this man is not calm

Chapter 506 The Leeks Outside

With the current scale of the domestic Internet market, it cannot accommodate much capital inflow. The only track that is worth looking at is e-commerce, which looks very promising and has very intuitive monetization.

I chatted with my second uncle Mei Yingnian for a long time. Other guests left one after another, and the two stayed until 4:30 in the afternoon. The total transaction volume on the first day of trading was released, which was less than 4 billion. Most of it was provided by oil and liquefied natural gas. The transaction volume of other commodities was not large, but it did not mean that they were not important.

As for the handling fee of less than one million, after deducting the operating costs, it is not enough to cover 80% of the operating costs. In other words, it is a loss from the start.

If you take into account the various fees charged, the initial investment costs, the personal connections used and the time spent, there is no doubt that the losses were huge.

“It’s better than I thought.”

Faced with such a situation, Jin Shang was also very optimistic; Mei Yingnian also agreed with Jin Shang's views and expressed satisfaction.

You should know that the total daily trading volume of the Beijing Stock Exchange on the same day was only 7 billion. After so many years of accumulation, it was less than twice that of the Hong Kong Stock Exchange on its first day of trading.

The transaction volume of the commodity trading market naturally has its natural advantages. The massive transaction volume of oil and natural gas cannot be compared with the secondary stock market which has not yet developed and grown. From this perspective, the Hong Kong Stock Exchange is not a failure, it just has not yet passed the pioneering stage.

Mei Yingnian, who was with Jin Shang, was looking at the various data of the exchange and chatting with Jin Shang, and accidentally saw the delivery note in his nephew's hand.

"Hey, why did you buy so much dimethyl ether?"

"The company's dynamic research team has developed a technology that uses dimethyl ether to generate a fuel additive with properties similar to diesel. What's even better is that this thing is a very good solvent and can be freely mixed with standard diesel, biodiesel, methanol, ethanol, liquid wax, and ether substances..."

“Artificial diesel additives?”

"Ok!"

After confirming his uncle Mei Yingnian's judgment, Jin Shang responded naturally:
"This liquid wax alcohol ether additive is miscible with various fuels and has a significant price advantage. In addition, domestic diesel is a strategic reserve material and is sometimes in short supply in some areas. Therefore, when developing diesel engines, dual-fuel engines, multi-fuel internal combustion engines, and flexible fuel engines, we must consider the issue of cheap substitutes."

As for various operating qualifications, there is no need to worry about that, we have obtained all that can be obtained.

So far, the energy and power company under Jinxi Culture is the largest private commercial entity in the country engaged in the manufacture, storage, transportation, sales and use of non-standard fuel oil.

Other companies cannot openly sell non-standard fuel oil at gas stations, but companies under Jinxi Culture can.

As for how to "mix" 2 million tons of green biodiesel using less than 500,000 tons of recycled "gutter oil" in cities next year... no, this year, that is a problem on another level.

Ninety percent of biodiesel is shipped to Western Europe and sold, and the rest is used for self-use, meeting the requirements of green, low-carbon and environmental protection, and obtaining various subsidies and preferential policies.

Don’t ask Jin Shang why he did this. The senior executives of the oil company and the leaders of the energy, foreign trade and industrial information departments were almost hinting to Jin Shang: Young man, don’t be too honest when doing import and export business.

Just like banknotes, can you tell which one is clean and which one is dirty?
Similarly, as long as it meets Western European biofuel standards, who cares whether you are “green” or “not green”?
Don't worry that foreign importers will lose money, they also make money. After receiving the goods, they just need to resell them or package them a little, and then they can sell them at a higher price and make a lot of money.

Even in China, as long as the operating vehicles under Jinxi Culture have green license plates, no one will care what proportion of "grey alcohol" the biodiesel in the fuel tank contains, and no one at the gas station will check how many liters of polyoxymethylene dimethyl ether are added to the fuel filled in the car.

To put it bluntly, these things can be considered a secret fuel additive that improves combustion performance.

Just like ethanol gasoline, it has excellent anti-knock performance, complete combustion, superior power performance, and can reduce carbon deposits. The only disadvantage is that it is "not resistant to burning". The mileage of the same volume of ethanol gasoline is slightly worse than pure gasoline. Many drivers have complaints about it. It's not that there is much criticism about ethanol gasoline, but they are somewhat dissatisfied with the fact that gasoline mixed with ethanol and pure gasoline are sold at the same price.

"Dimethyl ether..."

