Chapter 246 Moral shackles

  Arbitrage funds are a very important supplement between different markets, and can even be said to be a key factor in maintaining market balance in different regions, especially in the constantly flowing foreign exchange market.

For example, there is an exchange rate difference between the currencies of three freely convertible countries. Country A exchanges the currency of country B at an exchange rate of 1:2, and country B also exchanges currency of country C at an exchange rate of 1:2. In theory, The currency of country A should be exchanged for the currency of country C at an exchange rate of 1:4, but due to factors such as monetary policy, interest rate, inflation, etc., the currencies of country A and country C may not be circulated at a theoretical 1:4, then After weighing the exchange cost, the arbitrage funds will enter the relevant circulation areas, and continuously carry out exchange rate differences to bring the exchange rate back to an equilibrium level.

   Of course, this kind of arbitrage activity is not universal. Taking the oil market as an example, the price of crude oil per gallon in the Brent crude oil market is much lower than that of US light and medium crude oil. In theory, there is obvious room for arbitrage in these two markets. But this kind of arbitrage is difficult to realize. On the one hand, the pricing power of crude oil is firmly in the hands of the US exchanges (now the pricing power tends to be in the North Sea Brent crude oil market); Additional additional costs make it difficult for mutual arbitrage to have profit margins.

  However, in the foreign exchange market dominated by electronic transactions, this additional cost is almost negligible, so arbitrage funds are popular, filling every possible profit space.

  But this time the arbitrage funds are obviously too risky, or they are too easy to believe in IMF and BOT data, confident that they can get a certain profit before the depreciation of the Thai baht, so they are confident and bold to bet on the Thai baht.

   And this situation did not appear in the wave of attacks in May, which obviously shows that their judgment on the Thai baht and the judgment of hedge funds have deviated, and they may even stand on two opposite sides. However, arbitrage funds are very cautious, and they basically operate overnight ultra-short-term, just to avoid the worst situation.

"Why isn't it possible for other countries to take action?" Just as everyone was silently digesting Zhong Shi's judgment, Ma Jiarui said suddenly, "It is said that the last time Thailand and Singapore jointly intervened in the market to stabilize the currency value of the baht. Now this kind of situation, maybe it’s their funds again.”

  May is not far from now, what happened in the foreign exchange market is still vivid, and the researchers present are still fresh in their memories. When Ma Jiarui mentioned the details of the joint intervention, everyone suddenly realized that they had obviously overlooked this link before.

Zhong Shi glanced at Ma Jiarui approvingly, but then poured cold water on him, saying: "It's unlikely. If you pay attention carefully, you will find that from this month onwards, the Malaysian Ringgit, the Singapore Dollar, the Philippine The long-term short contracts in markets such as the peso have increased in varying degrees, which means that international speculative capital has already set its sights on these countries or regions. Under the current situation of the enemy, I am afraid that the central banks of these countries will not easily use them. foreign exchange reserves to aid other countries.”

  Currency crisis has never been a matter of a country. Judging from the currency crisis that has occurred, Europe has almost swept almost all countries linked to the euro except Germany. Even the free-floating Swiss franc that is not linked to the euro needs the intervention of the central bank, and the currency crisis in Mexico is Not to mention, major South American markets such as Brazil and Argentina have also been affected. If the United States hadn't extended a helping hand in time, several countries may have fallen into the abyss of economic crisis.

And this time it seems that it is only an attack on the Thai baht, but the central banks of the countries in the entire region have long been vigilant about this, and they are also guarding against it openly and secretly. The foreign exchange traders of those central banks are on call 24 hours a day. Be ready to deal with emergencies from the foreign exchange market at any time.

  The central banks of these countries realize that if the baht falls, they are likely to be the next target, or, even if the baht does not fall, they may also be the target of speculative funds. Under such circumstances, how can there be any thought to assist Thailand?

   What I regret most now is probably the Monetary Authority of Singapore. There are already different voices in Singapore regarding the previous spare no effort to aid Thailand, and voices for the replacement of Gao Shengming are also growing.

   As for these, Zhong Shi will naturally not say anything. But judging from the current situation, the situation of sweeping the snow in front of the door has been formed.

  After hearing Zhong Shi's analysis, everyone was silent again. Naturally, they have also discovered the unusual phenomenon in the current foreign exchange market, but the possibility that Zhong Shi said is extremely bold. They have also discussed it on weekdays, and they all think it is unlikely, but now they say it from Zhong Shi's mouth , Only then did I realize that with as much courage as the capital market, there are as many opportunities as there are. This shocking truth is really reasonable.

