Reborn in America, I am a legendary short seller on Wall Street.

Chapter 268 An Old Fox and a Little Fox (4k)

On Saturday morning, the sun slowly rose along the east side of Trinity Church on Wall Street, and the streets were peaceful under the bright sunshine.

Those who come to Wall Street for business are all well-dressed and in a hurry. In addition to businessmen and Wall Street professionals, there are also some elusive money brokers and financial journalists who wander around every day hoping for a lucky break and some inside information.

Henry Goldman of Goldman Sachs, dressed in a sharp double-breasted suit with a crisp white shirt, a top hat, and carrying a carefully chosen cane, walked from Pine Street into Wall Street. When visiting clients, Henry Goldman never slacked off, always ensuring his appearance and manners were impeccable.

After turning the corner, Henry Goldman noticed a man dressed as a reporter huddled at the foot of the steps of the Morgan Trust Bank, constantly looking around.

Henry Goldman was used to reporters who waited patiently for their prey. But today, this reporter waiting at the foot of the Morgan Bank steps was a bit of a surprise. The reporter was holding a small Kodak camera, and his expression showed a hint of anxiety, clearly waiting for someone.

Henry Goldman didn't deliberately look at him, but strolled along Wall Street. He only glanced at him occasionally out of the corner of his eye.

Just as he was about to pass the reporter, a magnificent carriage, with the clear sound of bells alerting pedestrians, slowly pulled up in front of the Morgan Trust Bank. Quite coincidentally, it stood directly in front of Henry Goldman and the reporter.

With his path blocked, Henry Goldman was forced to stop, and the reporter beside the stairs visibly tensed up, grabbing his camera...

The carriage door opened, and a bodyguard-like man stepped out first, followed by the passengers.

“Do wealthy people come to Morgan Trust for business? That’s quite common!” That’s what Goldman was thinking at the time.

But when Henry Goldman subconsciously looked at the man, his pupils immediately contracted, and a look of shock appeared on his face, because the person who stepped down from the canopy carriage was none other than J.P. Morgan!

Upon seeing J.P. Morgan, the reporter hurried forward and greeted him with a trembling, excited voice, “Good morning, Mr. Morgan! It’s an honor to meet you here today. I’m a reporter from the New York Herald, and we have a few questions we’d like to ask you…”

Henry Goldman frowned. He knew this was a common tactic used by newspaper reporters: waiting on the routes most important people would take and hoping for the best.

If they are fortunate enough to meet those important figures, they will immediately conduct surprise interviews with them.

In most cases, those important figures would ignore them and walk away; but a very few lucky ones would happen to be in a good mood and would stop for a moment to chat with them.

This presents a perfect opportunity for these financial sector reporters to gather information and exclusive news.

However, Henry Goldman didn't think the reporter was going to be very lucky, because Mr. Morgan was always arrogant. Let alone a reporter he'd bumped into on the street, even Mr. Pulitzer himself would have to book an interview six months in advance.

At the same moment Henry Goldman noticed the unusual situation, customers coming and going from Morgan Trust Bank, as well as pedestrians on Wall Street, also keenly observed J.P. Morgan as he stepped out of his carriage. A significant number of people stopped in their tracks, their eyes fixed on Mr. Morgan.

To Henry Goldman's surprise, J.P. Morgan glanced at the reporter who had suddenly appeared, stopped, nodded at him, and said casually, "Good morning!"

The subtext of this statement is that the interviewee agreed to the interview request.

The reporter looked flattered and quickly took a step forward, getting close to Mr. Morgan.

By this time, Mr. Morgan's other bodyguards had already taken their positions, separating the crowd from the reporters who were preparing to interview him. The crowd quickly filled the outer perimeter of the cordon.

Henry Goldman was standing close by, so he was next to the bodyguards, and second only to the reporter in distance from JP Morgan.

