Mediterranean hegemon

Mellon was also somewhat confused by what Hoover said, but he was under great pressure due to the sharp drop in the stock market. Finally, he reluctantly said: "Let's see the situation in the afternoon and see if the index can get better. If it can be pulled up, maybe there is still hope..."

When the market opened in the afternoon, Contini asked Livermore to harvest while carefully checking the stock market trends. Sure enough, Hoover's words at noon had a certain effect. Although Mellon himself was skeptical, he still told his colleagues on Wall Street through the internal circle. The stabilization fund headed by Mitchell desperately adjusted its positions and exchanged stocks, abandoning those hyped concept stocks and focusing on large blue chips with indicator significance - if the overall bull market is not good, a structural bull market is also good. Besides, the average P/E ratio of small and concept stocks is over 80 times, which is indeed too high, but blue chips now have only 15 times P/E ratio, which is supported by solid performance and is not high at all...

After hitting a low of 264 points in the afternoon, the Dow Jones finally started to rise as expected. Although the initial 20-point rebound encountered a wave of selling, with the joint efforts of several major companies to save themselves, the key index stocks have improved greatly. At least the trading volume has increased, and it is not going straight down. However, the concept stocks, theme stocks, hot stocks, and high P/E stocks that speculators, especially leveragers, like the most are still falling. The instructions received by the entire Wall Street investment institutions are the same: protect the big and abandon the small! In Hoover's words, we must confidently expand and strengthen the backbone key enterprises, and as for those small companies, they should go back to where they came from.

Since the Dow Jones Index is not an index covering the entire stock market, but only selects giant companies in the industrial and energy fields, the stock market soon became polarized under the impetus of this force: large stocks represented by US Steel and General Motors began to stop falling and rebound, while small stocks and high P/E stocks that had fallen sharply were falling straight down.

Livermore came to ask how to deal with it. Contini pondered for a long time and said, "What do you think is a better way to deal with it?"

"That depends on the estimation of the future market. Do you think 264 points can be maintained? Or, can it be maintained in the short term?"

Contini shook his head: "It's impossible. 264 points can be maintained for 1-2 weeks at most. I think it will fall below 200 points sooner or later, or even below 150 points." When he said this, he didn't dare to say that it eventually fell to 47 points in history - that would be too terrible.

"If that's the case, I understand... We'll stay put and wait until it goes up before shorting some. Now we'll go collect small bills to close our positions and buy some United bonds and stocks."

"We need to diversify our positions. The Fed and the exchange may soon conduct an inspection." Contini pondered, "How many positions do we have now?"

"4.4 billion. According to the margin ratio, it can support an 8 billion position."

"Part of the money will be returned to United Bank at the beginning of next month, and then to the Fed. This is what I promised. Reduce the position to less than 4 billion and wait for a day. We are not in a hurry to kill the stock market in one fell swoop..."

At the closing time, countless people left the exchange with exhausted feet - the record volume today was so huge that the telex machine took a full 105 minutes to transmit all the transaction data.

In this stock market crash known as "Bloody Monday", the Dow Jones Index began to fall from more than 370 points, and fell to a low of 264 points. It began to rise slowly in the afternoon, but finally rebounded to 292 points, failing to regain the 300-point mark. Investors familiar with the stock market can see that the so-called late-day rebound is only a rebound in the market and big stocks, and those small stocks and the hottest theme stocks in the market rumors continue to fall into the abyss - if they don't cut in half today, they will be embarrassed to say that they used to be hot bull stocks.

Even if calculated at 292 points, the stock market has fallen by 80 points, which is twice as high as last Monday, and the number of people cleared is also twice as much as last week - not to mention 5-6 times leverage, 3 times leverage is included in the forced liquidation. It's really that some people are lucky, and the points have risen again when they should be forced to close, so they luckily escaped the forced liquidation, and the overall market value of the stock market evaporated by more than 13 billion US dollars, so that Hoover had to come out to give a speech to stabilize the morale of the troops.

