The Son of Finance of the Great Age

  Chapter 790 European Consortium (2)

  Paulson's statement immediately put others in a difficult situation.

First, everyone was originally on the same team. Although it was a loose alliance, it was the first time Zhong Shi spoke up, and it was difficult for everyone to refuse; second, Zhong Shi and Paulson took half of the shares. The 5 billion euros under the contract are evenly distributed to everyone, which is only about one billion euros. This figure is not too large.

  The most important thing is that Zhong Shi made it clear that it is a short-term short-selling behavior. As long as some hedging measures are taken on options or forwards, the risk can be almost reduced to the minimum.

   Once Zhong Shi's request is rejected, the most serious consequence is that they will be kicked out of the team. If this is the case, the consequences will be disastrous.

  After understanding the stakes, the other five quickly reached an agreement without any hesitation. Among them, Delio paid 1.5 billion euros, and the remaining 3.5 billion euros were shared equally by the other four.

   "500 million euro spot, price 1.2330, focus on European banks, see if anyone wants to take this deal!"

  After switching to the broker channel in the United States, Zhong Shi continued to issue orders, "The banks in the United States will leave it alone for the time being. I will see what's wrong in Europe."

   Soon, the results of the traders' consultations came out. This time, the Italian National Bank took over the transaction. Although the price of the euro against the U.S. dollar was around 1.2335 at this time, the Italians did not hesitate to accept the big sell order that was slightly lower than the market price.

   The transaction stalled for a moment, Zhong Shi wanted to see if the Italians were planning to make a profit, after all, the market price was higher than their buying price. But fifteen minutes later, he carefully observed all the transactions on the board, and there was no such large-scale transaction, which made Zhong Shi realize that the Italians did not intend to make a move in the short term.

   At this time, due to the entry of Paulson and others, the number of sales increased significantly. The price of the euro against the dollar also began to plummet, and soon broke through 1.2330.

   "Perhaps because of this, the Italians are not in a hurry to arbitrage?"

  Looking at the rapidly jumping numbers on the screen, Jiang Shan said thoughtfully, "After all, for commercial banks, they have to add interest costs to their arbitrage, so they don't take this basic profit into consideration, right?"

  Based on one basis point, the fluctuation of 500 million euros means a profit of 50,000 euros, which is not a small profit for foreign exchange transactions. But even if the interest part is included, it does not constitute the reason Jiang Shan said.

   "You underestimate the Italians!"

Zhong Shi shook his head slowly, his face seemed to be covered with a layer of frost and looked ugly, and then directed the traders, "Call the traders of the Royal Bank of Scotland, 500 million euros, the price of 1.2225, ask Ask them if they are interested?"

  He determined to try again.

  Jiang Shan seemed surprised by Zhong Shi's decision. He lowered his head and thought for a while, but he still couldn't figure out the key point.

   Not long after, news came from Europe that the Bank of Scotland took the sale order without even participating in the bargaining. To the surprise of the traders, after the RBS traders took the deal, they even had unfinished intentions, and directly asked Tianyu Fund how much euro spot they wanted to sell.

  The trader did not have authorization, so he could only come to ask Zhong Shi.

"them?"

Now even Jiangshan realized that it was not good, because the exchange rate of the euro against the U.S. dollar on the disk continued to fall. Whether it was Santander, RBS Royal Bank of Scotland or the National Bank of Italy, the euros on hand were all at a rapid rate. The speed depreciates. It would be fine if they stopped the loss and shot at this time, but the RBS people not only did not do so, but continued to increase their positions.

   Very abnormal!

For the foreign exchange transactions of commercial banks, what traders do is to buy and sell during the day on the computer. The risk control system behind the whole system monitors these transactions, and when it touches a certain red line, it starts to call the police. Close out these losing positions as soon as possible.

  So when RBS and other institutions still wanted to take more positions regardless of losses, Jiangshan realized that the situation was a bit abnormal.

   "It seems that you also realized that something is wrong!"

   Zhong Shi was very speechless about Jiangshan’s hindsight, but this was not the time to pursue these things. He quickly replied to the trader, "1 billion euros, the price of 1.2222, ask them if they want it?"

   Tianyu Fund once again sold 1 billion euros, which obviously exceeded the expectations of RBS. After five minutes of communication, they replied again, "The price of 1.2222 is accepted!"

   Not only Jiang Shan, but even Zhong Shi was a little shocked.

  According to the figures on the disk, if RBS had not shipped at a high level, then they would have lost millions of euros. This figure is quite terrifying. But the weirdest thing is that even so, they still have plans to continue reducing their positions.

"what is this?"

  After the deal was concluded, Zhong Shi decisively ended the strategy of continuing to smash the market, and returned to the office to hold an urgent consultation meeting with everyone.

   "Gentlemen, how much did you smash in just now?"

  Zhong Shi first opened his mouth to explain the situation here, "RBS took two of my spot deals with a total of 1.5 billion euros in succession, and the prices were lower and lower, and there was no sign of shipment at all."

   "It's really weird!"

Paulson was also very puzzled, "The current exchange rate is still falling, but European banks seem to be on a stimulant. They don't ask me the price at all, and they directly ask me if there is any stock here. Just three minutes ago, I just had an exchange with France. Bank of Lyonnais reached a spot deal of 300 million euros, and before that I sold a spot deal of 200 million euros to Bank of Lisbon.”

