Mixed in 1980

Chapter 416 Appeal

"Can I rest easy now?"

Chen Fan's phone was on speakerphone. He had just spoken to Zhou Wenya on the phone when he received news that S&P had adjusted the credit rating of the US.

Xu Jinqiu heard it all without missing a word and breathed a sigh of relief. Even if she didn't understand economics, she knew that a credit rating downgrade was bad news.

It's inevitable that the son will make money by shorting stocks.

The next step is to see how he operates, how much money he can make, and even making money is secondary; the real question is how he can establish prestige through this.

Xinghuo Investment has too many companies under its umbrella, making management extremely difficult. If the boss is weak or incompetent, the "talented" subordinates will dare to secretly comply but secretly disobey.

The most important thing for the three Chen brothers was to establish their authority.

On Monday, Spark Investment held a press conference. The Chen brothers sat in the middle of the stage, with Zhou Wenya and Yu Jing on either side.

In an interview with reporters, Chen Yanjin slowly said, "S&P's downgrade of the United States' credit rating from AAA to AA+ will inevitably trigger a stock market crash."

"Due to the time difference, once the US stock market opens, Spark Investment will do its best to sell off its holdings of US stocks."

"For those who hold US stocks, today and tomorrow are the best time to get out."

The press conference was short, but it caused a stir in Hong Kong.

Especially in the financial world, everyone knows that the Chen family made their fortune through finance, fighting one financial battle after another to accumulate their current wealth.

"That's ruthless, just like in the past!"

Li Zhaoji lit a cigarette. He knew without even checking that the Chen brothers were definitely shorting US stocks, or even buying a large number of short positions in stock index futures.

Soros did exactly that when he attacked Hong Kong.

After the subprime mortgage crisis broke out, Chen Fan led everyone to attack the US stock market, using the same method to short the stock index and siphon off a large amount of funds.

Now that negative news has emerged, we can simply follow the script.

Taking a drag of his cigarette, Li Zhaoji nodded slightly: "After this financial battle, the Chen brothers will be able to establish themselves firmly in Hong Kong, and no one will dare to underestimate them anymore."

"It will also solidify its position as a financial leader."

"Just like Chen Fan, who can command a large following in the financial market, Soros and Buffett also have this ability."

"Young man, you're something else!"

Overwhelmed with emotion, Li Zhaoji picked up the phone and told his two sons to prepare to sell all their stocks as soon as the US stock market opened.

Many of the Li family's US stocks were bought at the bottom of the market at the end of the subprime mortgage crisis.

The shareholders of Hang Seng Bank acted in unison at the time, shorting the stock and then buying it on a large scale. Many of their stocks more than doubled, and some even quadrupled or quintupled.

US stocks opened at night!
The three Chen brothers were all at the company. They had already taken a nap during the day, and they would be busy all night, constantly issuing orders to sell off their shares.

Sitting in her office, Ye Wan felt uneasy watching her boyfriend's excited expression. Having been in Hong Kong for so long, she had learned a thing or two from what she had seen and heard.

This is a huge gamble!

Chen Yanjin's actions were not targeted at any one place, but rather at major financial centers around the world, where he shorted US stock indices, investing funds equivalent to the net worth of one of the world's richest men.

Ye Wan had looked at the futures contracts. The contracts were different in different regions. For example, the short contracts for Dow Jones, S&P, and Nasdaq that were bought in the United States cost $50 per point.

If the US stock market rises instead of falling, the Chen family's losses will be incalculable, potentially wiping out the market value of a giant company within a few days.

"Xiao Lu, are you nervous?" Ye Wan glanced at Gao Lu and slightly raised the corners of her mouth.

I thought this rich second-generation sister-in-law would be used to such a big occasion, but I didn't expect her to be just like me, her hands and feet were shaking and she couldn't sit still.

Gao Lu hummed in agreement and teased, "Aren't you nervous? I hadn't been paying attention to the data before, I didn't expect them to go this far, it's too crazy."

“They can sell it off in one go and make more than all of my family’s assets combined.”

"I've never seen anyone play like this before."

“My dad also invests in stocks. He probably has tens of millions of yuan invested in the stock market. He’s happy for half a day if the price goes up even a little.”

"When a stock hits its daily limit down, people can grumble and complain for days."

Upon hearing this, Ye Wan smiled wryly. It really proved the saying that different social classes have different ways of playing the game.

Shaking her head, Ye Wan stopped worrying about it and had her bodyguard take her home so she could prepare a light and nutritious late-night snack for the three brothers.

Tonight is destined to be anything but peaceful!
As the sun rose and the US stock market closed, the Dow Jones Industrial Average fell from 13000 points to just over 12000 points, a single-day drop of nearly 1000 points.

The S&P and Nasdaq indices were already low, but the decline was significant, with a single-day drop of 7%, which could almost be considered a stock market crash.

"It's settled. We'll close the deal in a few more days."

Chen Yanjin took out a cigarette, lit it, and took a deep drag: "Aunt Wenya, how are the media arrangements? Now it's time to see how the public opinion battle goes."

Zhou Wenya smiled slightly: "Don't worry, everything has been arranged. Not only in Hong Kong, but also in the media of major financial centers around the world, we will do our best."

"That's fine then!" Chen Yanjin nodded slightly.

After finishing his cigarette, he stopped caring and took his family home to rest. He would stay up all night again, and this might continue for several days.

