Chapter 580: The Great Melee

Due to the Western blockade of China after the founding of the People's Republic of my country and the isolation from the international environment for too long, many international practices are not well understood at home, which is very unfavorable for domestic financial institutions to go abroad for expansion.

In fact, China has suffered a lot of losses in this regard and increased tuition fees. For example, Yang Xing remembers that in his previous life, the more famous events include "China Securities Copper Losses Hundreds of Millions of US dollars", "CITIC Pacific's huge loss in purchasing Australian dollar futures" and "CNOOC crude oil futures loss", which have become painful lessons for domestic companies to go to Maicheng in overseas financial markets.

However, because of inexperience, I was deceived and wanted to hide back from my country. The method of relying on seclusion to continue to be free is obviously contrary to the general trend of globalization and obviously it will not work. Otherwise, the country would not have spent more than ten years talking about entry into the pass and entry into the WTO, and it has only recently achieved its true results.

In addition to opening up a broader overseas market for domestic companies, the just-concluded "WTO" negotiations between China and Europe and the United States also specifically mentioned the issue of the domestic financial industry integrating the financial industry with foreign countries. Although the country has made a reasonable effort to obtain certain protection for this, the financial industry has given a protection period after the WTO, but it is not a long-term solution after all. After the protection period is over, domestic financial companies still have to compete with their foreign counterparts. However, foreign financial institutions have a hundred years of development experience, but domestic financial institutions lack the opportunity to practice new financial products. The level of financial services is recognized to be far behind foreign counterparts. Once competition is likely to be a complete failure, such reality forces the central government to find another way and accelerate the pace of financial reform.

Yang Xing suggested very early that the domestic financial department should boldly send talents to financial cities such as Hong Kong, Singapore and Tokyo to take the initiative to operate on the spot. Don’t be afraid of any losses, and must insist on it. As long as you cultivate skilled financial talents, it is more effective than how much foreign exchange accumulated. According to Yang Xing’s memory in his previous life, domestic foreign exchange reserves will rise sharply after entering the WTO. How to deal with the growing foreign exchange reserves, without the debt-related US threatening the creditor China again happens, and professional financial officials urgently need to prepare for the future. Obviously, the central government’s advice to him is as good as the flow. This $300 billion financial war has become a living textbook for domestic financial officials to experience it personally.

The US market is temporarily closed for three days, but it does not mean that the European and Asian financial markets have also come to a standstill, because the market situation in the United States is rapidly changing and strange. These domestic financial officials who have seen the world can see the ever-changing data on the display screen and can feel the tension, panic and excitement of Yang Xing, Qian Yiming and others fighting in the Asian financial storm back then, and their hearts beating violently.

According to the plan, US$300 billion has long been broken into pieces and invested in hedge funds, various financial derivatives and US stock futures trading. Some funds lurk in the US stock market in the name of industrial investment, and cooperate with hot money invested in financial markets such as London, Berlin, Singapore, Hong Kong, and Tokyo to actively short US stocks. Although the hot money flows in the international financing market every day is hundreds of trillions of dollars, and US$300 billion is not conspicuous, they act together and the stirring vortex releases signals that are enough to affect market sentiment.

There is a theory in economics that even a market with large scale and complete systems will be affected by the "herd effect". Many investors will lose their minds under the control of rumors and panic, blindly following the general trend of the market, causing the market to not look at performance, and eventually collapse and destruction.

In 2001, US technology stocks fell all the way, causing households across the United States to lose as much as $4 trillion in wealth. The weak economic growth made many people more convinced that the United States is likely to fall into an economic recession. Radical analysts such as the Stardou Research Institute even pointed out that the United States had begun to decline in the second quarter.

The sluggish U.S. economy has led to both the Dow Jones Industrial Average and Nasdaq falling this year. The U.S. economy is the backstage of the entire Western developed countries. There is a saying that the United States caught a cold and sneezed around the world. Corresponding to the U.S. stock market crash, the entire Western countries are also in panic. Japan's Nikkei index fell to its lowest point in more than 10 years, and the European Central Bank is also considering cutting interest rates to drive economic growth.

The international financial market has pessimistic views on the international economic situation this year. Yang Xing has used this psychological fire to add fuel to the fire and has also attracted many investors to short selling. Now the "911" terrorist attack has occurred, and the United States' concept as a fortress of financial security has been seriously challenged. International investors are not optimistic about the future performance of the United States. The financial market is full of pessimistic atmosphere. Investors have chosen to take off US stocks and bonds as soon as possible, and choose Swiss francs and gold, which are mainly safe-haven.

Under this pressure, on September 18, the United States encountered panic selling by investors as soon as it opened on Monday. The panic brought by the 911 terrorist attack and the market atmosphere accumulated by the US economic downturn broke out. The US stock market suffered a heavy blow, and the decline of major stock indexes reached a shocking level. Although the Federal Reserve immediately adopted a significant cut in interest rates, causing the federal funds benchmark interest rate to plummet from 3.5 to 3, the stock market still could not get rid of the situation of a crazy decline.

