The refusal of the bank to fund the syndicate loan program led by Chase Bank and Citibank instantly spread throughout the United States, causing an uproar among countless people!

The first to rage was Wall Street!

"Nikben Bank rejected Chase and Citibank?"

"Oh my God, something big is going to happen, it's really going to be something big this time!"

"Chase Bank and Citibank have already contacted Riben Bank, why did Riben Bank announce its refusal today?"

"Don't care why Riben Bank announced that it will not contribute today, let's think about what to do with the shares of Chase Bank and Citibank in our hands!"

"The refusal of Riben Bank to contribute capital will inevitably cause huge losses to the reputation of Chase Bank and Citibank, and the stock market will be looked down upon, and if the retail investors rush to sell before us, it will inevitably make us lose a lot, no, I have to go to the pre-market to close the position now, even if it is to cut the price and sell the stock!"

"Farke, Citibank and Chase, the top financial institutions in the beautiful country, have all taken the lead, and you can imagine what a heavy blow it will be to the confidence of investors in the stock market, if we don't find a way to close the position at this time, I am afraid that as soon as the market opens tomorrow, our company may go bankrupt!"

"Quick! Get ready for pre-market trading! ”

"Everyone in the company is working overtime tonight, and we will trade before trading tomorrow morning!"

"When the company is at stake, everyone cheers up!"

This time, it is not only small and medium-sized financial institutions that are involved, but many large financial institutions have felt the huge crisis and want to wait until the time period after 4 a.m. EST to allow pre-market trading to close their positions as soon as possible, so as not to wait until the market opens too late to operate, which will cause more losses to the company.

Closing a position is a financial term that refers to the equilibrium of long and short positions.

In order to avoid the risk of operating foreign exchange, banks need to close their positions every day, that is, sell the excess position of a certain foreign exchange to prevent depreciation, and buy a shortage of a certain foreign exchange to prevent appreciation.

Of course, the group of financial institutions on Wall Street did not close their positions to buy and sell foreign exchange, but to sell their shares of Chase Bank and Citibank before the official opening of the market, and then short, so that the bears and longs reached a balanced point, not to mention making money, at least not to lose money.

……

It's not just the major financial institutions that are in an uproar.

Many ordinary people who saw the news were also stunned!

"What?"

"Banks as powerful as Chase and Citibank have to borrow six or seven billion dollars from the Japanese stupid people? Don't they have money themselves? ”

"Take the lead! Do you understand what it means to take the lead? ”

"I don't care what it means to take the lead, anyway, Chase Bank and Citibank must have a big problem, otherwise why would such a bullish bank ask for stupid people to borrow money?"

"The most important thing is that I haven't borrowed it yet!"

"Citibank and Chase are not to be trusted!"

"Yes, I'll take out the money deposited in their two banks tomorrow!"

"Don't go to Citibank and Chase Bank when you save money lately."

After seeing this news, many ordinary people began to wonder how to avoid risks!

This kind of thing is happening all over the United States.

For example, in a tavern in New York, there were two bartenders chatting about it.

Black bartender: "There must be something big wrong inside Chase Bank and Citibank, will it be that they will run away with the money?" ”

White bartender: "Gee, I put $300 in Citibank, shouldn't they be bothered?" ”

Black bartender: "You're embarrassed to say it if you save 300 dollars?" Do you think banks as big as Chase and Citibank would care about your money? Remember me and think about me. ”

White bartender: "How much did you save?" ”

Black bartender: "I saved six ......"

White bartender: "Six thousand dollars? ”

Black bartender: "Six hundred." ”

White bartender: "......"

The white bartender was speechless by the black bartender at that time, is there any difference between 300 US dollars and 600 US dollars in front of giants like Chase Bank and Citibank?

Although the two had a simple conversation, it only involved a few hundred dollars.

However, it is the conversation between the two "poor" bartenders that exposes a very serious problem!

That is, even individual customers with only a few hundred deposits do not believe that Citibank and Chase Bank can avoid risks because they see the news, and want to withdraw their money, not to mention the major financial institutions around the world, they have a more accurate vision and are more cautious about risk management.

I'm afraid that by the time the market opens tomorrow, Chase and Citibank will fall miserably!

No, it's not just the stock prices of these two banks themselves that will fall miserably, but all the listed companies and businesses involved will be implicated!

Another conversation between two shareholders confirms this statement!

In the supermarket, a 40-year-old aunt shareholder and a 20-something white girl shareholder are chatting.

