October 7, 1997
[KOSPI: 427.98 (▼13.42)]
The KOSPI, which had appeared to find a bottom and was showing signs of rebounding over the past few days, took another sharp dive. Jung Hwan-yeop shook his head in dismay.
"I had a sliver of hope, but yep—it was just a dead cat bounce."
Trying to quickly adapt to the team and pull her weight, Noh Hee-won—who had been diligently studying the stock market lately—leaned over to Hong Jae-hee, who was sitting at the conference table sorting documents, and asked in a small voice,
"What's a 'dead cat bounce'?"
Wearing a stylish Gucci scarf she received as a Chuseok gift from the company, Hong Jae-hee clipped a stack of papers together with a stapler and explained it clearly.
"It's a term that comes from the saying, 'Even a dead cat will bounce if it falls from a high enough place.' It refers to a temporary rebound in stock prices after a steep decline."
"Oh… So just like what's happening now?"
"Exactly."
Nodding lightly, Hong Jae-hee turned her head toward the large market board mounted on one wall of the office, her eyes filled with concern as she looked at the displayed KOSPI index.
"A dead cat bounce usually means the downtrend isn't over—it might even get worse. That's what's worrying."
Startled, Noh Hee-won responded with concern.
"Really? That's terrible. The news keeps saying a lot of people are already broke and getting wiped out."
"Of course. We're not talking about individual stocks here—the whole index has been slashed by more than half. In a market like this, hardly anyone survives."
Seeing the troubled look on Hee-won's face, Hong Jae-hee added,
"That's why the CEO is so impressive."
"Why's that?"
Hee-won asked with a puzzled expression, and Hong Jae-hee smiled faintly.
"You wouldn't know since you joined later, but when the KOSPI was at its peak, the CEO instructed us to liquidate all our positions and pull out. Back then, everyone was so optimistic, saying the market would keep climbing, so we thought he might be acting too hastily. But right after that, the market started to plummet—like clockwork."
"Seriously?"
Noh Hee-won's eyes widened like a startled rabbit.
"You could ask any of the other team members and confirm it right away. Why would I lie about something like that?"
"I don't know much yet, but the CEO really seems to have an amazing instinct for investing."
"He's not just amazing—he's a total genius. Even the department head, who's been in Yeouido for over ten years, is constantly impressed."
Hong Jae-hee smiled faintly, recalling what she had seen and felt firsthand in New York.
"You'll come to see it too, Hee-won. The CEO is a much bigger and more extraordinary figure than he seems right now."
***
At the same time
Sitting on the sofa in the president's office, Seok-won was receiving a market update from Choi Ho-geun when he suddenly scratched his ear, feeling an odd tickle.
Seeing that, Choi Ho-geun chuckled and said,
"Someone must be talking about you, sir."
"Must be," Seok-won replied, removing his hand from his ear and returning to the original topic.
"Where were we?"
Straightening his posture, Choi Ho-geun answered,
"I was reporting on the rumor about the investment trust companies that started circulating this morning."
"Go on."
Seok-won gave a small nod, prompting Choi to continue with a serious tone.
"Not long after the market opened, word began spreading around Yeouido that the big players were withdrawing large amounts of capital from the investment trust companies. As a result, there was a massive sell-off, and the index, which had briefly rebounded, dropped again—this time falling below the 430 mark."
"It's probably not just a rumor. The money really is being pulled out."
Crossing one leg over the other, Seok-won's comment made Choi's expression stiffen slightly as he responded.
"I checked with a few contacts of mine, and even though the losses are significant, the big investors are liquidating everything and pulling their money into cash."
"That makes sense. You know what they say—rats are the first to sense a sinking ship and flee. They must sense something's very wrong and are willing to take the loss just to get out of the market."
Seok-won laced his fingers together and rested them on his leg, then looked at the grave-faced Choi Ho-geun and asked,
"Do you know who's in Seoul right now?"
"I'm not sure…"
"Dan McCarty, the Deputy Managing Director of the IMF, and Henick, the U.S. Assistant Secretary of the Treasury, have quietly entered the country."
"...!"
Hearing this for the first time, Choi Ho-geun's eyes widened in shock. He swallowed hard.
"If the Deputy Managing Director of the IMF is here..."
Meeting his gaze, Seok-won continued calmly.
"The government's expansion of the exchange rate band has had an effect, but with capital still flowing out, the won has now surpassed 1,139 to the dollar."
"…"
"On top of that, the yield on 3-year corporate bonds—which serves as the benchmark for market interest rates—has jumped 0.3% from the previous day, reaching 14.3% annually."
Soaring interest rates reflected the growing sense of anxiety in the market.
With a bitter look on his face, Seok-won added,
"And after burning through reserves trying to defend the won, the country's foreign currency holdings must be nearly depleted. The only option left is to seek help from the IMF."
Speaking with conviction, he left Choi Ho-geun staring downward, his face filled with gloom.
"So... it's really come to this."
Even during Korea's most difficult times—the first and second oil shocks—the country had only discussed the idea of IMF aid; it had never actually taken that step. The shock of doing so now was immense.
"We'll probably hear an official announcement sometime this week at the latest."
"That soon?"
"If they don't move quickly, we could be looking at a full-scale national default."
