On this important day, Tiger Fund and Quantum Fund led European and American capital and international travel capital to wage a fierce struggle against the Bank of Thailand, short-term arbitrageurs, and foreign exchange market makers who survived with the help of the Bank of Thailand. Pen ~ fun ~ pavilion www.biquge.info

Of course, at this time, the Bank of Thailand, which should really bear the main responsibility, is waving its flag like a clown behind the war, without any practical action at all. The only thing they did was to make a statement to short-term arbitrageurs, foreign exchange market makers, that the central bank would never allow the baht to depreciate.

The Quantum Fund, the Tiger Fund, and European and American capital couldn't wait for the depreciation of the Thai baht for a long time, but the government's conspiracy against a certain country hung over their heads, so it took nearly 2 months to pierce this layer of window paper. And now that July 1st has passed, I naturally can't wait. After all, you must know that in order to maintain so many positions, the cost of quantum funds, tiger funds, and European and American capital is extremely high.

In the case of the Tiger Fund, which had borrowed some short-term baht to complete some of its positions and thought it could roll over when the loan matured, it was now forced to continue borrowing at a much higher interest rate: at the beginning of June, when the interest rate was 1%, the Tiger Fund was paying $1 million a day to keep its positions open.

The Bank of Thailand's aggressive intervention and the banning of loans to foreigners have indeed succeeded in reversing the decline of the baht in the short term. But in fact, restricting the Thai baht from lending to foreigners has the same effect as plugging a hole in the shower head: it only accelerates the outflow of capital through other exports. Annoying short sellers will cause foreigners who have borrowed money to Thai companies to demand repayment of loans, and companies will have to sell their baht in order to fulfill their obligations. In addition, cracking down on short sellers only makes it more expensive to borrow baht, but it is by no means impossible. If you are convinced that the currency is about to collapse, it is also worth borrowing short-term from the offshore market at high interest rates. As more capital flees Thailand, so does the likelihood of a collapse.

Druckenmiller, Fraga, Corwitz, Rodney Jones and other Quantum Fund executives are in Brazil, on Wall Street, or in Hong Kong...... The day was more than 12 hours and more than 18 hours. But they didn't sleep, today is the time to fight to the death, and the Quantum Fund cannot afford to fail, not only for morale reasons, but also for the high cost of maintaining positions every day.

Because of Soros's reputation, when there is a currency crisis in a certain region, people's first reaction is often that the quantum fund did it, which is a habitual thinking. But in fact, the strength of the Tiger Fund Soros is very jealous, and the Tiger Fund is more powerful than Soros and the Quantum Fund in terms of funds, connections, and achievements.

In the 1987 Black Monday and the 1989 Japanese financial crisis, these Soros and Quantum funds both failed, losing more than $2 billion. But Tiger Fund is complacent and makes a lot of money. And the classic battle tiger funds such as the British pound, the Mexican peso, and the London copper, which the quantum fund is proud of, have also gained a lot of money.

Tiger Fund.

It's been two weeks since they started raising money in the U.S. Treasury market, and they've only shorted $500 million in bonds.

"Not enough! Inadequate! Julian Robertson listened to the fund manager's report, shook his head and sighed, obviously not satisfied with the current strength of the fund.

With Tiger Fund now costing more than $1 million a day to maintain its position, Julian Robertson, who maintains Tiger Fund, can't help but use the fund's holdings of U.S. Treasury bonds to sell in the spot market in the hope of raising funds to expand positions and reduce costs.

Since the yield of the bond market has a lot to do with the benchmark interest rate. In particular, the treasury bond market, which is guaranteed by national credit. Compared with investment varieties in other markets. The fluctuation of the price of treasury bonds is extremely small, which is why treasury bond futures generally have tens or even hundreds of times leverage.

With the benchmark interest rate and its expected stability, investment in government bonds is mainly long-term holding, and liquidity is inevitably lacking. So when there is a massive sell-off in the market. The first reaction of participants in this market is that there is a problem with the fundamentals of bonds. But then they found out that this was not the case.

Of course, trading in the Treasury futures market is much more active than in the spot market.

The U.S. capital market has an extremely specialized division of labor. There are also a number of predators in the bond market. When the news of the hedge fund's collapse of the baht broke, followed by a significant rise in yields in the bond market, the two things were linked. It soon became clear that it was a hedge fund raising money, and the gossip began to spread wildly. In this case, the main buyers of the bond market are beginning to wait patiently.

