Chapter 289 Too big to fail (2)

   "What about financial regulation?" After a long silence, Zhong Shi continued to ask.

A researcher stood up, nodded slightly, and said: "About financial regulation and government regulation, I inquired carefully about South Korea, and found that the country's financial regulation is in vain. To be precise, when large companies need funds At the time, it was not the mortgage of assets and good reputation, but political power, such as the prime minister, the president, etc. Take the Daewoo consortium we met some time ago, their chairman Kim Woo-jung and President Kim Dae-jung have a very personal relationship. Well, we often play golf together. In this case, let alone the so-called review of the banking system. I am afraid that if the Presidential Palace sends a word, many banks will rush to grant loans to the Daewoo consortium, and they will not think about it at all. The basics of their operations."

"More than 50% of South Korea's loans are issued to large companies through political power. When these large companies have too much debt and their own growth is weak, the banks will be in big trouble. Some time ago, Hanbao Steel It is a living example. When Hanbao Steel fell into crisis and could not repay the loan in time, the First Bank of Korea and Seoul Bank could only be forced to declare bankruptcy. This kind of credit system is not to say that there is no supervision, even if there is supervision, it is very difficult. There is no guarantee that something like this will not happen.”

"There is another problem. Nearly 50% of the shares of large Korean conglomerates are controlled by foreign capital. This is contrary to South Korea's clamoring for the development of national industries, but these companies are generally run by Koreans. I think It is also because these Koreans are able to deal well with high-level government officials. It can be said that foreign capital has made full use of South Korea’s relationship.”

  The close integration of politics and business is a common problem in East Asian culture, and there is basically no way to get rid of it. A certain president of South Korea in later generations committed suicide by apologizing for this.

  Thinking of this, Zhong Shi secretly sighed in his heart. The South Korean president can be described as a model of hard work at the grassroots level. When he was a construction worker, he had been working hard to prepare for the judicial examination, and finally became a lawyer. Afterwards, he devoted himself to the cause of democracy in South Korea and became a national sensation. human rights lawyer. Later, he devoted himself to politics, and finally became the president of South Korea after several rounds of elections, reaching the pinnacle of his life. It was only later that he was trapped in a bribery scandal, and the fierce-tempered former president chose to commit suicide by jumping off a cliff, which caused a sensation all over the world.

After being silent for a long time, Zhong Shi came back to his senses. Seeing the strange eyes of the researchers looking at him, he couldn't help his old face becoming slightly hot, coughed lightly, and said, "What about the macroscopic aspect?" What these people said before involved some Macroscopically, but generally speaking, there are still too many microscopic aspects.

   "Let me talk!" Ren Ruowei stood up and nodded slightly towards Zhong Shi, "When it comes to South Korea's economy, you have to mention the Organization for Economic Cooperation and Development (OECD)."

The full name of OECD is the Organization for Economic Cooperation and Development, referred to as the OECD. It is an intergovernmental international economic organization composed of more than 30 countries. Its predecessor was the European Economic Cooperation Organization. It was originally established to coordinate the reconstruction of Europe after World War II. Plan, and later evolved into an institution to jointly deal with the economic, social and government management challenges brought about by globalization.

  The core of this organization is to urge member states to abide by the rules or carry out reforms through intergovernmental bilateral review, multilateral supervision and parallel pressure. Simply put, an organization that sets the rules of the game in terms of export credits, capital flows, and foreign direct investment.

"The South Korean government joined this organization in 1996, that is, last year. According to the requirements of the OECD, the South Korean government must relax the restrictions on the free flow of international capital into South Korea. This has caused the South Korean financial system to owe a large amount of foreign debt in a short period of time. And these foreign debts are denominated in U.S. dollars.”

"Of course, there is another theory, that is, the South Korean government has restricted consortiums from obtaining loans from commercial banks since the 1980s. The consortia had no choice but to rely on overseas investment to support their high debt ratio. They took advantage of Korea's entry into the OECD Chance has relentlessly lobbied the South Korean government, which eventually allowed the South Korean Ministry of Finance and Economy to relax restrictions on short-term foreign capital inflows."

"Although the OECD is said to have only suggested that the Korean side relax restrictions on long-term international capital flows rather than short-term capital flows, South Korea has done the opposite, relaxing restrictions on short-term capital inflows. Of course, these are not the point, the point is due to short-term international flows Capital constraints have caused South Korea to accumulate a large amount of short-term foreign debts during the year. The level of foreign debts is so high that it is simply staggering. The information fed back by South Korean brokerages is that according to their statistics, the short-term foreign debts owed by South Korea The total amount exceeds 50 billion US dollars, and this estimate tends to be conservative, and no one knows the actual figure.”

"What's more terrible is that South Korea's available foreign exchange reserves are definitely not as large as this. In other words, once the Korean won depreciates, it is absolutely impossible to rely on the strength of the South Korean central bank to hold the Korean currency." Ren Ruowei looked serious.

