Mediterranean hegemon

Hoover left Mellon alone to communicate again. Of course, he had to apologize. Andrew Mellon was not an ordinary person. He was so embarrassed just now. If he didn't give an explanation, he would not be able to work with him in the future. But the scolding was a public scolding. Apologize. It was a private apology, which actually felt different. What else could Mellon say about it? He could only accept the loss and acquiesce. He knew that the president would definitely have something waiting for him when he stopped him.

As expected, Hoover just scolded Mellon for just using the topic. What really annoyed him was that Wall Street took advantage of the situation in the past few days and took advantage of the circuit breaker to place more than 3 billion US dollars in short orders - these short orders pushed the already shaky market into the abyss. What’s even more embarrassing is that Hoover has used others to retrieve all short-selling customers from the exchange with positions of more than US$5 million: it is clear at a glance what stocks are short, how big the position is, and when they were short. This even surpasses May. Lung Er stabbed the exchange with a stick.

"You are saying that the market is ruined because of the United Group, and at the same time you are desperately betting on short positions to fuel the situation and push the market into despair. I need to hear an explanation for this hypocrite's two-faced approach."

Mellon said: "Wall Street is just taking advantage of the situation to short-sell, but you can see that the short positions through United Trust channels are more than 4 billion US dollars! This shows that United Group has more and more ruthless companies!"

"It's not like I've never been the Minister of Commerce. Do I really know nothing? I don't deny that little Ciano has short orders in his hands, but the positions invested through United Trust are all United Group's positions? Is it true that in Citibank? Does it all belong to Mitchell or this bank?"

Hoover was very unhappy and said, "This is one. If you look at other people's positions, more than half were shorted before September. At that time, the market was as high as more than 450 points. Don't you still welcome short selling and want to pull the stock market?" Is it down? I also want to go short. It has plummeted in the past two days. Of course, United Trust has taken advantage of the situation to sell short positions, but there are also many positions being closed. So what do you think? This is the second one, what do you think? People are threatening to sell their stocks, but as far as I know, United Group controls even more United stock than before. Even Pratt \u0026 Whitney, which just completed the transaction recently, has also bought a lot of additional shares. In other words, They didn't sell it but increased their holdings. They even allocated 15 million to increase the management's holdings. Although the amount is not very large, it still has an attitude. Where is your attitude? I asked you to protect your employment but you still refused. What do you want? Does this country belong to me alone? What good will it do to you if you screw him up?"

Mellon was immediately speechless: The short-sellers deployed early, so it is now easier to harvest, while Wall Street deployed late, everything is problematic, and they have to race against time to the point where it is ugly.

Hoover sighed: "I know Wall Street has also suffered huge losses, but we still have to unite sincerely and not criticize each other. The president has complained to me more than once that the financial community and the Federal Reserve are working together to suppress him. You dare to say that if this thing hadn't happened, Will he tear up the 4.4 billion contract? "

"Sir, this is nothing." Mellon quickly defended.

"Don't worry about it, at least that's how you give people the impression." Hoover knew that Mellon was telling lies with his eyes open, but this kind of thing could not be revealed. If it was revealed, even the last tacit understanding would be gone, so he changed his tone and said , "Didn't you say at the meeting that there are difficulties in the flow of funds? The president said that he has a sum of 300 million US dollars in hand, which was returned by customers. If you need it, it can be returned to you in advance..."

"Then...Okay..." Mellon didn't know what to say, but at this time, it was better to get the money back as soon as possible to feel at ease. If it went bankrupt, it would be troublesome. There was no need to worry about the loan to United Bank. The money given to other small and medium-sized banks is troublesome.

The Emergency 5 was disseminated on the radio that night. Hoover himself also accepted a reporter's interview for this purpose, saying: "Although the temporary restrictions on short selling seem to affect some freedoms, in the long run, only a United States that avoids entering a crisis can ensure the overwhelming majority of the US." The true freedom and democracy of the majority of the people, if there is only freedom of capital but no freedom of the people, then we will inevitably encounter a revolution in the future, so I hope everyone can fully realize this..."

