The American Kill Line: I Can Predict the Future

Chapter 96 Unexpected Event: The Black Swan Event in Egypt

Egypt's problems are nothing new.

Long-term high unemployment, soaring prices, and government corruption are serious problems that plague the people.

But what truly angered the public was that President Mubarak, who had been in power for 30 years, intended to "pass the throne" to his son.

Interestingly, the demonstration was scheduled for the 25th.

This day is Egypt's National Police Day, a national public holiday, and the Cairo Stock Exchange is closed all day.

Therefore, even if the demonstrations break out on the day they occur, market prices will not reflect the impact of the event.

Meanwhile, the Egyptian stock market's regular trading days are Sunday to Thursday, with Friday and Saturday being fixed weekend closures, completely different from European and American markets.

This is probably why, despite it being a "political black swan" event, I didn't receive any related "premonitions."

It's not that it's unimportant, but rather that it's unnecessary.

Therefore, Ron didn't hesitate and gave the order directly: "Victor, pass on the word that within four days, that is, on the 27th, all short positions in gold and long positions in euros must be sold off."

Considering the time-sensitive nature of the Egyptian black swan event and the time required for liquidation, Ron decided to reduce the notional amount: "An additional 20 times leverage, while simultaneously buying $800 billion in notional amount to short the euro spot and futures."

At this point, Ron paused, glanced at the euro's price on the chart, and then said, "Buy another $1 million worth of euro put options with a strike price of 1.3700."

Ron then opened his JPMorgan Chase account.

This is thanks to the better-than-expected financial reports released by General Electric and Google on the 21st.

Following this, the Federal Reserve's January policy meeting maintained the benchmark interest rate and the $600 billion quantitative easing policy unchanged, and raised its economic growth forecast.

The three major U.S. stock indexes have been rising steadily for the past two weeks.

The S&P 500 rose more than 2.8%, the Dow Jones Industrial Average rose more than 3%, and the Nasdaq Composite also rose more than 3% overall.

Although the figure is not high, the leverage this time is huge, with the notional amount exceeding $150 billion.

The S&P 500, with the deepest market capitalization, opened at $130 billion in notional funds.

If we close the position now, based on the current price, the total profit is expected to be no less than $6 million.

Ultimately, Ron decided to adopt the same strategy as the euro.

While gradually closing out existing positions, open short positions.

Time flies.

On the 27th, the number of initial jobless claims in the United States exceeded expectations again, and the euro and the three major US stock indexes saw gains.

Ron's hedge fund has finally completed its last long euro trade.

"How much profit did you make?"

"A $1.5 million euro call option yielded a total profit of $16.33 billion."

Ron nodded. Not bad, a little more than ten times what was expected.

"What about futures and spot trading?"

Victor took a deep breath: "$45.19 billion."

Since the 10th, the euro has risen by more than 7%.

But don't forget that at the beginning of the month, a short position was also opened, yielding a profit of over 3%.

In reality, the two transactions yielded a total profit of over 10%.

This is also the highest monthly profit for a single product since the establishment of Hunter Capital's hedge fund.

"What about the gold?"

"Since the beginning of the month, gold has fallen by more than 8%, with total profits of $13.48 billion."

Given the depth of the gold market, the total notional amount invested was only $200 billion.

Even so, the total profit from gold and the euro exceeded $70 billion.

More importantly, the last short position was also established within a short period of time.

Trading did not stop this month.

This is also what puzzles outsiders.

As is customary, Hunter Capital typically holds a celebration banquet around this time of month.

Even if it's a little late, I'll book the hotel in advance.

But now, whether it's the Tepsoho Hotel or other hotels on Wall Street.

We haven't received any reservation information.

This has inevitably piqued the curiosity of those who follow Hunter Capital.

Soros, Paulson, and other institutions that officially lifted their observation period last week are also curious now.

"Given that kid's flamboyant personality, the lack of news after all this time, could it be that he lost money?"

"Do you believe it? This market is so stupid, you wouldn't lose money even with your eyes closed."

"Others may not know, but Bridgewater has made a lot of money this month."

"Damn it, if we hadn't been being watched, we wouldn't have missed such a good opportunity."

"There's also the issue of Egypt. The market reaction is too muted right now. According to my information, this matter is definitely not going to end so easily."

"Are you sure? Is the information accurate?"

"What's the point of saying all this now? Besides, this young cowboy may seem reckless, but he's actually as cunning as a fox. I don't believe he doesn't have a backup plan."

"By the way, how much do you think he earned this month?"

"It should be around $50 billion. If it were me, with $200 billion in hand, and in this kind of market, buying gold only to see it rise while the euro falls, I'd get at least that much."