There is also an episode in between. Although the stock market plummeted, a strange force appeared at noon, trying to raise the stock index. Some commentators called it "patriotic purchases". It was obviously the local American forces wanted to save the stock market. Yang Xing later found out that there were shadows of large American consortiums such as Morgan and Mellon. But the so-called general trend is hopeless. The suppression of US stocks is no longer Yang Xing fighting alone, but the consensus of speculators throughout the international community. No matter how powerful the American consortium is, it cannot stop the tide of short selling.

Soon in the afternoon, the stock market fell into a tragic and bitter rain again because United Technologies issued a profit warning. The stock market led the stock market to plummetly fall by Microsoft and Intel, the former leader of technology stocks. Their stock prices fell by more than 6 today. The stocks of aviation, insurance, and companies with more businesses in the United States have all become hard-hit areas and are sold.

As investors sell off today, this selling wave has spread rapidly to the world. The declines of indexes such as the London Financial Times Index and the Dow Jones Industrial Average broke the famous decline record of the "Black Friday" stock market crash in 1987. Asian stock markets represented by the Nikkei Index also fell continuously. Taiwan, Malaysia, and Mexico stock markets even learned from the US closing market. The stock markets in the whole world did not create miracles, and a good show of rising against the trend emerged.

In addition to the stock market, the dollar exchange rate, which has been falling this year, has also been hit by international speculators. The ratio to the euro rose slightly before September, but now it has encountered a large number of options short contracts. The exchange rate of the US dollar against major international currencies immediately turned downward as soon as the market opened. Rumors are everywhere in the market that the US economy may fall sharply. Under the influence of panic, the dollar against the Japanese yen fell to a six-month low, and the exchange rate against the euro fell to a historical low of one euro against the 0.9331 US dollar.

At the same time, due to the market's concern that the Fed's continuous interest rate cuts will lead to increased inflationary pressure and insurance companies need a large amount of funds to provide high claims for the dead and survivors of the 9/11 attack, it is likely to lead to insufficient cash flow, and the price of US Treasury bonds also closed with a sharp drop. The stock market, foreign exchange market, and bond market were lost on three sides. No matter how high the "patriotic enthusiasm" is, it cannot turn the car to reverse the reality that the US economy has suffered a heavy blow. When the large U.S. local consortium saw that the rescue plan was ineffective, in order to avoid losses, it had to turn its guns and join the army that sold short.

This round of panic selling in the US financial market has been blowing for a week. The Dow Jones Index fell as high as 14.4 and the Nasdaq Index fell as high as 16, both of which are close to historical highs. Coupled with the chaos caused by the sharp drop in exchange rates and bonds, the United States lost tens of trillions of dollars in the financial market after 9/11, a large part of which fell into the pockets of speculators like Yang Xing and his collaborators.

Afterwards, we found that Yang Xing's $300 billion was at least nearly double the profit, exceeding Yang Xing's goal of "500 billion US dollars"! The happiest thing among them is Yang Xing's collaborators. The representatives sent to supervise the war all looked at the profit figures on the financial statements and cheered. Many people expressed their willingness to hand over more funds to Xingfu Investment in the future. Obviously, this is an recognition of Yang Xing and Xingfu Investment. No one in this world thinks that the money is small!

However, these are basically paper wealth. This time, the large amount of funds were in the United States and could not be concealed. The United States suffered a great loss. Of course, the regulatory authorities were not vegetarians, especially when they were attacked by terrorists and were robbed by these "financial terrorists" who took advantage of the situation. They could not swallow this tone and immediately introduced a number of temporary measures to transfer the money out of the United States immediately.

Yang Xing, who planned all this, sat firmly on Diaoyutai, hid behind Asian and European investors such as Swiss syndicates, International Hedge Funds and Rothschild, and asked them to act as shields. Because he had sold a lot of equity and debts in order to raise funds, and now he has to pay off his debts first because he has made a big profit. The dividends that have fallen into his hands are actually less than 10 billion US dollars. Although his wealth has doubled, it is not worth mentioning compared to the dividends of hundreds of billions of dollars received by other giants.

Regarding Yang Xing's behind-the-scenes approach, those big guys who act as shields to attract the attention of US regulators have no objection. This time, everyone made great contributions to Yang Xing. No one will take the initiative to confess to the Americans that this is Yang Xing's behind-the-scenes manipulation. First, even if he surrenders, who knows whether Americans will turn against each other and take back their money ruthlessly, their reputation is not good. Secondly, it is due to inner self-esteem. Most of Yang Xing's partners are old birds in the shopping mall. It is of course comfortable to follow his young man to make a big profit, but when it is spread, wouldn't it mean that their skills are not as good as others? So Yang Xing took the initiative to hide his identity and pass on the credit to Rothschild.

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Chapter completed!