Chapter 189
Chapter 189 First meeting with Wall Street
This time I returned to New York from my hometown in Texas.
To be honest, Abel was not in a good mood.
Lian Yisha's Christmas Eve performance.
According to AGB Nielsen statistics, the audience is up to 32 million people.
It also didn't help him feel much better. The audience of 32 million viewers is indeed very high, comparable to the audience watching the 1993 NBA finals.
This is also the highest record in the NBA at the present time.
The first program Isa was able to do just that.
We can say without a doubt that Elizabeth's garden became famous throughout America and even around the world.
Advertising effectiveness is great. It also allowed Elizabeth Garden, which opened on Christmas Day the next day, to fill 100 stores across America every day.
In just three days, the total sales of about a hundred ISA stores in the United States exceeded 45 million US dollars!
The average daily revenue of a store is US$150,000.
The highest daily revenue of a store is US$280,000 and the lowest daily revenue of a store is US$60,000.
These numbers are among the best in the industry.
Three-day sales are now equivalent to the sales of more than 100 Victoria's Secret stores over four months. This result would be commendable if it could be maintained.
It can be said that he is completely worthy of Abel's effort and money in this regard.
But Abel wasn't very happy about that.
Whoever called him, whether it was Isa Company or Isha Daxiu, it was just a fun whim for him.
He's in a bad mood. This interrupted his plan to keep quiet for a month or two.
I want to see the river of blood flowing.
Penultimate day of the year 2000
That is December 28.
Smith Building where Smith Capital is located. Re-enter the security status of the entire building.
He sent people to monitor Wall Street giant Smith Capital.
I immediately received this news.
Goldman Sachs, the market watchdog, also immediately notified its CEO.
At the time, Paulson was meeting with several company executives. The meeting aimed to discuss some investment strategies and plans for next year.
After hearing this news, the CEO fell into thought.
As far as Paulson knows, Smith Capital has been established for more than six months.
In the market, Smith Capital invests a lot and moves a lot.
But Smith Capital has only pursued firm-wide safe harbor status once before. Paulson learned this during a cover-up situation that lasted several days.
Smith Capital has made billions of dollars in profits in the international foreign exchange markets.
That's almost higher than Goldman Sachs' full-year profit this year.
This is a safe haven status across the Smith Capital company.
It's been over a month now. This time, Smith Capital fell into this situation again.
Then think about the news that Abel Smith just returned from Texas yesterday.
Paulson had to think: is this Abel's new capital hunting activity?
Or. Have you received assistance from Texas?
Otherwise why was Smith Capital busy as soon as he returned. Paulson, who had interacted with the people of Texas, must have thought so.
Paulson asked the head of market surveillance a question.
"I asked you to keep an eye on Smith Capital's shares on the stock market. How are they doing?"
The manager immediately responded:
"Most of the 131 stocks are up. The fastest-growing stock is up 76% since being acquired by Smith Capital."
Stocks are relatively public investment products. With Wall Street giants, you can get first-hand information about the market.
Unless when investing, you are doing a complex decentralized holding, using hundreds or thousands of accounts to hold.
Otherwise, a single joint stock company. It is difficult to escape the scrutiny of giants like Goldman Sachs.
Smith Capital's investment in the US stock market is not to hide from others. Anyone interested can inquire.
Be more careful and send more elite analysts to follow.
By the way, I want to know the daily rise and fall of these Smith Capital stocks.
It's not too difficult.
"That's according to your calculations." Paulson said:
"How much has Smith Capital gained or lost on these stocks to date?"
The manager had the exact number and responded immediately:
"Since the opening day today. Our estimate is from Smith Capital and the account value of these 131 stocks is around $15.6 billion to $16 billion.
Hearing this number, Paulson frowned and looked at his bald face.
Paulson recalls Smith Capital's investment in US stocks.
Goldman Sachs analysts analyzed it.
Smith capital account value.
Probably between $13.5 and $14.5 billion. According to this review.
Based on a minimum calculation of $13.5 billion, Smith Capital has earned more than $2 billion in profits from investing in US stocks.
