Breaking Up Is Better Than Divorce

diesel gate

“Volkswagen? Is there any problem?”

“Have you heard of clean diesel?”

“yes. Volkswagen and other European automakers are advertising a lot these days. Diesel cars emit less carbon dioxide and toxic gases than gasoline cars. I also drive an Audi in my home country, so maybe there was a clean diesel in it too?”

Diesel engines have better output than gasoline engines, but emit much more nitrogen oxides (NOx), which are deadly to the human body.

Because of this, the sale of diesel passenger cars was banned in the United States, where environmental standards for automobile emissions are much higher than those in Europe.

However, over the past 10 years, the European automobile industry has demanded that the regulation on diesel passenger cars be lifted, saying that it is equipped with a smoke reduction device that has solved it.

“It seems that diesel cars are selling quite a bit these days. Thanks to this, the Volkswagen stock price more than doubled.”

In particular, when oil prices are high like these days, it was doing quite well in the US market because it was a powerful, low-cost, and environmentally friendly car.

“Last year, the West Virginia University exhaust gas research team did an interesting experiment. It was to prove that high-tech automobiles could filter out those toxic substances sufficiently. But it turned out to be very interesting.”

“Is it an interesting result?”

“uh. When the car was operated indoors, toxic components in the exhaust gas were significantly reduced, but strangely, when the car was driven outside, the toxic gas emissions increased dramatically.”

Joanna makes a face that she doesn’t understand.

“How could that be?”

“Even the University of West Virginia research team couldn’t get it. Why is the toxic gas normally filtered indoors, but when I go out, it emits toxic gas again? That is dozens of times the standard value.”

“It looks like the experiment went wrong. Is it a problem with the experimental equipment, or is it a problem with the car used in the experiment, or both?”

“Is that so?”

Eugene asked with a smile.

“yes. Otherwise, how could it make such a difference?”

“This assumption is not possible. That’s how it was made from the beginning. When the Environment Agency is testing for car sales, the reduction device that reduces toxic gas is activated, and in actual driving, the reduction device is turned off.”

“Is that possible? Did the car automatically turn on and off the abatement device to determine if it was in a test situation?”

Joanna thought for a moment.

“If you think about it, it might be possible. Do not move the steering wheel for a certain period of time, or start the engine and operate the abatement device for a certain period of time, and then stop the abatement device after that. Or we could use temperature or pressure.”

She’s a smart woman, so she quickly finds a few ways.

“But why?”

“For example, if you turn on the reduction device, the performance of the engine may decrease or the fuel efficiency may deteriorate. It’s advertised as clean diesel, but it could have some flaws.”

“Could a giant like Volkswagen be able to commit such a scam? If we were to be caught, we would do a lot of damage.”

“If you get caught.”

Eugene laughed and said.

“Well… … .”

It seems to be a fraudulent play that is difficult to imagine even for Joanna.

“So what is the result?”

She asked Eugene with a look still in disbelief.

“I don’t know yet. We are negotiating with Volkswagen after receiving the test results from the Environment Agency, but it seems that Volkswagen is claiming that it is an error.”

It was difficult to understand all the current situation with the data requested by the Environment Agency.

“You’ve been negotiating for over a year?”

Joanna’s complexion darkened.

“I really can’t rule out the possibility that such a cheating program exists.”

“So this could be an opportunity for us.”

“I guess so. If it turns out that Volkswagen was really cheating, the aftermath would be great. the problem is… … It’s been over a year since I’ve been working on it, and the key is whether that will really come to light, and when the truth will come out.”

“No one knows that.”

“Are you still thinking of doing something?”

“uh. So let’s hit the Volkswagen Short.”

“You really don’t have any worries.”

“uh. And prepare for the interview.”

From now on, I plan to move much more openly than before.

“The office is nice.”

It’s a decent office that William admires.