"Mr. Morgan, it's a great honor to have you here for this interview. My question is: the newly formed General Electric has a large amount of debt, and in this situation, it still needs to build power plants and lay power lines… There are reports on Wall Street that its competitors have already won contracts from the Chicago government. This news has already caused General Electric's stock price to fall on its first day of trading. The decline in the stock price may even trigger subsequent bond financing plans for General Electric. So, as the integrator of this project, does Morgan Bank intend to intervene to support the stock price?"

Morgan's face showed displeasure, but after glancing at the crowd and pondering for a moment, he spoke briefly.

"It's true that I initiated the integration of GE, but I believe that market matters should be left to the market. You should ask GE's chairman how it will develop from here!" Morgan said coldly, staring at the reporter. "I'm just stating my position: we at Morgan Bank will not interfere with stock prices unless GE demonstrates a positive attitude towards its product lines."

As Morgan answered, the reporter quickly jotted down his remarks in his notebook. Meanwhile, the onlookers, hearing Morgan's response, gasped in surprise and murmured amongst themselves…

Only Henry Goldman watched all this with a cold eye, a faint smile playing on his lips.

The reporter stenized Morgan's words and then quickly asked, "Mr. Morgan, what do you mean by GE's positive attitude towards its product lines?"

Morgan paused for two seconds before continuing, "In other words, GE first needs to take action to save itself, or show an attitude of actively expanding its business, before we will consider lending money or using other means to help GE get out of the quagmire."

Morgan's remarks further shocked those around him.

The recent unexpected drop in General Electric's stock price after its IPO has sparked numerous rumors on Wall Street.

Normally, a railroad company restructured by Morgan would not allow its stock price to plummet like this. The last time the Morgan consortium restructured New England Railroad, its IPO coincided with a sell-off of US stocks by foreign investors, resulting in a drop after the opening bell.

But Morgan hired its skilled traders who not only drove the stock up to the opening price, but also pushed it up significantly, causing many short sellers who were shorting the stock to pay a heavy price.

A smart person won't fall into the same ditch twice.

Therefore, after GE's stock price fell this time, there were no short sellers aggressively pushing down the price, because they were afraid that Morgan's traders would come in to support the price.

But now that Morgan has said to reporters that he "does not want to intervene in the stock price," everyone understands that Morgan's subtext is that General Electric may not be able to get a loan from Morgan Trust Bank or market support in the short term.

This is big news! Henry Goldman overheard people whispering around him, already starting to fabricate the latest version of the rumors based on speculation.

For example, it must be that Edison hurt Morgan's feelings; or Morgan harbored great dissatisfaction with a certain manager or board member at General Electric...

Therefore, Morgan's attitude towards General Electric is currently lukewarm.

Hearing the whispers around him, Henry Goldman's sneer grew even hotter.

Henry Goldman thought to himself, "What are you all still thinking about? This is all just a show for you!"
So-called chance encounters on the street and interviews with reporters are all part of a pre-arranged script.

Henry Goldman had realized this long ago.

Aside from the fact that such a chance encounter was too sudden, and the very small but very noticeable detail that Mr. Morgan did not use his VIP passage but appeared at the bottom of the bank steps;
Henry Goldman had just noticed a detail: J.P. Morgan's bodyguards' first reaction was to separate Morgan, the reporters, and the crowd; they did not, as is customary, search the reporters first.

What does this mean? It means that the reporter's appearance was exactly what Morgan's bodyguards had expected.

Henry Goldman watched Morgan and the reporter's performance with a cold eye, listening to the murmurs from the crowd. Some even turned and left immediately, perhaps to try and short General Electric at the nearest stockbrokerage firm…

Henry Goldman's sneer never stopped.

Then the reporter asked another question, but Mr. Morgan already looked impatient. He waved his hand to stop the reporter from asking further questions and said briefly, "I've already answered too much! I don't want to say anything more. Thank you for your blessing just now. Now, goodbye!"

The onlookers showed expressions of disappointment.

Henry Goldman, however, wore a solemn expression.

