Just as plenty of folks predicted, before the markets reopened, the Fed teamed up with the European Central Bank, each slashing interest rates by 0.5% to calm everyone down.
On top of that, the Fed pledged at least $60 billion to prop up the markets.
September 17, 9:30 a.m.—U.S. markets were back in business!
European stocks had bounced back a bit, up around 3% overall. But European investors? They weren't living in America.
The second U.S. markets opened, panic selling kicked in. Stocks tanked hard. In a flash, the Dow Jones plummeted 7.1%.
Insurance, tourism, and airline stocks took the worst hits.
Day one: Dow down 14.3%, NASDAQ down 16.1%, S&P down 11.6%!
That measly $60 billion rescue fund? A drop in the bucket.
In just one day, the U.S. markets vaporized over $1.1 trillion!
The major indexes kept sliding, rivaling last year's dot-com crash.
Microsoft's stock fell from $30 to $26—a 13.3% drop.
Disney went from $25 to $18—down 21.8%.
General Electric slipped from $40 to $34—a 15% dip.
Goldman Sachs dropped from $76 to $69—9.2% off.
Ford Motor fell from $19 to $16—15.8% gone.
Lockheed Martin, though? Jumped from $38 to $43—up 13.1%. Well, they make fighter jets.
People tend to follow the crowd. When stockholders saw others dumping shares, a lot couldn't resist joining the frenzy.
But over time, seeing the government's resolve to step in, they'd cool off.
Especially the big Wall Street players—they'd never miss a chance to buy low like this!
Dunn and Scott Swift had hashed this out plenty beforehand. Cashing out couldn't wait, couldn't drag—they had to move fast!
The goal? Close all their short positions by the end of the week!
It kicked off on September 18.
That day, Dunn Capital closed out 128 stocks. Average drop: 15.8%. Profit: $35.1 billion!
September 19: 107 stocks closed, averaging a 14.5% drop. Profit: $26.9 billion!
September 20: 42 stocks, the hardest-hit ones—airlines, tourism, insurance—averaging a whopping 29.3% plunge. Profit: $21.3 billion!
September 21, Friday, the week's last trading day.
Dunn Capital wrapped up the last 30 stocks. These were steadier, averaging a 5.4% dip. Profit: $2.8 billion.
After three months of financial wizardry, Dunn Capital's wild short-selling spree racked up a gross profit of $86.1 billion!
Subtract short-term interest fees, transaction costs, and the capital gains taxes they'd owe later. Then knock off the $8.5 billion they'd lost shorting earlier this year…
For the year, Dunn Capital turned a $3 billion investment into a $58.2 billion net haul—a 194% return!
Even after taxes, they'd still have over $9 billion in cash on hand!
Overall, the crash wasn't as steep as the dot-com bust, but Dunn had more capital to play with this time.
With this windfall, plus Dunn Films' assets, he'd easily crack the top 20 on the Forbes rich list!
…
Dunn Capital's bloodbath in the markets flew under the radar for regular folks, but Wall Street's big dogs saw it all.
Last time Dunn cashed in big during the dot-com crash, word spread fast, and he caught heat. This time, though? Wall Street stayed quiet.
For one, they'd been humiliated. Back in the summer, Dunn loudly predicted doom, and the whole street laughed him off.
Now, who'd dare report on him? Better to play dumb. A bunch of financial hotshots getting schooled by a movie director? Embarrassing.
More importantly, Wall Street was too busy raking it in to care about anyone else.
Over the past few days, the street's top investment banks and funds had shorted everything in sight, making a killing off the national tragedy. In one week, the NYSE and NASDAQ lost $1.4 trillion in value!
Now it was the weekend.
The Fed and Treasury would surely roll out bigger, bolder moves to fix this mess.
Conveniently, 90% of the Fed and Treasury's top brass came from Wall Street banks—Goldman Sachs especially.
Stocks had hit rock bottom—prime time to scoop them up. Wall Street was deep in strategy mode, plotting the most efficient ways to maximize profits!
Dunn's little stunt? Who cared?
