Chapter 6: Confronting the Federal Reserve (1)

ps: The 200th monthly ticket will be updated in January...

Contini's trip this time was replaced by a formation composed of the Andrea Doria as the core, and the naval officers and diplomatic attachés were also changed to give everyone a chance to go abroad in turn! With funding provided by the United Group, the Italian Navy and Ministry of Foreign Affairs are now very wealthy and often send a large circle of people to accompany them abroad. This not only highlights Contini's identity, but also makes the staff very happy. Everyone knows that the president is quite generous to the people below him. , didn’t everyone who went on the inspection last time get gifts and benefits?

Everyone’s thinking is why doesn’t the CEO go abroad every day? Then you can hang out outside every day...

In February, the stock market showed a pattern of two steps forward and three steps back, and the performance of individual stocks also began to diverge. This month, Contini did not reduce his holdings of many stocks, and the reduction amount was basically only used to repay loans and interest. Now the leverage ratio of United Group It has come down, which is a good thing for the U.S. financial system, and the banking community is generally relieved.

The Federal Reserve is finally in a better mood, because they withdraw $600 million through gold, of which $500 million was submitted by Union Bank. Union Bank's reason is very simple. Union Bank is expanding rapidly within the Italian credit system and needs more gold to support the lira. This excuse is very official and economical. The Federal Reserve, which has been suffering from difficulties in withdrawing funds but has a surplus of gold, is also relieved. The problem is They didn't consider the possibility that the gold would never come back after it ended up in Italy.

On March 1, Contini's fleet arrived in New York. This time he was greeted with enthusiasm. Henry Lewis Stimson, who had been nominated by President Hoover and was about to become Secretary of State, personally greeted Contini's arrival at the dock. In fact, Hoover wanted to come on his own, but after all, he was about to take office as president, and it would be disrespectful to welcome a diplomatic envoy with the dignity of a president, so he could only use the highest standards and use Stimson to welcome him on his behalf.

Stimson and Contini were not familiar with each other. After the two parties paid a courtesy visit, they were preparing to go to Washington. However, the sharp-eyed reporters discovered a radiant beauty in the entourage behind Contini, but it was not Ada, nor was it something they had seen before. The president’s life secretary.

"This is Adriana, the famous host of IBC, who hosts two programs "Roman Times" and "Hello Italy". She is a famous Italian program host..."

"The Age of Rome" is usually broadcast in prime time between 7 and 8 pm, and is used to comment on the important news of the day, while "Hello, Italy" is usually broadcast between 10 and 11 o'clock in the morning, and is used to interview famous Italians and military circles. Celebrities in politics, business, academia, scientists, entertainment and other fields are honored to appear in this column. In the words of the audience, you can often hear Miss Adriana's sharp, funny and witty interviews and comments. Italians may not know who the director of IBC is, but no one who listens to the radio knows who Adriana is.

"I have made careful preparations for this trip with the president. IBC has prepared a full set of interview recording equipment, preparing to introduce what we saw and heard in the United States, the grand occasion of President Hoover's inauguration, and the modern era of the United States to the Italian people. "Facing the swarm of reporters, Adriana spoke eloquently without any stage fright, "I would like to interview President Hoover and ask him to talk about his understanding and views on the bright future of the United States in the next four years, and to listen to his governance philosophy. and governance vision, the president repeatedly told the Italian people that the economic and trade exchanges between Italy and the United States have developed to such a close level that the economies of the two countries have gradually integrated into a whole. American industrial facilities and advanced technologies can be seen everywhere in Italy, and the United States He also opens his arms to welcome Italian motorcycles, endless waves, various fashion brands and Roman culture. He hopes that the United States and Italy will be well, but he does not want the United States to sneeze and Italy to catch a cold..."

The reporters nodded. Due to the sudden rise of the United Group, the relationship between the United States and Italy has become very close. Italy is the largest exporter of the United States, mainly large industrial equipment and other technical industrial products (such as automobiles), and the United States is Italy's second largest exporter. The objects are mainly motorcycles, Bailangduoxi and various fashion products, as well as ships (this is mainly a routine of the United Group to fabricate shipbuilding orders and steal US dollars from the United States).

The two sides also cooperate in many other fields. General Motors and United Group have established a joint venture automobile company. American Radio and United Telecommunications are strategic partners. The four major American oil giants have undertaken most of United Petroleum's exploration tasks. The United States is the second to follow up and go to Shenzhen. American capitalists from the countries investing in the special zone have obtained construction contracts for a series of basic public facilities such as water plants and power stations.

More importantly, the joint-stock companies of Italy's best conglomerates that are currently supported by the market are listed in the United States and are closely related to the majority of investors.

