January 4th.

Goldman Sachs corporate headquarters.

in the trading department.

Many people are looking at the USD/JPY pair that is shorting to around 105.900.

They couldn't help but feel a little more admiration for the company's CEO, His Excellency Paulson.

Know before that.

The reason why Smith Capital started to aggressively short USD/JPY.

A lot of people at Goldman Sachs want to be like last month.

Enter the market like Merrill Lynch, Lehman Brothers, etc.

They wanted to see if they could tear off a bite or two of meat on Smith Capital like they did last time.

But CEO Paulson, who made this decision last time.

This time, he rejected the views of these people in Goldman Sachs.

Paulson didn't give a reason either. He simply used the authority of the CEO to get them to obey orders.

These elites at Goldman Sachs still didn't understand this.

But now I see this kind of long to short, it is still a very fast long to short market.

Everyone couldn't help but admire Paulson a little.

If Goldman Sachs had entered the market like other Wall Street investment banks at the time.

The scrambling appearance of other investment banks now will also be what Goldman Sachs is now.

Let's take a look at the investment banks that were long before.

At this time, one or two, they are busy turning more short.

They are all thinking about trying to ensure that floating profits turn into profits.

It's not that easy.

Goldman Sachs avoided this and was able to sit on the sidelines.

Paulson's ability to invest this time made everyone a little more convinced of him.

But in reality, Paulson was secretly rejoicing.

You know, this time Paulson didn't let Goldman Sachs go.

And not because of his ability to invest.

It's because Paulson, who is getting closer and closer to the Texas side.

Through some channel, he learned of Abel's close ties with the bush family.

This guy wants to give himself a way out and go for his future development.

Paulson decided to try not to be an enemy of Abel as much as possible.

Avoid the influence of Abel's side and affect his future career.

That's what Paulson decided that Goldman Sachs wouldn't do this time.

Paulson's decision was, to put it mildly, a bit selfish.

It is against the interests of Goldman Sachs.

Unexpectedly, it might have been a bad thing for Goldman Sachs, but now it has become a good thing.

Goldman Sachs, which has not ended, does not have to be in a hurry like other Wall Street investment banks at this time.

Facing the heartfelt awe of his subordinates, Paulson's heart was refreshed.

With an unfathomable expression on his face, Paulson asked the head of the Market Surveillance Department:

"What is the status of the accounts of the major investment banks, as well as Smith Capital?"

Goldman Sachs' market surveillance department is within a similar department across Wall Street.

It can definitely be at the forefront. This department specializes in collecting capital market intelligence, as well as various business intelligence from around the world.

It has brought a lot of accurate business intelligence to Goldman Sachs, and indirectly brought a lot of profits to Goldman Sachs.

This also makes this department very important at Goldman Sachs.

Goldman Sachs has invested a lot in it and has formed a good positive feedback.

The more resources are invested, the better and more accurate the department's business intelligence gathering capabilities become.

Faced with a question from the CEO, the head of the market surveillance department at Goldman Sachs replied:

"Mr. Paulson. From what we know and observe."

"More than a dozen large investment banks, including Morgen Stanley, Lehman Brothers, Merrill Lynch, Bear Stearns, etc., have basically begun to complete the transformation from long to short."

Paulson nodded

。

This is very common.

When the market is bullish, everyone likes to go long.

In a bear market, everyone likes to go short.

In normal times, it is all too common for Wall Street investment banks to switch between long and short.

But Paulson's next words surprised Paulson.

The head of the market supervision department of Goldman Sachs said:

"But according to some other information we've learned. In the second half of the market yesterday, Smith Capital closed all their short positions."

"And after that, Smith Capital built up a lot of long orders."

"According to the intelligence we have available, Smith Capital has at least $20 billion in positions on the bulls."

"Smith Capital is running too late?" Paulson said in surprise.

"That's right." The person in charge of the market supervision department replied.

Paulson couldn't help but frown.

Paulson at this moment is the same as David Mellon yesterday.

I can't figure out why Abel did this.

The Fed has cut interest rates, why do they still do more?

Although every time the Fed cuts interest rates, the currencies of other countries will also choose to cut interest rates along with them.

As a result, the depreciation cycle of the dollar is often only a few days.

So this bearish market will not go long.

But soon, it will generally have a short market that lasts for four or five days.

Four or five days is enough time to trade in the foreign exchange market several times.

In other words, at least for a few days.

USD/JPY will both be bearish.

The short order that Abel had established before still has at least four or five days to make a profit.

As a result, Abel did not let these profits go, but went long against the general trend of the market.

This is the same as his previous shorting against the general trend of the market, which puzzled Wall Street.

Fortunately, Paulson also made up his mind not to get into trouble.

Therefore, whether Abel is long or short, it has nothing to do with Goldman Sachs.

He just let the people from the Market Supervision Department continue to stare at the market.

Goldman Sachs' indifference is largely due to Paulson's personal reasons.

But other Wall Street investment banks will not sit idly by and watch this "good thing" remain indifferent.

Lehman Brothers Bank.

in the trading department.

