supreme golden pupil

Supreme Golden Eyes - Chapter '3 Changes in the Wind and Cloud

1997 was a very dramatic year. The most popular movie in the world was "Titanic" filmed by James Cameron. It was the largest luxury liner in the world at the beginning of the [-]th century, which was said to be unsinkable. With the accompaniment of elegant music and one after another of terrified screams, it sank to the bottom of the North Atlantic Ocean, and what sank together was the love between the young wandering painter Jack and the noble lady Rose.

When Chinese audiences walked out of the theater with mixed feelings, in the commercial world, tragedy was unfolding, and the sadness was exactly the same.

亚洲金融风暴从夏季开始，历时四个多月，它对亚洲各国和所有的产业都造成了重大的影响。菲律宾、马来西亚和印尼的中产阶级财产分别缩水50%、61%和37%，华夏香港、新加坡和泰国的居民资产则跌去了44%、43%和41%。

New York Times columnist Thomas Reidman was in Thailand when the storm hit.Later, in his best-selling book "The World Is Flat", he described the scene at that time with lingering fear. The Thai government announced the closure of 58 major financial institutions, and overnight, those private bankers went bankrupt.He drove to a party on Asok Street in Bangkok, Thailand's Wall Street, where most of the financial institutions have failed.

As his limousine ambled past these bankrupt banks, the chauffeur murmured at each passing one, BREAK - BREAK - BREAK - these Thai banks are the first in the new era of globalisation. The first domino in the global financial crisis.Before that, Thailand was dazzled by the image of one of the "Four Tigers" in Asia.

"It seemed like we were so rich that everyone was going to buy a Mercedes," recalls one small owner.

They are keen on beach houses, Omega in Switzerland, XO in France, Mercedes-Benz in Germany, and Panasonic in Japan.Like Americans, they smartly arrange trips to Europe every year; their children are sent to private schools... When you meet a country housewife or even a street vendor in the suburbs of Bangkok, you may be a member of the stock army; It's too easy", at that time, they will say in such a joking tone that they are preparing to travel to Europe.

But now, Thais watch dumbfounded as Soros and his like take from them everything that was theirs; family cars are towed away by the police, unemployment begins to haunt them, romantic trips to Europe are canceled, and children are forced to move to Inexpensive public schools...

Malaysian Prime Minister Mahathir said: "This guy came to our country and overnight, he wiped out more than ten years of struggle of our people."

Chawang, the president of a certain bank in Thailand, said: "We can only watch Soros, a gangster, deprive us of the wealth we once owned. We just want to say, don't you just want money?"

Money is an original sin.

For all Southeast Asians, a lot of wealth they once had in the past disappeared in an instant. Chanovast, president of Samat Telecom, said: Bangkok people have not even had time to enjoy the glory. The car has just rolled off the production line and the house has been newly painted. The paint hasn't dried yet.But they have lost everything.Indonesian musician Bonnie Le Gumaha had been fighting for 30 years to buy a dream garden. When he was about to move in, a storm came. "I had to return it," he said.

An era of worrying about food, an era of frugality is inevitable, but the feeling of the past makes them still immersed in the aftertaste of being rich.In a square in the center of Bangkok, a peddler shouted hoarsely for renting clothes, "You can rent anything. Students in private universities rent almost from head to toe in order to keep decent." The peddler said his business was pretty good. Hot, the shopping malls on Sundays are still crowded with people, the only difference is: they are already cash-strapped, so they can only hang out.Just like so many old people in Beijing walking their birds.

Those rich and wealthy can only watch 50% or more of their property disappear without a trace. It is estimated that from March to September, the top 3 millionaires in Malaysia lost money in the stock market alone. The children of Indonesian President Suharto have also been forced to sell their companies to avoid a situation where there is no income.

"The world of the past no longer exists," said Ram Sam, president of Agricultural Bank, Thailand's third largest bank.

The strange scenery of Bangkok is still so beautiful and moving, and the high-rise buildings in Kuala Lumpur are still so row upon row; however, the gap between the rich in the past and the poor in the present is so far away. "It's not just a sense of loss," a university professor in Thailand sighed helplessly.

Facing reality, perhaps this is the most painful and helpless choice for Southeast Asians!And now, the thing that worries Hong Kong people the most has finally happened. Soros is here, financial speculators, large and small, are here, and the financial storm is here...

However, when history came here, there was a small deviation. Due to the emergence of Hange Investment Management Company, a company that did not exist before, the original historical process continued, but the time was different from the original one. It's not the same anymore.