   "Let's all go to rest. It is estimated that by this time tomorrow, the Thai baht may be over!" Seeing that everyone has been busy all night, and the transactions in markets such as Chicago and New York tend to be flat, Zhong Shi gave everyone an early rest in due course.

  Hearing what Zhong Shi said, everyone was both surprised and very excited. The lack of liquidity for two consecutive days has allowed them to see the dawn of victory, but they don't think it will happen in the short term, and a group of traders left with mixed feelings.

Ma Jiarui did not leave, and waited until everyone had left before approaching Zhong Shi, with obvious confusion on his face, and asked: "Zhong Sheng, according to the current situation, what do you think the currency crisis will eventually develop into?" the point?"

  The concept of a currency crisis is completely different from that of a financial crisis. Later generations generally refer to what happened in Southeast Asia as the Southeast Asian financial crisis. This is because the currency crisis led to a financial crisis, which ultimately deeply harmed the economies of these countries.

  Zhong Shi was a little strange. He took a deep look at Ma Jiarui and said, "According to the course of the previous currency crisis, I am afraid that these countries in Southeast Asia will not be spared. What's the matter, what do you think?"

   "No." Ma Jiarui shook his head, and said slowly after a long time, "I'm thinking, if this currency crisis continues to spread, it may eventually endanger Hong Kong. What should we do then?"

  As a Hong Kong native who was born and raised in Sri Lanka, Ma Jiarui naturally has a deep affection for this land. As a macroeconomic researcher, he knows the seriousness of this currency crisis. This is not only the contradiction between the two exchange rate systems, but also involves the healthy development of the entire economic system.

  If the currency crisis spreads to Hong Kong, he will encounter a contradiction in morality and professional conduct, although this contradiction is not a big problem for financial practitioners, because they only have money in their eyes. But Ma Jiarui is obviously not such a person. During this period of time, he was even considering whether to resign, although Zhong Shi has always favored him.

  Hearing Ma Jiarui's words, Zhong Shi fell silent, but he was thinking about Ma Jiarui's original intention in his mind. Although he knew that even though Hong Kong suffered two large-scale shocks, the Hong Kong dollar remained firm and could be called the strongest currency during the entire Asian financial crisis. At the same time, it also made the entire speculators leave in "disgrace", but these cannot be said .

Whether the Hong Kong dollar is strong or not is not only related to Hong Kong's independent monetary policy, but also to the livelihood of millions of people. It even has a great relationship with the current thriving mainland economy. That's why the mainland government rushed to help the Hong Kong government later. .

  After half a day, Zhong Shi said solemnly: "Hong Kong is our foundation and our foothold. If we face an impact at that time, we cannot be accomplices, but..."

  Although the following words were not spoken, Ma Jiarui already understood what he meant. Since you don’t act as an accomplice, there is a great possibility to stand on the sidelines. Although it is nothing to lose a hedge fund with a capital scale of around tens of billions of dollars (using low leverage), it depends on the Hong Kong government whether it can hold it. own efforts.

  Zhong Shi's statement completely dispelled his doubts in his heart, and Ma Jiarui, who was in a good mood, chatted for a few more words, and then left with a smile on his face.

   "Although I didn't say short Hong Kong dollars, I can't let go of the opportunity to short Hong Kong dollars!" Zhong Shi muttered to himself, looking at the direction Ma Jiarui left.

  …

Rodney Jones has been annoyed recently because of the unusual fluctuations in the Thai baht market. This unexpected fluctuation made the entire Quantum Fund focus on the Asian market, and all the pressure was on him. Economists based in Hong Kong. At this time, it is inconvenient for him to appear in Thailand, because this country has already listed him and the consortium behind him as unwelcome. And Chavalit's recent public speeches have brought his apparently divisive moral troubles to a climax.

  He decides to fight back.

   "Deflationary Economics, What Keynes Says to Thailand" This is the title he proposed. This analysis report will be released to the market soon, telling the entire market the role of Quantum Fund in this currency crisis. In the report, Jones used extremely strong words. He called Thailand's behavior of choosing ultra-high interest rates rather than currency devaluation as "pure insanity".

Although this kind of view will anger the Thai government, it will extract the entire Quantum Fund from a moral perspective, and it will even cause the entire market to reflect on the impact of the hedge fund industry on the monetary system, and then find that people like them are in the entire economic operating system. Playing the role of correcting, Jones thought so naively.

   Thank you very much for the book friends Tokihikari, Prodigal Son Xuan Shao, and I have feelings for drinking water and full votes for monthly support! Thank you very much for the reward from book friend a13702297!

  

  

  (end of this chapter)