Mei Yingnian looked up the current prices of major commodities. The current price of dimethyl ether is slightly higher than diesel, but much cheaper than gasoline and liquefied petroleum gas.

Compared with the current prices, it is definitely not cost-effective to use dimethyl ether and its polymers to replace diesel.

But if you take into account road maintenance fees, vehicle and vessel taxes and various expenses, it will be a different story.

The core logic is that gasoline and diesel are vehicle power sources, while methanol, natural gas and dimethyl ether are industrial raw materials. The two are completely not on the same level in terms of tax burden.

What's more, as oil prices rise sharply in the future, the prices of refined oil products will naturally rise, and the advantages of various alternative fuels will become more and more obvious.

"I roughly understand your business logic for getting involved in the energy sector. Whether it's fossil energy or electricity, you have never thought of completely replacing the traditional model. Instead, you want to reduce dependence on fossil energy, save costs, and enhance energy security through diversification, alternative solutions, and low-carbon and environmental protection. And this... happens to coincide with the above idea."

Jin Shang smiled silently as he looked at his second uncle Mei Yingnian who suddenly realized what had happened. After he had digested the information for a while, he spread his hands calmly and said:
"If big businessmen like us don't keep up with the times, cooperate with policies, take advantage of the situation, and follow the trend, how can we make a lot of money and continue to grow bigger and stronger?"

The logic of small business... and big business are completely on a different level.

To put it bluntly, if Beijing did not need to introduce private capital, revitalize idle land, accelerate real estate development, and promote urbanization, even with Jin Shang's introduction, my second uncle Mei Yingnian's entry into the Beijing real estate market would not have been so smooth.

"Don't go against the times..."

Mei Yingnian sighed softly and said this.

These were the words of instruction from his benefactor and father-in-law, and Mei Yingnian has always kept them in mind.

Taking stock of Jin Shang's business empire, all of them are dancing with the wind in line with the general trend, including the Internet, green energy, agriculture, cultural media, and maternal and child health care.

The topic returned to the Stock Exchange. Mei Yingnian roughly calculated and asked:
"Based on the current trading volume, the Stock Exchange will probably lose over 100 million yuan a year. This amount... is not unaffordable. A share from a few companies is actually not much. The problem is..."

“Can it be done? Is there any hope of making a profit?”

Jin Shang understood and continued,

“Losing money at the beginning is not a big deal, but if it keeps on losing money, there must be a core demand that allows everyone to unite and continue to support this exchange.”

"For example... the right to set prices for goods?"

“This is still too far away. My idea is that the most important thing is to help core members, traders and customers avoid risks in commodity trading to the greatest extent possible.”

Mei Yingnian immediately understood Jin Shang's plan and echoed:

"Strengthening the ability to fulfill contracts, that is, ensuring that everything from the production, transportation, storage to delivery of goods is smooth and unimpeded, can win the trust of customers."

The Stock Exchange is essentially a place for buying and selling things. On the surface, what is traded are asset-securitized tickets, but the commodity trading behind them is the basis of everything. Not all member customers come here to speculate in futures and spot goods and make quick money by taking the price difference. A large number of them really come to buy things and want to get the goods they want at the most stable price possible.

In fact, Jinxi Culture is such a client. If you really want to rely on financial operations to earn extra spreads, the capacity of domestic exchanges is too small, and it is far less profitable than Jinshang going to the international market.

To put it bluntly, the reason why so much money is invested in the Stock Exchange is to obtain a stable supply of energy and raw materials and prevent losses caused by short-term price fluctuations.

Stabilizing commodity prices on the Hong Kong Stock Exchange, increasing trading, and becoming a "quasi-market maker" are just incidental.

When it was dinner time, Mei Yingnian and Jin Shang were still in high spirits, so they went to a private room in the staff cafeteria and talked while eating.

"Ashan, one of our bank's main means of attracting deposits is the ability to manage wealth on behalf of customers. You are also aware of this. A large part of the profits come from your 'consultant's' products, or even simply invested in your private equity. Those young people with various 'managers' titles have too little experience. The foundation of our Minxing Bank is still too shallow. Can you spend more energy to help?"

“With more big clients, there are more requirements?”

"That's it."

There was nothing that the uncle and nephew could not keep secret from each other in private. Mei Yingnian had also seen what a real master was like. With Jin Shang's level, he would receive a good salary in any bank or brokerage firm. If it were not for the sake of their relationship, Jin Shang would not have been able to make money with those "half-baked people".

