Aside from the bankruptcy of Orange County, Zhong Shi refocused his efforts on the exchange of Mexican pesos, which was inaccurate, and it was accurate to say that he borrowed a relative amount of Mexican pesos from American and European banks with branches in Mexico using US dollar capital as a guarantee.

The reason why it is a loan, rather than a full exchange, is very particular, especially when professionals operate similar things, and they will never let their funds go into the country where they want to attack the currency. First of all, what they want to attack is the currency of this country, and it is absolutely impossible to hold it for themselves, because once the process of attack is launched, it is not something that can be controlled by one institution. Second, if you hold a borrowed foreign currency, you can use it to repay even if the currency is still strong, because there is no possibility that the foreign currency will rise in the short term at this time.

"Andrew, you can start taking a short position on the Brazilian stock index!" After thinking about it, Zhong Shi dialed Andrew's phone in South America and said lightly.

Andrew on the other end of the phone was obviously still in a state of half-sleep, but he subconsciously responded, and only screamed after a long time, and asked in disbelief: "Zhong Sheng, I heard you right, you are talking about the bears, the Brazilian stock index?" ”

"Not bad!" Andrew asked a strange rhetorical question, and then reacted, at this time the time in Brazil should still be in the early hours of the morning, and he couldn't help but feel a little guilty in his heart, but this guilt disappeared immediately with Andrew's rhetorical question. This Andrew, how to do things is still so unreliable? After secretly slandering in his heart, Zhong Shi asked a little unpleasantly, "What." Have an opinion on my investment? ”

......" Andrew was silent for a long time, and finally said boldly: "At present, Brazil's economic situation is very good, and it is said that their government is also interested in negotiating reciprocal trade with the United States. Moreover, this year, driven by the shijie economy, Brazil's agricultural exports have increased significantly, and the increase in exports of natural resources, especially iron ore, has also attracted attention, so it is rash to short-sell at this time......"

"You don't need to be reminded of this!" Zhong Shi interrupted Andrew's words without much explanation, "We are holding it for a short period of time, and we have to risk the exchange rate, you just have to carry out the order." ”

Zhong Shi, who hung up the phone, was a little helpless. This kind of knowing what will happen in the future. But the idea of not being able to tell others made him a little crazy. After a deep sigh, Zhong Shi casually grabbed a research report in front of his desk and read it casually.

The reason for shorting the Brazilian stock market is that among the stock markets of South American countries, only Brazil has opened stock index futures. Other words. Only the Brazilian market is able to make money by shorting. It is similar to markets such as Argentina and Mexico. There is no shadow of stock index futures at all, even if the future collapse of the peso causes a financial crisis that will affect the whole of South America. It is also difficult to make a profit through the stock markets of certain countries.

……

The Bank of Mexico is the central bank of Mexico, which Congress has granted them to operate autonomously and is a relatively independent central bank.

Like most central banks on Shijie, the Bank of Mexico is responsible for the issuance and circulation of currency, as a lender and for cooperation with foreign legal entities. Naturally, monitoring foreign exchange flows and market interest rates is also part of its function.

"Mr. Sanchez, the rediscount in March has recently increased significantly, should you report this matter in person? Do you need to increase the rediscount rate? A young staff member spoke to the bank's council adviser Mannyon. Sanchez asked.

Mannoon. Sanchez is a tall, silver-haired, middle-aged man with a standard South American face. He is an advisor to the Board of Governors of the Bank of Mexico, where he is responsible for interbank discounting and rediscounting.

Since interbank deposit and loan positions need to be liquidated on a daily basis, rediscounting reflects the real situation of bank deposit and loan business to a certain extent. On weekdays, these positions can be covered by the interbank lending market, but after dozens of commercial banks have lent out large sums of money together, the amount of funds in the interbank lending market is also somewhat stretched.

"The savings rate continues to fall, but the loan rate has risen? Increasing the rediscount rate? Crazy? "Mannoon. Sanchez rubbed his temples hard, and his head began to ache again.

Due to the financial openness since the beginning of the 90s, in order to attract foreign capital, the Bank of Mexico has set a higher bank interest rate, which has certainly attracted a large amount of foreign investment, but at the same time has also caused inflation to a certain extent. Although this money has entered Mexico, investment and productivity in Mexico have not increased much, and the economic data for the first three quarters of '94 is simply dismal, and the current insider's forecast is only about 2%.

In such a situation, a decline in the savings rate is inevitable. While the Bank of Mexico has done a good job of stabilizing its exchange rate, it has done so at the expense of an adequate response to the market. At this time, the major commercial banks suddenly began to lend a large amount of money, and although it was only for three months, this abnormal situation still attracted the attention of the central bank staff.