"Fuck! Damn it, it's all Blackstone's fault. They didn't put in any effort and made us miss a great opportunity."

For these large institutions, not making a profit in such a one-sided market trend is equivalent to a huge loss.

Anyone with a discerning eye can see that Hunter Capital definitely made a fortune this time.

The shareholders have so much confidence in Ron that they haven't called to inquire.

However, there are also those who are blind to reason.

Musk then called.

Looking at the caller ID, Ron frowned and pressed the answer button: "Ron, it's been a while since I heard from you. There's a celebrity party in Silicon Valley next week, do you want to come?"

Having known him for so long, Ron knew this guy's character very well.

They will never call unless they need money.

Ron said coldly, "Elon, I'm giving you a chance to cash out. I'll buy back your shares at a net worth of 200."

"What do you mean, cash out? Why would I cash out?" Musk paused, then tensed up. "Ron, is someone eyeing my shares?"

He was still counting on the dividends in April to make a profit, so why would he cash out?

Back in August, many people sold their shares in the first fund.

Some were forced into it, while others felt it was safe to cash out and leave.

But no matter how I left, I deeply regret it now.

"You're really not here to gather information?" Ron asked, somewhat doubtful.

"What happened? Sorry, Ron, I've been busy with the factory these past few days," Musk asked with concern.

Seeing that he didn't seem to be faking it, Ron smiled and said, "It's nothing, it has nothing to do with you, and it has nothing to do with the fund."

Just then, the phone rang. Changing the subject, he asked, "What are Tesla's shareholders saying?"

"Don't worry, everything has been settled. The reason I invited you to Silicon Valley is for this very reason."

"OK, I'll come over when I'm done with this."

Not only Tesla, but now that they have spare cash on hand, they also need to finalize their Nvidia shares.

He can't keep buying on the secondary market; it's too slow and troublesome.

Once it exceeds 5%, every additional 1% must be reported.

Thomas has been doing quite well with venture capital lately. He's learning quickly, and several of the projects he's submitted look very promising.

After ending the call, Ron turned his attention to Egypt.

The Egyptian stock market experienced a sharp drop at the opening bell in the past two days.

The benchmark EGX30 index fell by more than 16% in two trading days, wiping out more than $120 billion in market value. After the market closed, the exchange immediately announced an emergency market closure.

However, as a niche emerging market, Egypt did not initially attract the attention of mainstream global capital, and this round of plunge did not trigger a global market chain reaction.

However, on the second day, Friday morning Egyptian time, which was the early morning of the 27th Eastern Time.

This day also marks Friday, the Friday prayer day for Egyptian Muslims, and the demonstrations have taken a decisive turn for the worse.

Due to time zone differences, Thursday the 27th was a normal trading day for European and American markets, during which global capital completed risk repricing.

However, this risk pricing was clearly affected by the time difference-induced information lag.

The market made a serious misjudgment, severely underestimating the severity of the event.

On the one hand, the initial organizers were grassroots youth organizations, which the market believed lacked the backing of mature political forces and the ability to mobilize nationwide.

On the other hand, Mubarak controlled the police, the army, and a complete authoritarian system, leading the market to assume he had the absolute ability to quell the situation.

In addition, although the demonstrations on the 25th were large-scale, no large-scale deadly clashes broke out, and the market unanimously judged that "the risk is controllable".

No large-scale risk aversion was triggered.

This is why the foreign exchange market rose instead of falling on the 27th.

By the 28th, the number of demonstrators had surged from tens of thousands to millions, covering all provinces of Egypt.

It became the largest nationwide protest in Egypt in nearly 30 years.

Global investors are only now waking up to the fact that the impact of this "black swan event" has exceeded the worst expectations of the global market.

According to subsequent statistics, fierce gun battles broke out in Egypt that day, resulting in more than 60 deaths and thousands of injuries.

Mubarak declared a complete curfew in the core city and ordered military armored forces to enter Cairo.

Market concerns have begun to grow regarding the safety of shipping in the Suez Canal.

This corridor carries 12% of global oil transportation and 8% of maritime trade, directly causing international crude oil prices to surge by 4.32% that day, marking the largest increase in more than a year.

This then spread to global stock markets, foreign exchange markets, and gold markets, creating a global chain reaction.

Trading volume surged by 20% to 40% compared to the previous day.

The euro plunged as much as 1.2%, gold surged as much as 2.99%, and the three major U.S. stock indexes plummeted by more than 2%, with the Nasdaq index falling by more than 2.7%.

Ron's short positions saw an instant surge in profits.

"Victor, hurry up and calculate the net worth for this month!"

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