Excellent model steps are very pleasing to the eye, especially now that the fashion world has not yet been occupied by various second-generation IT girls who can only 'walk'. If you want to be on the top, walking well is the basic skill.
Inside Elite's training base.
Simon enjoyed the live performance without staying too long and quickly left with Grace, leaving behind a group of extremely disappointed girls from all over the world.
Still influenced by Simon's big butterfly, the fashion world has changed beyond recognition.
Just like this time, except for the two Korean models Shin Chae Hye and Jeon Woo Jin who were arranged in advance, they were also the kind that had not appeared in history. Simon did not recognize the others. All she has is a young face with a slim waist and long legs, which is pleasing to the eye.
Leaving Brooklyn, Simon took Grace on a helicopter flight to a shooting range in Greenwich.
I haven’t played with a big gun for a long time, so I spent the rest of the afternoon shooting through a dozen magazines to my heart’s content.
Grace accompanied him throughout the whole process, watching her little man standing in the shooting range with an exaggerated Barrett on his shoulders. She was simply stunned. At one moment, she was quite self-destructive and wanted to run and be his. How wonderful that the target would just turn into ashes.
Overnight at a manor in the northern suburbs of Greenwich.
Guests were invited to dinner tonight, Lady B and his wife, as well as John Meriwether and his wife, the heads of Long-Term Capital Management, where Lady B’s husband, Mark Shiner, works.
As Alia quickly competed with Bloomberg and showed an overtaking attitude, Alia software has also become an important financial information dissemination tool in the Westeros system that affects international financial trends. In fact, it is equivalent to financial voice, which is crucial, so Simon I have been keeping an eye on Girl B's mess.
However, the topic of dinner today is not Aaliyah, but Long-Term Capital Management.
Some time ago, Simon asked Girl A to collect data on the bond hedging positions of various mainstream countries, which served as the basis for the topic of this dinner.
Simon originally thought about leaving this matter alone, but after thinking about it, he still planned to intervene.
First, let’s talk about the operating methods of Long-Term Capital Management.
This is the financial trading model created by John Meriwether during his time at Salomon Brothers. It once contributed more than half of Salomon Brothers' profits. Later, Salomon Brothers collapsed due to the national debt scandal. Meriwether's team was not affected, but left to become an independent company. , established Long-Term Capital Management.
Its main operating method is to use the difference in interest rate fluctuations of bonds from various countries around the world in different periods to make bets.
The core is still the zero-sum game of futures betting.
Professional models are of course very complex, but in the simplest terms, for example, the United States issues a batch of 10-year Treasury bonds with an annual coupon rate of 8%. Because of the differences in the international financial environment, after the bond is issued, the actual trading process may not be 8%, maybe 7%, or 9%. Of course, this is just for convenience of example. The actual fluctuation range is the same as the US dollar foreign exchange ratio, which is very Low, maybe only 0.01%.
Long-term Capital Management used this issuance position to bet against others. It was optimistic that the interest rate on this batch of U.S. Treasury bonds would rise from 8% to 9% in three months, so it established a long position. This is probably the case.
However, because the fluctuation ratio of bond interest rates is very, very low, 0.01%, if you want to obtain enough income, you need to use more than 100 times of leverage to establish a very large position.
Just the data recently collected by Simon shows that the current spread hedging position held by Long-term Capital Management exceeds US$300 billion, while the principal used by Long-term Capital Management is only US$2 billion, which is more than 150 times leverage.
If it were ten years ago, or even five years ago, this matter would not have much to do with Simon.
But it's different now.
As the scale of the Westeros system becomes larger and larger, the correlation between the entire Westeros system and the global economic trend becomes stronger and stronger.
Therefore, Simon does not want to see a large systemic financial risk that may affect the Westeros system.
How did the global financial tsunami that Long-Term Capital Management almost triggered happen
Very simple.
Around the second half of 1998, the Asian financial turmoil spread across the world, and attention turned to Russia. When the country's economy was in danger, it had to seek assistance from the IMF like many Asian countries.