This was Hoover's most severe political warning to date. All the reporters present were silent. They had learned more or less through the news in the past two days and knew that this was by no means sensational. In despair and desperation, Anything can happen, just like the bankers who committed suicide in the past two days. In fact, they themselves did not lose much in stocks. If they could barely maintain their personal lives, it was okay, but they lent large sums of money to investors. These After the investors were liquidated, they still owed a large amount of money to the securities companies, let alone repaying the bank loans. The bank would eventually have no choice but to go bankrupt. Seeing a lifetime of hard work go up in smoke, people who can't bear to think about it will of course shoot themselves to death.

When the market opened the next day, under Hoover's 5 bans, the situation became much more stable, market transactions were very active, and large-scale declines were contained - it was not that there were really so many buying orders, but that after a stock fell sharply, there would always be some The short sellers came forward to close their positions. These were the Wall Street speculators who had been warned by Hoover yesterday. Mellon passed on these warnings intact, so the tycoons eliminated the weakest players to complete the task of dealing with Hoover, and continued to wait. Harvest to maximize profits.

What Hoover and Mellon said yesterday was only effective for 3 minutes. After 3 minutes, this passionate and country-oriented mentality was defeated in the face of real dollars and interests. To use Contini's words to describe it - - Touching interests is more difficult than touching souls. It is impossible to expect the red-eyed Wall Street predators to stop.

At least on the surface, Hoover's requirements have been partially met, and the overall short position is decreasing, which makes him feel relatively satisfied.

But no matter what, the overall losses in the stock market are still very large. Since the circuit breaker was triggered on Black Wednesday, the U.S. stock market, which has experienced multiple circuit breaker, has been cut in half from the average point, and at least from the highest point. 60%. The market value loss this week alone has exceeded 10 billion US dollars, and the market value loss since the highest point has been nearly 40 billion, which is more than the entire investment of the United States in World War I - including military expenditures and other types of The total financial expenditure is even greater.

With these bans, more than 200 banks declared bankruptcy and entered the market liquidation process within one day. There were so many announcements of bankruptcy that it was no longer enough to publish announcements in the middle of newspapers. The New York Times and the Wall Street Journal 》 made an exception and used a full 4 pages to publish the bankruptcy liquidation news - a unique irony!

And this kind of bankruptcy is just the beginning. Following the bank failure, the United States will soon usher in a wave of industrial enterprise failures...

Chapter 50 The Great Collapse (6)

"President, I received a call from the exchange, telling me in a very stern tone to stop short selling immediately and close the position as soon as possible."

"Finally called you?" Contini smiled, "Is it your personal position or the company's position?"

"Including myself and my investment company's positions, there is no mention of United Trust..." Livermore said unhappy, "They are bullying the weak and afraid of the strong!"

Contini laughed loudly: "You just know that? Now you understand that I have so many troops and guards, and there are battleships standing guard outside. Isn't it a waste?"

"Indeed, they dare not touch your strength."

"You will still move when you should move." Contini smiled, "How much did you earn? 200 million?"

"It's still a little short, about 160 million..." Livermore muttered, "Give me another month, no! I will be confident that I can reach 200 million in another 10 trading days."

"That's almost it. Don't make the last bit of money. Safety comes first. You can't make enough money."

Livermore was a little reluctant, but he knew that there was nothing he could do. The exchange was indeed too powerful. If he didn't want to die on the streets one day, it was best to obey orders.

"Of course, I can't let you lose too much. Let's find a low point tomorrow to help me close my 300 million position. You can help me close 30 million, so that I can explain to them."

"Why?" Livermore asked strangely, "You are not like this."

"I promised Hoover to return the $300 million loan in advance to help Wall Street stabilize the financial system."

"Then there is no need to reduce the holdings so much. There is now more than 500 million in cash in the account, which is more than enough to cope with daily liquidity..."

