Winner Takes It All, Resurrection 2009

At this time, whether it is inside or outside the field.

Whether it is an exchange or a primary underwriter.

They all realized that something was wrong.

However, Wall Street still underestimated the strength of the opponents who came to attack together. This is because the control of the world's most important energy trading market is not entirely in the hands of American capital.

For example, New York, London, Switzerland, Singapore, Hong Kong, and even Tokyo, Frankfurt, Paris, and Shanghai all have their own primary underwriting rights.

They are both distributors of the world's largest energy futures trading market controlled by US capital and direct traders in their own economies. They usually also participate in on-site transactions controlled by US capital.

But more often than not, primary dealers distributed around the world have their own trading platforms, and clients, institutions, and funds place orders through dealers in their respective regions.

In theory, it should be aggregated to the world's largest energy trading platform, but in reality it was intercepted midway.

Because the energy market is such a huge pie, even the most powerful American capital does not dare to openly take it all, so all parties have a certain say.

Of course, the premise is that this part of the discourse power can only be achieved by relying on the hegemony of the US dollar. After all, the US dollar is linked to energy and other commodities, which is the core foundation for American capital to dominate the world.

The petrodollar isn’t called that for nothing.

But at the same time, the hegemony of American capital also needs the recognition and conviction of global capital, which requires extensive distribution and exchange of interests, and at the very least, it is necessary to ensure that major economies do not stand up to oppose it.

So when all parts of the world began to short crude oil together, their primary channel was outside the United States, which gave Wall Street the illusion that there was much ado about nothing.

Because the amount of funds directly involved in transactions in the U.S. energy market is not enough to reverse the entire situation, the two sides are now in a stalemate.

But when they summarized the final public data at the closing, they found something wrong.

Why are mainstream traders, financial institutions, and banking groups around the world selling short?
Where did their internal buy long orders go?
“Unless they aggregate the internal orders they intercepted and find that the scale of short selling orders has far exceeded the risk control range.

I had no choice but to take it to New York to hedge the risk.”

Tommy, chairman of the New York Reserve Bank, put forward a hypothesis with a serious expression, "Based on the list of institutions that have taken action now, the top three buyers are the London Energy Exchange.

Singapore Energy Exchange, Hong Kong Energy Exchange.

The top ten seats also include Dongda Modu Futures, Jiaobenji Tokyo Futures, Oumeng Swiss Futures, White Elephant Mumbai Futures, Oumeng Frankfurt, and Paris Exchange.

Ladies and gentlemen, I don’t need to explain what this means, right?”

Everyone was silent, digesting the explosive inside information revealed.

That is, the main buyers and sellers in the financial market in the past were basically investment banks, banks, and funds. At most, a sovereign fund of a certain economy would emerge and be optimistic or bearish on future trends.

For example, the sovereign funds of major investors previously authorized Goldman Sachs, Morgan, and Bank of America to invest more than US$500 billion in the energy market, with an overall long position, and the current profits are very considerable.

But there has never been a time when nine of the top ten traders are futures exchanges in various economies, which means that the global market has suddenly undergone a major shift.

A finance professor from Princeton said with some fear in his voice, "Things are heading in the worst direction.

We may have misjudged the situation. Normally, primary dealers do not trade directly with the New York Stock Exchange because this means paying a large commission expense.

Under normal circumstances, for example, in London, if a long order of 100 barrels is received, a sell order of 100 barrels will also be received. Even if there is an excess of transactions on one side occasionally, they can still pass the floating margin system.

Make sure both parties to the transaction have enough margin and deposit it in the exchange's escrow account, so that no matter which party wins, they can make a profit from it.

After all, commission income is the most important source of income for every exchange, and they cannot hand over their core resources to Wall Street.

But now, they actually appeared openly on the main trading seats of the selling and short selling party, which means a horrible fact.

That is, when they received a buy order for 100 barrels, they received a sell order for 500 or even 1000 barrels.

Taking the London Stock Exchange as an example, under normal circumstances, its daily energy trading volume is around 50 lots.

(Including orders where secondary dealers do not enter the market to conduct transactions but participate in the final settlement, excluding direct off-site betting and agreement orders of black funds. In short, it is very complicated).

Even if over-the-counter orders are included, the number will not exceed 100 million lots, which means about several billion US dollars in margin trading every day (excluding leveraged principal), which would cause such a large-scale unilateral crushing.

How much money would it take to force the London Stock Exchange to short sell 7 orders in New York to balance the hedging risk?

After his explanation, everyone immediately realized the seriousness of the problem.

Nine major traders collectively flocked to New York to short sell. What does this mean?
This is equivalent to the fact that the world's mainstream brokerages, trading platforms, and financial institutions have been squeezed out, and the number of people going long is far behind the scale of short selling.

In order to avoid excessive losses, the exchange was forced to personally intervene to reduce risks.

"But if they reduce the risk, aren't they just piling the overall risk on us?"

Someone figured it all out and immediately became furious, "These damn financial parasites and thieves deserve to die!
We must find ways to curb their behavior and prevent the crisis from spreading further.”

Now even a fool can see that something is wrong, because no single economy has such strong power to launch an attack on all financial institutions in the world at the same time.

