Chapter 19 The Big Short (6)

ps: The 800th monthly ticket will be updated

On September 9, the Federal Reserve Board, which had basically made its judgment, reported to the public. The content was eloquent. In other words: In addition to the consideration paid for 800 million U.S. dollars in gold, the U.S. branch of United Bank also transferred nearly 4 billion to the outside world. USD positions. If Union Bank declares bankruptcy at this time, the United States will have at least 4 billion U.S. dollars of funds that cannot be recovered. In theory, the Federal Reserve has the right to pursue loans issued by Union Bank in the future, but these companies are scattered in Europe, and it is difficult to come to collect debts.

Four billion U.S. dollars is not a small amount. The cumulative loans issued by the United States to Germany's Dawes Plan a few years ago were only at the level of 2.7 to 8 billion. Four billion U.S. dollars is enough to completely sort out the financial system of a European industrial power. Treasury Secretary Mellon burst into flames in his office and said angrily: "Nonsense, this is nonsense, let them give the money back!"

"The other party said that the loan had been issued and could not be taken back. Anyway, there was no breach of contract. Who stipulated that the loan could not be issued."

"I don't believe that these loans were issued to other companies in Europe. They must have used cover-up methods to finance themselves and avoid supervision." Mellon said, "Put the phone through and I'll speak to President Ciano."

"He attended the New York Investors Summit today. He was not present. The person in charge was Francisco, the president of United Bank..."

"It's useless to look for him. He is just a professional manager. The real boss behind the scenes is little Ciano. You greet him immediately and say I will visit him tomorrow, and then I will report to the president now."

"Should it be disclosed or publicly condemned?"

Mellon shook his head: "No, you can't do this. To be honest, he has not violated the rules of the game now. He has made full use of the rules, so we can't expose this matter yet. We still have to persuade him to get the funds." When he comes back, he can buy industrial equipment if he wants money, but he can't use this desperate method. This is not what a gentleman would do. "

Of course, Mellon knew that it would not work, as it would trigger a crisis in the entire banking industry, so he could only ask the Federal Reserve to give Francisco a death order. In any case, the 800 million gold and the current loans must be recovered as soon as possible. At the same time, the United Group They also need to provide a guarantee, of course the term can be longer, as long as they promise that the Ministry of Finance will not control it too tightly, the CEO will still have some face.

Mellon immediately went to report to Hoover. In fact, there had always been differences in concepts between him and Hoover: Mellon, as a typical financial group leader, believed that capital should be given more space, while Hoover, from the perspective of a national leader, believed that the country should carry out control.

But no matter how much freedom Mellon asked for, he would only give freedom to the American consortium. He did not intend to give the same freedom to the Italian consortium, so when he reported to Hoover, he gave Contini a hard eyedrop.

Hoover was also shocked after hearing this. After all, he had seen a lot of strong winds and waves. After a moment of silence, he calmed down and said suspiciously: "This matter does not strictly violate the law, so it cannot be sanctioned for the time being. What I want to find out most is why he What's the benefit of doing this? If he needs financing, he can do it openly..."

"He has expressed his views many times recently, believing that the Federal Reserve's interest rates are too high and suffocating the development of industry and commerce. At the same time, he also believes that the stock market will usher in a profound adjustment." Mellon also calmed down, "He is afraid that he will not be able to get so much money by then... … He wanted to strike first and signed a total of 4.2 billion industrial orders, but only paid 500 million in deposits, which is still 3.7 billion short! Even if it is paid in three years, it will still be 1.2 billion per year!”

"Let me call him. This matter needs to be resolved properly and decently. Try not to cause uproar in the city. The Federal Reserve's verification team can come back... Just figure out the big issues and don't worry about the details."

"The Fed said they haven't found any solid evidence of illegality yet. They..."

"Idiots! It's not unfair for the president to call some of them idiots!" Hoover knocked on the table and said impatiently, "What evidence do they want to find? So what if they find it? It's to imprison Ciano. Or kill? So what if there is evidence? The important thing is to get the money back. If there is no evidence, everyone can persuade the president to save face, and this matter will be settled. What do you mean by forcing someone to give up all 4 billion? Are you leaving? What matters is money, not people..."

"They said Ciano is still in New York, it's okay... it's okay..."

"He is a diplomatic envoy and has diplomatic immunity. Who is crazy enough to arrest him? Even if he is arrested, can you catch him? By the police? Don't be kidding. The police in New York can't even control the gangs, and they can still fight with them. The president's guards are fighting against the French Foreign Legion in Algeria! How can you use the army without the authorization of Congress? The president will be fine in the end, and we will be punished for abusing our power! Fo hates the irony and scolds, "The bankers at the Federal Reserve usually have their eyes on the top and think they are proficient in economics and finance. In politics, in politics..."