Based on the calculation of 14.5 billion US dollars, Smith Capital's profit on the US stock market is at least 1.5 billion US dollars.
This. How many days has it been? Have you earned that much money in less than half a month?
After reading this data, Paulson was speechless for a long time.
Finally, he ordered the market surveillance department: "Continue monitoring." See what financial products they invest in in this state. After receiving accurate news! Don't forget to let me know right away!
"Remember, you must be informed anytime, anywhere! Twenty-four hours, no matter what time it is, understand?"
24-hour monitoring is all too common in the financial sector. Even if Paulson is in a high position, it is inevitable.
Who is the global financial market? It is constantly evolving and there are markets that trade 24 hours a day.
When Goldman Sachs received the news.
Other giants on Wall Street naturally refused to let go.
Merrill Lynch Securities, Morgan Stanley and other giants also received information from Smith Capital that they have returned to safe haven status. This is different from Goldman Sachs being somewhat cautious because of Paulson.
Merrill Lynch and Lehman Brothers heard the news.
Stanley O'Neal and Richard Fuld, the bulldogs of Wall Street.
These two Wall Street tycoons are much more radical and enthusiastic.
Stanley O'Neill immediately rushed to the company. The black chairman summoned relevant personnel from the company's investment department.
So did Richard Fuld.
It's not just about these two companies.
Many Wall Street giants are watching Abel.
There are also different but somewhat similar reactions. After receiving this investment.
Abel started his own merchant bank.
And to some extent, his approach certainly sets up a confrontation on Wall Street.
After the confrontation, Wall Street became suspicious of him.
threw a lustful look at him. Also last month, he intentionally caused David Mellon to make a number of mistakes in investment transactions.
has been greatly improved.
Like later that day.
The Wolf of Wall Street's aura was gone.
People are no longer afraid of him. Everyone wanted to see if they could get a piece of the meat from Smith, like Goldman Sachs, Lehman or Merrill Lynch.
Even though a lot of people know.
Smith Capital's failed transactions were probably not made by Abel.
But in the eyes of these people, after this brief moment.
It is as if Abel Smith has a crack in his unbreakable golden body in the capital markets. People started testing, people started watching.
Everyone wants to see if they can get a shot at Smith Capital's next move.
About three hours later, at noon on December 28.
Most Wall Street giants have discovered this.
Smith Capital's investment management has entered safe haven status. What a change!
Abel Smith plays the most, earns the most profit and is also the financial product with the highest risk.
Everyone discovered that this time Smith Capital invested a large amount of money in the USD/JPY currency pair.
This time, most of Smith Capital's funds are managed through Pacific Bank of Commerce.
Another part of the fund, through Wells Fargo and Citibank.
It's no longer as close to these investment banks as it used to be. This only makes these Wall Street investment banks know that Smith Capital this time has a large amount of capital, with a capital of at least one billion US dollars.
But there is no way to know the exact amount and their exact flow.
Smith Capital has its own capital circulation center.
Its investment situation and capital flow, there is no way to monitor it completely.
Wall Street giants can only give a rough assessment of approximate cash flows. Smith Building.
In the trading room on the third floor.
At noon, Abel was looking at the USD/JPY currency pair on the screen wall.
This is actually what some of the information discovered by these Wall Street giants shows.
This time, Smith Capital is focusing on the USD/JPY currency pair. Specifically, Smith Capital is selling USD/JPY.
Today, USD/JPY is at 107,700.
Since 1998, the USD/JPY bull market has lasted nearly three years.
During the second half of 2000, the USD/JPY bull market reached around 107.
At this time, the attitudes of international speculators and domestic investors were somewhat divided. Half of the people affirmed that this time the yen could reach the exchange rate of 100, or even more than 90 in 1994 and 1995.
These people's comments are similar to those of people who are relatively optimistic about the economic situation of neon companies in their country.
The other half believes that the yen is unlikely to strengthen any further.
Because it continues to grow stronger, it will significantly constrain the economy of an export-oriented country like Neon.
Furthermore, in the market, many long-term bulls have begun to close their positions. The strength needed to sustain USD/JPY's rise is also increasingly weaker.
