March 19, 1928, noon.

In the HSBC building, senior McLeanthos sat in his luxurious office with a little tiredness. After all, he is an old man, and this sudden financial turmoil did make this gray-sided, old British man feel a little haggard, and he is also a little at a loss. An economy that seems so prosperous and thriving is on the verge of collapse or has collapsed in just a few days...... In just one morning, the fiat currency fell by half, from... The stock market has fallen by almost 20% to 7 yuan to 1 dollar, and if you take into account the collapse of fiat currency, the actual decline is as high as more than 60 percent, the flour has more than doubled, and the performance of the bond market is a bit confusing? In this market that has collapsed across the board, there is a three-year bond codenamed 327 that has risen by a full 10 yuan, what is this concept, it is a bond, not a stock or a commodity like flour. Bonds are fixed-income varieties, taking this 327 bond as an example, its annual interest rate is only 5%, and the principal and interest will be repaid once at maturity. In other words, only 115 yuan of fiat currency can be obtained at maturity, and now its price is as high as 114 yuan, God, its maturity has only passed a few months, which means that investors who buy this issue of public bonds can only get a return of one dollar in the next two years or so...... How is that possible? It must be that the Shanghai Stock Exchange is mistaken, these Chinese are really sloppy, no wonder they will be washed away by the Japanese financial market, if it were replaced by the British Empire, it would not look like this...... It's time to take over the money-rich United Exchange.

With a bang, the door to Mary Lehoseon's office was slammed open.

It was none other than Charles who crashed into the door. Uncle. He was the head of HSBC's bond trading department, a tall and slightly bald British gentleman in his thirties, who had just been sent by Macrison Taipan to the Shanghai Stock Exchange next door to inquire about the quotes of 327 bonds and related bond futures. By the way, I would like to ask these sloppy Chinese, especially the rogue general manager Du Yuesheng

As soon as he looked up, he saw Uncle Ho standing there with a flushed face, clutching a stack of papers in his hand, his face full of disbelief and speechlessness.

Marison frowned slightly, a little surprised. This Charles. He Boke was born in a diplomatic family, and received the strictest aristocratic education since he was a child. As a result, he has developed an extremely elegant aristocratic bearing, and no matter what serious incidents he encounters, he can always maintain the most elegant posture of an English gentleman, and there will never be a trace of panic...... But what's going on here? Could it be that those Kuomintang were in a hurry to lose and wanted to send troops to attack the Shanghai Concession?

Thinking of this, Macrison's brows also frowned, and his face sank slightly: "Charles, what happened?" Isn't it Chinese to ...... Use of force? ”

Charles. He Bo just shook his head, his expression was anxious and nervous, and he took a breath for a while: "Mr. McLixun has an accident, it is a 327 bond accident"

Senior McLeucun sighed lightly and said with a smile: "Are those Chinese mistaken?" I knew these people couldn't be trusted......"

"No, no, they set a trap on this to trap both the Japanese and HSBC," Uncle He stomped his foot, his face almost crying. When he arrived at the Stock Exchange, the morning's trading had just closed...... Several brokers in charge of bonds and bond futures came to greet him almost in tears, because the closing price of the 327 bond at noon on this day was 135 yuan, and the price of the 327 bond for the three-month futures was 145 yuan, which was a big jump compared to the price reported to HSBC ten minutes earlier. As the head of the bond business of HSBC Shanghai Branch, Charles Brown. Uncle He's eyes were black at that time, and he almost fainted...... As for what exactly happened, he figured it all out a second after hearing the news. These Chinese have adopted an extremely rogue method to set a trap for the Japanese, and they have also pushed HSBC, which provides economic services for bond trading to the Japanese, into the abyss

But MacLeon's senior class still sat steadily, silent: "Trap? Oh, the Japanese have invested tens of millions of dollars in this coupon today, right? They've had a bit to lose...... But in other respects, they won by a big margin. Shouldn't it change anything? ”

He Bo smiled bitterly: "...... Mr. MacLetheon, I'm not done yet...... Before the close of the market at noon, the Chinese had pushed the spot closing price of the 327 bonds up to 135 yuan, while the price of the three-month futures of the 327 bonds was 145 yuan, and the Japanese opened a full 100,000 short orders on the three-month futures of the 327 bonds through our HSBC account, with an average transaction price of 100 yuan and five jiao. ”

"What" Senior McLeucun jumped up suddenly, pointing to the quotation in Uncle Ho's hand, his face turned pale.