As Seok-won's grim words sank in, Choi Ho-geun's face darkened further.
They had received numerous warnings, so he had braced himself to some degree—but now that IMF intervention seemed truly imminent, it was hard to suppress the heavy weight pressing on his chest.
Understanding those feelings well, Seok-won continued in an even tone.
"Even after the IMF bailout is announced, that won't be the end—it'll just be the beginning."
Choi Ho-geun gave him a questioning look.
"But once the bailout is in place, shouldn't the foreign currency shortage ease and the exchange rate stabilize?"
"Yes, that will happen. But the actual disbursement of the funds takes time. In the meantime, we're going to see major volatility."
"Hm... When you put it that way, I suppose you're right."
Choi Ho-geun understood what Seok-won meant and gave a slight nod.
"And in return for the bailout, the IMF will likely demand a number of things—massive corporate restructuring among them. So the stock market probably won't break out of its slump anytime soon."
"Nothing comes for free."
He understood it logically, but couldn't shake the feeling of heaviness in his chest.
"Take all of this into account and start putting together a response plan."
"Understood."
After that, the two of them continued discussing the unfolding situation in depth for quite some time.
***
Three days later, at the Government Complex I in Gwanghwamun.
Though it was well past 9 p.m., the floor housing the Ministry of Finance and Economy was brightly lit—an indication of the precarious economic situation.
The large conference room on the 19th floor was packed with both domestic and foreign reporters. The reason: a sudden, urgent press conference called by Deputy Prime Minister for Economic Affairs, Lee Eun-hyung.
Tension filled the air following the revelation the previous day that Dan McCarthy, Deputy Managing Director of the IMF, was in Seoul—fueling speculation that the long-rumored bailout might actually come to pass.
Joo Chi-do, a journalist covering global economic news, glanced nervously at the tense Ministry staff and leaned toward Go Dae-hong beside him to whisper.
"This doesn't feel normal."
Photojournalist Go Dae-hong from Hanseong Daily responded with a grim face while swapping in a new film roll.
"The fact that they're holding an unscheduled press conference at this hour means something definitely happened."
"You think they're really going to request a bailout from the IMF?"
Securing his freshly loaded camera onto a tripod, Go Dae-hong replied, "We'll know soon enough."
He tried to act calm, but even a seasoned journalist like him—nearly a decade into the job—couldn't stop his fingers from trembling as he faced this unprecedented foreign exchange crisis.
Joo Chi-do, also visibly uneasy, kept wiping his sweaty palms on his pants pocket, shifting restlessly in place.
"We're not actually going to see Korea default, right?"
"Don't jinx it."
Go Dae-hong frowned and shot him a sharp look.
The economic situation was so dire that even journalists, usually chasing scoops, were more concerned about the nation's future than headlines.
"Ssss… I should've gone out for a smoke earlier."
Having just finished setting up his camera, Go Dae-hong muttered in regret, patting the cigarette pack in his pocket out of habit.
He craved the nicotine to calm his nerves, but with the press conference about to begin, he had no choice but to hold back.
Just then, murmurs rose from the entrance, and moments later, Deputy Prime Minister and Minister of Finance and Economy Lee Eun-hyung appeared.
The moment he did, Go Dae-hong immediately rose to his feet, grabbed the camera slung around his neck, and snapped several shots of Lee walking into the room.
Click-click-click! Cha-chak!
Amid the loud clicks of camera shutters and flashing lights, Deputy Prime Minister for Economic Affairs Lee Eun-hyung walked toward the podium with a stiff expression.
The large conference room was packed with domestic and foreign reporters, not a single seat left unoccupied. Lee took his place before the live-broadcast cameras, his image being transmitted in real time across the nation.
He wore a neat suit with a wine-colored tie, but the toll of recent days was written clearly on his face—he couldn't completely hide how worn and haggard he looked.
As the shutters clicked once more, trying not to miss this historic moment, Lee Eun-hyung stood before the podium lined with multiple microphones, a heavy weight on his shoulders.
Once the noise subsided, a Ministry of Finance official standing to the left stepped forward and calmly addressed the room.
"We will now begin the emergency press conference. We ask for your silence."
Though more than a hundred people had gathered, the room fell utterly silent, save for the occasional cough. Every eye turned toward Lee Eun-hyung, waiting for him to speak.
Lifting his head, Lee glanced briefly at the sea of reporters before him. Then, as the red light on the broadcast camera blinked on—signaling that the broadcast was live—he looked directly into the lens and began to speak in a somber voice.
"Dear citizens, the government, after discussions with the International Monetary Fund, has decided to request liquidity support in order to overcome the recent financial and foreign exchange crises."
Just as expected, the announcement of Korea's turn to the IMF sent a wave of murmurs and shock through the room.
"The government has been in close contact with the IMF through various channels to resolve Korea's foreign exchange crisis. We have received assurances that should Korea request support, the IMF is prepared to provide active assistance. If the bailout proceeds as hoped, Korea's international credit rating will improve, and the foreign currency liquidity shortage will be alleviated. With this foundation, if the government, businesses, financial institutions, and workers all work together in solidarity, I am confident that our economy will return to a stable path in the near future."
As the entire nation watched with shock and anxiety, this moment marked the official beginning of one of the most painful chapters in South Korea's modern history: the IMF crisis.