Mr. Richard Foord, Chief Executive Officer.

He was staring at a subordinate he was talking to.

That subordinate was on the phone in very fluent neon at this time.

Richard Forder couldn't understand the neon words and could only wait by the side.

A few minutes later.

The subordinate who could speak neon ended the call.

Richard Forde immediately couldn't wait, "How? Is there any definite news?"

The subordinate who spoke neon words replied respectfully:

"According to our sources over there."

"We're in Neon. The informant in the line said, in a short time."

"Due to pressure from the Fed and the White House, they won't cut interest rates as soon as other currencies do."

Hearing the news, Richard Forder suddenly had an ecstatic expression on his face.

It has already been said before.

After the Fed made the decision to cut interest rates.

Most countries in the world will follow suit and cut interest rates.

In this way, the dollar depreciates, and others depreciate more, which is reflected in the dollar, and the dollar appreciates on the contrary, and the dollar index will rise.

But in essence, the Fed cut interest rates, and the dollar depreciated.

What's more, there are still a few days of reaction time in between, and the dollar will definitely depreciate in these days.

Richard Foord, an informant from Lehman Brothers on the neon side.

Learned about this neon yang. The bank was forced to follow the news of the Fed's interest rate cut.

The pit bulls of Wall Street suddenly became overjoyed.

Because as long as Neon doesn't cut interest rates with the Fed.

This means that the yen will continue to maintain the current strength of the exchange rate.

The dollar depreciated, while the yen maintained.

This is the exact opposite of the previous three-year bull market, which is conducive to the continued shorting of USD/JPY.

Richard Forde can't fully believe this news channel.

This kind of transaction, which involves tens of billions of dollars, of course, requires as accurate intelligence as possible.

The Bulldogs of Wall Street, it took another few hours.

Through many channels, after the news was confirmed in many ways.

Determine the reason why Neon was threatened by the White House.

Neon really won't cut interest rates with the dollar this time.

Really sure that the news is true later.

Richard Forder, in the trading department, decisively made the decision to aggressively short USD/JPY.

All of a sudden, he placed more than 30,000 lots of USD/JPY short.

This has increased to more than 80,000 lots.

It's not just Lehman Brothers who got the news that Neon won't cut interest rates this time.

Other well-informed Wall Street investment banks also got the news.

These people make the same judgment as Richard Forder.

The dollar cuts interest rates, and the yen doesn't follow suit.

That's bullish for JPY/USD, and the yen will appreciate.

The reverse is bearish for USD/JPY, and the dollar will depreciate.

Some people may think, isn't USD/JPY and JPY/USD the same?

Aren't they just the exchange of two currencies?

Between normal foreign exchange exchanges, they are indeed the same.

But in the international foreign exchange futures market.

USD/JPY is USD/JPY.

JPY/USD is JPY/USD.

The two are two different currency pairs.

Even if they are in the foreign exchange market, they usually appear in pairs.

USD/JPY is based on the US dollar.

On the other hand, the yen/dollar is based on the yen.

Let's put it this way, USD/JPY 107.500 means that one dollar can be exchanged for 107.5 dollars.

If the short becomes 107.300, it becomes 107.3 yen per dollar.

The amount of yen that can be exchanged for one dollar has become less, so the dollar has depreciated, and the USD/JPY has gone short.

In turn 107.500, it becomes 107.600.

That is, the amount of yen that can be exchanged for one dollar has increased.

For the dollar, it means that the dollar appreciates and the yen falls.

USD/JPY, which is benchmarked against the US dollar, is naturally bullish.

At this time, the neon central bank was pressed by the United States to cut interest rates, but the United States cut interest rates on its own.

That is, the dollar depreciates, and there is less yen that can be exchanged for it.

This is reflected in the USD/JPY pair, which is now fiercely fought between bulls and bears.

That is, USD/JPY will continue to be bearish as a matter of course.

It will remain empty until the end of the period when the United States does not allow Neon to cut interest rates, and after Neon begins to cut interest rates, it may go long again.

This is undoubtedly a very favorable condition for Wall Street investment banks who are short the yen.

That's why Stanley O'Neal before them.

There will be serious suspicions about the reason for Abel's collusion with the White House.

This happens, in addition to the fact that it is good for strengthening the US economy.

There is no doubt that there will be huge benefits for Abel, who was fully short USD/JPY at that time!

It was precisely because Abel benefited the most at that time that Wall Street investment banks doubted him

Collusion with the White House.

But now

Not only Goldman Sachs has found out that Smith Capital has turned from empty to long, and it has a bad brain to start long USD/JPY.

Goldman Sachs found out, but chose not to play because of Paulson's personal reasons.

But other Wall Street investment banks, after confirming these two news.

They're not going to be polite.

Lehman Brothers' Richard Forde pressed 50,000 new empty orders at once.

Merrill Lynch's Stanley O'Neill was also not polite, and also confirmed these two news.

The most powerful black man on Wall Street even directly bet Merrill Lynch on 100,000 empty orders.

On the afternoon of January 4th, the international foreign exchange market.

USD/JPY has hundreds of thousands of more short orders.

