Chapter 437 overwhelming criticism

   "Good job, George!"

  After the European and American markets closed, Soros, Julian Robertson, Druckenmiller, Paul Tudor Jones and others gathered in DelPosto, the most famous Italian restaurant in Lower New York City, to celebrate.

   In the past few hours, the Dow Jones Industrial Index plummeted from the highest point of 8556 points to the closing point of 8425 points, a full drop of 131 points, a drop of 1.53%.

  In the past month, the Dow Jones Industrial Index fell from a peak of 9,000 points to less than 8,500 points today, a full drop of 500 points. These are nothing, and more importantly, due to Russia's reasons, the Dow Jones Industrial Index has no hope of rushing to 9,000 points again in the short term.

  The Russian market that Soros named in the article saw a drop of 7.02 points on this day. But readers, don't underestimate the 7.02 points. You must know that the RTS index in Russia is only around 100 points, and the drop of these 7 points is already a 6.49% drop.

   Compared with the 571 points in October last year, the Russian stock market has lost 80% of its market value in less than a year, which can be described as the most tragic decline in the global market. As soon as Soros's remarks came out, some analysts commented that although the depreciation of the currency may stimulate Russia's exports, Russia has not always been known for its exports. Outflow, so the Russian stock market may continue to fall, or even fall to 50 points.

  In fact, Russia’s capital market has just started, and there are very few listed companies, so investing in these companies does not have much practical significance. The reason why hedge funds value Russia so much is that in addition to shorting their currency, more energy is still placed on their treasury bonds with frighteningly high interest rates.

   Now, they have finally succeeded in once again provoking the market's doubts about the creditworthiness of Russian national debt, or the expectation of a default on Russian national debt.

Julian Robertson first raised his glass and nodded slightly at Soros across the table to show respect, "Not only New York, London, but even Frankfurt's indexes are falling. It seems that this wave of expectations about Russia's prospects Serious indeed. But this way, the more likely we are to hopefully make a profit!"

  He said confidently.

   Regarding Russian government bonds, the market is currently speculating whether it will default. Will the IMF led by the United States sit idly by? Although they are very clear in their hearts that this national bond has several to dozens of times the risk of default compared with other national bonds, but because of such a serious default risk, the yield of Russian government bonds has increased significantly. The possibility of making a profit also increases greatly.

  As an example, a one-year Treasury bond contract with a face value of $100 has a coupon rate of 5% to maturity. And if the market's one-year interest rate level is 5%, then the normal circulation price of the national debt is around US$100. For investors who simply invest in government bonds to eat the coupon rate, and speculators who benefit from speculating on the price difference of government bonds, the yields of the two are basically the same, both of which are 5%.

However, if there is a rumor of a default on this type of national debt, the price of this national bond will be far below 100 for investors who simply invest in national debt or for speculators who benefit from speculating on the price difference of national debt. dollar up. Because it is possible to lose all their money after maturity, they can only reluctantly part with them and sell these national bonds at a low price.

  Then here comes the problem, if these treasury bonds are sold at $90, and they can be cashed out normally at maturity, the final yield of the party who bought at a low price is (105－90)/90=16.67%. This figure is much higher than 5%.

  As for the coupon rate of 30% or more on Russian national debt, if the national debt can be cashed at normal maturity, this number can be much higher than 16.67%, and it can even block everything!

   Now, that's what the hedge funds in New York think, and that's what they think. They firmly believe that because powerful economies such as the United States and Europe will not allow Russia's nuclear weapons to spread around, even after Russia has made it clear that it will not comply with the IMF's economic reform measures, these countries will still help Russia through the current crisis. difficulties.

Therefore, the opportunity they thought came. They took advantage of the market panic to absorb a large number of low-priced Russian government bonds. When Europe and the United States help, these government bonds will return to normal price levels, and then they can make a lot of money. a sum.

   According to the internal report of Quantum Fund, the final yield of this national bond is very likely to exceed 50%. For this reason, they invested a total of 3.5 billion US dollars in positions, hoping to use this opportunity to achieve the most profitable transaction in history.

  This is why Soros even risked offending the Russian government by going shirtless himself!

  If you don't enter the tiger's lair, how can you get a tiger cub!

As for Julian Robertson, Paul Tudor Jones and others, they all think so, and they all operate in this way. Apart from Hong Kong, they also invested huge positions in Russian national debt .

   Of course, in addition to these few, other funds on Wall Street have also invested in a large number of positions, and the entire Wall Street is betting on Russian government bonds. No, this statement is not accurate. It should be said that the entire Wall Street is betting on the IMF, betting on the reaction of the United States and Europe to Russia.

  That's why they hired a large number of retired politicians from Europe and the United States to fully and detailedly study the various risks and serious consequences of the Russian national debt default. In the end, they agreed that those in power in Europe and the United States would not allow Russia to default on its national debt, because the consequences would not be something they could afford.

   "How could a nuclear power default?" This sentence also began to circulate in Wall Street.

  After the Russian market fell, several people couldn't wait to sit together and began to celebrate each other.

   "It's just a pity that the Hong Kong market did not fall as expected!"

   Several people chatted happily while eating delicious food such as black truffles and caviar. Words such as "million" and "billion" that came out of their mouths from time to time made the waiter who served the dishes tremble with fear. Just when he was full of wine and food, Druckenmiller suddenly let out a long sigh and said this sentence.

  Although Druckenmiller is not as famous as the others, he is definitely qualified to sit with these big shots. In fact, Druckenmiller has made many investment decisions of the Quantum Fund in recent years, so in the eyes of professionals, his weight is almost equal to that of Soros.

In the dim and blurred lights and the melodious and light music, several people were very excited again, and they were a little drunk, so they didn't hear Druckenmiller's words clearly for a while, but after he repeated it, several people The drunkenness in his eyes immediately disappeared without a trace.

