trust me on this. You won’t lose out.”
In the short time we’d been talking, she’d heard nothing but unbelievable things, so it was no wonder she was still bewildered.
Yet, Beth Potter had stumbled upon the opportunity of a lifetime.
Opportunities like this appear without warning, and there’s never much time to decide whether to seize them.
Because opportunity is a ruthless thing that waits for no one.