Chapter 567 The Giant Falls (4)

What many bigwigs on Bear Stearns' board of directors would never have imagined is that Joseph Lewis, the largest individual shareholder of Bear Stearns, is in New York at this time, and he is still not far from Bear Stearns, the headquarters of Quantum Fund. .

   "George, what is your purpose?" Lewis asked Soros lightly.

  Joseph Lewis is five feet two inches tall, with brown hair and sharp eyes like a falcon, but the gold-rimmed glasses on the bridge of his nose dilute this shrewdness and sharpness a lot, adding a bit of bookishness. As a super-rich man who started out as a foreign exchange trader, he is no stranger to the quirks of the stock market. In fact, when Soros approached him, he knew that the hedge fund manager wanted to short Bear Stearns' stock.

  As the largest individual shareholder of Bear Stearns, Lewis should have firmly refused, because shorting Bear Stearns stock would shrink his wealth. But this billionaire has his own considerations: First, he is optimistic about the long-term profit prospects of Bear Stearns, and believes that the current low price is a good time to buy bottom; Satisfied, hoping to hold more shares, and Soros's plan to short Bear Stearns is in his hands.

  And the most important thing is, by selling to the other party for a good deal, and allowing Soros to help manage part of the funds, why not do such a good thing? You must know that there are countless billionaires in this world, waving banknotes to let Soros manage the funds but not getting in, and now I have such an opportunity, how can I miss it?

Although Joseph Lewis started his business by trading foreign exchange, when his funds reached a certain level, he could not help but consider diversifying his investments, because it is very dangerous to put all his eggs in one basket. Buying Bear Stearns stock It is also out of such considerations. Of course, if the funds can be managed by top hedge funds, especially managers like Soros, it is naturally the best choice.

   It’s just that if Joseph Lewis wants to know the real thinking of Soros and others, that is, he is not shorting Bear Stearns for a while, but is planning to completely kill Bear Stearns, he will not lend this part of the stock at all.

  But there are so many ifs in this world!

"Of course I shorted the Bear Stearns stock price and took the opportunity to make a fortune!" In front of the spacious and bright floor-to-ceiling windows, it was Soros standing with Lewis and looking into the distance. He replied, "Joseph, you also know that I am a person who pursues profits, so whether I am long or short, I am pursuing the maximization of profits."

   "But the stock price has fallen to the current level, should it have reached what you hoped?" Lewis' tone was a little impatient, because the recent decline in Bear Stearns' stock price is really a bit severe. In just one week, the stock of Bear Stearns fell from around US$70 per share to the current US$50 per share, a drop of nearly 30%, which also means that he lost more than 30% of the assets he bought in Bear Stearns.

  Anyone who encounters such a situation cannot calmly talk to short sellers, and Joseph Lewis is no exception.

"Relax, Joseph. Although the current stock price has fallen severely, it is far from what I expected." Soros did not answer immediately. He poured two glasses of Scotch whiskey at the bar and handed Lewis a glass. After shaking for a long time, Only then said with great interest, "Maybe you don't know much about this market, but you should have heard about my operating style. If I don't have more than double the profit, I won't sell it easily!"

"What?" Lewis, who had just poured the whiskey into the glass, coughed violently. He was shocked by Soros' words, "Double the profit? More than that? My God, George, you are so surprising gone."

Joseph Lewis, who has been immersed in the foreign exchange market all year round, encounters daily market changes of a few basis points. It is rare for a market to have a change of about 1%, and the exchange rate that rises or falls by about 10% within a week The change can almost be called a catastrophic change in the foreign exchange market, let alone a 30% drop in a week!

  Although foreign exchange trading can increase leverage by several times or even tens of times or hundreds of times, leverage itself is a double-edged sword, and Joseph Lewis has always been cautious about it.

After coughing for five minutes, Joseph Lewis calmed down his breath, but then Soros' words made him uneasy again, "But Joseph, at that time, you can take advantage of a large share of the stock, as long as it is controlled within 10% , I believe it should be able to reduce the cost of many of your early positions. When the stock price rises in the future, it will be very simple for you to profit from it, won’t it?”

  Before Joseph Lewis' investment company held about 7% of Bear Stearns shares, because it was purchased last year, and the price is higher than the current one. But now, if you know when the stock price of Bear Stearns is at the bottom, then you can buy a part of it at that time, which can greatly reduce the cost of building a position. The price at the time of purchase.

  Lewis quickly calculated in his heart, and after confirming that this move could reduce the cost to a certain number, a look of joy appeared on his face. In this way, he not only satisfied his desire to increase his shareholding in Bear Stearns, but also reduced all costs. Although he had to pay an extra part of the funds, in the long run, all of these would be rewarding.

   "George, you really surprised me!" Lewis admired sincerely. In fact, after Soros contacted him, he began to pay close attention to the news about Bear Stearns in the market. The result naturally opened his eyes. The trend then spread to Europe. With the closing of the transaction, the stock price of Bear Stearns plummeted, and the seemingly endless selling orders appeared in the market, which shattered the confidence of the bulls within a few days. And now, everything seems to be a foregone conclusion, but since Soros said that he still wants to suppress the stock price, he must have a plan, which aroused Lewis' curiosity, "But what I want to know more is, What are you going to do next to get Bear Stearns down to around $30?"

"Wow, Joseph, you are really an expert!" Soros put down his wine glass, gave Lewis a thumbs up, and replied with a smile, "Of course it's the same routine as before. Didn't you notice, whether it's Bloomberg or Hasn’t the Wall Street Journal, or big media such as the New York Times or the Washington Post reported negative news about Bear Stearns?”