The aunt asked, "Did you buy Exxon oil stock?" ”

Caucasian girl: "Auntie, I followed you to buy stocks, have you forgotten?" ”

The aunt pushed the shopping cart and said thoughtfully: "We will sell the shares of Exxon Oil as soon as the market opens tomorrow morning." ”

Caucasian Girl: "What's wrong?" ”

The aunt was startled and said, "You haven't seen the news yet?" Citibank and Chase Bank have run out of money, they have to borrow money from Riben Bank, and they haven't been able to borrow yet, and the two major shareholders of Exxon are Chase Bank and Citibank, what do you think they will do with Exxon Oil's shares? ”

The white girl's face turned pale with fright, "Are they going to sell Exxon Oil's stock?" At that time, the stock market will collapse, yes, yes, as soon as the market opens tomorrow morning, we have to dump it before Chase Bank and Citibank sell their shares to withdraw funds, otherwise the stock price will plummet and we will lose money. ”

Similar scenes are happening all over the United States!

"Chase and Citibank are finished!"

"Huh?"

"What's going on?"

"Why are Chase and Citibank so awesome?"

"You haven't watched the news yet? In the news, it was reported that Chase Bank and Citibank borrowed money from the stupid people, and then were rejected by the other party, although I don't know why Chase Bank and Citibank wanted to borrow money from the stupid people, but such a big bank actually wanted to borrow money from others, it must have encountered a crisis, and then the stupid people still refused to borrow, I am afraid that Chase Bank and Citibank will not be able to get through the difficulties, and even the situation is worse, these two banks may fail! ”

"Yes, you have a point!"

"Old Frank, you deserve to open a newsstand, and you read more newspapers and magazines every day, and you really know more than us!"

"Chase Bank and Citibank are no longer good, everyone should sell the shares of the companies they hold shares in!"

"Did you hear that? Chase and Citibank are going out of business! ”

"Chase Bank and Citibank have collapsed, but they haven't announced it to the public right now!"

"The chairmen of Citibank and Chase Bank have run away, and I heard that tens of billions of dollars have been swept away!"

The more outrageous the news!

At first, everyone was still talking about why Chase Bank and Citibank wanted to borrow money from the Japanese stupid people, but it became that Chase Bank and Citibank had encountered a huge dilemma before borrowing money from the Japanese stupid people.

Even more egregious rumors were that the two banks had collapsed and could not control public opinion, which allowed the bad news to come out.

Say anything!

But without exception, the spearhead is pointed at Citibank and Chase!

As a result, the major companies held by Citibank and Chase Bank were implicated and fell into bad luck!

Take Exxon, for example.

Ji Cheng's old acquaintance, now Exxon Oil's chairman Darren . As soon as Woods got home, he received a call from the company.

"Darren, something is wrong!"

"Griffin, what's wrong?"

"Many of our customers whose contracts are about to expire and were talking about renewing their contracts suddenly said that they will not renew their contracts."

"What? How could this happen? ”

"It is said that it is because of the major financial problems within our two major shareholders, Citibank and Chase, that customers are afraid to renew their contracts, for fear that we will be implicated, which will lead to a series of consequences, such as the collapse of the company."

"What's going on in their heads? Chase and Citibank are only leading the way in raising funds, and there is no real problem. ”

"But the customers don't trust us, and we can't do anything about it."

"That's right...... That's right. ”

"What?"

"Chase and Citibank can't really fail, right?"

“……”

"Tomorrow the market opens to help me sell the shares of these two banks."

“…………”

Even Darren, who was propped up by Citibank, State Street and Pioneer Group. Woods was scared and wanted to sell the shares of Citibank and Chase Bank, but you can imagine how distrustful the outside world is of these two banks!

Why, then, is it that just the refusal to fund the syndicate loan program led by Chase and Citibank has had such a devastating effect?

In fact, there are several reasons.

First of all, Ji Cheng said to the heads of the Boston consortium that there was a problem with the junk bonds.

Since the stock market crash in '87, Western countries have taken measures to stimulate economic growth in order to prevent economic recession, resulting in widespread inflation in 1988.

In order to control inflation, countries have tightened monetary measures one after another.

Under such circumstances, many companies with poor credit ratings have difficulty in raising funds, so they have to raise funds by issuing high-risk, high-yield junk bonds.

By the end of 1988, the total amount of junk bonds in the United States had reached $200 billion.

In order to attract investors, the yield on junk bonds is generally 3.5 to 7 percent higher than the yield on three-month Treasury bills, that is, the highest interest rate is about 15 percent, which is difficult for ordinary companies to bear.

According to the data of the Ministry of Commerce of the United States, the net interest expenses of enterprises in the first half of '89 increased by 18 percent compared with the same period in '88; At the same time, the net cash flow of companies in the United States fell by an average of one percent.

This situation bodes extremely bad for junk bond investors.

Junk bonds were mainly purchased by institutional investors, with mutual funds and insurance companies buying about 60 percent of the total.

In the event of a downturn in the junk bond market, they will inevitably have to sell off their stocks as a contingency.