Even if there were, those controlled by American capital could transmit intelligence in a timely manner, but such a long time has passed since the incident and no useful information has been reported back. Isn't this enough to prove everything?

What made the world's major exchanges flock to New York to short sell personally was not the outcome of the previous raw material futures war, in which American capital pulled the plug and scared off individual financial institutions?

People are worried that the US capital will do it again, so they simply let the exchange directly step in to compete with the US capital, and prevent it from secretly stealing the money of a single financial institution.

But it would never dare to steal money from major exchanges openly.

If this is really done, everyone will die together. No one is a fool. If American capital really plays this way, blatantly turning the table and refusing to admit its obligations, then there is no need for the US dollar to exist.

Because the exchange has more than just crude oil projects, and although the money it takes out is the margin that investors deposit in the exchange, the problem is that the exchange needs to be responsible for the safety of their principal!

Once the US capital turns the table and refuses to pay, the money cannot be taken back, and the credit of major exchanges will be bankrupt instantly, which will have an impact on all other types of products being traded, such as raw materials and industrial products.

Agricultural products, in short, everything that can be used in industrial society and everything that is legally produced can find counterparties in futures exchanges, and the exchanges themselves do not have much money.

The funds needed by large distributors are all granted by banks, and the deposits are all investors' own funds. Combined with the leverage provided by financial institutions, it is possible to easily create transaction amounts of trillions or even hundreds of trillions of yuan.

Its actual scale is not that large. For example, the London Energy Futures Exchange would fall into a liquidity crisis as long as $200 billion of funds were seized in the United States, and would go bankrupt immediately if there was another run.

By then, not only will the crude oil futures market be lost, but all other varieties that have been impacted will also be wiped out, and all major financial institutions, investment banks, and securities firms that rely on exchanges will also be finished.

It is so exaggerated because all the funds of the exchange added together will not exceed tens of billions of US dollars, while the futures, options and other financial derivatives it controls are worth trillions of US dollars.

If something really happens, no one can take responsibility.

Therefore, all economies will not sit idly by and watch problems arise in their own exchanges. They will inevitably step in personally and put crazy pressure on the New York Stock Exchange and the Chicago Stock Exchange.

They may even resort to this as a last resort.

If American capital reaches this point, no matter what the final outcome is, it will lose its most important financial hegemony, thereby bringing down the dollar's world hegemony.

This is the unsolvable trap that Qingyun Group and various financial institutions have discussed for half a year and has set up specifically for American capital.

They do not directly intervene in the internal trading market of US capital, but by increasing short selling in their own exchanges, they force their own economies to short sell US capital. Exchanges that have made advance arrangements and coordinated interests will naturally not refuse the benefits that come to their doorsteps, after all, every short order is money!
The consequence of accepting all offers is a surge in short orders, which the local economy's market cannot absorb, so it becomes inevitable to use U.S. capital to short sell in order to hedge risks.

If US capital wants to maintain high oil prices, it must continue to buy, which provides a market to absorb the massive short orders.

To put it bluntly, futures trading is a zero-sum game of capital that competes for the amount of funds. There are no fundamentals to speak of. Whoever has more funds and off-market resources will win.

There are now two paths open to American capital.

First, continue to ignore everything and take all the short orders, and then use the old method to force oil-producing countries to reduce production and artificially create tension between supply and demand.

With low production and high demand, prices will naturally go up.

But now is the winter season with strong demand, and the oil-producing economies will go crazy to help American capital take advantage of the fire. If something big happens, such as consumers who cannot afford high-priced natural gas for heating or filling up their tanks, it will be a disaster.

If we walk around the streets holding signs for a few times, will the economies still be able to survive?
In the past, American capital could calm the situation by winning over allies and coordinating interests. Everyone benefited, and a few scoldings were fine. If they could get through it, the worst that could happen was a few losses.

The profits that can be earned are several times the expenditure, so after weighing the pros and cons, one will naturally be willing to cooperate.

But given the current situation, everyone is banding together to settle accounts with American capital. It would be strange if they would listen to what American capital said.

Any oil-producing countries that do not receive effective guarantees and dare to reduce production capacity at this critical juncture and cooperate with US capital in raising prices will be doomed to die miserably.

We can’t do anything about American capital for the time being, and we can’t deal with the big players and big cats, as well as small and medium-sized economies such as Venezuela?
Now that the crude oil card has been ruined, don't blame everyone for joining forces to wipe out all the overseas investments of oil-producing countries, and then impose various sanctions to ensure that the oil-producing economies will have a hard time in the next decade.

No matter how powerful American capital is, it is impossible for them to compensate for the losses. They may even come in and take advantage of the situation. No matter how stupid the oil-producing countries are, they cannot go against the whole world.

This makes it very difficult for American investors, as they cannot just reduce production capacity and raise prices.

There is only the second way left.

That is to take out real money and pour it into the exchanges of various economies to solve the problem directly at the source. If everyone wants to short, then it will go long, and finally take back the initiative by relying on its advantage in capital size.

But the problem is that no matter how powerful American capital is, it is impossible for it to target so many economies at the same time, not to mention that it has money and others have money too.