Time may be money for hedge funds, but it is not a problem for funds that invest in the Treasury market, and their clients are risk-averse compared to those of hedge funds, satisfying them with even a 5% return in a year. Because there is less requirement for absolute returns, these funds have enough patience.

That's why Tiger Fund started selling U.S. Treasuries in the market, and only now raised just $500 million.

"Those institutions have already discovered our intentions, and I am afraid that it will be difficult to have liquidity at the current market price." The traders in charge of bond trading are also helpless, in this market is not their final say, there are many giants with more funds than them.

"yes!" Julian Robertson sighed, he was also at a loss, it wasn't their home field, "How's the situation on the baht?" ”

Billy King, who is in charge of keeping an eye on the Asian market, shook his head slightly when he heard Julian Robertson's question, saying: "On the Thai side, the finance minister and the prime minister have come out one after another to make another statement, saying that they have the ability and confidence to ensure that the Thai baht will not depreciate. However, our analysis is that there is a high probability that there will be a shortage of foreign exchange reserves on the Thai side. However, they are still intervening in the major currency markets, including in the spot market. The forward price has also returned to around 26, which is a positive sign. However, in the spot market, there has been a lack of liquidity for two consecutive days, and Soros and Mr. Reed have achieved initial results in their offensive. ”

Julian Robertson was keenly aware of a phenomenon that Billy King had mentioned, and before he could finish his sentence, he immediately asked, "What did you just say?" The market has been experiencing a lack of liquidity for two days? Spot market? ”

"Yes, the Bank of Thailand does not seem to have resisted at all in the spot market, and the exchange rate has already broken through the 27 baht mark." King was surprised by Julian Robertson's reaction, knowing that it had been a long time since he had seen the Wall Street powerhouse in front of him behave like this.

"In terms of national debt, I'm afraid it won't be clear in the short term. With these assets as collateral, we will lend funds to the banks as soon as possible and go all out to short the Thai baht, this time with a target amount of $2 billion. "Julian Robertson was a decisive man, and when the answer came to his mind, he made the final decision on everything from this financing to everything.

"Sir, would you like to think again?" Billy King, a veteran of Tiger Fund and a confidant of Julian Robertson, thought about it and suggested it head-on.

Indeed, when Druckenmiller presided over the affairs of the Quantum Fund's sniping of the Thai baht, the Thai currency did not change much against the dollar. The Quantum Fund could have a paper loss of $500 million, including financing costs and other expenses. The region's English-language newspapers gleefully reported that hedge funds had lost the "baht war," and a week ago Thailand's prime minister called on the central bank to pledge a celebration party for its staff — the central bank is said to be pointing at Soros. According to a newspaper report, his fund suffered losses of up to $4 billion.

Nowadays, the profit of the Thai baht position in the Tiger Fund account is basically not recorded, it is regarded as financing costs and other expenses, and it seems that the Tiger Fund's sniping of the Thai baht is a failure. Another increase in the amount of 2 billion dollars, he did not dare to imagine! If the sniper baht fails, the Tiger Foundation will lose much, but he is sure that Julian Robertson will be besieged by all the fund unit holders. You must know that it is not people who invest in Tiger Funds who are not famous and powerful, and even some European royal families have invested.

"Billy, don't worry, they've already made a move." Julian Robertson stood in front of the floor-to-ceiling windows and looked at the building named after Morgan not far away, "This is the last moment, and I hope to see $2 billion by 12 noon." ”

"In such a hurry!"

"That's right, it's late, we only have to drink soup, and we don't even have soup left!" As a top talent on Wall Street, he understands the greed of his peers on Wall Street.

Julian Robertson listened to his henchmen leave the office, and instead of sitting down in his place, he turned his gaze to another building, which had a fund rival called the Quantum Fund.

Julian Robertson was curious if Soros could see the signals from the market, but he would never call to ask or inform. Although the two hedge funds often cooperate, the relationship is not good, as the saying goes, peers are enemies, and it is no wonder that the two funds and the people at the helm of the two funds can be good. Of course, it is not the kind of enemy of life and death, which is related to the fact that the quantum fund is at the mercy of the foreign exchange market and the tiger fund is in the stock market.