Mediterranean hegemon

On May 28, the United Group held another press conference, which was chaired by Contini himself. Since the United whirlwind was very strong in May, there were so many people coming this time that Contini had to use New York City Hall as the venue for the press conference. The New York City government was also happy to lend it, not only for free, but also to help with various service work. These orders are all tax revenue for the city government.

"In two weeks, I will leave the United States and return to Italy to get engaged to my girlfriend. Many of you have met her. She is a very quiet girl..." Contini smiled, "I received a lot of love letters during my time in the United States. I have even received letters from enthusiastic American girls while working in Italy. I have a special personal secretary to help me deal with this. Every letter is filed and properly kept. It will be very useful for writing memoirs in the future. Thank you for loving me, I love you too! But I can only marry one, and she will be Ada Mussolini!"

Everyone applauded enthusiastically to congratulate: the young, rich, talented, handsome, and rarely scandalous president has always been the popular lover of American girls. There are even many novels describing the domineering president falling in love with me. Although the temperaments are varied, the basic template cannot escape the role of Contini.

"The news of my engagement is not one of the three key points to be announced today. A special press conference has been held regarding Italy's agreement to join the initiative of the United States and France. Today's announcement is mainly about important economic news."

The reporters waited calmly for the president to continue.

"The first news is a package of contracts between the United Group and 27 American industrial consortiums. This is the cornerstone of the grand vision of rebuilding Italian industry in ten years. We have signed memoranda and strategic cooperation agreements with these companies. After clarifying the requirements and technical parameters in September, we will formally sign contracts. These American companies mainly include..."

Strictly speaking, these news are not particularly new, but after listing them here, they still give people an extremely shocking feeling. Every time a memorandum and strategic contract news came out in the past two days, the stock prices of these big companies jumped up. A $2.4 billion contract, according to a 20% net profit estimate, will add an additional $500 million in profits. If measured by the current average price-earnings ratio of 26 times for blue-chip stocks, it will add 13 billion in stock market value. At present, the entire US stock market value is only more than 60 billion US dollars, which means that the stock market will rise by at least 20%!

These increases have been reflected in the stock market in the past month, that is, rising, rising, rising! Department store stocks rose particularly well in the early stage, because the media disclosed that the Agnes purchasing group spent at least several million US dollars! In the later stage, equipment and industrial stocks rose well, so speculators on Wall Street especially welcomed the president. They believed that the president was the god of wealth and the golden finger of the entire US stock market, and this thigh must be embraced!

Contini knew that they put the cart before the horse. The root cause of the white-hot US stock market was a series of measures taken by the Federal Reserve in August 1927. The two most important points were: first, the rediscount rate of the US dollar was reduced from the original 4% to 3.5%, which was equivalent to publicly guiding interest rate cuts; second, government bonds were also allowed to enter the market for free trading, so speculation heated up again.

The reason why the Federal Reserve did this was certainly not to ripen the stock market, but because the stock trading markets in France, Britain and even Germany had been sluggish, and Britain, France and Germany were struggling to prevent their currencies from depreciating. Since European countries generally still adopt the gold standard, if the Federal Reserve lowers the rediscount rate of the US dollar, it will effectively prevent gold from further gathering in the United States, thereby helping Britain, France and Germany to get out of the shadow of currency devaluation. This exchange rate reconstruction is beneficial to the United States' foreign exports.

Under this state, the current purchase and transfer of gold by the United Bank is not only not interfered with by the Federal Reserve, but also encouraged, believing that this can support the credit of the lira. The fact that the lira is pegged to the US dollar also makes the Federal Reserve very happy. The United States exported capital to Germany through the Dawes Plan and mastered the discourse power of German capital; through the United Group, it exported capital and equipment to Italy. Although the discourse power is a little worse, it at least has a strong influence on the lira.

However, nothing can be perfect. Under the general economic connection between European and American powers, the close relationship between the United States and Italy will cause the differentiation of other relationships. In order to continuously increase the share price of Contini, the United Group cooperated with the super-large companies in which Contini held shares. These large companies continued to expand their exports in the United Group's affairs, not only squeezing out the market share of countries such as Britain and France, but also the small and medium-sized companies that constitute the main force of US foreign trade could not share. The domestic market demand in Italy has been completely distorted by the investment of the United Group. Therefore, the traditional markets of Britain, France and Germany are particularly important to other American companies. By 1928, the economy had two extremes: the United States was driven by finance and trade, and Italy was driven by investment. Its consumption of cement and wood was almost equal to the sum of Britain, France and Germany. The United Group led the pace. Contini used more than 2 billion US dollars of investment in 5 years to leverage at least 4 times the capital in Italy. The United States exported equipment and capital, while Britain and France, traditional major exporters to Italy, plummeted in the process. This cross-top model of direct docking between the United States and Italy was advocated by Contini as a "new type of major power relationship", which was actually a disguised weakening of the strength of Britain and France and the stamina of economic development.