He repeated it twice, unable to find a suitable word to describe it. Finally, after holding it in for a long time, he finally managed to squeeze out a word: "naive!"

Although Mellon and Hoover had some differences in ideas, they still agreed with each other on this matter: President Ciano should focus on coaxing, and everyone should discuss it carefully, and must not fall out. If they fall out, a series of political and economic troubles await the government. political, financial, and diplomatic issues are all a series of issues. Now he hates the Fed again. Why would he check other people's accounts? Now that there is a problem, it's not a problem. It's not a problem. It's not a problem. It's better to pretend to be deaf and dumb at the time. That might cause less trouble.

Here we are busy explaining, and over there Contini is still attending the investment summit. Before Contini spoke, it was the economist Fisher who proposed the Fisher equation. He advocated that he should continue to be optimistic about the stock market, although the stock market index has fallen a little. High. This speech was similar to what the previous 7-8 big guys said, so the response it received was average, and everyone just applauded politely.

Contini was the last one to speak. The organizers’ intention was very clear. They wanted to bring out the president as the finale, because the president always has explosive remarks and everyone is waiting to hear his new ideas, especially when more than 170 investors jointly issued a statement not long ago. He said that Contini was wrong, and coupled with the momentum of Dow Jones breaking through 450 points, everyone was eager to hear his defense.

Among the people sitting in the audience was Livermore. Looking at the big shots around him who were gearing up, he couldn't help but sigh: Not only did the CEO sing empty words, he already had more than 2 billion short positions in his hands. But does he dare to reveal these words? If you dare to shake it out and keep it for safekeeping, it will be riddled with holes by Chicago typewriters tomorrow.

Contini glanced around, first laughed, and then said creepy words:

"Thank you very much for your optimistic remarks about the stock market just now. I am honored to be your opponent. I have cleared all my stock positions..."

There were whistles and shouts from the audience, but more powerful words were yet to come.

"Not only that, I have gradually established a short position that matches my personal status and wealth!" Contini said, "I am a very sincere person. I sing empty words but go short in my hands, and my attitude is clear. This is why the press likes me very much. I never say anything ambiguous, and I can put my judgment here..."

Everyone held their breath and listened to the president's judgment.

"A big crisis and a sharp decline are already waiting for us. They are not very far away, maybe next month, maybe on Christmas Eve..." Contini said unhurriedly, "So far this year, the agricultural product index has Consolidation has been maintained at a low level, and workers' wages have not grown as much as last year. President Hoover's efforts to develop the economy have been strongly blocked by the Federal Reserve, which has stifled the vitality of the economy with high interest rates. How can we expect to have stock market vitality without economic vitality? Is this impossible? It is a wise judgment. As far as I know, the industrial and agricultural index has reached its peak in June this year. Now the main commodities are unsaleable and the European market is also growing weakly. The only best-selling products are a few varieties. I would like to ask you. , besides United Motorcycle and Bailangduoxi, can you find a third item that is in short supply?”

Everyone in the audience squinted their eyes and thought for a moment, it seemed like there really wasn't.

"Yes! The third thing that is in short supply is called stocks! There are 47 brokerages, more than 200 trusts, and more than 1,000 over-the-counter underground black markets in New York. Even the tavern owner is making bets on the over-the-counter market. The only margin is his Courage! Countless people were involved. I went to Boston to visit, and the driver was asking if U.S. Steel had gone up by $5. I went to dine, and the waiters hid aside and discussed which stock was better. The shoe shine vendor asked me, Sir, would you like to recommend some stocks to you? United Pharmaceuticals is very good. This company invented Bailangduoyi. Would you like me to introduce you to someone who can buy ordinary stocks? There is an additional handling fee of US$5 per share, so don’t think it’s too expensive. You’ll make a profit if you buy it! Sooner or later, this stock will exceed US$1,000 per share.”

The audience burst into laughter and promoted United Pharma stocks to the president? Who doesn’t know that the president is the largest shareholder behind United Medicine.

“The market is so frenzied that I, a person who touches stocks every day, am trembling... Will the remaining industries of the United Group: United Power, United Real Estate, United Shipping, and United Airlines also be packaged and listed? And United Can movies, United Packaging, United Publishing, United Newspapers, United Refining, United Railway, United Power, and United Energy also be supplied continuously? Oh, I forgot, I also have United Education, United Telecommunications, United Construction, and United Steel? , United Shipyard, United Machinery, United Metallurgy..." Contini waved his hand, "If you want, I can list the entire Italian heavy industry. This is a large asset package of more than 30 billion US dollars. According to the current stock market of 3 Based on the price-to-book ratio, we can issue US$90 billion in shares, what do you think?”