"Well done, George!"

When the European and American markets closed, Soros, Julian. Robertson, Druckenmiller, and Paul. Tudor. Jones and others gathered at DelPosto, the most recognizable Italian restaurant in Downtown New York, to celebrate.

Just a few hours ago, the Dow Jones Industrial Average plummeted from a peak of 8,556 points to a close of 8,425, a full 131 points, or 1.53%.

Over the past month, the Dow Jones Industrial Average has fallen by 500 points, from a high of 9,000 points to less than 8,500 today. And that's not all, but more importantly, due to Russia, the Dow Jones Industrial Average does not see any hope of breaking to 9,000 again in the short term.

The Russian market, which Soros named in the article, fell by 7.02 points on this day. But don't underestimate the 7.02 points, you must know that the RTS index in Russia is only about 100 points, and the decline of these 7 points is already a decline of 6.49%.

Compared with 571 points in October last year, the Russian stock market has lost as much as 80% of its market value in less than a year, which can be described as the worst decline in the global market. As soon as Soros's remarks came out, some analysts commented that although the currency depreciation may stimulate Russia's exports, Russia has never been known for exports, on the contrary, it will exacerbate the outflow of funds because of this remarks, so the Russian stock market may continue to fall, and even fall to 50 points.

In fact. Russia's capital market is just starting and there are very few listed companies, so investing in these companies doesn't make much practical sense. The reason why hedge funds value Russia so much is that in addition to shorting their currency, they are focusing more on their Treasury bonds with frighteningly high interest rates.

Now, they have finally succeeded in once again stirring up doubts in the market about the creditworthiness of Russian government bonds, or the expectation of a default on Russian government bonds.

Julian. Robertson first raised his glass and bowed slightly at Soros across the table in respect, "It's not just New York, London. Even Frankfurt's index is falling. It seems that this wave of expectations about Russia's prospects is indeed very strict. But the more likely we are to make a profit! ”

He said confidently.

As for Russian government bonds, the market is currently speculating whether it will default, and whether the IMF led by the United States will sit idly by? Although they all know it in their hearts. This treasury bond is relative to other treasury bonds. There is a risk of default that is several times to dozens of times. But because of such a strict default risk, the yield on Russian government bonds has increased dramatically, and the possibility of profit has also increased.

Here's an example. A one-year Treasury contract with a face value of $100 has a coupon rate of 5% to maturity. If the one-year interest rate in the market is at 5%, then the normal float of the Treasury bond is around $100. For investors who simply invest in treasury bonds and eat the coupon rate, and speculators who benefit from speculating on the price difference of treasury bonds, the yield of the two is basically the same, both at 5%.

However, if there is a rumor of default on this variety of Treasury bonds, the price of this Treasury bond will be far less than $100 for both investors who simply invest in Treasury bonds and speculators who benefit from speculating on the price difference between Treasury bonds. Because there is a possibility that they will lose all their money after maturity, they can only reluctantly cut their love and sell these treasury bonds at a low price.

Now the problem arises, if these Treasury bonds are sold at $90 and can be cashed out normally at maturity, the final yield of the party who buys at a low price is (105-90)/90=16.67%. This figure is much higher than 5%.

As for the coupon rate of the Russian government bond, which is often 30% or more, if the government bond can be cashed out at maturity normally, this figure can be much larger than 16.67%, and even large enough to block a qiē!

Now, that's what New York's hedge funds think and think. They are convinced that because powerful economies such as the United States and Europe will not allow Russia's nuclear weapons to spread, they will help Russia through the current difficulties, even after Russia has made it clear that it will not comply with the IMF's economic reform package.

Therefore, they see an opportunity to take advantage of the market panic to absorb a large number of low-priced Russian government bonds, and when Europe and the United States come to their aid, these government bonds will return to normal price levels, and then they can make a lot of money.

According to an internal report by the Quantum Fund, the final yield on this Treasury bond is very likely to exceed 50%, for which they have invested a full $3.5 billion in positions, hoping to use this opportunity to make the most profitable deal in history.

That is why Soros, even at the risk of offending the Russian government, personally went into battle shirtless!

If you don't enter the tiger's den, you can get the tiger!

And for Julian. Robertson, Paul. Tudor. Jones and others all think this way, and they all operate in this way, in addition to Hong Kong, they have also invested huge positions in Russian government bonds.

Of course, in addition to these few, other funds on Wall Street have also invested significant positions, and the whole of Wall Street is betting on Russian government bonds. No, this statement is not accurate, it should be said that the whole Wall Street is betting on the IMF, on the reaction of the United States, Europe to Russia.

That's why they have hired a large number of retired politicians from Europe and the United States to fully and in detail study the various risks and consequences of a default on Russian government bonds. Eventually, they agreed that those in power in Europe and the United States would not allow Russian government bonds to default, because the consequences of the ultimate lead were not something they could afford.

"How can a nuclear power default?" This sentence also began to circulate around Wall Street.

After the decline in the Russian market, several people couldn't wait to sit down together and start celebrating each other.

"It's just a pity. The Hong Kong market did not fall as expected! ”

While eating delicious foods such as black truffles and caviar, several people laughed and chatted, and the words "million" and "billion" that came out of their mouths from time to time made the waiter feel frightened. Just when he was full of wine and food, Druckenmiller suddenly let out a long sigh and came to this sentence.

Although Druckenmiller is not as well-known as the others, he is definitely qualified to sit with these bigwigs. In fact, many of the investment decisions of the Quantum Fund in recent years have been made by Druckenmiller, so in the eyes of professionals, his weight is almost equal to that of Soros.

In the dim lights and melodious music, several people were in high spirits. They were all a little drunk. So he didn't hear Druckenmiller's words clearly for a while, but after he repeated it again, the drunkenness in the eyes of several people immediately disappeared without a trace.