It’s not that Britain and France don’t want to follow the United Group’s approach, but after thinking deeply, they found that they couldn’t do it: first, Britain and France did not have such a topic-filled enterprise; secondly, the political system of Britain and France determined that it was impossible for them to do so; thirdly, Britain and France Large conglomerates have achieved symbiosis with politics. In other words, parties are fighting and consortiums are everywhere. Unlike Italy, there are no very powerful consortiums except Art. However, Mussolini did not like Fiat, so he gave the United Group unlimited power. Room to grow.

In February, when Contini arrived in the United States, the president of the New York Philanthropic Association wrote a report: "The current unemployment rate is the highest in the post-war period, setting a historical record." Under such circumstances, stock commentators and Some analysts have begun to continuously issue warnings to investors. Moody's said: "The current stock price has far exceeded the expected state. The stock market is operating in a very irrational state, and no one knows. We How much effort will it take to adjust the current stock market to its normal state?"

In March, Moody's once again declared: "Only after the currency becomes excessive and banks have to encourage credit expansion, can the public gradually change the current bear market mentality." Subsequently, the Harvard Economic Association also analyzed: " It can be seen from the stock market conditions in February that stock market trading is currently entering a stage of re-adjustment. In the mid-term of the stock market, stock prices will inevitably slide downward, but it should not cause a large drop, nor will it turn into a collapse of the stock market. Great Depression."

However, this reminder was not taken seriously by the market, and Contini would never allow the public to take it seriously, so he added fuel to the fire by saying in public that "300 points for the Dow Jones Index is the beginning of a new round of bull market." Of course today He could not lead such a rhythm at such a crowded press conference, so after announcing the project, he only concluded: "This kind of cooperation not only means the further deepening of economic and trade cooperation between Italy and the United States. , which also means that the majority of American investors and the Italian people will witness a better future.”

This reassuring voice was obviously in line with the intentions of other corporate executives to appease the market. The reporters thought this was a good statement and applauded to express their support.

"The second important news is that United Group is preparing to issue US$1.5 billion in long-term construction bonds this year and next year, with a term of ten years and an annual interest rate of 1.5%!"

This news shocked everyone, because United Group had just announced the successful issuance of 4-year bonds, and was it going to issue bonds again in the blink of an eye? Moreover, it is such a big number of 1.5 billion. This number is larger than the total number of bonds on the market in the first quarter, and the annual interest rate is only 1.5%. Doesn’t the CEO know that the current bond interest rate is generally between 4-4.5%? 1.5%? How could he send it out?

"You must have noticed the 1.5% interest, because these bonds are not simple long-term construction bonds, but convertible bonds linked to the shares of United Group." Contini dropped the bomb with a calm face, "There are companies under United Group that continue to pay The listing will eventually be achieved when the construction cycle is relatively complete. Now there are voices in the media criticizing us for always looking for consortiums to make strategic investments before going public. The price has increased by 20-30% before the public offering. We are unwilling to invest in better products. I wanted to share my business growth prospects with ordinary American investors. I realized this mistake and decided to make a change.”

"Of the US$1.5 billion long-term construction bonds, US$1 billion will be reserved for institutional investors, and the other US$500 million will be sold to ordinary investors through the joint banking system." Contini said, "The bonds are expected to be issued in July and will expire within one month. After the year, the company will start the sell-back process. Investors can convert the principal + first-year interest into company shares, or they can convert only the interest into company shares. The initial arrangement price for the conversion is US$10 per share, and the corresponding price-to-earnings ratio. It is 25 times, and the corresponding price-to-book ratio is about 2.5 times. In view of the fact that United Group has not officially launched its IPO yet, in order to increase the protection for investors, the group will transfer its current holdings of United Bank, United Petroleum, and the upcoming IPO. United Motorcycle, United Petroleum and other shares were jointly and severally pledged, with a total scale of nearly 1.5 billion!”