His haul was peanuts next to what the big banks were pulling in.
Sure, Dunn's profits were all his, while the banks and private funds split theirs among shareholders. Per person, Dunn came out way ahead.
He made a fortune quietly, staying off the financial pages—but that didn't mean he vanished from the media.
His $50 million donation made waves in the entertainment sections.
This wasn't your typical charity drop. Teaming up with Dunn Films and Universal, he pushed for victims to catch The Unsinkable in theaters—a move praised by mental health experts.
Mental illness is real illness.
In the U.S., where people take mental health seriously—pretty much everyone's seen a shrink at some point—Dunn's gesture hit the right note with the country and its people.
The praise and goodwill poured in.
Especially that weekend, when he made a trip to New York. Fresh off cashing out his stocks, he hit up five high-profile charity galas.
Under "Dunn Walker," he dished out donations to various funds.
In total, he splashed $48 million—pocket change from Dunn Capital—back into society, earning heaps of acclaim.
Rich folks donating isn't rare, but a young guy dropping big bucks like that? That's a standout.
For Dunn, it was peace of mind money.
Even so, he didn't dare push his luck further. Twice now, he'd shorted the markets in a crisis, pocketing over $10 billion!
Even legends like Soros or Rogers never pulled off something that wild.
Time to quit while he was ahead!
No doubt, Dunn Capital's cash would face tight federal scrutiny going forward.
Just like Soros ended up on financial blacklists in multiple countries.
"Scott, our days in the stock market game are done," Dunn said, gazing out the window of Scott Swift's office at Manhattan's still-glitzy streets, letting out a long sigh.
Scott raised an eyebrow. "You firing me?"
"Huh?" Dunn laughed. "No way I'd be that low."
Scott shook his head, frowning. "Then what? No stock plays—what else is there? I'm a stockbroker by trade."
Dunn gave him a deep look. "But your field's financial investment. Stocks are just one kind of investment, right?"
"Oh?"
Scott caught the hint.
Dunn went on, "These two moves we pulled were too loud. Wall Street's on guard now—might even send corporate spies. And don't get me started on the feds. We're out of the stock game! I've got plans for the trust fund cash. Most of it's going into Dunn Films—big acquisition next year."
"What do I do?"
Dunn grinned. "The past two years, Dunn Capital hasn't just killed it in stocks. We've invested in tons of companies—Google, Apple, Hasbro, Pixar, EA. You've done great talking to their boards."
Scott waved it off. "Money talks. I bring cash, they roll out the red carpet. That kind of 'talking' is easy."
"That's plenty!"
Scott's eyes lit up. "Wait, Dunn—you saying Dunn Capital's shifting to venture capital?"
"Exactly!"
"But people are freaked out right now. VC's not the move."
"We can go overseas."
"Abroad? 9/11 hit them hard too."
Dunn smirked. "Not everywhere. Fully market-driven countries took a big hit, sure. But some places run a half-market system with government guidance. Barely a ripple."
Scott's eyes sparkled. "You mean… that big population across the strait?"
Dunn nodded. "I'm putting up $500 million for a VC fund. Dunn Capital takes 80%, you get 20%. You're the GM, running all investments. Focus there if you want—Korea and Japan are solid too."
Not 20% of profits—20% ownership. Totally different ballgame.
Scott wouldn't have to lift a finger. The fund launches, and he's already a billionaire!
"But I'm no expert in VC."
"You can learn," Dunn said with a smile. "Besides, you've invested in U.S. tech firms already—you've got experience. I'll toss you some pointers. Feel it out as you go. You'll make waves over there."
"Pointers? What direction?"
"The internet, obviously!"
"Oh…"
The past six months, Scott had seen Wall Street's true colors.
When Dunn Capital was bleeding cash, everyone mocked him, throwing shade left and right. Now, with the big wins, he was the center of attention.
He was sick of the backstabbing, the fake smiles, the crocodile tears.
Maybe…
A change of scenery wasn't a bad idea.
"This VC fund—can we name it after me? Scott Swift Venture Fund?"
"No problem!"