Chapter 226 Bangkok Clouds (4)

"No! What we are doing is not wrong. It is not precisely that we are exacerbating the gap between rich and poor in this country. On the contrary, we are helping this country to go on the right path, not the current wrong one. The road is getting farther and farther." Soros said firmly.

  This is the financial district of New York's Central Park, and the office of the Quantum Fund is on the top floor of a building here. People who sell hot dogs, shine shoes, or get haircuts on the street in this area deal with people in suits and leather shoes all day long, and they even know each other very well, but they may never imagine that these well-dressed, funny-talking people Will soon be seen as the devil by those on the other side of the world.

   When Fraga and his team returned to New York, they reported the results of their investigation to the entire Quantum Fund executives. In addition to talking to BOT officials, they also focused on the construction situation they saw in Bangkok. Almost all the cranes they saw stopped working, and there were few people on the construction site, which foreshadowed the collapse of the real estate market in Bangkok. . According to information obtained from fellow Asian investment banks, the country’s total loans account for 140% of GDP, and more than 50% of them have become bad debts. It is said that more than 85 of Thailand’s 90 financial companies are in trouble. successor situation.

These shocking figures are exaggerated, but the senior executives of Quantum Fund present realized that there is only one way for this country to go, which is to choose devaluation as soon as possible instead of continuing to support the crisis-ridden Thai baht. .

Although the huge benefits are in sight, the views of Fraga and Rodney Jones still moved some people. When the senior management of Quantum Fund was arguing about whether to short the Thai baht with all their strength, Soros stepped forward in time. Ended the debate about the code of ethics.

"There is no doubt that what we are doing is a speculative act. But the starting point of this action is not our malicious short selling, but the huge problems in the Thai economy. And the role of our speculation , is precisely to remind the government that change is urgently needed. Take Thailand as an example, they need to adjust the baht immediately. This adjustment can avoid suffering for ordinary people, because at least part of the capital can be retained. But if the Thai government delays the devaluation of the currency for longer, the consequences of the currency collapse will be more serious, and not only will foreign capital flee wildly, but even the only foreign exchange reserves will be exhausted.”

   "So, my personal opinion is that we don't need to go all out in the process of attacking the baht, just let the Thai government realize their problems and promote them to devalue as soon as possible."

   "George, how big a position do we need to build?" Seeing that Soros had spoken, the others were silent. Although most of them agree with Soros' views, to distinguish whether it is a malicious attack or a "friendly" reminder, it is still necessary to look at the scale of short selling.

  After Soros finished speaking, everyone was silent for a while, and finally Druckenmiller asked the question on everyone's mind. As a person under one person and above ten thousand people, he is naturally duty-bound to bring up this sensitive topic.

   "Stanley, how much money have we invested in Thai baht?" Soros pondered for a while and asked Druckenmiller. In the past few years, he has not operated much on investment matters, and the details are all carried out through Druckenmiller.

   "US$2 billion, the share is very small." Druckenmiller thought for a while, and gave a number that surprised everyone.

  In January 1997, some hedge funds took aim at the Thai baht, including Quantum Fund. However, at that time, the Quantum Fund did not undergo a detailed investigation, so it invested a symbolic part of the position in the Thai baht, and the specific amount was 2 billion U.S. dollars. Now that Druckenmiller has exposed this position, it means that there has been no additional funds in recent months.

   But there is no doubt that this part of the portfolio must be profitable.

   "Then keep this position and don't change it, what do you think?" Soros gave an even more unexpected answer without even thinking about it.

   For Soros to have such an attitude, those senior employees who are sympathetic to ordinary people in Thailand are very relieved, because at least they don't have to bear the moral baggage that has caused thousands of people to lose their jobs. But those partners and fund managers who want to make big bets have nothing to say, because even if they don't hit the baht, they can also make profits from other places, if they do it right.

  The most important thing is that Soros has the supreme authority within the Quantum Fund, so when he speaks, almost everyone obeys subconsciously.

   "Sir, I'm afraid this kind of behavior is inappropriate now." Just when everyone thought that the overall situation was settled, a voice suddenly sounded, attracting the attention of almost everyone including Soros. The speaker was Rodney Jones, an economist based in Hong Kong, and it was he who raised the ethical issues that led to this discussion.