"Wow, that's a problem!" Soros wiped his mouth with a crisp white tablecloth. snapped his fingers into the air. After motioning to the waiter to take away the plate. "I really didn't expect that the Hong Kong government would risk being criticized to save the market. They don't want a 'free trade port' anymore? ”

"This is indeed a matter of strict zhòng!" Julian. Robertson also said, "Although we expected this kind of government intervention in advance, we all think that it is unlikely. But who would have thought that the current Hong Kong government would actually do this? Oh God, the slam they've received is enough to make them uncomfortable for a while. ”

"Not bad!" Paul. Tudor. Jones also chimed in, "I always thought that Hong Kong was known for its economic freedom, and now in order to save the capital market, they should give up this advantage, which is really incredible." How much freedom does this kind of government, which is both the maker of the rules and the end of the game, have the market under it? Oh my God, they really want everything! ”

Druckenmiller looked at a few big guys who seemed to be drunk and unconscious, and said innocuous words without a trace, and couldn't help but feel a little anxious in his heart. Tudor. As soon as Jones had finished speaking, he interjected, "Gentlemen, the problem is not here. Because of the intervention of the Hong Kong government, they will definitely boost their confidence in the short term, and now the question is, can they succeed in taking Hong Kong? ”

"Although the current index is far from the average position of our positions, in the next half a month, it is difficult to guarantee that they will not raise the index to the level of our positions, and if the Hong Kong dollar cannot be attacked, coupled with the losses on the Hang Seng Index futures, we will really fail in the Hong Kong market!"

"Don't you understand the severity of things? Gentlemen! The last sentence he uttered almost angrily.

"Relax, Stanley!"

Seeing that Druckenmiller was really anxious, Soros hurriedly spoke out to comfort his number one assistant, "My old man, you should also know very well that the Hong Kong government has to support the stock market on the one hand, and on the other hand, it has to deal with the pressure from the Hong Kong dollar market, and this time it is undoubtedly a war from both ends." Think about it, my friend, as long as we continue to adhere to the tactics of attrition, and one day suddenly increase the offensive and consume its funds from two sides, when that time comes, I am afraid that no matter how much the Hong Kong government boosts market confidence, I am afraid it will not be able to offset the negative impact from the Hong Kong dollar! ”

"What do you mean?" Druckenmiller looked puzzled, looked down and thought for a long time, and when he looked up again, he found that several other people were staring at him motionlessly, which made him think, "Suddenly come at a certain time, and make the Hong Kong government's rescue measures useless?" Do you already have any plans? ”

"Not bad!" Julian. Robertson nodded appreciatively, and after glancing at Soros, he saw that the other party nodded slightly, and then continued, "Stanley, we do have a preliminary plan for Hong Kong, and now we can discuss it and see if there is anything we can add." The specific strategy is that even if the Hong Kong government intervenes, we will continue to attack, because this is the same strategic link as the Russian market. However, at present, the market is reversed, and we can only temporarily avoid the limelight and wait until the right time to exert our strength. And if you start it again, you may have to carry out a variety of strategies together to achieve the maximum profit effect! ”

"Futures?" Druckenmiller reacted immediately and blurted out, "The futures index in August, I don't plan to transfer positions, just fight with the Hong Kong government on the last calculation day of August?" I understand! But then what? Aren't we going to attack the Hong Kong dollar? ”

"Naturally, it's going to attack!" Paul. Tudor. Jones interjected, "That's going to take a long time!" As long as we can get enough benefits from the Russian market, the scale of funds we can use will be enough to hit the Hong Kong market again, and even with the support of the Hong Kong government, we can fight a long war with them and slowly drain their funds! Of course, in order to teach them a lesson, we must let them know in August what the consequences of intervening in the market will be! ”

"Like Russia?" Druckenmiller was deep in thought, and after a long time, he suddenly said, "Do you want to make a public appeal in the newspapers and put pressure on the other side?" ”

"That's right!" Soros clapped his hands and laughed, "Since Stanley has thought of this method, I will publish an article in your name when the time comes, and exert the most powerful public opinion pressure on the Hong Kong government, so that they know that a mere Hong Kong government is not taken seriously by us." ”

Druckenmiller's face immediately showed a wry smile, "I'm afraid I'm not enough, right?" George, you must be joking, I don't think I have any prestige. ”

"Don't underestimate yourself! Stanley, I'm serious. But since you have some scruples, if other celebrities stand up and speak out, you shouldn't have any scruples! Soros said sternly, but soon, an unfathomable smile appeared on his face, and Druckenmiller's heart was hairy.

"Who? Who will it be? Druckenmiller hurriedly asked. He heard it, the person who can make Soros famous will definitely not be a general, as for who it is, he can't guess it for a while.

Soros smiled and did not answer.

……

After Cen Yinquan's remarks on bailing out the city were reported, it was like throwing a huge stone into the originally unquiet lake, which immediately caused an uproar. Soon in the global economic circles, there was a wave of criticism of the Hong Kong government's bailouts, among which Federal Reserve Chairman Alan Greenspan was the most famous and widespread.

"The Hong Kong government's intervention in the financial markets will cause people to lose confidence in their HKMA, which is contrary to Hong Kong's long-standing philosophy of a free economy. And, most terrifyingly, the Hong Kong government's intervention will not succeed, but will lose the wealth of taxpayers! ”

Greenspan said.

In addition to him, several Nobel laureates in economics published articles in the following days, criticizing the Hong Kong government's bailouts.

As for the criticism of other well-known people in the financial world, let alone how many! (To be continued......)

PS: Thank you to the book friend Huang Tianlong for voting for the monthly ticket!