100,000 empty orders, one is 10,000 yuan, a total of 1 billion fiat currency face value of public bonds, of course, this is not equivalent to the Japanese invested a billion fiat currency margin, the margin ratio of public bond futures is 2.5 percent, that is to say, magnified 40 times, and the Japanese opened a position at a price of 100 yuan and 5 jiao, and now the contract transaction price of this three-month 327 bond is 145 yuan, that is to say, they lost almost 450 million fiat currency in just ten minutes, and what is more serious is ...... The Chinese actually pushed the futures price of a bond with a maturity of only 15 yuan to 145 yuan, so can they push it up to 200 yuan? Four hundred dollars? Or is it...... What about a thousand dollars? In this case, the Japanese will naturally lose all their money, but the Hongkong and Shanghai Banking Corporation of the United Kingdom, which is a broker, will also have to bear the responsibility of compensation

Now the head of the Shanghai branch of HSBC, the well-known senior McLexon in Shanghai's financial circles, suddenly has a feeling of crying. Of course, there is still a little bit of indignation that these Chinese are so shameless, how can they do this? Finance is a civilized transaction between gentlemen, not robbers

"Sir...... Do you say they will continue to push prices higher in the afternoon? Uncle He's voice trembled a little when he asked, as if he had seen his destitute appearance after being fired by HSBC......

"Then do you need to ask" MacLesen glared at Uncle He fiercely, and roared, "Hurry up and answer the phone call from the Consul General, Sir John Wall, and ask him to come forward and put pressure on Chinese to make them ...... Let them stop this shameless behavior immediately"

……

The Consulate General of the British Empire in Shanghai is also on the Bund, very close to the HSBC Building and the Shanghai Stock Exchange. So much so that ten minutes later, Consul General Sir John Wall, together with his old friend MacLehoseon Taipan, walked slowly into the Shanghai Stock Exchange with the most leisurely steps of a gentleman in the British Empire.

And Luo Yaoguo, Song Ziwen, Kong Xiangxi, Chen Guangfu and others also tried their best to pretend to be gentlemen, and invited the two Brits into the VIP room on the second floor with the most sincere smile and the most humble attitude. And then Natalie. Lesinskaya brought out the best South American coffee that had been prepared for a long time and the exquisite western pastries that had just been delivered from the Western Restaurant of Huizhong Hotel. In short, the British fully felt the friendliness and sincerity of the Chinese people.

It's just that this friendship and sincerity of the Chinese people doesn't seem to have played a role, and Sir John just sat down and began to protest in a stiff Chinese mouth: "Your Excellency, we in the British Empire originally thought that you Chinese had learned to do things according to international practice, but today it seems that something extremely unusual has happened in the Shanghai Stock Exchange. It is clear that someone is breaking the rules of the game and doing something very undignified and fair, and the British Empire is extremely ...... about it Concerns. ”

Sir John had wanted to use the word "indignant", but he suddenly remembered that the young marshal in front of him had defeated the mighty Soviet Red Army the previous year, so he changed his indignation to concern.

Hearing that the British were very concerned, Luo Yaoguo smiled slightly, put down the small coffee cup in his hand, and spoke fluent American English: "Sir, I think the rules of the game will be slightly different in each place, right?" For example, in the British Empire, the supreme leader is the king, while in the United States of America the president is the head of state. We can't say that the presidential system violates the rules, and we can't say that a hereditary monarch is necessarily wrong, right? Today, all of our operations on the Shanghai Stock Exchange comply with the rules here. For example, there is no upper limit on the amount of open positions in futures contracts (300 million bonds issued are opened for billions), for example, there is no rule that does not allow the futures or spot price of government bonds to be lower than the price to be paid at maturity. In fact, it was the Japanese who were negligent and did not carefully read the rules of the exchange, not us who broke the rules of the game. I deeply regret this. ”

When McLison heard this, he almost couldn't bear to jump up these Chinese, and took what common sense and practice identified, but what was not in the exchange regulations, as a loophole to exploit. What's even more annoying is that at the moment HSBC is the broker who is responsible for this bond futures transaction, which means that if the Japanese lose all their net worth, there is no way to close the position...... That is HSBC covered the compensation, doesn't this mean that HSBC gave the Chinese a blank check that can be filled in at will? Is this worth it? Theoretically, those Chinese can use the manipulation of the price of government bond futures to force the HSBC bank to collapse, of course, in fact, those Chinese should not dare to do this, right?

"Mr. Macrison, what about the 327 public debt this time...... I like it very much, you know that if you like something, you can buy it at a little bit more price. Luo Yaoguo didn't wait for the two Britons to speak, and began to talk about his crooked reasoning again:

"It's just...... I also have some financial resources, and I am not familiar with the financial markets. So I would like to ask you for a reference, what is the reasonable price of this 327 public bond? I mean, we don't want HSBC, Citibank, Macquarie Bank and Crédit Agricole CIB to suffer unnecessary losses in this financial crisis, you can come to China to invest is the greatest friendship to the Chinese people, we can't let friends suffer, don't you say? ”

What does this mean? A hint of surprise flashed across MacLexon's face. Listening to the other party's meaning, it seems that he just wants the Japanese to lose all their money and stop playing. HSBC and all the foreign banks involved in it will not be able to suffer losses, which means that he and Barrison will not have to bear any responsibility for this, and the entire HSBC Shanghai branch can still maintain good performance. And those Japanese who have lost all their net worth...... They will not look for HSBC if they want trouble, they should go to the Chinese for trouble. As for whether to go to court to fight a lawsuit or choose to go to war directly, the relationship with HSBC is not very big, and there is another point, I should immediately notify the head office to close all positions related to Japan as soon as possible, and it is estimated that I will lose more than a billion yen in Shanghai at once, and this country should also have a financial crisis that is not big or small.

