A $50 million margin call? I'll short Wall Street.

March 7, 2008, Friday, early morning.

Boston, Financial District.

Early spring in Massachusetts still carries a biting chill, with cold winds blowing across the towering office buildings along the Charles River.

As he has done every workday for the past twenty years, Dr. Edmund Harriman walks into his office at 6:45 a.m. sharp.

He was sixty-eight years old, bald, wore thick reading glasses, and his suits always carried a faint scent of cologne and the chemical smell of the dry cleaners.

He never wears Armani or Tom Ford; his suits are all custom-made at local old tailors, sturdy, durable, and wrinkle-free.

The Massachusetts Municipal Employees Retirement Fund manages $4.2 billion in assets.

This money belongs to the state's teachers, firefighters, police officers, and sanitation workers.

As the chief risk officer, Harriman doesn't need to gamble like those star fund managers on Wall Street. His only task is to prevent these people's retirement money from being eaten up by Wall Street casinos.

He is an old-school actuary.

In his eyes, there are no invincible giants, only numbers that don't lie.

He sat down at his desk, turned on his computer, entered the complex sixteen-digit password, and then opened his email.

My first task every morning is to review the overnight global market risk reports and internal compliance alert emails.

But among today's pile of routine emails was one with no subject and the sender's address showing up as a Swiss encrypted server.

Harriman frowned.

Normally, such emails would be blocked by anti-spam systems, but this email somehow bypassed the firewall and quietly sat at the top of the inbox.

He hesitated for a moment, then clicked on it.

The email body was completely blank, with only an attachment titled "Risk Warning" attached.

Based on his long-standing risk control habits, he did not download the attachment directly, but instead imported it into the fund's internal sandbox environment and opened it.

The moment the PDF file unfolded on the screen, Harriman's hand holding the coffee cup froze in mid-air.

It was an extremely clear and cold data comparison table.

The title of the left column: Bear Stearns Institutional Client Public Monthly Report (as of the end of February 2008)

The title of the right column: Monitoring data on the actual default of underlying CDO assets (extracted from the internal network, as of February 28, 2008)

There were no sentimental words, no warnings of "imminent collapse," and absolutely no nonsense.

Only the raw numbers:

Below the table are several highly professional screenshots showing the underlying asset penetration.

Harriman could immediately recognize the numbers and watermarks on these screenshots as belonging to a high-level database page with investment banking internal audit capabilities.

The most fatal thing is the last line.

That wasn't even a sentence; it was just an objective statement:

Appendix: The Massachusetts Municipal Employees Retirement Fund currently holds a total exposure of $3.204 million to Bear Stearns Steady Structured Credit Fund.

Harriman stared intently at the screen, his breathing becoming heavy.

$3.2 million. This amount represents nearly 8% of the fund's total assets.

If the data in the right column is accurate, it means that the underlying assets of these $3.2 million are completely worthless and could face the risk of being halved or even wiped out at any time.

He is an actuary.

What actuaries value most is the underlying logic.

In its reports to its major clients, Bear Stearns packaged that stinking garbage as a beautiful chocolate cake.

"Thump."

Harriman slammed his coffee cup down on the table.

He did not immediately press the "risk mitigation" button that could trigger a full liquidation and withdrawal of investment.

As a veteran, he wouldn't make a decision worth hundreds of millions of dollars based on an anonymous email from an unknown source.

This is very likely the work of a hedge fund that maliciously shorted Bear Stearns.

He grabbed the landline on the table and dialed the head of client relations at Bear Stearns' asset management department.

The phone rang for a long time before it was answered.

"Good morning, Dr. Harriman. What can I do for you, calling so early?"

A young male voice, tinged with feigned enthusiasm, came through the phone.

"Listen, I'm going to check the accounts."

Harriman's voice was as cold as ice in a Boston winter.

"I need you to provide immediately the current true default rates of all subprime mortgage-backed securities in the underlying holdings, not the smoothed monthly average, I need the raw, real-time data."

There was a visibly pause on the other end of the phone, and the enthusiasm instantly waned by half.

"Doctor, that data falls under the confidentiality scope of our internal risk control system, according to the agreement..."

"I don't care about any damn agreement!"

Harriman raised his voice.

"If I don't see real penetration data within two hours, I will immediately initiate the full redemption process for the $3.2 million share, and then hold a press conference to report to the state legislature that you are concealing risks!"

"Please wait a moment, Doctor, please calm down..."

"Two hours. Not a minute more."

Harriman slammed down the phone.

[9:15 AM, Goldman Sachs Headquarters]

Richard Kleiman had just entered his system password on his computer.

Then, his personal cell phone on the table—not the company-issued Blackberry—suddenly began to vibrate rapidly.

This is a number that is only available to a small number of core customers.

Richard answered the phone: "Feed?"

"Richard! It's me, Jason."

It was the Bear Stearns client liaison manager he had spoken to on the phone just yesterday.

This time, however, Jason's voice lacked the ease of yesterday; instead, it carried an undisguised panic.

"What's wrong, Jason? What happened?"

Richard's heart skipped a beat.

"That damn retirement fund in Massachusetts!"

Their risk control officer, Harriman, that old lunatic, suddenly went crazy this morning and called us directly, specifically asking to check the real default data of our underlying assets!

Moreover, their attitude was extremely tough, threatening to withdraw their 3.2 million yuan investment immediately if they didn't provide data within two hours!

Richard felt a chill run up his spine.

Why would he suddenly want to investigate these things?

Richard, trying to remain calm, asked, "Did he say what the reason was?"

"He didn't say. But I just had someone check and found that an anonymous email was sent to his inbox from an encrypted server in Switzerland this morning."

Although the specifics are unknown, it's highly likely that our batch of nearly rotten CDO data was leaked!

Jason's voice was pleading:

"Richard, that old man is stubborn, and my level can't control him at all."

Do you have any ideas? He attended your lecture at a seminar before. Could you call him as a Goldman Sachs VP?

"Just say... just say that Goldman Sachs recently reviewed Bear Stearns' data and everything is normal, and that someone outside is maliciously shorting and spreading rumors."