Hoover said to the reporters with a grim look: "… the basic enterprises in the United States, that is, the process of commodity production and distribution, are based on a sound and prosperous foundation. Some setbacks will not shake this prospect and confidence for the time being. I still maintain a cautious and optimistic attitude towards the US economy. Now we need to boost confidence and reduce operations. For those companies with poor fundamentals, no industrial support, and lack of subsequent development space, I think their stock prices have bubbles, while the fundamentals of those key companies are still good, with a price-earnings ratio of only 14-18 times, which is a relatively stable range..." This is the first time that the official has announced the collapse of small tickets with clear news. Of course, the words are very cautious. Hoover chose to rely on some when he could not save all capitalists - the target is of course the big consortium, big companies, and big capitalists. As for the others, they are just for Wall Street to swallow up in this round of reshuffle. Hasn't Wall Street relied on crises to carry out mergers and acquisitions and asset restructuring for many years? As long as this is done, those lawyers, accountants, auditors, rating agencies and even investment banks will have a lot of room to share, and it will not be difficult to create another capital feast.

A reporter asked how he viewed the United Group's breach of contract. Hoover replied seriously: "First, this is a normal business transaction. Both parties have a contract and are performing their rights and obligations in accordance with the contract. Secondly, the United Bank under the United Group lost a lot of funds some time ago due to market confidence and depositor runs - according to their statistics, it is as high as 900 million US dollars. Any large bank facing such severe liquidity tension will have problems, but there has been no default incident in the United Bank. The rights and interests of all depositors have been guaranteed, and the borrowed funds have been repaid on time. Behind this, the United Group has made a lot of sacrifices, which reflects the attitude of a highly responsible consortium. This sacrifice first manifests itself in the suspension of the equipment purchase contract to ensure liquidity. I and several business leaders expressed regret and understanding for this, and made a special call to the president hoping to change or at least partially change this. Decision, he said he would carefully consider it..."

"You mean, United Group will continue to perform the contract? Haven't many companies issued announcements to accrue losses?"

"That's right... But contracts are dead, people are alive. For example, General Motors clearly stated that they and United Group have a good history of cooperation in the past, and the communication and exchanges between the two sides have always been very pleasant. In this extraordinary period, we cannot add insult to injury. After holding an emergency meeting, the board of directors unanimously agreed to extend the payment cycle of United Group for 3 months, and these 3 months will not be considered a breach of contract... The board of directors of General Electric is also holding a similar meeting. I am optimistic about reaching a compromise... I called the president for 1 hour and 15 minutes today and patiently persuaded him, from the perspective of the future stability and friendship of the relationship between the two countries, from the perspective of the historical cooperation between United Group and the American business community, and from the perspective of the misunderstanding between United Group and the American financial community. The president accepted my suggestion and said that he would consider it carefully. At the same time, he expressed his gratitude to old friends for their concern. "

Hoover changed the subject: "Today, many reporters or media vaguely attributed the decline of the stock market to the president's statement, but I think this attitude is not objective. Is it that the stock market can only rise but not fall? No one person or company can manipulate the US stock market, and the United Group and the president do not have such great power. The stock market is basically the withdrawal of the market's internal laws. To put it another way, who would be willing to lose a deposit of 500 million US dollars in vain unless it is absolutely necessary? It is easy to destroy mutual trust, but difficult to build mutual trust. Now is an era when confidence is more valuable than gold. I think only trust in each other can overcome difficulties..."

"What do you think of so many jumping incidents today?" said the reporter, "According to the intelligence we have received, 39 people jumped from buildings in New York alone today, exceeding the total number of people who jumped from buildings across the country last Monday..."

"First of all, I express my condolences to the dead and their families. It is really sad that things have developed to this point." Hoover took off his glasses with a talent for acting, took out a handkerchief and wiped his eyes, as if there were really tears flowing out of them, and then said in a choked voice, "This is the misfortune of the times. I hope others will learn from the lesson and reduce leverage as soon as possible. The government, the Federal Reserve, and the exchange are studying whether to limit the leverage multiple..."

In fact, Hoover said one less word. When an internal meeting was held, some scholars had proposed whether to ban short selling, but they were opposed by many tycoons led by Mellon. The reason was high-sounding: the rules cannot be modified at will, otherwise it may lead to a loss of confidence. If there is another round of plunge tomorrow, it will be hopeless. In fact, everyone knows that this is just an external slogan. The real situation is that these tycoons have not completed the short selling arrangement and have not sold all the stocks that should be sold. How can they tolerate changing the rules now? If they want to change, they have to wait until they have arranged it.