As soon as I got back from Korea, I found two offices on West 9th and 5th Avenue, not far from Black Rock and Trump Tower, and started setting them up, and it was getting close.

It’s an unusually expensive office in Manhattan just because it has a direct view of Central Park, but it’s not a burden.

“I am thinking about buying it altogether.”

Rather, Eugene thought about purchasing the buildings containing the offices.

Considering the rising price of New York office buildings in the future, it is not bad to buy a few now.

The two offices were each for running the family office and one for the asset management company, which had entrusted full power to William.

He purposely obtained two offices in separate buildings, showing a gesture that guarantees William’s independence.

The office located on 5th Avenue will be used by the asset management company, and the space located right next to the Plaza Hotel around the corner will be used by the family office.

“You can start as soon as you are ready.”

The job of an asset manager is not urgent.

But the family office was already at war.

“What is the status of the Volkswagen stock price?”

Joanna, who is the head of the family office, is the busiest.

“The current stock price of Volkswagen is $174. It has a market cap of $123 billion.”

Although she is young, she is accustomed to dealing with people, so she is definitely a princess.

“Lend as much as you can. Don’t be bound by interest.”

The borrowing rate for stocks borrowed for short selling is not fixed, but is decided by both parties of the transaction, so it varies greatly from time to time.

Usually, it is set at around 10% per year, but when overheated, it can rise to 40% per year, and sometimes even up to 100%.

At that time, the interest cost was much higher than the gain from short selling, so it was rather a loss.

But in this case, there is nothing to worry about interest.

It will be over in a month at the most.

“I buy put options as much as possible.”

The US stock market is significantly larger in size for individual stock options than the stock index options market. As it is less regulated than Korea, ordinary people can continue to invest in one stock in various ways.

For this reason, some people professionally research only one stock, set an appropriate price, and then use shorts, longs, and options to make money.

“See if there is an agency that will accept the Volkswagen short.”

Don’t forget to invest in derivatives in the over-the-counter market.

Derivatives based on stock prices, regardless of the issuance of shares in circulation, sometimes trade at a much larger amount than the stock market.

So the most talented employees were put into this job.

Since the contract is concluded entirely by agreement between the parties to the transaction, networking and negotiating skills are important.

So far, these transactions have been made through BlackRock, and they have paid a small fee.

Of course, it was well worth it. Because Eugene didn’t have the human resources to do that at the time.

But now, half of the volume and about half of the volume were traded through BlackRock with its own manpower.

Now is not the time to cut fees. It is important to have as many contracts as possible.

A few days later, a Forbes reporter came to Eugene’s home and gave an interview.

This is after achieving the desired amount of short selling and put options.

“I heard that you have been very successful in predicting a decline in the Chinese stock market.”

“The overheating of the Chinese stock market was already sufficiently predictable. A bubble that has inflated beyond its normal limit is bound to burst at any time.”

It is not difficult to analyze the cause of the bursting of the Chinese stock market bubble.

However, if it comes from the person who actually made a huge profit from the situation, it is bound to be much more convincing than the commentary of any expert.

Eugene talked for a long time about the contents that Joanna had prepared.

“I heard that Eugene Kang’s assets are now over $50 billion. It was also confirmed by BlackRock. In fact, he was the second richest person in the world after Bill Gates. It’s hard to believe that it happened in just one year.”

“I have nothing else to say other than that luck was with me.”

Even in America, there is nothing wrong with the slightest bit of humility.

“Do you think this will be possible in the future?”

Even a slightly aggressive question has been arbitrated in advance to the last.

“I can’t say it’s going to be possible forever, but I think it’ll be fine for the time being.”

“It’s a lot of confidence. Isn’t there another investment product you are aiming for?”

“Actually, we are working on a new investment right now.”

“ah! So, could it be made public?”

“Sure. Do you remember when Volkswagen recalled diesel cars last year?”

When Eugene readily answered, the reporter nodded.