The long-term long position that had been saved for more than two years was instantly flattened.

USD/JPY held its trade rate around 106.100 for a day, moving down again, falling below 106.

Smith Building.

Smith Capital's traders.

They looked at Smith Capital's account with some despair.

&00,000 lots of USD/JPY long orders, with a cumulative floating loss of more than $1 billion.

If it weren't for the fact that the main provider of funds for Smith Capital this time was Pacific Commercial Bank, it was Abel's own bank.

Losses to this point, bank middlemen.

It will definitely suggest that Smith Capital close the position, or ask Smith Capital to increase the margin.

But this kind of loss is also already scary.

The total margin is only three billion dollars, which is a third of the loss.

It is not far from the forced liquidation line, that is, the liquidation line.

In this regard, David Mellon had to find Abel in person.

"Boss, things don't look good."

David Mellon worriedly said:

"Go ahead, even if Pacific Commercial Bank doesn't have to make a margin call. But Citi and Wells Fargo will definitely ask us for a margin call."

Margin calls, which are common in financial investments.

But the problem is that now Smith Capital only has hundreds of millions of dollars left in its account.

These hundreds of millions of dollars are used for emergency response, and they can't all be filled in.

And even if you fill it in, it may not be enough later.

Abel certainly knew about the situation.

But the more he did that, the more relaxed the expression on his face looked.

"Simply put, it's a lack of money, isn't it?"

Abel asked with a smile.

David Mellon hesitated for a moment and nodded slightly.

Because strictly speaking, there is really a lack of money.

There is no shortage of money to ensure the maintenance of the margin, and there is no fear of floating losses.

"Can you squeeze a little more over at Pacific Commercial Bank?" Abel's first thought was his bank.

David Mellon shook his head and said:

"I've been in touch with John over there. I'm afraid not. The tipping point has been reached. If you cross the line, John says, it might attract attention. There is a high probability that there will be a lawsuit."

This time Smith Capital's foreign exchange investment.

Pacific Commercial Bank has provided $25 billion in funding each.

Its custodial assets are only about 100 billion US dollars.

Most of them are still immovable assets.

In fact, it can be said that all the funds that can be mobilized have been taken out to support the boss.

It would be a bit too much to let Pacific Commercial Bank contribute.

In fact, strictly speaking.

This investment from Smith Capital, if something happens.

The Pacific Commercial Bank will definitely be hurt by this.

It is not even necessary to go bankrupt because of it.

own

There's no way around the bank.

There are only two ways for Able to scrape together a lot of money.

One is the mortgage of the Pacific Commercial Bank.

Pacific Commercial Bank is now a medium-sized bank with more than $10 billion in its own assets.

Use it as collateral to go to those big banks for loans.

At the very least, billions of dollars in loans could be obtained.

That's it, a little too much for Pacific Commercial Bank.

It has already made it contribute at the risk of bankruptcy in violation of regulations.

Now it's going to take it out and mortgage it for money.

It wasn't even the last step, and Abel didn't want to do it.

He has another source of funding.

"Then let's take out our part of the U.S. stock market first."

Abel spoke.

Smith Capital has invested in 131 stocks in the U.S. stock market.

The total investment is more than $14 billion.

The purchase time has been more than half a month.

In the past half a month, each of them has risen to a certain extent.

"Sell the ones that go up the most, the ones that have the best market." Abel confessed to David Mellon.

David was also aware of the funds.

Smith Capital's $14 billion investment in U.S. stocks.

In half a month, Smith Capital has earned nearly $3 billion.

Many of these stocks will continue to rise, and holding them for a while will allow them to make more profits.

David was reluctant.

But Abel insisted on this, and David could only immediately order the traders to start acting.

Because the market was very good, Abel selected 31 of the 131 stocks to sell.

Sell fast.

Of these 31 stocks, Smith Capital invested about $3.1 billion.

After selling them all, Smith Capital had $4.8 billion more in its account.

In other words, the stocks brought Smith Capital $1.7 billion in profits.

This made David realize something.

He asked Abel, "Chief, it seems that you think that they will not go up any longer, so you chose to sell them, right?"

Abel smiled and didn't speak.

But it's really just as David guessed.

Stocks that will continue to rise and continue to make money, Abel did not choose to sell them.

Most of the 31 stocks sold have already run out of gains.

Or that it will not rise on a large scale in the future.

Therefore, the liquidation of this part of the stock has little impact on the investment profit of Smith Capital in the U.S. stock market.

The extra $4.8 billion also made Smith Capital's funds abundant and flexible.

It's Abel after so much more free money.

He immediately gave another order that made David tremble.

Abel asked Smith Capital to continue to increase its shorting efforts on USD/JPY!

By continuing to put in the margin, the money is transferred to the margin accounts of Wells Fargo and Citibank.

On January 6th.

Smith Capital's forex account.

I already hold more than 550,000 lots of long positions on USD/JPY.

The account float is more than $2 billion.

At the same time on the day of the sixth.

Six p.m. in neon time.

Neon Central Bank, announced one of their new policies.