Zukun Miller, one of the managers of Quantum Fund, is also one of Soros's four main lieutenants. He hurried into Soros's office without knocking. At Quantum, he was also one of four people who could get into Soros's office without knocking.
"Miller, what's wrong?"
"Mr. Soros, XX Commercial Bank of Thailand, has lent a large amount of Thai baht forward contracts. He is not one of our people."
Soros smiled, did they finally take action? In fact, this Feng was someone he admired very much. He believed that Feng's financial abilities were no less than those of his four deputies.
It's a pity that Feng is from Xiangjiang and has a lot of money, so he will never be his deputy. But to say that Feng could be on an equal footing with him, he was disdainful.
I don't know what kind of luck that kid got, but he actually bought so many Microsoft stocks. Otherwise, how could he compare with him
"Watch and see if they operate in the same way as us." Soros also wanted to see what Feng could do if he only agreed to cooperate but did not listen to his orders.
In the afternoon, he got feedback that a large amount of funds entered the market and bought the stocks of some Thai banks.
Soros has understood that the other party's operating methods are the same as his. The next step is to use various methods to continuously expand the debt ratio.
…
Feng Yu used the borrowed money to buy stocks, long-term bonds, etc. Basically, he borrowed as much as he could and bought as much as he could. Then he mortgaged these stocks and bonds, borrowed money again, and purchased stocks and bonds in a cycle.
In this way, US$10,000 can buy hundreds of thousands of US dollars in long-term bonds. Where did the rest of the money come from? It was all borrowed from Thai banks and financial institutions.
"Feng, what's going on? Why do we have so much debt?" Kirilenko panicked. Isn't the debt too high
"More debt is a good thing. What would happen if we throw away all these bonds now?" Feng Yu asked with a smile.
"Huh? Throw them all away? Wouldn't that definitely cost you money?" Kirilenko was shocked. Wouldn't it be stupid to do this? We are here to make money, don’t you have to lose money by doing this
Lennon, the chief financial analyst hired by Kirilenko, couldn't stand it anymore. He reminded: "Mr. Kirilenko, have you forgotten that we bought a lot of stock index futures before, and they were all short-selling."
"Short selling? We shorted a lot?" Kirilenko said excitedly, then turned to ask Feng Yu: "What does short selling mean?"
Feng Yu and Lennon looked up at the ceiling at the same time. You don't know anything. You were so excited when you heard about short selling just now!
"Short selling means that we first sell some stock index futures contracts, and then buy them back to them within a certain period of time according to the agreement for delivery. And we only need to pay a ten percent margin, which can also be understood as ten percent. times leverage. We used one dollar to do ten dollars’ worth of work.”
Kirilenko still looked confused: "Then what?"
"Then what you just said is that once we sell bonds, stocks, etc. in large quantities, the stocks will inevitably fall. When stocks fall, the stock index will also fall, right?"
"Of course I know this!" Kirilenko rolled his eyes at Feng Yu, as if "you still ask me such a simple question."
"If the stock index falls, it will in turn stimulate the stock to continue to fall, and then form a vicious circle. A large number of investors will engage in panic selling. Some foreign investors will also lose confidence in the Thai stock market and sell Thai stocks. You Look, we sold these futures for ten yuan. At that time, we didn’t have the goods in hand. It was equivalent to borrowing them. When they dropped to eight yuan, we bought them back and returned them to them. In this way, we made two yuan. With a price difference of RMB 10,000 and ten times the leverage, we made 20 RMB. This is how we made money by selling the stock index futures short contract."
"But we lost money before. Can this part be subsidized to recoup the losses?" Kirilenko still remembers what Feng Yu said. I'm afraid I won't make any money in the first two months.
"We can't make it back, but it won't be much different. The main reason is that our debt ratio is too high, so we will lose a lot of money on ordinary bonds and stocks. But don't forget, we also have a sharp tool, which is foreign exchange contract."
Kirilenko blinked. This time he saw Feng Yu's angry eyes, and he smartly didn't ask any questions, waiting for Feng Yu to say it himself.
"Falling stocks and stock indexes will make many investors bearish on Thailand's economy and the Thai baht. Think about what we did when the ruble depreciated?" Feng Yu reminded.
"I know this, quickly convert rubles into dollars!" Kirilenko said excitedly.
Feng Yu nodded and gave a thumbs up to Kirilenko: "Yes, it is to replace it with US dollars that can better preserve its value. Although I am very reluctant to admit it, I have to say that the US dollar is the most widely circulated national currency in the world. One of the most important foreign exchanges in the world.”
Kirilenko kept a dark face and said nothing. He was unhappy when he heard that the U.S. dollar was better, but there was nothing he could do about it. The ruble was not strong enough.
"Foreign exchange is the same as stocks. When a certain type of foreign exchange is sold in large quantities, what do you think will happen? For example, the exchange ratio?" Feng Yu reminded.
Kirilenko said tentatively: "The exchange ratio has dropped?"
Feng Yu cast an approving look: "Yes, the exchange ratio will inevitably decline. From 24:1, it will continue to decline and exceed 30:1. Then the value of the US dollar will remain unchanged, and the Thai baht will depreciate."
"In that case, our Thai baht contract will make money, right?"
"Of course, in this way, we can make money from our foreign exchange futures contracts. The depreciation of the Thai baht will cause inflation in Thailand, which will further weaken Thailand's economy, and then the stock price will fall further. We can make money. , which are short-selling stock index futures and foreign exchange futures.”
"That's not right. We should be able to make a lot of money this way. Why do you say we may not be able to make money?" Kirilenko still didn't understand. Even with ten times leverage, why can’t I make money
Lennon explained from the side: "When we sell Thai baht, aren't we also losing money?"
Kirilenko was completely confused. He would lose money first and then make money. He couldn't understand this. Forget it, finance is so damn difficult. Not everyone is like Feng and is proficient in everything. As long as you have money and a good friend like Feng, you can just make money along the way.
Feng Yu looked at Kirilenko's confused look, and he didn't bother to explain. He tried his best to explain it in vernacular to people like this who didn't understand anything at all, but it was still difficult. Of course, this is also related to his previous job. As a financial broker in my previous life, how could I tell my clients all the details
It's just that some conditions need to be hidden, and some conditions need to be made ambiguous, so that customers will ask you to operate them. If it were as simple as buying or selling vegetables, then who would use their financial broker
"Brother Ji, you have to know that our accounts will continue to lose money in the past few days, so you have to calm down."
Kirilenko said angrily: "When did I have a bad attitude? I said I'd leave it to you, so I'll leave it to you. Feng, don't you believe me? It doesn't matter if you lose money, I'm happy!"
Feng Yu rolled his eyes, are you still in a good mood? If you had a good mentality, you wouldn't give up your hobbies of wine and sex and just sit in the office, looking at financial data that you can't understand at all. Forget it, he can just stay here if he wants to. .
(End of chapter)