At this critical point in time, Long-Term Capital Management believes that according to usual practice, Russia will definitely reach a rescue agreement with the IMF. The worst is that when it comes to the country's sovereign credit, Russia will not let its own national debt default even if it sells the iron.
Now that the direction has been determined, when interest rates plummeted due to systemic panic, Long-Term Capital Management decisively chose to be bullish and used ultra-high leverage to establish a position of hundreds of billions of dollars.
The result is known to everyone.
Russia suddenly overturned the table and stopped playing. It allowed the ruble to depreciate, proactively defaulted on its national debt, and closed the trading market.
As a result, not only Russian domestic bonds, but also Europe, Latin America and Southeast Asia were in mourning, falling across the board. The extreme market conditions directly led to the breakdown of Long-Term Capital Management's positions.
The foundation of the international financial market is based on the national credit established by the country behind it over a century. Wins and losses must be honored. If it cannot be honored, the credit will collapse and the entire financial system will be wiped out. Therefore, under extreme market conditions, huge losses will first occur. Devouring the traders themselves, and then the exchange platforms where the positions are located, if the exchange capital is also exhausted, if the international financial system does not want to collapse, the country will need to rescue it.
During the 1987 stock market crash, the federal government mobilized large sums of funds overnight to rescue the Chicago Board of Trade.
In the 2008 subprime mortgage crisis, the same extreme market situation occurred. In order to prevent the financial system from collapsing, the U.S. government poured hundreds of billions of dollars into the mess left by Wall Street's huge positions to make up for the hole.
In between, the 1998 Long-Term Capital Management crisis was no different.
Even based on the current position of Long-Term Capital Management, a leverage of 150 times can support a fluctuation of up to 0.67% in bond spreads. Under normal circumstances, a fluctuation of 0.01% will not liquidate the position. However, Mao Xiong flipped the table. This extreme market situation has directly caused the fluctuation of international bond interest rates to exceed 1% in the short term, making liquidation inevitable.
Inside the Manor Restaurant in the northern suburbs of Greenwich.
John Meriwether thought that Simon was like those wealthy people who have been flocking to Long-term Capital Management in recent years. He wanted to invest money in his company, and he was inevitably proud of it. Unexpectedly, while chatting, the other party's topic changed. Turn to things that allow him to reduce the company's positions to avoid extreme market conditions.
Even with the decline of Salomon Brothers, John Meriwether has not experienced any setbacks over the years, including the 1987 stock market crash. Not only did they not lose money, but they made money from it.
Therefore, even though he was facing Simon Westeros, who had trillions of dollars in assets and had an amazing performance in the field of hedging, John Meriwether, who relied on his own model to be absolutely foolproof, was still very unhappy: "Simon, maybe you are not too Understand our model, well, speaking of it, there are definitely not many people who can understand our model. It was developed by two Nobel Prize winners. I think your worries are somewhat unnecessary."
Simon had just patiently explained his worries. He was not angry when he saw John Meriwether acting like this. He stood too high and looked down at all living beings. It was difficult for him to have strong emotional fluctuations about many things now. Hearing this, he just said: "John, frankly speaking, how your company operates has nothing to do with me. If Long-Term Capital Management's operations, winnings, losses, and losses are limited to itself, I will not care at all. But your position size is too large, and the current international financial situation can change at any time." Extreme fluctuations may occur, triggering a systemic financial tsunami, so you'd better seriously consider my suggestion and reduce your leverage ratio to less than 50 times as soon as possible, and the position size should not exceed US$100 billion."
Simon's tone was still calm. Even though he was still a little reluctant in his heart, John Meriwether would not be stupid enough to fall out with Westeros. In the end, he nodded: "Okay, Simon, I will seriously consider it."
Simon continued, with a sense of matter-of-factness in his tone: "It's not about thinking about it, John. If you don't respond, then I will respond for you. It's just a matter of a few phone calls."
Meriwether's face looked a little ugly now.
Girl B and her husband Mark Hill looked at each other and wisely did not interrupt.
Simon's posture was still calm, but the so-called 'matter of a few phone calls' sounded like a thunder to Meriwether and others.
Very simple.
Take the fire out of the cauldron.