Chen Yanjin couldn't be like his father. The old man often acted like he had God's perspective, giving orders and having his subordinates follow them step by step. He didn't have that ability himself; he had to keep an eye on things.

Before he made the arrangements, the old man only mentioned it briefly, setting a general direction, and the rest of the operation was up to him.

Back home, Chen Yanjin went straight to sleep.

While he was dreaming, public opinion in Hong Kong was in an uproar. With the popularization of the Internet and Hong Kong being one of the world's financial centers, there were quite a few people speculating in US stocks.

Overnight, many people suffered heavy losses.

Meanwhile, some media outlets reported that Chen Jiage had invested a large amount of money to short US stock indices on a massive scale in major global financial centers.

This was information deliberately released by Zhou Wenya.

When Chen Fan stepped from behind the scenes to the forefront, he used the British as a warning to others. Similarly, when the Chen brothers rose to power, they needed a chicken to establish their authority.

This chicken is the US stock market!
For the Chen family, establishing their authority is the priority, while making money is secondary. It's all about whether the three brothers can maintain firm control over the Chen family business in the future.

Meanwhile, an ironic scene unfolded in the market.

The stock market crash triggered a surge in US Treasury bonds, which ironically became a safe-haven asset as large amounts of capital fled the stock market and flowed into US Treasury bonds.

This also exposes a deep-seated contradiction in the financial system: even if a credit crisis occurs in US debt, the market still cannot find a safer alternative.

But this year also marked the beginning of a transformation.

In the aftermath of the crisis, central banks around the world began to accelerate the diversification of their foreign exchange reserves, with Russia, for example, directly launching a "de-Americanization" strategy.

The proportion of US dollars in reserves will decrease significantly in the future.

Nobel laureate economist Joseph Stiglitz went even further, stating, "The 2011 crisis was the first clear sign of the decline of the dollar's hegemony."

Chen Yanjin didn't care about these things.

With money in hand and a reputation established, this trip to Hong Kong has been perfect. Now, everyone in Hong Kong says that the Chen family has a worthy successor.

As the Dow Jones Industrial Average fell below the 10000-point mark, Chen Yanjin simultaneously controlled the media to continue publicizing the stock market crash while busy settling his short positions and arbitrageurizing his profits.

If we don't leave now, it will be difficult to travel!
The plunge in US stocks originated from US Treasury bonds and also benefited from S&P's downgrade of credit ratings. However, with the US raising the debt ceiling and implementing quantitative easing, US stocks will soon rebound.

Once the short positions were settled, Chen Yanjin issued an order to repurchase US stocks, believing that the next few years would be a bull market based on the current trend.

After issuing the order, Chen Yanjin took out his phone and called each of the shareholders of Hang Seng Bank to explain the matter of buying up US stocks at the bottom.

Previously, Hang Seng Bank's shareholders had been very helpful in assisting with the sale of US stocks. In return, they deserved a fair return.

In the future, if there are any major operations, a single call will be enough to gather a large group of people, just like my father. Starting from the harvest of Mexico in 1994, he was able to gather a large group of people for every financial war.

This kind of appeal is extremely important!
Soros's success in shorting stocks and reaping profits wasn't due to his personal wealth, but rather his influence and ability to attract a large number of allies.

The importance of this appeal was also evident in the following days.

The US stock market is currently in a state of panic, with a loss of confidence, doubts about the economic recovery, questions about the performance of listed companies, strong short-selling sentiment, and concerns that the bull market has ended.

However, Buffett stepped forward!
The company announced directly to the public: "Given that Berkshire Hathaway's stock price is currently severely undervalued, the company will repurchase A and B shares at a premium of up to 10% to their book value."

This news briefly boosted two types of Berkshire Hathaway stock, which surged 8% that day.

Subsequently, more companies strengthened their confidence in the stock market and followed Buffett's example, allowing the US stock market to regain its bull market.

That's the power of influence!

Chen Yanjin is currently building up his influence and building his appeal. Immediately after Buffett announced the market rescue, he issued an order to short gold.

Similarly, short selling occurs on stock exchanges in major financial centers worldwide.

And they immediately offered 100 billion US dollars!

Five times leverage was used.

At the same time, a message was released to Hang Seng Bank's shareholders, followed by a press conference, announcing that rising US Treasury yields have significantly increased the opportunity cost of holding gold, weakening its investment appeal.

It means being bearish on gold.

At this point, the price of gold had risen to $1920 per ounce.

"Second brother, are you so sure gold will fall? If I remember correctly, gold has been rising for several years now, right? It's always been the top choice for investment." Gao Lu asked curiously.

My father, Gao Yalou, bought a lot of gold as an asset allocation. He would get very proud every time he talked about gold, as it had more than doubled in value.

"It's only when prices rise too much that they fall."

Chen Yanjin pondered for a moment and explained, "There is an inevitable relationship between the US dollar, US Treasury bonds, and gold. When the US dollar and US Treasury bonds strengthen, gold will inevitably weaken."

“Back in the 1980s, my dad’s method of trading gold futures was even simpler. He just had to keep an eye on the Federal Reserve. When the Fed raised interest rates, the price of gold would fall, and when the Fed lowered interest rates, the price of gold would rise.”

"That's so simple?" Gao Lu asked in surprise.

Chen Yanjin nodded and said, "The actual operation process may be complicated, but it is essentially that simple."

Gao Lu, unwilling to give up, asked, "What if it doesn't fall?"

PS: The first update is here~
(End of this chapter)