Chapter 328, Opportunity for Disaster
In just one week, the people of the United States suddenly realized that the sky seemed to have changed.
First of all, there is no doubt that this is a stock market crash. As various financial media and authoritative institutions continue to release data, more and more people are increasingly aware of what has happened to the global stock market in the past few days.
Monday, October 19, 1987, this was a day worthy of the people of the whole country. The New York stock market on Wall Street saw a stock plunge, and the biggest collapse in history broke out. The Dow Jones Index fell 508 points in one day, a drop of 226, setting a record high in a single-day decline since 1941. Within 65 hours, the New York stock index lost $500 billion, its value is equivalent to one-eighth of the country's annual GDP, and it is directly equivalent to the entire France!
The most direct result of this is that countless middle-class families suddenly lose huge amounts of property, countless mortgages, car loans and various loans cannot be returned in time, a large number of enterprises will fire employees, and a large number of residents will lose their jobs overnight!
Of course, not all families will be difficult to maintain, because not everyone will bear huge debts, and not all companies will fire all employees. Of course, many small and medium-sized enterprises are indeed immediately in business difficulties. Many newly recruited employees and ordinary white-collar workers have received a resignation letter, such as the express logistics industry, chain fast food restaurants, and supermarkets industry. They even dismissed a large number of employees this week. No matter when, the most suffering will always be the vulnerable group.
But at the same time, media around the world have moved. They can be said to be the industry in the world that is least afraid of economic crisis, because the more this time, countless news that needs to be reported will burst out in every corner of the world. No matter how an individual is affected by the economic crisis, he will definitely not lack the change from a newspaper, and secondly, he needs to know the current news more than anyone else, so this gives many media a chance to fully express themselves.
How many years have passed since the Great Depression in the late 1920s, how many media have not adopted black and white layouts?
Fifty years have passed.
In just one week, it is not enough to make most people come back to their senses. Although they understand the meaning of stock market crashes, some people were pessimistically afraid of the arrival of a major stock market crash on Friday 16 last Friday, but when this scene really happened, it was still not something that many people could easily accept.
Because, this hasn't happened again in the United States for fifty years.
The late 1950s and the entire 1960s were the "golden period" of US economic development. The national economy continued to grow steadily, and the inflation rate and unemployment rate dropped to very low levels. By the 1980s, the stock market had experienced a full fifty-year bull market, with stock market value soaring from US$2472 billion in 1980 to US$5995 billion in 1986, easily achieving magical changes that doubled.
Since 1982, the stock price trend has continued to rise and the trading volume has increased rapidly. The finance department of the business school has emerged in large numbers, with Wall Street surging people day and night. Many research institutions are proud and excited to study every stock in the US stock market. Many financial media magazines led by the Wall Street Journal are subtly reducing reports on the outside stock market. Because for Americans, their own stocks are enough to attract all their energy.
Unexpectedly, something suddenly happened.
Of course, all kinds of measures have been implemented since Tuesday, and even as early as the closing day of Monday, governments and related institutions that would not stop operating for a moment were already saving the stock market at all times.
The Hong Kong stock market announced a four-day suspension on Tuesday, which was Hong Kong stocks. West Germany announced a reduction in securities repurchase rate, while the G7 began to discuss how to provide liquidity to the financial system. It was all international. The international sector is important, but for ordinary Americans who suddenly became poor overnight, what they care most about is the measures of their own authorities.
On the day of the collapse, all walks of life in the United States had already had extremely strong reactions, with radio, television and newspapers publishing a large number of reports and comments. The largest part was the original statement issued by the White House after the closing. The general idea was that the country's economy was in good condition, employment rate was at the highest level, production was increasing, and trade balances were improving. The Federal Reserve recently issued a speech saying that there was no sign that inflation would occur further.
But is this true?
What countless public learned was that researchers at the New York Stock Exchange spoke, saying that they hoped that this situation would not continue, and other relevant personnel also made speeches to stabilize market sentiment.