Once a large-scale long-term sell-off occurs, USD/JPY will also fall at the intersection of the new year and the old year.
But this is not really Abel's analysis.
The reason he made this comment is very simple.
His talent told him: "The three-year USD/JPY bull market will usher in a major correction. »
For this reason, Smith Capital established 50,000 short positions throughout the morning. The average open position is 107,500.
This causes Smith Capital to still lose money.
Holding 10 short USD/JPY positions, the volatility of one point is US$500,000 and the current floating loss is US$10 million.
Ten million dollars to Abel is just a drizzle, Abel is completely indifferent.
But the Smith Capital traders in charge of the operation as well as David Mellon are getting a little nervous. Because previously the investment capital was led by Abel.
From start to finish there were virtually no floating losses.
it's about winning and winning every time.
Always because of Smith Capital.
When Abel asked, there was a floating loss for the first time. Everyone has a little worry in their hearts.
Abel instructed Smith Capital to open a position and continue selling.
But he asked Smith Capital not to create positions too quickly.
This is because even with his current financial knowledge.
Also note in this case. If you create too many positions too quickly, you will sell hundreds of thousands of USD/JPY short orders at once.
It is estimated that the market will not be able to digest it, which will easily cause USD/JPY to decline.
Abel doesn't want to do that, his talent allows him to eat as much as possible in the top zone.
This keeps profits higher.
It is now one o'clock in the afternoon. Abel noticed that USD/JPY soared to 107,500 again, so he immediately shorted 10,000 lots of USD/JPY!
This approach immediately caused USD/JPY to drop 5 points before finding support.
Immediately, USD/JPY started to fluctuate.
After 5 minutes he rushed again.
Abel immediately short-circuited another 10,000 arms and suppressed it again.
Just like that repeated many times, USD/JPY could no longer rush to position 107,500. It is currently hovering above the 107,400 position, but the support at the 107,400 position remains strong.
Seeing the USD/JPY trend right now is consistent with my assessment of "talent".
This makes Abel scoff - this time let you see, what is the big hole in Wall Street!
From morning until now.
Smith Capital is at position 107,500, selling a sell order of 50,000 USD/JPY.
Currently, Smith Capital holds a total of 100,000 USD/JPY short positions. Floating losses amounted to more than US$30 million.
100,000 standard positions, without using leverage, would cost $10 billion.
Smith Capital's free money currently only amounts to about three billion US dollars.
Without leverage, it is impossible to raise this amount of money.
Therefore, in this investment, Smith Capital also uses leverage. This is simply because Wall Street investment banks cannot be trusted.
This time, only three banks remain as guarantors for Smith Capital.
Pacific Commercial Bank, Wells Fargo and Citibank respectively.
Fifty percent of the capital came from American Pacific Mercantile Corporation, and the remaining 50 percent was handled by Citigroup and Wells Fargo.
Although Citigroup and Wells Fargo are also part of Wall Street. However, the core business of Citigroup and Wells Fargo is still commercial banking.
It is much more trustworthy than other investment banks.
Together with abundant capital, they can meet Smith Capital's financial needs.
The two banks both granted Smith Capital 8 times leverage.
Abel has $1 billion in deposits in two banks. In other words, it can mobilize a total of $16 billion in capital from these two banks.
The remaining leverage of Pacific Commercial Joint Stock Bank is very exaggerated.
Abel's deposits at Pacific Commercial Bank also amount to one billion USD.
But Pacific Bank of Commerce gave him 25x leverage.
One billion US dollars is deposited in the Pacific Bank of Commerce, an amount that can be mobilized up to 25 billion US dollars.
Such an amount of money, such excessive leverage. This is almost impossible to happen in any other bank.
But called the Pacific Bank of Commerce, it was his personal bank that was wholly owned.
As long as his boss is willing to take the risk, as long as Pacific Bank of Commerce has enough capital.
Even though he used 100 million US dollars to raise a lot of money.
In terms of form and law, this is completely reasonable. This is the advantage of having your own bank with enough money.
Of course.
This entails costs.
The first is that interest and fees must be paid as is, even if they are paid to the minimum standards required by the Federal Reserve.
