The rise of a great power: starting with military industry

Chapter 544: Planning for Black Monday
Hong Kong.

After inspecting the Beijing-Kowloon Railway, Liu Tao came to Hong Kong.

There are three things for this trip to Hong Kong. One is to determine the time of the shareholders' meeting of each of its listed companies and to formulate a dividend plan to be voted on at the shareholders' meeting.

Since he has taken over these listed companies, Liu Tao will also abide by some of their rules.

Dividends for listed companies are not fixed, nor are they required to be paid.

In the stock market, there are a lot of companies that do not pay dividends.

However, normally, as long as the company is profitable, listed companies will often distribute dividends.

The dividend distribution time is not fixed. Generally speaking, listed companies distribute dividends in the form of year-end dividends, quarterly dividends, etc.

The listed companies controlled by Liu Tao have been implementing year-end dividends in recent years. After the Spring Festival, the board of directors determines the date of the shareholders' meeting and requires the preparation of financial statements and dividend plans. At the shareholders' meeting, a vote is held on whether to distribute dividends according to the dividend plan.

In addition to dealing with the affairs of listed companies, the next step is to sell the shares of Jinlong Technology Group in order to obtain more funds.

Jinlong Technology Group went public, and now almost all of the shares he controlled have been unblocked and can be traded on the market.

This matter is closely related to the third matter.

That was the 1987 financial crisis!
The late 20s and the entire 50s were the 'golden age' of American economic development. The economy continued to grow steadily, inflation and unemployment rates dropped to very low levels, one worker could easily support a large family, and an auto worker could live in a big house and drive a car. That was the best time for America.

By the 80s, the U.S. stock market had experienced a 50-year bull market.

It is said that during the first oil economic crisis in 1973, the US economy was weak, with high inflation and unemployment rates, but that was all based on manufacturing and the real economy.

In the financial markets, the United States as a whole continues to rise.

Since 1982, stock prices have continued to rise and trading volume has increased rapidly. The stock market has continued to heat up, and its development speed has far exceeded the growth rate of the real economy. The development speed of financial transactions has greatly exceeded the development speed of world trade.

Things are so strange. It stands to reason that the financial market and the real economy should complement each other and be related. If the real economy weakens, the financial market will also be weak. However, the US financial market is so out of control. After the first oil economic crisis, the US manufacturing industry was in trouble. The low-end manufacturing industry either went bankrupt or built factories overseas to reduce costs. The automobile manufacturing industry was faced with the challenge of West German and Japanese cars and was beaten to a pulp. The overseas market of US cars can be said to be constantly shrinking. Even in the US market, the market share of US cars has been declining at a visible rate.

However, the US financial market was not affected. Although there were occasional declines, it was generally in a bull market.

Especially since March 1986, the Dow Jones Index has soared all the way, jumping from 3 to over 1686 points, and speculation has clearly become overheated.

According to Liu Tao's memory, by September 1987, the Dow Jones Index would reach 9 points, and the market value of the U.S. stock market would be as high as 2722.42 trillion U.S. dollars, far exceeding the actual capital supporting its activities, causing short selling to prevail and speculation to enter a frenzy.

Entering September, stock price fluctuations have become extremely abnormal. From October 9 to 10, the Dow Jones stock fell 3 points, a drop of 9%. From October 158.78 to 6, the index fell 10 points, a drop of 11%.

October 10th, it’s another cursed Monday.

That day, the Dow Jones Industrial Average plunged 22.61% to close at 1738 points.

On that day, the NYSE Composite Index fell 19.2%, the AMEX Composite Index fell 12.7%, and the Nasdaq Composite Index fell 11.35%.

The face value of $5030 billion of stocks, equivalent to France's annual GDP and one-eighth of the United States' annual GDP, was wiped out in one day.

On that day, among the 1600 stocks listed on the New York Stock Exchange, only 52 stocks rose, and the rest all fell. Among them, 1192 stocks fell to the lowest level in 52 weeks, and many representative blue-chip stocks were also doomed. Almost all the stocks of major companies plummeted by about 30%:

For example, General Electric fell 33.1%, AT&T fell 29.5%, Coca-Cola fell 36.5%, Westinghouse fell 45.8%, American Express fell 38.8%, and Boeing fell 29.9%.

This financial crisis is a crisis for most people, but for Liu Tao, it is a rare opportunity.

If handled properly, at least tens of billions of dollars can be gained from this economic crisis.

As for whether this kind of action of adding insult to injury would cause the US stock market to suffer a greater setback, Liu Tao just laughed and said it was none of his business.

A dead Taoist friend will never die but a poor Taoist.

He just wanted to take this opportunity to make a fortune so that he could have more money to invest in China and make China develop faster.

If China wants to develop faster, it cannot do without financial support.

If China is to reform and open up and become a great and powerful country, it will require a huge amount of funds.

The funds required for infrastructure construction alone are enormous.

Since he knew about this economic crisis, he naturally had to make good plans and make a fortune from it.

The United States is different from Japan. If you want to make this money, you have to plan ahead.

Here, Hong Kong's advantages as a free trade port are fully demonstrated.

Of course, he doesn't need to do this personally, he just needs to provide guidance, and naturally there will be multiple teams carrying out the work separately.

After arriving in Hong Kong, Liu Tao checked into the Peninsula Hotel.

Looking out from the window of the suite, Hong Kong is more prosperous than ever before, with bright lights and bustling traffic everywhere.

Even at nine o'clock in the evening, it is still very lively.

By now, Hong Kong's industrial structure has been almost adjusted. Hong Kong Island, Kowloon and other places are mainly dominated by finance, education, tourism, trade services and technology industries, while other places are dominated by high value-added industries such as electronics industry, automobile industry, motorcycle industry, home appliance industry, gaming industry, etc.

These industrial structures are sufficient to support Hong Kong's development in the next forty years.

Moreover, although the current housing prices in Hong Kong have exceeded those in 1982, because many people have begun to develop in other areas in recent years, more and more real estate developments have been carried out. In addition, since last year, voices and discussions about the integration of Shenzhen and Hong Kong have begun to emerge in Hong Kong. This has to some extent suppressed the rise in housing prices, so that housing prices in Hong Kong will not be too outrageous.

At this time, a lot of funds flowed to other industries instead of all flowing into real estate, which also forced real estate developers to devote more energy to developing the mainland real estate market.

After all, the real estate market in the mainland is just beginning. Real estate developers in Hong Kong have advantages in experience, vision and capital. The real estate market in the mainland is very broad. Although there are still various policy constraints, it is a sure profit and there will be no losses.

This has also led to more and more Hong Kong real estate developers entering the mainland to develop real estate and invest more money.

(End of this chapter)