As a matter of fact, as early as 29 August, the beautiful Gome MGM Group announced that it would not be able to pay interest on its US$925 million bonds, which caused a crisis in the junk bond market.

Second, banks are overexposed.

Since the 80s, many Western countries have relaxed their financial controls, intensifying competition in the bank credit market and narrowing the spread between deposits and loans, while the debt crisis in the third world has shifted the focus of banks' loans and investments from international to domestic.

In order to increase profits, banks have increased high-yield, risky investments and loans, and actively participated in corporate leveraged buyouts. In fact, the money center bank of the beautiful national university has relied on acquisition financing, with 15 percent of its annual earnings coming from leveraged buyouts.

In '89, 25 banks borrowed $43.6 billion in leveraged buyouts, up 25 percent from '88, most of which were senior debt.

When banks are involved in acquisitions, they need to increase their holdings to complete their acquisition plans, and if there is a problem with loans, the bank's liquidity will be difficult to turn around, causing turmoil in the financial system.

Alan Greenspan, chairman of the Federal Reserve of the United States, had previously warned commercial banks not to be overly involved in leveraged buyouts, so as to avoid a liquidation crisis in the entire financial market.

In addition, there are a series of factors such as excessive corporate borrowing and overheated stock market.

But in any case, the refusal of the bank to give Chase Bank and Citibank led the syndicate loan program caused such a huge repercussion, not because the people of the country have a great influence in the country, but because of the financial market of the country itself, the bank refused to lend just a fuse.

A fuse that ignites a barrel filled with a fire lid!

The huge chain reaction is raging in the beautiful country, and those big conglomerates are also stunned!

……

Conference call.

No one spoke, and there was utter silence.

It's like no one is on the phone.

But in fact, whether it's Lawrence. Rockefeller, Henry. Morgan or Stillman Jr. and the others were all on the phone, but they were so bitter that they didn't know what to say.

In the end, it is still the oldest and spiciest Henry. Morgan spoke, "Tell me what you think about this. ”

Little Stillman smiled bitterly and said: "That group of stupid people talked about it well before, who knew that they would suddenly change their hexagram and not contribute." ”

Henry. Morgan was speechless: "Is it now a question of whether the bank will contribute or not?" I mean, tomorrow when the stock market opens, the stocks we bought in large quantities today will definitely plummet, and then will we grit our teeth and hold it, or will we resolutely break our wrists? ”

Lawrence. Both of Rockefeller's hands were shaking, "I...... I think we should grit our teeth and persevere, otherwise we will lose too much. ”

"No, the impact this time is too great, if you grit your teeth and insist, who knows if the stock market will collapse like a tsunami like in '87?"

"The public opinion of the outside world is one-sided, which is very unfavorable to us!"

"No, I don't care what you do, I'm going to sell all the stocks I bought today at the opening tomorrow morning to avoid greater losses!"

Several other consortium leaders are babbling their opinions.

In just a few words, Lawrence. Rockefeller had a feeling of being abandoned by everyone.

Although the heads of these consortia are only talking about selling stocks, they are actually abandoning trust, and they no longer believe that the century-old glorious Rockefeller family can successfully survive this difficulty, so they decided to sell stocks, and would rather lose than resist!

But Lawrence. Rockefeller still had a glimmer of hope, as long as Henry . . If Morgan doesn't let go, there is still hope that he will get through it.

Can be made Lawrence. Rockefeller was desperate that Henry. Morgan was silent for a long time and gave up continuing to fight side by side with the Rockefeller family, "I'll sell the stock tomorrow morning." ”

Just a short sentence, Lawrence. Rockefeller is like falling into an ice cave!

Little Stillman, who had been proud before, was also depressed at the moment, and said helplessly: "I...... It should be the same. ”

The two biggest boosts are going to be withdrawn!

Lawrence. Rockefeller's two wrinkled hands were already trembling at the moment and couldn't even hold their cigars!

Finished!

This time, the family is going to be greatly damaged!

Lawrence. Rockefeller really couldn't understand why the bank was suddenly reluctant to contribute, and what he couldn't understand was that it didn't announce it early or late, but it was only after they smashed a lot of money into the stock market that the bank announced it.

A terrible thought popped into his head......

Results Lawrence. As soon as Rockefeller's idea was born, little Stillman said his thoughts again, "This matter shouldn't have anything to do with Ji Cheng's guy, right?" ”

"Unlikely, right?"

"Does he have that much energy?"

Many consortium leaders don't think so.

However, not long after they hung up the phone, Ji Cheng personally appeared on the stage to prove it!

Huajin Capital has taken advantage of the fire to release a devastating report on the current situation, a report on the risk exposure of major banks in the United States to highly leveraged trading in 1989!

】

When the heads of these consortiums saw this, their faces all changed in an instant!