After giving him five minutes to digest, Ren Ruowei continued: "Another phenomenon worthy of attention is that South Korea's balance of payments has reached 23 billion U.S. dollars. This is last year's data. I believe there should be more this year. In the face of this unbalanced trade surplus, the adjustment of the Korean won exchange rate is extremely small. I believe that the Central Bank of Korea must be responsible for it. However, this kind of intervening exchange rate under the surface will soon be discovered, and when the hedge funds find out , which is the end of the won.”

"Because of this, even if South Korea's GDP growth rate is close to 7%, the unemployment rate is below 2%, and the savings rate is as high as 34%, almost the public opinion in the market believes that the currency crisis will not affect the South Korean economy, but I personally can say One conclusion is that South Korea’s exchange rate system has entered the field of vision of hedge funds, and in the foreseeable future, they...or we will launch a merciless attack on South Korea’s exchange rate.”

  Ren Ruowei said decisively at the end. After he finished speaking, he looked at Zhong Shi, and seeing that Zhong Shi's face hadn't changed at all, he wisely added: "I just don't know what time it is."

   This sentence immediately relaxed the tense atmosphere, and the other researchers woke up from the excited state just now, and laughed one after another.

  Jong Seok didn't laugh, he was thinking about how to use South Korea's financial system to seek greater profits. It is impossible to borrow a large amount of Korean won loans from South Korean banks at this time. He vaguely remembered that the central bank of South Korea only intervened in the market for a few days, and then gave up after finding it was futile. Then the Korean won plummeted, from the average level of 800 won to 1 dollar to 1,500 won to 1 dollar, a drop of nearly 50. %. The magnitude of this depreciation is also extremely rare during the entire financial crisis in Southeast Asia.

How to establish a sufficient position before the arrival of international hot money has become the focus of his current consideration. According to the experience of later generations, around late October, international hot money will pay attention to the Korean market, and before mid-November, South Korea will Declaring the fall, in just about ten days, the speed is astonishingly fast.

  Be sure to establish a good position before them, Zhong Shi secretly thought.

   "Since everyone is so determined, let's prepare to attack the Korean won!" After a while, Zhong Shi, who had been silent all the time, suddenly spoke.

   "What?" Ren Ruowei's expression immediately became weird. He never imagined that just a small-scale research activity made Zhong Shi make up his mind to short the Korean won. "Don't think about it anymore. Although our view is that the Korean won tends to be overvalued, but in just a few days, there should be other aspects that have not been estimated."

  He has a good intention, but Zhong Shi has already made up his mind, and the rest are some details.

"No need!" Ren Ruowei regretted the words of persuasion. During this period of time, he also vaguely understood Zhong Shi's psychology. As long as the helmsman opened his mouth, there was basically no room for reversal. . Sure enough, Zhong Shi glanced at him indifferently, and then said: "Since there are so many aspects that are not conducive to the Korean economy, even I myself can't find a reason not to short the Korean won."

"Jason, Denny, Chris, you are responsible for borrowing Korean won loans from South Korea, and then selling them in the market, and the others are responsible for the forward exchange rate of Korean won. Ren Ruowei is in charge of the entire team, and the relevant quotas and reports must be submitted every day. Come to my desk. This time the attack on the Korean won has a very large upper limit in terms of positions. I will disclose an amount here, at least 5 billion US dollars. The time is set in about two months. If the Korean won has not depreciated by then, Just take back all the capital, when we lost."

  Zhong Shi stood up, and without waiting for others to refute, he waved his hand and finalized the entire general plan. The researchers had just recovered from Ren Ruowei's humor when they heard that Zhong Shi had already made an attack plan. They were stunned by the speed, and they didn't say a word for a long time.

  Ren Ruowei's face was stunned for a moment, and then he showed an expression of ecstasy. If he can make a profit in the process of attacking the Korean won this time, it will undoubtedly give him the upper hand in the competition with Ma Jiarui. Even if the attack is unsuccessful, the final loss is nothing more than hundreds of millions of dollars in interest losses, if the South Korean side does not raise interest rates significantly.

   Soon, these researchers reacted, packed up the things in front of them, and filed out one by one. They need to devote themselves to work as quickly as possible, and questioning is not the best choice for a subordinate, especially when the boss's decision-making is almost without error. In less than half a minute, the entire meeting room was empty.

  Zhong Shi sat down again, looked at the conference room that was still full of people a moment ago, and said to himself with a complicated expression: "Too big to fail? Is it really too big to fail? Humph!"

  But before he could catch his breath, Zhong Yi walked in and said to him solemnly: "International hot money has already begun to attack Hong Kong, this time is definitely not a test."

   Thanks to the book friends ANSENLV, Niu Xiaofan, the wind waiting for the mooring, forget it when you laugh, and allen_**w for voting for the monthly ticket! Thank you Xiaoxiao stupid stupid cat for the reward! Thank you July Liuyan for your vote! Everyone's support is the author's motivation, I hope more book friends can support, thank you~

  

  

  (end of this chapter)