Henry Goldman knew this was a trap set by J.P. Morgan, and Morgan, who set the trap, first had to change his aloof persona.

Since he answered the reporter's questions so enthusiastically, stepping forward to greet him now would most likely elicit a positive response as well.

This is my best chance, my best chance to make JP Morgan remember Goldman Sachs and myself!

So, just as J.P. Morgan took a step up the steps, Henry Goldman seized the opportunity to raise his hat in respect to Morgan and said loudly,
“Mr. Morgan, I am Henry Goldman from Goldman Sachs. If a company like Goldman Sachs wants to have the opportunity to participate in underwriting projects of the scale of Pennsylvania Central Railroad in the future, what else does Goldman Sachs need to improve in addition to the necessary capital and reputation?”

Henry Goldman's question was very clever. It had three layers of meaning. First, it introduced Goldman Sachs and his own reputation to Morgan; second, it recommended to Mr. Morgan that a company like Goldman Sachs had the ability to underwrite railroad tickets! It was a declaration, and also an intention.

Finally, because the Pennsylvania Central Railroad was not fully disclosed, Henry Goldman was able to glean or roughly guess the current progress of the project from the other party's answers.

J.P. Morgan stopped his slightly hurried steps, turned around, and scrutinized the young man in front of him with his insightful eyes.

The breadth and sharpness displayed in Henry Goldman's questions clearly exceeded Morgan's expectations. A very faint smile played at the corners of his mouth, but he still pursed his lips and replied,
"Goldman Sachs? Capital lubrication is certainly important. But to truly underwrite railroads, you need the ability to define the rules, not just follow them. The fact that you asked this question means you've already reached the threshold. But beyond that threshold lies a much longer road."

Henry Goldman nodded and smiled. "Thank you very much, Mr. Morgan! I will visit you when I have the chance."

Henry Goldman had gotten the answer he wanted from J.P. Morgan's words.

In his mind, the question he had just asked was, "Does Goldman Sachs have a chance?" Morgan's answer was, "You've grasped the crux of the matter, but recognizing it and being able to act on it are two different things. I see you; now, prove it to me!"

When Henry Goldman mentioned wanting to visit him, Morgan didn't answer this time. Instead, he coldly turned his head towards his bank. Then, he steadily walked up the steps, his bodyguards following closely behind.

A sigh of disappointment rose from the crowd, as everyone lamented the lack of further news.

But clearly, these people were also secretly pleased that they had been lucky enough to meet J.P. Morgan and hear firsthand gossip.

The crowd quickly dispersed. The lucky reporter who had just interviewed Mr. Morgan also took a picture of Morgan's back. Then, he excitedly ran to the street corner, hailed a horse-drawn carriage, and hurried back to his newspaper office.

Henry Goldman stood there, the satisfied smile still on his face.

“This is really interesting! Three days ago, Larry Livingston asked me to investigate shorting General Electric, when the stock wasn't even listed yet. And here Morgan is putting on a show for everyone…”

With that thought in mind, Henry Goldman made a decision. He wouldn't visit the client today! He was going to see Larry Livingston! He'd pretend to give Larry feedback on his intelligence, and also find out what Larry's next move was.
Henry Goldman then flagged down a carriage at the street corner. After climbing into the carriage, he told the driver, "To the New York branch of Paine Webber Securities, it's on the Upper East Side."

After the carriage started moving, it quickly headed towards the Upper East Side.

Henry Goldman thought he was the only one who had seen through Morgan's trickery. But an unassuming young man in the crowd also smiled.

He was Bernard Baruch, the front desk manager of Reading Securities. He watched Morgan disappear through the bank doors, then glanced at the hurried figures of the others leaving. He quickly walked to the street, flagged down a carriage, and had it take him back to Reading Securities.

After alighting from the carriage, Bernard Baruch entered the brokerage firm and hurriedly instructed the traders in the branch office, "Prepare a trading order for me! Also, bring me all the GE quotes up to today!"

(End of this chapter)