As an adviser to the central bank's governing board, Sanchez's main job is to monitor the abnormal dynamics of the responsible department and form a report as soon as possible, which is sent to the governor's desk. But he did not intend to do so, because a number of high-level government officials, including the governor of the central bank and the finance minister, were arguing about whether to devalue the peso by December 1, 1994, when the newly elected president, Sedillo, would form a new government.

Although the new government is inclined to implement a floating exchange rate policy, Mexico still implements a fixed exchange rate system pegged to the US dollar because the opinions of the newly outgoing Salinas government have prevailed.

In such a situation, sending the unusual volatility of the rediscount market to the office of Governor Otis is tantamount to adding to the chaos. Although Sanchez understands that this will not be a trivial matter, he can sit in the position of an advisor to the council, and he clearly understands what is more important.

"Let's put it in for now!" Sanchez ultimately rejected the young analyst's proposal.

……

It has to be said that Mexico is a country that still has a unique vision of the current economic situation, and the staff of the new President Zedillo twice suggested in September and November that the current government should lower the peso interest rate to prevent the current account deficit in international trade from further expanding, but in order to maintain the North American trade area, Salinas's cabinet, especially the finance minister and the central bank governor, categorically rejected this proposal, which made Mexico's fixed exchange rate system come to an extremely dangerous situation.

"Mr. Zhong, the loan has been completed! Where do we want to go next? Putting these funds into Mexico? "Two days later. Inside Bell Stone's office. Maxim was reporting on the borrowing of Mexican pesos.

In his opinion, it is very unwise to exchange Mexican pesos at this time, because the domestic economic data of Mexico is not impressive, although the interest rate is relatively high. But Mexico is a country that is not at peace. During the year, even presidential candidates were assassinated. The volatile political situation means that the risks in the capital market are infinitely magnified. Although it also means opportunity, Maxim does not see it as a good thing.

"Starting today, convert these Mexican pesos into dollars. At least $500 million per day, with no cap. Zhong Shi secretly breathed a sigh of relief, knowing that the situation of the loan had been completed, and the rest was the matter of exchange.

8.5 billion US dollars, converted into more than 25 billion pesos, such a large loan, Zhong Shi used 15 commercial banks, and it took a week to loan all of them. In this process, although there is nothing wrong with the act of lending, such a large-scale loan will inevitably have an impact on the market in the short term, and if the regulatory authorities find that something is wrong and take any measures in time, Zhongshi's carefully designed behavior will be wasted.

For example, if the Mexican government announces the depreciation of the peso at this time, Zhongshi can only put these pesos on the market as soon as possible to convert them into dollars, and then in the process of peso depreciation, it is necessary to grasp the corresponding progress, because once the historical process changes, it is impossible to predict where the peso will fall, and if the corresponding interest part cannot be earned, Zhongshi's funds will face the danger of loss.

Although attacking the fixed exchange rate system is considered to be the least risky and the most profitable investment method, even this investment model is not without a lot of risks, especially for those with large positions and longer holding periods. Because the larger the position, the more interest is paid, and if the final attack fails, then the loss in the exchange process and the loss of interest are quite huge.

Of course, such losses are far disproportionate compared to gains, which is why financial institutions such as hedge funds, investment banks, and commercial banks are keen to attack fixed-exchange rate countries.

Although Mexico currently has two different views on the exchange rate regime, due to the high interest rate policy, the inflow of foreign capital into the country is still in a positive direction, that is, there is still a surplus between the inflow and outflow of dollar capital. On top of that, the Bank of Mexico has tens of billions of dollars in foreign exchange reserves, so the Mexican government is not worried about the attack of international money.

For Zhong Shi's decision, Maxim has been faintly aware of a little, although he has experienced the battle against the Japanese stock market, but never thought that the scale of a fund can overwhelm a country's foreign exchange system, especially the Tianyu Fund, which has a capital scale of only more than 2 billion. So after saying yes, he went out.

Of course, Zhong Shi's next move is not only these, he must pull in large commercial banks to operate together, otherwise he will not be able to compete with Mexico's huge foreign exchange system with his own strength. Thinking of this, he dialed Jeremy's phone: "Hi Jeremy, I'm Zhongshi from Tianyu Fund. I need you to do me a favor......" (To be continued......)

PS: Thanks for tipping again that made me think about it! At the same time, I would like to thank the book friends who have paid attention to this book recently, the achievements of this book come from everyone's joint efforts, and the author will continue to work hard, xiexie everyone~