Chapter 968 The Next Plan Is to Short Island Country Bonds.
Chapter 968 The next plan is to short island country bonds.
Yang Chen, Wall Street investment banks, Bill Gates, and so many big guys shorted the European stock market together, attracting ordinary investors to follow suit.
Although the Rothschild family spent a large amount of cash to forcefully increase the stock prices of some industry giants, it was still unable to reverse the decline of the European economy and stock markets.
After more than a month of decline, the stock prices of many companies have been cut by at least half.
The halving of the stock price will not have any impact on the company's operations, but it will significantly reduce the book wealth of shareholders.
Take the LVH Group, the parent company of LV, for example. The stock price cut in half caused the wealth of Arnold, the richest man in Europe, to shrink by nearly 40%, forcing him to give up his position as the richest man in Europe.
Yang Chen never earns the last copper. Although the European economy is unlikely to pick up in the short term, the stock prices of European listed companies are also unlikely to rise significantly.
But it is unlikely that it will fall further. It will basically maintain the current level and fluctuate up and down.
Therefore, Yang Chen didn't want to waste any more time and continue to hold short orders, so he should close his position as soon as possible and settle down.
Yang Chen sent a message to the Wall Street giants, inviting them to hold a video conference to talk about closing the network.
After some pleasantries, Yang Chen directly talked about the topic.
Yang Chen: "I think it's almost time to close the net. Don't make the last copper plate. Everyone, buy and close your positions as soon as the market opens tomorrow."
Goldman Sachs President: "Ah? I think there is still room for decline. There is at least 10-15% room for decline. Why close the position now?"
Citigroup CEO: "That's right! We can guarantee more than 10% more income, so why not wait?"
Capitalists are indeed greedy. They have already made a huge profit of 50% and are not satisfied. They have to earn the last 10% to be satisfied.
President: "We agree with what Mr. Yang said about not earning the last copper. However, that is a theory that is only used when the situation cannot be controlled or the outcome cannot be determined. Now we can clearly know that the European economy will last at least ten years. It is impossible to return to the previous level within a short period of time, so the stock prices of major companies must be bearish in the short term. So, why don’t we continue to hold short orders?”
Ask these greedy capitalists to give up the 10% of their profits, and they will definitely not agree.
So Yang Chen thought of a way to use their greed to his advantage.
Yang Chen quickly said: "Actually, I have a new project, so I asked everyone to close their positions quickly."
As soon as the giants heard that Yang Chen had a new project, they immediately became excited.
President of Goldman Sachs: "Haha... I just said that Mr. Yang can't ask for liquidation of positions for no reason. Tell me about any new projects?"
President: "Haha... I just asked why Mr. Yang didn't want the last 10% of the profit. It turned out to be a deliberate project. I don't know what project to do this time?"
Yang Chen replied with a smile: "The current international situation is unstable, and Mao Zedong has restricted energy exports, causing global energy prices to soar. It is not only Europe that is affected, but also other countries that rely on energy imports. They are also greatly affected. .”
Yang Chen paused deliberately.
President Miyin Milin quickly asked: "Well, Mr. Yang is right. So what project does Mr. Yang want to do?"
Yang Chen made a decisive decision and said: "Short island country bonds!"
As soon as this statement came out, the giants were shocked.
If we say that shorting the stock market is only targeting listed companies, it is not targeting any national government.
So shorting the bonds of island countries means that they have to compete with the governments of island countries.
At first glance, shorting the entire European stock market is definitely more difficult than shorting a small island country.
actually not.
They are shorting European stock markets, and as long as they do not go too far, European governments will not end up competing with them.
At most, institutions with large equity holdings such as the Rothschild family will step in to save the stock price.
But shorting island country bonds is different.
Island country bonds are issued by the island country's government, and shorting them means competing with the island country's government.
Therefore, the Wall Street giants were shocked when they heard what Yang Chen said.
Goldman Sachs President: "Mr. Yang, are you kidding me? Are you sure you want to short island country bonds?"
Yang Chen nodded and said confidently: "That's right, you heard me right, I'm talking about shorting island country bonds."
President of MiYin Milin: "But the currency of the island country is the third most common currency in the world. It is not easy to short their bonds. If they resist desperately and print money frantically to recycle the bonds on the market, we will not be able to short them."
President: "That's right! If you are shorting the bonds of a small country, there are still ways to do it. With our strength, we can definitely win. However, shorting the bonds of island countries is too risky and has no operability at all."
It seems that these capitalists still have a sense of crisis, and they are not willing to do anything for profit.
President of Morgan Stanley: "But I think it can be done. In theory, we can get considerable profits. Mr. Yang is right. 90% of island countries' energy depends on imports and 60% of food depends on imports. They are self-sufficient. Very bad, which also determines that their own country’s economy is too affected by external factors. Now that energy and food prices are rising globally, and the economy of the island country is in a mess, I think it is really worth trying to go short.”
President: "Who doesn't understand this? The problem is that what we are shorting are bonds. The island government can release more money to buy back bonds, but we cannot be successful in shorting."
It seems that the investment capabilities of these giant CEOs are not very strong, but they have the help of super intelligent teams, and all their talents are invincible on a global scale.
Yang Chen said with a smile: "Let me analyze our operational ideas for everyone. After I finish the analysis, everyone will decide whether to do it or not. Okay?"
The giants nodded.
Yang Chen analyzed his thoughts for everyone.
Assume that 1 meter of gold can now be exchanged for 200 island currency.
Now Yang Chen and the others borrowed 10,000 island national currency bonds from the island country and then sold them on the market.
This will inevitably cause the island country's bond prices to fall. A bond with a face value of 10,000 may only be worth 9,000 island currency.
In this way, they can use 9,000 island currency to buy bonds with a face value of 10,000 to repay the island bank.
The 1,000 island national currency difference is their profit.
This situation is an ideal operating process, which means that the island government does not intervene in the bond market and allows the market to develop freely.
However, from a common sense point of view, the island government cannot sit idly by and ignore the decline in bonds. They will definitely print more money for repurchase and force the price of the bonds back to their par value.
This is also what worries Wall Street giants.
From an economic theory point of view, they will definitely get a price difference from short selling. The question is whether the island government will allow them to earn this price difference is hard to say.
If the island government does not want them to make this money, there are many ways to reverse the situation.
Therefore, this involves Yang Chen's second plan.