   Now that he actually stood up against maintaining the current position, everyone including Fraga was taken aback. They didn't expect him to be dissatisfied.

   You must know that they are not presidents or senators after all, but a group of fund managers who are dedicated to managing funds for their clients. Their job is to pursue profits, instead of dressing up as saviors and giving charity everywhere!

  Thinking of this, most people looked at Rodney Jones with a little dissatisfaction, and they couldn't help thinking that he was pushing an inch. However, thinking that he was the only one here who knew something about the East Asian market, he could barely suppress the dissatisfaction in his heart and pricked up his ears, hoping to hear what Rodney Jones wanted to say.

   "Ronnie, do you have any better suggestions?" Soros' expression remained unchanged, and he remained calm. Druckenmiller, who was sitting under him, showed a thoughtful expression. He would not superficially think that Jones was simply opposed. In fact, on East Asian economic issues, both he and Soros attach great importance to Rodney Jones' opinions.

"George, the situation has changed." Jones stood up, turned on the TV in the conference room, and after a while, an East Asian face appeared on the screen, speaking in a language they didn't understand. talk.

Seeing doubts on the faces of those present, Jones lost no time in explaining: "This is Thailand's Prime Minister Chavalit Yongchaiyuk, who delivered a televised speech on the night of the 11th. The main idea of ​​the speech is that the Thai government will go all out to He supports the Thai baht and absolutely does not allow depreciation. However, he did not say it to death, and finally he said that he cannot promise to do this.”

"How could this be?" Hearing this "stupid" guy make such an ambiguous statement, almost everyone was dumbfounded. They never expected that the leader of a country would say such a child's play. Come. Whether this is support or not, not only the people present, I am afraid that anyone who heard him speak can't figure it out.

"The problem is with us!" Jones glanced at Fraga, saw that his face did not change much, and continued, "Our visit to Thailand was exposed by the Thai media. This is undoubtedly telling market, hedge funds are all around them. According to the latest news from Thailand, local investors are extremely disturbed by the news of the appearance of American hedge funds in the domestic market, and a wave of selling Thai baht to buy dollars has begun. BOT has begun to reduce This is why Mr. Prime Minister said this.”

  Obviously, Fraga had expected this kind of reaction a long time ago, after all, he still had the identity of the former president of the Central Bank of Brazil. Therefore, when his visit led to a bad situation, he had already foreseen it.

   "According to your point of view, will the Thai government choose to depreciate?" Soros didn't change much after listening, but changed the topic from the Thai economy to the government.

Jones was startled, then lowered his head and thought for a while, before saying uncertainly after a long time: "According to my information, the Thai government is unlikely to take the initiative to choose to devalue, and there are rumors in the market that they also borrow money from several nearby countries and regions." A considerable amount of money has been allocated to deal with this crisis. If not, Mr Prime Minister would not have said so."

  The atmosphere in the meeting room fell into a stagnation for a while, and the people present only considered the issue from the economic aspect, while ignoring the complex political ecology of Southeast Asia. After being silent for a long time, Soros slammed the dark conference table and said resolutely: "If this is the case, then let us help him make this decision!"

Although there is a lack of political awareness, everyone here has a feeling that if the Quantum Fund increases its position, the Thai government will soon realize its troubles in the foreign exchange market, which is likely to Prompting them to rethink the feasibility of maintaining a fixed exchange rate system again.

"However, Stanley, if you want to increase your position, you still have to be careful. You know, Thailand's political system is not like the political system we know, and they have more influence on the banking system than we think. "Jones reminded without losing the opportunity.

   "Okay!" Druckenmiller nodded, "I plan to increase the scale of funds by 50% in the next three days. I think these funds are enough for the Thai government to understand what they are doing."

  Add 50%, or $1 billion. At that time, the position of the entire Quantum Fund will reach as much as US$3 billion, and Druckenmiller is very confident. But in fact, even when his entire position increased to 3.5 billion U.S. dollars, the Thai government did not consider whether to abandon the fixed exchange rate system, and even launched a counterattack against the greedy hedge funds in their eyes.

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  (end of this chapter)