Judging from Soros' previous performance in the financial market, this speculator, hated by governments and financiers in many countries, is better at the strategy of three-dimensional speculation. The so-called three-dimensional speculation is to use three or more financial instruments. As long as a breakthrough is made in any direction, the other two financial instruments will take the opportunity to completely knock down the exhausted opponent.

But this time in Hong Kong, he used a similar strategy. Simply put, his operation sequence and method in the Hong Kong market are: first short sell some stocks → then short HSI futures and options → then short Hong Kong dollar futures →Finally, sell a large number of Hong Kong stocks.

The asset bubble in Hong Kong and the inherent flaws of the linked exchange rate system provided Soros and other hedge funds with at least four speculative opportunities: short selling Hong Kong dollar futures, short selling HSI futures, selling HSI options, and short selling Hong Kong stocks.

Short selling Hong Kong dollar futures is the most important part, which requires the completion of the following three steps: (1) borrow Hong Kong dollars from multinational banks at the spot interest rate of Hong Kong dollars; (2) sell the borrowed Hong Kong dollars at market prices and buy U.S. dollars; (3) Lend the purchased U.S. dollars at the U.S. dollar interest rate.Short sellers of Hong Kong dollar futures can profit when the Hong Kong dollar depreciates against the U.S. dollar, or when the spread between Hong Kong dollar interest rates and U.S. interest rates widens.

According to the hedging interest rate equivalence theory (1 + Hong Kong dollar interest rate) = (1 + US dollar interest rate) x spot exchange rate of the futures price, a drop in the forward Hong Kong dollar exchange rate will lead to a sharp rise in the spot interest rate.Interest rate futures are closely related to HSI futures, options and Hong Kong dividends.When interest rates tend to rise, the stock market, which is quite sensitive to interest rates, will tend to fall, and HSI futures and options will also tend to fall accordingly.

In mid-October, the market saw big hands selling Hong Kong dollar futures short again, and the risk premium of the Hong Kong dollar forward exchange rate rose sharply, which pushed up the interbank offered rate. It has soared to 10% (converted by annual rate)!Although it increased the cost of foreign exchange speculators, the high interest rate also hit the stock market hard, causing the stock exchange to sell like a wave. The plummet of the Hang Seng Index is already something that every investor can easily see.

However, when the local investors in Hong Kong were extremely nervous and Soros and others were ready to raise their glasses to celebrate, no one noticed that among the funds that were salivating and ready to participate in this feast, some Tens of billions of dollars of HSI short-selling contracts expire about a week earlier than others!In the eyes of ordinary people, the reason for this situation is that the owners of these funds are too cowardly, and they are ready to leave when they make a fortune, and they dare not stay too long in the turbulent Hong Kong financial market.

Even Soros and others think so. They are too confident in their own strength, thinking that everything is under control, and they don't believe that anyone can play tricks under their noses.

Unexpectedly, within a few days, the situation in the Hong Kong stock market changed suddenly. Two days before the expiry of the earliest short-selling contracts, hundreds of billions of funds that had been dormant suddenly mobilized. The Hang Seng Index plummeted by more than 1800 points within a short period of time, and it was even worse the next day. The Hang Seng Index dropped by an astonishing 2300 points!In just two days, 40% of the wealth in the Hong Kong stock market was evaporated!

This caught Soros, as well as the Hong Kong government and the local rich people by surprise, but all this changed too quickly, and it was too late for them to react, and they could only watch helplessly as everything was out of control , Numerous stockholders frantically sold all the stocks on hand but there was nothing they could do.They really want to buy the bottom and hold these severely undervalued stocks in their hands. Unfortunately, all their funds have been invested in the futures market, and they cannot be used before the delivery date arrives.

However, just because they can’t move doesn’t mean that others can’t either. After the short-selling contracts were delivered and tens of billions of dollars of amazing profits were pocketed, the mysterious funds swept the stock market frantically again, buying the stock market regardless of cost. The stocks that have been sold on the Internet, especially the Hang Seng Index constituent stocks, blue chip stocks and red chip stocks, are not falling at all, and they are all in their hands!

According to the most basic economic law, when there is a large amount of acquisition funds in the market, the rise in prices will be an inevitable result.Therefore, in the following three days, the Hang Seng Index and the stock prices of various important stocks, which had just been smashed into pieces, continued to climb upwards until they exceeded the value of the stock price before these vicissitudes. position, this upward momentum slowed down a little.

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