Since Simon specially invited Meriwether, he would not let his saliva go to waste.
If Meriwether was unwilling to execute, Simon would tell Long-Term Capital Management investors to withdraw their capital. With the intricate influence of the Westeros system, it is not difficult to do this now.
After dinner, the Meriwethers left first, and Simon left Lady B and his wife to chat about some matters related to Aaliyah's company before sending them off.
The time came to around nine o'clock in the evening.
After seeing off Girl B and his wife, Simon returned to a living room on the side of the villa and asked about something. Girl A brought over a piece of information she had just compiled during the day.
Since the dinner, Grace has been listening because she was offered a position as a director of Bank of New York Mellon by a man. She didn’t want to live up to the man’s instructions with a blind eye. Grace worked hard to learn some financial courses on her own, so the dinner process just happened. Chuuya probably understood the discussion between Simon and Meriwether.
At this time, Grace cuddled up to the man with a fruit plate prepared by herself. While putting the fruit into the man's mouth, Grace asked: "What you said is that there may be a national debt default in Asia or Eastern Europe. It shouldn't happen easily, right?"
Simon took a bite of the apple, continued to flip through the documents in front of him, and said: "It is precisely because everyone thinks it will not happen that we need to pay attention."
Grace thought for a moment and said, "Since you think this might happen, maybe you can go short in advance?"
Simon smiled and said: "In the primitive accumulation stage, in order to obtain enough funds as soon as possible, it is okay to make a few bets, but if you keep doing this, sooner or later you will overturn. Therefore, for me, financial means are indispensable. , but it can definitely only be regarded as an auxiliary, and the core is to do various real physical businesses. The most important problem of the Federation now is to get this thing reversed. I remember Buffett said an interesting little story, Buffett, you know it? ?”
Grace nodded her chin on the man's shoulder, listening intently: "Of course."
Simon continued: "What Buffett said was that a group of financial elites were stranded on a desert island because of a plane accident. As a result, only two people went to engage in production activities such as planting, gathering, and hunting, and everyone else began to play around with the production materials of these two people. Various financial operations, do you know what the results are?”
"They must all starve to death," Grace said with a smile, "However, I think there is such a group of people who would not be stupid enough to do such a stupid thing."
"The problem is that the current trend in the federation is like this. A large number of entities have moved abroad, and the proportion of financial industries such as investment banking and insurance is increasing."
Grace thought for a moment and said, "Aren't we all talking about globalization now? I think this is just a division of labor trend."
"Imagine," Simon said, "If some extreme events occur in the future, such as war, and the global supply chain suddenly breaks, you will find that the federation will suddenly become a lonely wasteland where two people are engaged in production and another person is involved in finance. Island, what will be the result?”
Grace imagined along the man's train of thought, then shuddered slightly and looked up at Simon: "So, are you going to do something?"
Simon continued to flip through the information in front of him and said calmly: "What can't be changed, we can only take care of ourselves, Westerosian, understand, you are also a Westerosian now."
The man's words always seemed to have some strange magic power. When Grace heard what he said, she nodded her head naturally and leaned towards him again: "I'm just your Westerosian."
"Then don't be lazy and give me another piece of apple."
"Yeah, hehe."
Grace felt her body go limp. She smiled softly and put a piece of apple into the man's mouth. She carefully held the fruit plate in her hand and glanced at the document Simon had been looking at just now: "What is this?"
"Draft issues for the G8 summit."
Grace thought for a moment before reacting: "I saw it on the news recently, on June 8th, in Birmingham, England."
"yes."
The G8 summit must be familiar to those who come after us.
Coincidentally, this year's summit is the first G8, and Russia was only approved to join in the second half of last year. In addition, the core of this year’s topic is also very interesting, globalization.
Grace continued curiously: "What are you looking at this for?"
"I'll go over there then," Simon said, "There's a cocktail party arranged there for everyone to get together and have a casual chat."
"Um."
Grace expressed her understanding, but inevitably felt a bit of admiration and pride.
A group of people that my little man talks to casually and casually are actually the heads of state of the most powerful group of countries in the world.