Only a very small number of people know that on the evening of October 19, President Reagan immediately recalled Finance Minister Baker, who was visiting West Germany, and Fed Greenspan, who was away from home, to discuss countermeasures and pay close attention to the development of the situation.
Then, the first day after the nightmare officially began, on Tuesday morning, banks stopped providing credit to professional brokers and traders because they were worried that those people would go bankrupt and could not get back their loans. Professional brokers no longer had enough cash to pay margin to the exchange to maintain trading freedom, because on Monday, they had bought excessive stocks to stop the stock from falling.
So the first thing that is to bear is that these professional economists are unable to participate in the second day of stock trading, which will undoubtedly contribute to the continued decline and long-term downturn of the stock market. At this critical moment, the Federal Reserve delivered a historic speech, supporting banks to continue to issue loans to stock traders and will immediately inject funds into the banking system.
So immediately afterwards, the two major commercial banks immediately announced the reduction of preferential interest rates. Chemical banks quickly increased securities loans of $400 million, and Banker Trust also said that in any case, it would guarantee the needs of customers' funds. Those listed companies listed on exchanges slightly restored their confidence, and President Reagan and Treasury Secretary Baker also spoke on this, repeatedly pacifying all citizens.
After taking these measures, the stock market did rise by 100 points on Tuesday, and surged by nearly 200 points on Wednesday compared to Tuesday. Unfortunately, when Thursday arrived, the stock price fell by a full seventy points. So, when Thursday evening news was broadcast, President Reagan made his third televised speech, striving to cooperate with the whole nation and prepare for a fight against the stock market crash.
Then, at the end of the week, when Friday's closing comes again, it was time for major media to get busy and repeatedly evaluate the gains and losses that have come this week.
Then, just when summarizing, a very interesting situation was first discovered by the Wall Street Journal, the New York Herald and other century-old newspaper media on the East Coast.
In fact, this is a continuous report, but during this whole process, few people have the energy to pay attention.
A large retail investor is "rescuing the market".
No one cares about how many times Alice has visited the stock market before, and everyone knows that she hasn't been idle this week.
First, Coca-Cola, which fell 365 on the first day, just opened on Tuesday, the girl invested 50 million US dollars in stake. Then, as the overall market gradually improved, this extremely wise investment from a hindsight perspective immediately brought me millions of dollars in net profit.
The problem is that when the market fell again, Alice King took advantage of Coca-Cola's short position before the decline, and did not suffer any losses. On Thursday when it began to recover slowly, she reinjected the principal of 50 million yuan into this stock, and then earned profits as the market once again.
Similar situations occurred in several stocks and attracted the attention of many financial people, because her investment was huge and her operations were very frequent. Just when she bought Coca-Cola's 50 million shares on Tuesday, she directly invested $3 million to buy all the shares of a small TV network, and did not sell it until the weekend.
JPMorgan Chase immediately conducted a detailed investigation into the deal. Englare TV network is not large in scale and ranks medium among countless TV networks of different sizes across the country. Of course, it is even more impossible to compare with the "five majors". As a "fan stock" on the Nasdaq Exchange, its market value is not high, and it is no surprise that it was bought by only three million dollars after the stock market crash.
Someone investigated the acquisition.
But this is just routine.
There are too many things worth investigating, even if the other large investments of King Alice herself are enough to attract many people's attention.
After realizing it, people from Nasdaq discovered that Alice had sold a large number of Microsoft stocks as early as October 1st. Of course, as the second largest shareholder of the company, she could not be spared when the market value of the entire company evaporated by more than 3 billion yuan. But when that historic Monday arrived, her selling behavior still avoided at least 207 million yuan in losses for herself.
"Two millions?"
In Manhattan, New York, the "Time Life" building, Fortune Magazine's headquarters, a gray-haired lady read the research report and murmured: "Is this girl so rich? The losses avoided by selling stocks are as valuable as before?"
As she murmured like this, she looked directly at the bookcase behind her. In the upper left corner of the only mahogany bookcase in this private office, a magazine was placed there, and the cover was printed with a photo of King Alice's smiling upper body. To be continued.
Chapter completed!