"Wow, that's a problem!" Soros wiped his mouth with a clean white tablecloth, snapped his fingers in the air, motioned for the waiter to take away the plate, and said, "I really didn't expect that the Hong Kong government would take the risk. At the risk of being criticized, they don’t want a ‘free trade port’?”

"This is indeed a serious problem!" Julian Robertson also said, "Although we have anticipated this kind of government intervention, we think it is unlikely. But who would have thought that the current Hong Kong government would actually Just for real? Oh, my God, this is definitely enough to make them feel bad for a while.”

"That's right!" Paul Tudor Jones also echoed, "I always thought that Hong Kong is known for its degree of economic freedom. Now in order to save the capital market, they would give up this advantage. It is really unbelievable. This established rule Or, with a government that is playing games, how much freedom can there be in the market under it? God, they really want everything!"

Druckenmiller looked at a few big men who seemed to be drunk and half-awake, talking insignificantly, and felt a little anxious in his heart. After finally waiting for Paul Tudor Jones to finish speaking, he immediately interjected: "Mr. Ladies and gentlemen, the problem is not here. Because of the intervention of the Hong Kong government, they will definitely boost their confidence in the short term, and now our question is, can they still successfully capture Hong Kong?"

"Although the current index is far from the average position where we opened positions, it is difficult to guarantee that they will not increase the index to the level where we opened positions in the next half month. If the Hong Kong dollar cannot be attacked by then, plus The loss on the Hang Seng Index futures, we have really declared failure in the Hong Kong market!"

   "Don't you understand the seriousness of the matter? Gentlemen!" He almost roared out the last sentence.

   "Relax, Stanley!"

Seeing that Druckenmiller was really anxious, Soros hurriedly spoke out to appease his number one assistant, "My old man, you should also be very clear that the Hong Kong government has to support the stock market on the one hand, and has to deal with it on the other. The pressure from the Hong Kong dollar market is undoubtedly a war from both ends. Think about it, my friend, as long as we continue to stick to the tactics of attrition, suddenly step up the offensive one day, and consume its funds from two aspects, until then , I am afraid that no matter how the Hong Kong government boosts market confidence, it may not be able to offset the negative impact from the Hong Kong dollar!"

"What do you mean?" Druckenmiller looked puzzled, lowered his head and thought for a while, and when he raised his head again, he found that several other people were staring at him motionlessly. Thinking, "Suddenly come at a certain time, so that the Hong Kong government's rescue measures will be in vain? Do you have any plans?"

"That's right!" Julian Robertson nodded appreciatively, and after glancing at Soros, he saw the other party nodded slightly, and then continued, "Stanley, we do have a preliminary plan for Hong Kong." Now that you have said it, you can discuss it and see what you can add. The specific strategy is that even if the Hong Kong government takes action, we will continue to attack, because this and the Russian market are two links in the same strategy. However, the current market is reversed, we can only temporarily avoid the limelight, and wait until the right time to exert force. And if it is launched again, it may be necessary to carry out multiple strategies together, and strive to achieve the greatest profit effect!"

"Futures index?" Druckenmiller reacted immediately, and blurted out, "August futures index, don't plan to transfer positions, just fight the Hong Kong government on the last calculation day of August? I understand! But then What? Shouldn’t we just attack the Hong Kong dollar?”

"Of course we will attack!" Paul Tudor Jones interjected, "This is a long-term plan! As long as we can obtain enough benefits from the Russian market, the scale of funds we can use will be enough to attack again In the Hong Kong market, even with the support of the Hong Kong government, we can fight them for a long time and slowly drain their funds! Of course, in order to teach them a lesson, we must let them know in August, intervene What will happen to the market!"

   "Like Russia?" Druckenmiller was lost in thought. After a long time, he suddenly said, "Are you going to make a public appeal in the newspaper to put pressure on the other party?"

"That's right!" Soros clapped his hands and laughed loudly, "Since Stanley, you have thought of this method, then you will publish an article in your name to exert the most powerful pressure of public opinion on the Hong Kong government, so that They know that a mere Hong Kong government is not taken seriously by us."

  Drukenmiller immediately showed a wry smile on his face, "It's just me, I'm afraid I can't do it? George, you must be joking, I don't think I have any prestige."

"Don't underestimate yourself! Stanley, I'm serious. But since you have scruples, if other celebrities stand up and speak out, you shouldn't have any scruples!" Soros looked serious and serious Said calmly, but soon, an unfathomable smile appeared on his face, which made Druckenmiller's heart tremble.

   "Who? Who could it be?" Druckenmiller asked quickly. He could tell that the person who could make Soros say famous would definitely not be an ordinary person. As for who it was, he couldn't guess for a while.

  Soros smiled, but did not answer.

  …

  After Cen Yinquan's remarks about saving the market were published in the newspapers, it was like throwing a huge boulder into a lake that was originally not calm, which immediately caused an uproar. Soon, in the global economic circles, there was a wave of criticism against the Hong Kong government's rescue of the market, among which Alan Greenspan, chairman of the Federal Reserve, was the most famous and most influential.

"The Hong Kong government's intervention in the financial market will cause the public to lose confidence in their Monetary Authority, which is contrary to the free economic philosophy that Hong Kong has always pursued. Moreover, the most frightening thing is that the Hong Kong government's intervention is unlikely to succeed, and will instead pay taxpayers wealth!"

   Greenspan said so.

   In addition to him, several Nobel laureates in economics published articles one after another in the following days, criticizing the Hong Kong government's bailout behavior.

  As for the criticisms of other people who are not well-known in the financial industry, let alone how many there are!

   Thanks to book friend Huang Tianlong for voting for the monthly ticket!

  

  

  (end of this chapter)