Of course, this is just a high-sounding reason. Only a few people know the real intention is that Adriana is accompanying Contini to play out, because Vivian, Ada and even Monica have already been to the United States. As for Adriana, If you haven't been here before, a bowl of water will be the same. Secondly, because Adriana gave birth to a child the year before, she spent the least time with Contini. This also needs to be compensated, so everyone agreed that Adriana Yana goes with you. Isn’t it hard to find a reason?

On the ship, Adriana's room was right next to Contini's room, and she would sneak over there every night. How could she not be glowing under such "nourishing" conditions? The only regret is that I can't buy it this time, not because Contini doesn't give money, but because of the special situation. Even if Adriana has money, she can't be exposed like this. But she didn't care about it at all, because she had everything she needed to buy, and no matter who else came out, they would give her their share. As for what she personally liked, she could just pick a little. Besides, with the moving golden mountain of the CEO here, are you afraid that you won’t have the opportunity to buy or buy in the future?

Hoover gave a warm welcome to Contini's arrival and met Adriana's individual interview request. During the interview, Hoover not only elaborated on his policy ideas, but also talked about goodwill and friendship. Adriana also He touted Hoover without any trace as the main architect of Coolidge's prosperity. Italy also benefited from this round of prosperity. Anyway, Contini had explained that he should praise Hoover as much as possible and at the same time express his concern for the current policies of the Federal Reserve.

So Adriana also asked a tricky question: "Currently, most observers believe that the stock market is overheated. The Federal Reserve is trying its best to raise lending rates and has curbed the inflow of funds into the stock market. However, such high interest rates have also hurt the real economy. Not everyone Every company has the strength like United Group to issue low-interest convertible bonds to replace loans. If they have problems, will it have a blow to the economy? "

Hoover himself was troubled by this matter. Of course he knew that stock market speculation had gone too far and needed to be controlled, but he did not agree to simply and crudely curb it as the Fed was doing now. He just hoped that it would be gradual, but this contradiction could not be directly displayed in front of the public. So after thinking about it, he said: "Economic prosperity and social stability are the main responsibilities of the government, and they are also the starting point for the formulation and implementation of the Federal Reserve's policies. However, any policy has a lagging effect. I hope we can maintain the rhythm, stability and consistency." ...You can take a closer look at the effectiveness before moving forward.”

This was a subtle criticism of the fast pace. Adriana found out the bottom line and Hoover's current thoughts, and then told the president the news. Contini was thoughtful about this, but his movements were not slow. Taking advantage of Hoover's inauguration, nearly US$300 million in shares were sold.

In order to enable the market to take over, he has recently visited various large American companies frequently: negotiating with Harley-Davidson about co-production of motorcycles. In fact, Contini knows that although United Motorcycles has a large number of orders scheduled, as long as a big crisis comes, the follow-up There will be no more, so the cooperation is doomed to be imaginary; negotiate with Ford Motor Company to establish Ford United Motors Company in Italy to produce Lincoln-brand cars. Now Lincoln itself does not have any excellent luxury cars, and it is not as good as United Group's own Admiral. ; Negotiating with Carnegie Steel Company to set up a steel plant in Shenzhen; Negotiating with Chevron to set up a refinery in Libya... These hollow glutinous rice balls have effectively prevented the market from shrinking overall and still maintain high popularity.

Contini continued to withdraw from it. By late March, the stocks he held finally fell to less than 1 billion US dollars for the first time. In order to hedge the risk, Union Bank's publicly held stocks reached 300 million, which was far away from the 500 million commitment at the time. There is still some distance.

By late March, the speculative fever in the stock market was finally under control, but the problem of capital shortage began to emerge, because the Federal Reserve's new policy caused short-term demand loan interest rates to continue to rise, and the interbank interest rates continued to soar from 12%, 15%, and 17%. On March 26, the Federal Reserve even announced that the overnight lending rate even reached 20%! The rate was the highest demand rate in the postwar decade. The stock market trading volume that day reached 8.25 million shares, setting a record high in history. The mailboxes of small and medium-sized investors were flooded with letters calling for margin calls. Some people believed that the bull market had finally come to an end.

Hoover was deeply angry about the decision because it was obviously too fast and too heavy, but the Fed, as an independent department, ignored Hoover's criticism, which made him furious.

Although small investors are desperate, bankers are unwilling to sit still and wait. Now is a good time to lend, and the interest rate of 20% is such a coveted figure!

Citibank President Charles Mitchell believed that the banking community should unite to resist the Federal Reserve's artificial interference and burst the bubble. In the end, bankers gathered together to discuss how to save the precarious stock market. Union Bank was also invited to participate. It was Alfonso, the president of the American branch of United Bank. Unexpectedly, it was Contini who attended in person in the end...