Finally, three proposals were reluctantly passed:

First, introduce a circuit breaker mechanism to suspend trading after the stock market plummets by 7%, so that all parties in the market can calm down. The 15-minute suspension is convenient for communication and coordination. If it falls by 10% again, trading will be suspended for the whole day. Everyone agrees that it is necessary. Anyway, the consortiums have direct seats and everything is clear at a glance. It is better for you to end your life by yourself;

Second, reduce the leverage ratio. Large blue chips can reach 6 times, and small stocks can only reach 2.5 times. This is for the good of you ordinary people. It’s okay to lose all your money. Don’t always think about jumping off the building to make trouble for the government. You must consciously maintain the image of the government and respect the management authority;

Third, restrict naked short selling. The so-called naked short selling is simply short selling without any positions on hand. This is because the New York Stock Exchange has counted today’s situation and found that many people took advantage of the situation to short sell, and actually made a lot of money, taking advantage of the tycoons. How can we let Wall Street carry the sedan chair for ordinary people? This is not conducive to the consortium cutting leeks, it should be strictly prohibited, and only the consortium is allowed to short sell, because the consortium has a lot of stocks on hand. However, it was finally "mercifully" given a little concession, naked short positions can be closed within one month, and those that are overdue for more than one month must be forcibly closed.

These improvement suggestions will be implemented from September 24th. In order to give the market sufficient reaction time, the stock market will be delayed until 10:30 on Tuesday.

That night, numerous reporters flocked to the United Group hoping to interview Contini - because the president who had predicted the stock market fall many times was so accurate. Isn't the US stock market plummeting now? In the past, jumping off a building was news, but now jumping off a building can no longer arouse everyone's interest. Stocks are the focus of everyone's attention. Reporters all want to ask whether the stock market will rise or fall tomorrow. Even panicked professional investors gathered outside hoping to listen.

In the end, the 20-point rise at the end of today's trading gave these gamblers a little hope. They always believed that fate was not over and there was still a chance to turn things around.

But the United Bank had already stated: The president will not hold a press conference until Tuesday, so please be patient.

Faced with the rejection, these reporters and investors really tried their best and rushed to the Union Bank to ask for the president's help. They knew that the president lived here now. Although they didn't understand why Contini chose to live in the front line and "share weal and woe" with the employees instead of staying in a high-end hotel with good facilities, the reporters still admired this spirit, especially after they visited once and found that neither Contini's bedroom nor Francesco's room was luxurious, which was the standard of a large company's guesthouse, and they praised it very much.

How could they understand that Contini was not very particular about food, clothing, housing and transportation, and was too lazy to work hard on luxury and extravagance, but he really paid attention to safety, which no rich man in the world could learn. What the reporters saw was only the resting place on the surface of the Union Bank, and the real core place was in the underground bunker - but it was not open to reporters. The president's mansion was decorated not with valuable oil paintings and antique furniture, but with tanks, armored vehicles, and defense walls built by the armored belts of battleships.

They kept negotiating with the staff of the Union Bank, hoping that the president would show up and talk to everyone: Everyone knows that the president is in a bad mood, just a few words will do.

So for the first time, there was a sign of no queuing for withdrawals at the Union Bank. In order to prevent the information from being blocked by the middle level, everyone shouted in unison, "Please meet the president", "Please meet the president". Later, a few people said that this was not okay. "Please meet the president" made us seem too strong and aggressive. The president didn't owe us anything, and we were begging him to talk to us.

Everyone nodded and asked, "How should we shout?"

"I have seen Italian movies, and people call us like this..." He stood at attention in fear, raised his right hand to salute, and shouted in a fanatical tone, "Long live the leader!"

Thanks to his perfect Italian, everyone was shocked by the scene. There was also a reporter who knew Italian and said, "The leader is not here, we have to shout the president, the president is the reserve leader..." So everyone stood in unison and shouted "Long live the president", and they were still in Italian. For a while, it was a sound of mountains and seas, and the whole bank was shaken.