“Sure. I know there was a problem with the device to reduce harmful substances emitted by exhaust gas.”

“However, did you know that the amount of harmful substances emitted after the recall has not decreased?”

“no. Wasn’t the recall resolved everything?”

“It doesn’t look like it. The Environment Agency is requesting to reveal why it continues to emit toxic gases dozens of times the standard value, but Volkswagen has yet to reveal the cause. I can’t reveal it. In fact, it was all a scam.”

The reporter was slightly surprised by Eugene’s rather straightforward remark and asked.

“It’s a scam. That’s a problematic statement. Aren’t you worried that Volkswagen might sue you?”

“Rather, we are awaiting prosecution. If a complaint comes from Volkswagen, I am willing to respond using all my resources to uncover the truth.”

“When you say that, I am rather scared. If you’re going to use your entire $50 billion fortune to tell the truth, no one cares. But it’s a scam. In what way is that?”

Eugene explained in detail the experimental results of the clean diesel that he knew.

“I can only think of a cheating program that only works in the lab and doesn’t work in normal driving to pass the Environmental Protection Agency’s tests. Otherwise, something incomprehensible is happening.”

“If true… … It is very immoral.”

The reporter’s surprise was real, as what Eugene had just said was not pre-coordinated.

“Volkswagen has sold more than 1 million environmentally friendly diesel vehicles in the United States under the name Clean Diesel. However, if you know the truth, diesel cars sold by Volkswagen are emitting dozens of times more toxic emissions than gasoline cars.”

“then… … .”

“Nitrogen oxide (NOx) emitted from diesel engines is a very lethal substance to the human body. Americans have been fooled by the Volkswagen scam, thinking they are making the environment cleaner, and in fact, they are polluting the air we breathe.”

“For me, I wish what Eugene Kang said was not true. That we were polluting the environment with our own hands… … If it’s true, it’ll make your teeth tremble. I also drive a diesel car on the weekends… … .”

There was sincere anger on the reporter’s face.

“I think this will come to light soon. And I think that time is not far off. I don’t think Volkswagen can continue to ignore and fool the EPA.”

“Then, are you referring to a short sale of Volkswagen stock as a new investment?”

“Yes. Now that I know this, I have no choice but to act. If the truth is revealed, Volkswagen’s stock price will go down to the bottom of hell.”

“It must be the people who own the Volkswagen stock that fall to the bottom of hell with him.”

“So, I am giving you a warning. If you are holding Volkswagen shares even now, dispose of them as soon as possible. That’s a way to cut losses.”

Eugene said in a firm tone.

“If it were true, a lot of people would be harmed.”

“If I owned Volkswagen stock and suffered such losses, I would sue Volkswagen immediately. Acts that harm not only consumers but also shareholders need to be compensated accordingly.”

“It’s a pretty radical statement, but to be honest, you’re right. If Eugene’s words are true, Volkswagen will be held accountable for everything.”

The Forbes reporter spoke with a hard face, not like a reporter doing an interview.

“How was your interview today?”

After the reporter passed away, I asked Monica, who was hired as a public relations expert.

“Very good. However, I think we need to pay a little more attention to some pronunciations.”

Monica corrected Eugene’s accent.

“It’s getting better quickly. I can’t believe it’s been a while since I came to America. He’s an almost perfect native New Yorker.”

Well, it’s only natural that Eugene has lived in New York for decades.

However, since he crossed over 30, he still had a bad habit.

“There is nothing wrong with your posture. It might be better to raise your head a little higher and talk.”

While constantly praising Monica, she constantly pointed out areas that needed to be fixed.

There was no doubt that she was a very good coach.

Eugene tried her best by following her eyes and gestures.

I had to correct it as much as possible before going on air in earnest.

That is the reason why I did my first interview with Forbes and not on TV.

If possible, I plan to show a confident and uncluttered appearance from the beginning. In order to attract as many likes as possible to those who encounter Eugene for the first time.