   "What?" Lewis was really shocked this time, "George, do you know what you are talking about? Do you want to say that you can control what these media say, or when?"

  The Western world pays attention to freedom of the press, that is, it is okay to express any views you want. But the concept of freedom of the press does not mean that everything you say can be presented to the public. In fact, both editors and anchors have deleted and selected the broadcast content. Without affecting the authenticity, they only publish those Something newsworthy in their minds. The news affiliated to different organizations and different anchors (editors) has different interpretations because of different values ​​and political stances. That is, on the basis of the three principles of objectivity, authenticity and timeliness, news It also has a position.

   When it comes to different news organizations, this position is even more obvious, because there is a shadow of a consortium behind every news organization, and the reports will be more or less affected. But Soros in front of him was able to control most of the mainstream media from reporting negative news about Bear Stearns. His energy and influence immediately impressed Lewis. You must know that even the president of the United States does not have this kind of energy, and only capital can do this.

  In fact, Joseph Lewis was wrong. Soros did not have this energy at all, nor did he have such a great influence. The reason why many media did not report the news of Bear Stearns was mainly because the entire financial world had not released similar news, because most analysts or traders could see that there was a financial crisis surrounding Bear Stearns. A lot of wrestling is taking place. Before they figure out who their opponent is, it is inconvenient for them to speak out on this issue, because if they speak out, it means standing in line and it is bound to offend one of them.

  On Wall Street, making a fortune silently is the kingly way.

Naturally, Soros would not expose Lewis's conjecture. He just smiled and pretended to be mysterious and said: "Yes, this was originally part of my plan. I believe that in a few days, all kinds of inside information about Bear Stearns will be released." The endless streams will surely shock the entire Wall Street, and their board of directors will definitely not sit idly by at that time, and when they come out to 'refute the rumors', it's time for you, Joseph, to take action!"

"It's the same trick again!" Lewis murmured with his head down. At this moment, the mobile phone in his arms rang. After pleading guilty, Lewis walked two steps quickly and picked up the phone while Soros was watching. Picked up the phone, "Gordon, it's me!"

  Soros turned around wisely, pretending to be indifferent. But what Lewis never imagined was that the old fox's ears had been erected long ago, and he was trying to catch every word he said.

"They are indeed in trouble? They want to mortgage the headquarters building?" Lewis' exclamation sounded quickly, but he immediately realized something, lowered his voice and continued, "The current situation is not that bad...Okay , I see, keep in touch."

  Gordon is Lewis' agent. After attending Bear Stearns' board of directors, he immediately informed Lewis about what happened on the board of directors. Lewis was particularly surprised by the fact that Kane and Schwartz wanted to mortgage the Bear Stearns headquarters building.

   "Is everything okay?"

   When Lewis answered the phone and walked to the French window again, Soros didn't ask what the other party said, but just greeted him lightly.

  Lewis was taken aback for a moment, then realized that his voice might have been too loud, and immediately replied with a little apology: "Please forgive my rudeness, Mr. Soros. Thank you for your concern, everything is fine."

  Soros nodded silently, turned his head and stopped entangled in this topic, and talked about some irrelevant issues. It's just that what Lewis didn't notice at all was that Soros had already seen the joy that showed between the corners of his brows just now.

  …

   On the 11th, several mainstream media outlets in the United States reported that Bear Stearns may be in a "liquidity tension" situation, which immediately caused a strong panic in the market. Many large and small institutions and individuals, including traders, have requested to withdraw funds from Bear Stearns, because they are afraid that if Bear Stearns goes bankrupt, their funds will be frozen. Institutions in the United States that deal with Bear Stearns have also instructed their traders not to make deals with Bear Stearns.

  Affected by this news, Bear Stearns’ share price fell sharply again, falling 19% throughout the day, from $51 the previous day to $41.3 at the close, and the shareholders who held it suffered heavy losses.

On the 12th, more details about Bear Stearns' "liquidity tension" were revealed, especially the proposal that the Bear Stearns board of directors had mortgaged the headquarters building two days ago was also revealed, which exacerbated the market's turmoil. panic. The phenomenon of withdrawing funds from Bear Stearns was even more serious. Calls from all over the United States almost overwhelmed Bear Stearns' customer service system, and the amount of funds in their accounts was also rapidly reduced like a stream of water.

  Bear Stearns is in danger!

In the past two days, Alan Schwartz has been anxious like an ant on a hot pot. Although he has repeatedly assured their large institutional clients that there is no problem with the liquidity of Bear Stearns, the other party still wants to take it away and put it in Bear Stearns. funds, regardless of whether these funds are in profit or loss. For the past two days, Bear Stearns has been like a patient bleeding all over his body. Although Schwartz ran around and unblocked him up and down, the blood still flowed unstoppably.

  In just two days, about 30 billion US dollars of funds were withdrawn. At present, Bear Stearns still has less than 30 billion U.S. dollars in capital reserves, which is enough to guarantee the normal operation of Bear Stearns, but who knows what will happen in the next two days?

The only thing that makes Schwartz feel lucky is that the funds placed in the Bear Stearns accounts by the hedge funds on Wall Street, Greenwich and Long Island have not been withdrawn, and this part of the funds is as high as 20 billion U.S. dollars, accounting for the current More than 60% of the total capital of Bear Stearns. Schwartz, who has not yet understood it, even feels a little grateful to these hedge funds.

   Now is the time to publicly "debunk the rumors," Schwartz told himself.

   Thanks to book friends Xing Xiyuelang and Henry_Fung for voting monthly!

  

  

  (end of this chapter)