"I still need to transfer $400 million to Italy." Contini sighed. "Wall Street has political pressure, and so do I. The domestic situation in Italy is very bad, and I have to prepare in advance to stabilize the situation... I can do it in the U.S. market. It doesn’t matter if I watch the excitement, can I still watch the excitement in Italy?”

Now it was Livermore's turn to be silent: It is impossible to be a pure investor unless you are very small. When you reach a certain scale, politics will inevitably come to your door. Sometimes it is easier to make money with political protection, but sometimes you have to worry about political factors and make less money. Although the Caracciolo-class battleship in New York Harbor is popular, there is no less responsibility behind it. He hesitated and asked: "Short selling will stop tomorrow. Do you think this market can be saved?"

"I see no hope, because Europe is also continuing to plummet. A globalized world will have cross-infection and shock feedback. Before these emotions are vented, it is difficult for the stock market to make a major turn for the better. Maybe it will get better after the New Year next year." , but I’m afraid November and December will still be tough, and we must be prepared for the Dow Jones to fall below 150 points.”

The Dow Jones currently has 180 points, and falling below 150 points means it will continue to fall by at least 20%. Livermore knows this: This is highly consistent with his judgment. But Contini did not tell him the complete truth - this was an economic crisis that lasted for four full years, not just a few months, and would continue to fall into a quagmire after a brief recovery. You think that 150 points has been cut off by two-thirds from 450 points, and you think it’s almost there, but there is still hell under the floor, and there is more than one level of hell. Historically, the Dow Jones Index ended when it fell to 48 points, which is equivalent to 150 points. On the basis of the point, cut off two-thirds, and only one-tenth is left compared to the highest peak.

The index moved a decimal point, and the stock price plummeted. Similar to stocks like General Electric, which did not rely on themes and concepts to operate, the stock price fell from the highest of 396 US dollars to only 8 US dollars - only 2 of the highest value. %, Livermore historically misjudged that the stock had fallen to the bottom and was preparing to speculate on the rebound. Unexpectedly, he speculated to death in it. In 1929, when a large number of people jumped off the building, he made more than 100 million, but in 1934, everyone has begun to gradually forget When this happened, Livermore was almost doomed - because he bought the bottom too early!

Of course, it is obviously too outrageous to say that he was so poor in the end that he could not even afford a few dozen dollars. Before Livermore committed suicide, he still had about 4-5 million US dollars in property. As a man with more than 100 million To a multi-property investor, this was an obvious failure, but for most people, $5 million in the 1930s was still an aspirational figure.

Contini is now looking forward to the subsequent fate of Livermore. Although Francisco has hinted at "cleaning up", Contini does not think it is possible because, unlike Roosevelt and Churchill, their deaths will hardly be suspected. President, but Livermore's work for United Group is almost an open secret - everyone just doesn't know that all United Trust's accounts belong to United Group itself, and even Livermore doesn't know. He always thought he was in They manage finance and trade on behalf of clients, thinking that Contini owns at most one-third of these positions, and the other two-thirds belong to the big guys in Europe. They have no idea that the other two-thirds also belong to Contini. , killing him would raise too many suspicions - extremely unwise!

Of course, there are also problems in Italy. After the continuous circuit breaker plunge in the U.S. stock market, Italy's domestic stock and bond markets fell simultaneously. Government bonds have fallen to only 10% off their face value - even slightly lower than United Group's long-term bonds, which is very low. Apparently investors have seen how Contini has coped with the US market run, and they have confidence in United Group even more than they do in government finances.

At the same time, the exchange rate of the lira against the pound and the U.S. dollar continues to decline. Coupled with the cancellation of a large number of orders and the obstruction of exports, a unique situation of stocks, bonds, foreign exchange, and trade is formed, especially the lira as an economic indicator. The response was even sharper: The original warning line set by Contini for the lira was 125 lira for 1 pound and 25 lire for 1 US dollar. But in fact, as of today, the lira has exceeded 150 lire for the pound and the US dollar has exceeded 30 lire. , since the US dollar and the pound are also depreciating relative to gold, it is equivalent to the lira depreciating even more sharply against gold.