   "I reached a spot transaction of 400 million euros with HSBC!"

  Dairio also went on to say, "The price is around 1.2220, and the other party didn't even bargain, so the deal was done directly. Just now, Barclays called and asked if we had Euro spot to sell. The price is easy to negotiate."

   "Me too, Royal Dutch Bank..."

  Ackerman also said, "The price is similar, 100 million euros in stock. They seem to want to continue, but I stopped it."

   Immediately afterwards, the remaining few people also expressed similar meanings, that is, there are still many buyers in the market even though they are trying their best to smash the market.

   "Gentlemen, have you noticed that the main euro buyers are from Europe!"

After listening to everyone's narration, Zhong Shi was keenly aware of a problem, that is, most of the buyers are from large European conglomerates, "and their buying momentum is very fierce, directly ignoring the market trend, which greatly violates the our understanding."

  After his reminder, everyone realized that it was indeed the case.

   "There are only two possibilities now. One is that they all took the wrong medicine, and the second is that they are sure that the euro will rise in the market outlook!"

Zhong Shi continued, "Compared with these big financial groups, our capital advantage is not very obvious. But until now, I believe that you should have accumulated some profitable positions on hand. I suggest that we start to close positions now. The opponent is the European opponent who sold first, what do you think?"

   Regarding the abnormal reaction of the European consortium, Zhong Shi couldn't think of a better way for a while. If he continued to smash the game, the chips on hand would be exhausted sooner or later, which was too dangerous. At the moment, he changed his mind and decided to back off first, and wait for the situation to become clear before proceeding.

   "This is turning?"

For Zhongshi’s decision, Paulson obviously had a different reaction, “So far, we still have enough bargaining chips, as long as we continue to suppress the price of the euro, at least wait until we run out of chips before doing the opposite. "

  “It doesn’t matter what their intention is, but as long as we implement our established strategy, we will look back and see what they are going to do. Could it be that when the market rebounds, are we still afraid of lack of liquidity?”

   This is the first time Paulson has disputed Bellstone's opinion.

  The arguments of both of them are reasonable, and the rest of them will inevitably face a problem of choosing sides.

   "At least so far, the exchange rate of the euro is still falling, and I don't see any possibility of a rebound."

Delio was the first to say, "Mr. Zhong, you are right. But since we have formulated a strategy of smashing the market, we should not give up halfway. Although the profit received today is not too much, I plan to continue to smash Go on, this is a very rare opportunity.”

  "Although it is a bit dangerous, I still think Paulson's method should be the best."

  Jim Chanos also said, "Intraday fluctuations are normal, and this market has sufficient liquidity, so there is no possibility of liquidation. Mr. Zhong, are you worrying too much?"

   Then, others also stood up against Zhongshi's suggestion.

   This is the first time that everyone disagrees with Zhongshi's opinion, not just one person.

   "You all think so?"

Zhong Shi didn't feel frustrated, but was slightly surprised by their reactions. After a moment of contemplation, he decisively gave up his previous thoughts, "If you think so, then go ahead and do it. I won't either. Close the position, this may take advantage of you in vain."

   Naturally, everyone was quite satisfied with Zhong Shi's attitude. Because once Zhong Shi closes his position, with the size of his position, it is easy to offset all the pressure on the market caused by the continued suppression of the crowd, so that it is one of his own people beating his own people.

   "But I'm still going to contact the European banks and see what the **** they're up to!"

  But what Zhong Shi said next made everyone realize that Zhong Shi had not given up on his conjecture deep down in his heart. But since they won't kill each other in the market, everyone will naturally not put higher demands on Zhong Shi.

  The matter was decided like this.

  Next, Paulson and others began to unscrupulously suppress the exchange rate of the euro, and sales orders worth hundreds of millions of euros appeared in the market one after another, and the already declining exchange rate of the euro accelerated the rate of decline. Under such circumstances, American banks are very cautious, but the large commercial banks from Europe seem to have no relevant concerns. They take over almost without hesitation when there is a sale order, sometimes even regardless of the price. .

   Soon at the close, the exchange rate of the euro against the U.S. dollar fell to 1.2144. Although it was not as shocking as the Asian session, it still hit a new low since 2009.

   Paulson et al. are very satisfied with this.

   As for closing positions, they didn't even think about it. After all, the foreign exchange market is an all-weather market. The trading time in the United States is when the exchange rate of the euro is fully suppressed. It only takes a little time for them to liquidate their positions from the market in Asian and European time.

  However, their joy did not last long, and soon Zhong Shi brought them a very unexpected news.

   "European banks are not willing to sell their positions!"

  After stopping selling euros, Zhongshi ordered traders to ask RBS, Deutsche Bank, Santander Bank and other institutions about the possibility of buying euros. However, traders made frequent phone calls, and the price was raised from 1.2200 to 1.2230. The other party refused, and instead asked whether Tianyu Fund had a spot position in euros and wanted to sell it.

   This price is basically the price for them to open a position. It can be said that the price offered by Zhong Shi is very kind, but the other party still chose to refuse without hesitation.

ps: I had no idea yesterday, I wrote it too late, and even wrote the title wrong in a hurry... So I updated it earlier today~ It was another day without a vote, but I can only blame myself for being too late , so I am embarrassed to say anything. Anyway, writing a book is not easy, and sometimes it is really a headache. I hope everyone can understand and be considerate. Thank you for your support. The author will continue to work hard~

  (end of this chapter)