"What's so difficult about this..."

Jin Shang wiped his mouth while speaking nonchalantly.
"Wouldn't it be better to split those real estate investment projects into a large number of small orders, package them into financial products, and sell them? If that doesn't work, why not cooperate with the municipal investment company..."

“This…isn’t it…”

Mei Yingnian was no layman and he knew what Jin Shang meant as soon as he heard it.

Subprime debt!
If it goes wrong, it will be called the subprime mortgage crisis.

If we add various swap transactions, leverage, insurance swaps, and stacking, a penny of assets is enough to support tens of thousands of derivatives, or even more.

It's like an inverted pyramid. Once the bottom stone falls over, the whole thing will collapse.

The destructive power caused by this is simply immeasurable.

The world has not yet experienced a real financial crisis caused by the collapse of real estate prices. Instead, the chain reaction caused by the bursting of the Internet-centered technology bubble in the past two years has dealt a heavy blow to the asset market.

Just because you haven’t seen it doesn’t mean that businessmen with a certain amount of economic knowledge can’t see the crisis.

When real estate prices continue to rise and the capital chain is stable, everyone involved can obtain excess returns, but once the growth slows down, there will be trouble.

As if aware of his uncle Mei Yingnian's shock, Jin Shang explained slowly:

"As long as there are no gaps in supervision, we can do it. What's the problem? As long as we earn enough profits before the risks come, and then withdraw..."

"When the time comes, whether you will be willing to quit while you are ahead is hard to say."

"Others don't care about it. Our core business is not here. We are just following the trend. Besides, if we don't do it, others will not do it?"

It is almost impossible to expect human nature not to be greedy.

Facing his second uncle Mei Yingnian's puzzled look, Jin Shang said leisurely:

"The bubble is about to burst. What should we do?"

Without waiting for the other party to answer, he continued to persuade:
"Join the game as quickly as possible and try to 'blow bubbles'. An old stock investor in the secondary market once said, 'Buy when no one is interested and sell when everyone is talking'. If you were to discuss with me how to make decisions in the real economy, I would have a lot to say. In the financial market, the most important thing is to figure out whose money are we going to make?"

In other words, who are you going to harvest the leeks from?

Financial capital is a scourge that wants to eat meat, which is completely different from the core logic of running an industry.

Real estate is an industry, but also finance; Minxing Bank is a capital operator that is a "buying and selling money" entity. Huge amounts of money have been invested in the market, and its size is small, just like an elephant breaking into a house, with no room for maneuver.

There are only a few industries that can meet the requirements of investing billions or hundreds of billions of dollars and realizing them flexibly.

Apart from real estate, which is a field where you can make money, or even a lot of money, relatively speaking, is there anything else that is sure to make money?
Jin sees no signs of this industry declining for at least the next twenty years.

With such a long window period, there is nothing that cannot be "accommodated". As for who will be the last unlucky guy to take over, who cares, as long as it is not one of our own.

"What if... we are in a difficult situation?"

"Second uncle..."

Jin Shang raised his index finger, shook it gently, and then chuckled.

"The thirst for cash flow in the real estate industry is almost unlimited. The domestic market is large enough. As long as you are not arrogant enough to become one of the top property tycoons and pin your hopes on the illusion that you are too big to fail, you will inevitably feel a sense of crisis, because this is all your money..."

After much persuasion, Mei Yingnian finally made a decision.

"I agree! But... you must join us, and we can do something big together. When you are ready to run, don't leave me behind..."

"Of course! You are my uncle..."

Before the "Lehman moment" came, few people really realized that subprime loans were so dangerous and that if they were not properly regulated, the destructive power would be terrifying.

In fact, in the current domestic and international financial systems, it does not violate any regulations, but is rather an emerging "financial innovation" that has only recently appeared and is small in scale.

"Let me start with an introduction. Let's mainly issue bonds overseas! Since Europe and the United States are trapped in the crisis of the bursting of the technology bubble and are looking for investment opportunities, the domestic market with such rapid economic development is a popular choice, isn't it?"

If the fools in our country cannot control their greed and rush into a flame, we cannot blame others. There are actually quite a few fools abroad and you can find them if you look for them.

"Opportunities from the East", "Expand the pie of emerging markets", "Sharing the dividends of development", etc., Jin Shang has even thought of the rhetoric.

Those who come early will definitely make money. As for who loses in the end, it depends on who has bad luck!
(End of this chapter)