Mussolini once again sent an urgent telegram asking how to respond, and strongly urged Contini to return to the country as soon as possible to discuss the plan - because the Ministry of Finance was now helpless, and even the $100 million that Contini had transferred back last time had been transferred by the Ministry of Finance It was put in to stabilize the lira exchange rate, but it was still a drop in the bucket.

Although the United Bank headquarters still has nearly 1 billion U.S. dollars and 800 million gold reserves, no one dares to touch these things without Contini's order. Mussolini was also furious, but he thought about one thing clearly - —He doesn’t understand economics. Most of the people around him who understand economics have backgrounds in other financial groups. If he listens to their suggestions, he will be in catastrophe if something goes wrong. Only when Contini comes back to take charge of the overall situation can there be hope. The old Ciano has already He took the initiative to express his position: he thought he could serve on the Grand Fascist Committee, but the Minister of Transport wanted to leave it to his son. Mussolini thought that this was completely acceptable. The position of the Minister of Transport now was not a good one.

After receiving the domestic telegram, Contini said that the foreign exchange crisis was handled in the same way as last time. On the basis of prohibiting borrowing, the United Bank still exchanged foreign exchange, and then used the exchanged foreign exchange to buy back discounted bonds in the market. , if they are long-term bonds of the United Group, they will be canceled; if they are government public bonds, the Ministry of Finance will be required to issue new long-term bonds to replace them, and the old bonds will be canceled simultaneously.

The only thing to note is to first buy bonds held by Italian people and institutions, and ignore bonds held by foreign institutions in large quantities, lest they get the lira and then go abroad for foreign exchange.

In other words, it doesn’t matter if the US$400 million newly added by Contini is released to the Italian people and consortia. It must not become ammunition for European speculators to further attack Italy. After thinking about it, he asked someone to leave it in the telegram. A note: "If the market is really weak, temporarily stabilize the price at 150 lira: 1 pound is also acceptable, but the export of gold must be strictly prohibited, and violators will be severely punished!"

With this US$400 million as a base, especially the ability to repurchase government bonds, Mussolini began to tremble again, and said brazenly: "The government will fight to the last minute to defend the lira..." He kept telling the industry and commerce Jie Chufeng told them not to panic, but instead urged Contini to return home as soon as possible.

Old Ciano couldn't understand his son's operation: This is obviously a good opportunity for you to shine, why did you give it to the leader in vain? Now he doesn't urge you to return to the country. He typically wants to take the credit for himself.

Or Agnes could see it clearly: "This operation in Calais has confirmed the position of the Minister of Transport and the limelight? Let the leader go out. Do you really think that these oligarchs can't understand where the leader's money comes from? Besides, $400 million is nothing, Calais must have made several $400 million in the United States!”

That night, the couple was desperately trying to guess how much money Contini had made through the stock market: Old Ciano estimated it to be $2.5 billion, and Agnes estimated it to be $3.2-3.5 billion. In fact, since the layout in 1922, Contini first took advantage of the rising stock market to harvest more than 3 billion, and then took advantage of the plunge to harvest 1 billion convertible bonds - 1.5 billion convertible bonds, with very few exceptions, were all turned into stocks, and then the stocks fell sharply and were repurchased, one in and one out was 1 billion, and then at most 5.5 billion short orders were arranged, and nearly 3 billion were harvested after the stock market fell to the current point. Although the $500 million deposit was lost in the middle due to a package of industrial contracts, the operation of cutting leeks back and forth in the past month or so has basically earned back the $500 million, so the cumulative profit is about 7 billion, deducting some necessary expenses, interest and expenses, at least 6.5 billion.

Last time 100 million, this time 400 million, adding up to only 500 million, compared with the total income of $6.5 billion, it is really nothing.

So Contini could calmly accept that Livermore earned 160 million - this was what he deserved.