"Your Excellency, I ...... On behalf of HSBC, thank you for your kindness. As for what the value of this bond should be. I'm going to talk to the senior executives of Citibank, Crédit Bank, and Macquarie Bank, and promise to give you a satisfactory answer before the market opens in the afternoon, so I'll take my leave. After saying this, MacLexun didn't care about any gentlemanly demeanor, and trotted all the way out of the VIP room. There isn't much time left to leave the afternoon market open. Be sure to calculate the value of these Japanese people with a few friends from foreign banks before this...... Oh, and the commission they have to deduct as well, which is HSBC's profit

……

With the sound of a gong to open the market, the "farce" in the Shanghai Stock Exchange continued to be staged.

Right now...... The Great Bull Market has begun

Almost everything began to rise sharply, except flour, oil, coal, gold and foreign exchange. The reason for this situation is actually related to the "margin trading system" in the Shanghai Stock Exchange at that time and the "short selling and short buying" trading was allowed. In fact, the main driver of this morning's market plunge is the "short selling" represented by the Japanese chaebol and the Beiyang chaebol. They used the huge amount of money in their hands to use the system of "short selling" transactions to directly and significantly suppress the market. However, due to the lack of opponents, they sold almost zero short orders at high levels. It was not until after the market crashed that there were successive orders to enter the market, and at this time, the real long and short competition on most varieties began...... At this time, the Japanese and Beiyang chaebols continued to use their capital advantages to frantically suppress and create panic, attracting followers to short the stock market and bond market, and "forcing positions" on the "nine major banks" in South China. Trying to push down the stock price and bond prices enough to bankrupt the "Big Nine" and then trigger a run on depositors, so that the opponent can be completely defeated. Of course, if they don't get to this point, they will just make less money. Because under the trend of panic trading, the market will definitely collapse to an extremely low position. Enough for them to make a profit on the "short selling" trades they made at relatively high levels.

Theoretically, the Japanese and the Beiyang chaebol had a great chance of winning in this round of short selling, and it was almost impossible to fail, but the problem was that in this era, China's securities and futures trading laws and regulations were very imperfect. In fact, countries around the world are not very good in this regard, and basically give the responsibility of regulating the market to exchanges and brokers. The Jiangsu-Zhejiang chaebols, Nanyang chaebols, and Kuomintang bureaucratic capitalists who founded the Shanghai Stock Exchange deliberately left some loopholes...... For example, the upper limit of the open position of short and long trades is temporarily determined by the exchange, which means that it can be set or not. In addition, there was no "circuit breaker" mechanism and temporary suspension system for futures trading, which was actually not available in all countries at that time.

Therefore, a huge *UG has appeared, first of all, there is no upper limit to the increase of any trading target, and there is a lower limit to the decline, at most it falls to zero.

Secondly, there is no upper limit on the "open interest" of the trading target in the "short selling" and futures contract transactions. Take the 327 public bond as an example, its total issuance is only 300 million fiat currency, but the total position in the futures contract is as high as 100,000, which is equivalent to the face value of one billion fiat currency, to put it in more detail, it is a kind of public bond with a total amount of only 300 million, and the Japanese sold one billion in the futures market, so how can it be possible to complete the maturity delivery? Therefore, this kind of "futures" trading has become purely a contest of financial strength, to see who can force the opponent to "liquidate"?

The third problem is that in this contest of financial strength, the Japanese and the Beiyang chaebol have a total of 1.5 billion to 1.6 billion fiat currency, while the Kuomintang has a central bank that can issue an unlimited amount of fiat currency

In this way, in this gambling game, the Japanese and the Beiyang chaebol are fighting against unlimited rise with limited falls, and compete with unlimited funds with limited funds, and another reason why Chen Guangfu chose 327 bonds is that a total of 300 million bonds of this variety have been issued, of which 250 million are in the hands of the nine major banks. In fact, even if it is pulled to two hundred yuan, there is not much cash to smash out...... It's really how you want to pull up. And for every 10 yuan raised, the Japanese and the Beiyang chaebol will lose 100 million yuan, as long as the futures contract transaction price of this bond with a maturity of only 115 yuan is pulled to 260 yuan, the 1.6 billion legal tender of the Japanese and the Beiyang chaebol will be gone, and their money will be gone, and the sharp decline made with financial strength will naturally not be able to sustain it.

In fact, it is not necessary to go to this point at all, and those major European and American banks that act as brokers have begun to implement "forced liquidation", that is, to sell everything that can be sold in the hands of the Japanese, and to close everything that can be closed, and to set out fiat currency as the margin for the 327 bond futures contract. And the first to be sold was the foreign exchange in the hands of the Japanese and the Beiyang chaebol, so the fiat currency began to grow wildly. The second thing that was sold was flour and other material futures, so the price of materials began to plummet. The third thing that was closed was the short selling of various stocks and bonds (that is, buying back the corresponding varieties), so the stock market, foreign exchange market and bond market began to reverse .......

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