Moreover, when playing away from home, the opponent has the right to interpret the rules. What if there is a margin call and deleveraging?
With each company holding tens of billions of dollars, even if Citigroup and Morgan Stanley took out the last penny in their pocket, it would not be enough to cover the margin shortage.

Among them, there are closed markets like Dongda, which are easy to enter but difficult to exit. It is not allowed for multinational companies to trade with RMB. Once they are discovered, they will still be dealt with.

The most crucial thing is that US capital does not dare to modify the rules of its own exchanges without authorization. In view of the final stage of operations in raw material futures, various economies have already had a fight with US capital.

The fight was fierce, but in the end no one could do anything to anyone. However, the U.S. was ultimately in the wrong. In order to enhance its credit, Wall Street has made concessions on several key points in exchange for mainstream financial institutions continuing to participate in U.S. market transactions.

Therefore, it is impossible to temporarily modify the rules this time.

"What can we do?"

Tommy was very anxious, "If we don't invest real money in futures trading in various economies, then major trading markets around the world will experience horrible market inversions.

This will further stimulate major global funds to continue to short crude oil. By then, even if we put out a trillion dollars in capital, we will not be able to beat everyone. "

Morgan didn’t care about his traditional last appearance at this time, and he said directly: “They don’t have enough crude oil reserves.

As long as we seize the monthly delivery period, we can still turn the situation around.”

Someone soon retorted, "What about normal times? You know, there are more than 20 trading days in a month. Do we lose money on 20 days and then make it back on the last few days?"

This is simply a joke, because everyone knows that when it comes to energy futures, once one party has an absolute advantage and the investment logic behind it is clear, then the international hot money that is on the sidelines will be attracted.

They will not hesitate to beat the fallen dog.

It is bound to be the case that someone will turn against the Squid Capital Group, and the situation will be totally out of control by then.

“What can we do? Once all the mainstream exchanges are inverted, and the price is capped in New York and Chicago, as long as there is a price difference of more than $5, it will attract the attention of the world.”

Morgan is in a lot of trouble. “Except for Europe, which may be affected now, other places are totally out of control.

Even if we use all the previous means to support oil prices, we may not be able to achieve a bottoming out.

Unless~"

"No, now the main force of the rumbling force must maintain its deterrent power. Once it is dragged into a new round of war, Europe will be completely out of control."

Before he finished speaking, the chairman of First Citigroup next to him retorted, "Don't try to release the devil.

Those traditional groups are eager to open up another front so that they can make huge profits, but the Mesopotamian Basin and the crossroads of Asia have already taken up too much energy.

The only mobile force that can be mobilized needs to be transferred to Europe at any time. I really can't think of a place where we can attract the attention of the whole world and get away quickly. "

"For example, what about the eastern coast of the Mediterranean?"

Big Morgan was also pressed into a corner, and said without hesitation: "If a world-shaking change happens here, can the situation be completely reversed?"

"That means letting the big cat out once and for all."

Tommy retorted without hesitation, “We are already in enough trouble. The Dongda issue has not been well resolved. For Ou Meng, we have gambled all the chips we can mobilize.

If the big cats are released from the Black Sea and the Mediterranean, the situation will get completely out of control.”

“It may be worth trying, but the impact on oil prices may not be that profound. Don’t forget that the big cat itself is one of the most important energy suppliers in Europe.

Once the Huskies start a war on the eastern coast of the Mediterranean, southeast of where they live, Europe will feel threatened and will inevitably make corresponding concessions to the big cats.”

After weighing the pros and cons, the chairman of Goldman Sachs shook his head and said, “It’s very risky, especially since the choices of big investors have been inconsistent recently.

Not only did they transfer 10% of Aramco's shares, valued at over billion US dollars, to a core enterprise of Dongda, they also supported Babtie to publicly show goodwill to Dongda.

The California consortium sent a message that the 24 Fu-16s originally planned to be sold to Babuti had been rejected by Babuti because their boss had ordered more than 120 Gou-10s from Dongda in one go.

We must clearly realize that the University of Tokyo is relying on its super-fast growth in strength and the window of geographical restrictions to quickly deploy and attack everywhere. "

"Europe first, Asia second is a collective decision made by all of us. We cannot change it frequently just because Dongda's development exceeds some expectations. Our primary enemy is still Oumeng Capital."

Morgan waved his hand and said, "But we must speed up our deployment in Europe. Perhaps we can test both regions at the same time."

Tommy was puzzled, "But what about the oil price!"

"First force oil-producing economies to cut production. It's time for them to make sacrifices for the benefit of the United States."

Morgan said without hesitation: "Whoever disagrees will be killed.

After the expected production cuts take effect, some special measures will be arranged to find ways to reduce the existing delivery storage, and then funds will be raised to flow into the two major exchanges in London and Switzerland.

We will take the short-selling orders at all costs and extend them to the delivery date, forcing the two companies to deliver enough crude oil, otherwise they will be liquidated directly, creating a deterrent effect.

I think other exchanges will be cautious, and then at home, they will do everything they can to resist the short-selling attack until some irreversible event happens! "(End of this chapter)