Otherwise, this is illegal and will be penalized by the regulatory agency. other.
This is high leverage or internal leverage.
If exposed, it could cause concern for Pacific Commerce Bank customers.
Therefore, it could cause a race to the Pacific Bank of Commerce.
Meaning, no matter the cost. Abel's current "ammunition" is 80,80,250, totaling 41 billion US dollars.
Currently, 100,000 vacancies have been opened, costing about 10 billion USD.
It still has $31 billion in stock.
It was two o'clock in the afternoon.
When USD/JPY falls again. Abel saw an opportunity and shorted 5,000 lots of USD/JPY again.
Suddenly, USD/JPY fell two points again, then found support again at 107,400.
Abel immediately continued to increase his short position by 5,000 lots and immediately the USD/JPY exchange rate could not hold at 107,400.
After more than ten minutes, USD/JPY dropped 10 points and reached 107,300.
The data milestone shown in "Talent" has arrived. Abel was immediately happy and continued to sell USD/JPY.
Right now, in the trading room of Merrill Lynch Bank, in a single office.
Stanley O'Neill sees USD/JPY falling again.
He turned to Charlie Schaff and the CFO gently replied:
"Basically, that is certain. Smith Capital is shorting USD/JPY on a massive scale."
"Does he think the yen bull market is over? » Stanley O'Neill asked. Charlie Scharf shrugged: "Who knows? But he dares to sell such a large amount of money, he must think so."
Stanley nodded and thought for a few minutes.
Suddenly, the black president asked: "How profitable is our long-term account?"
The USD/JPY bull market has been going on for almost three years. At first, the bulls and bears fought hard and were in a relatively balanced state.
However, over the past two years, short positions have proven insufficient and brief massacres have taken place. Since then, many bulls have begun trading long-term.
Firms such as Merrill Lynch and Goldman Sachs have been involved in this relatively long-term stable sector.
"About 50,000 extra hands," Charlie Scharf replied.
Hearing this data, Stanley decisively gave orders to Merrill Lynch's trading department.
At position 107,300, a buy order of 10,000 USD/JPY was decisively placed. Merrill Lynch's black chairman continues to be bullish on USD/JPY.
Why did Stanley O'Neill gradually replace the company's original CEO over the past two years?
Except he's very good at being a man and can please the board.
This is also because Stanley O'Neill has been using the USD/JPY currency pair for three years.
brought a lot of profits to Merrill Lynch. Over the past two years, Stanley O'Neill has been waiting for a long-term decline in USD/JPY, and the combined profit has reached two billion US dollars, which is truly something new.
This incredible profit was combined with his excellent office scheming skills.
Only then did Stanley O'Neill gradually fire the original CEO.
Otherwise, just rely on office skills.
You may be able to survive in the four major investment banks, but it is absolutely impossible to occupy a high position. Investment Banking Investment Banking Investment Banking.
Ultimately, he wants to take first place, relying on his abilities in the investment field.
Currently, Stanley O'Neill remains bullish on USD/JPY.
Although the recent USD/JPY rally has begun to taper off.
But he believes parity between the dollar and yen still has a long way to go. Stanley O'Neill is therefore in no hurry.
Stanley O'Neill's 10,000 USD/JPY long position, as well as other long positions.
About 30,000 lots immediately wiped out the market's sell orders.
This type of behavior caused USD/JPY to rebound, from 107,300 to 107,390.
On the other side of Wall Street. Lehman Brothers Bank Transaction Office.
Richard Fuld has just decided he wants to integrate his subordinates into the sales department.
Buy 20,000 lots USD/JPY, but I don't expect anyone to be ahead.
As said before.
USD/JPY has been bullish for two years. There are a large number of investors and institutions around the world and they all have a large number of USD/JPY buy orders.
Merrill Lynch is like that, so is Lehman Brothers.
Over the past two years, the neon economy has recovered and the yen has strengthened.
Let the neon cabinet yen overtake the pound last year to become the world's second-class currency.
It goes without saying that first is the US dollar. The market is bullish, with a large number of long positions.
In the past two years, any short sellers entered the market.
Usually, all are forced to exit the market one after another due to the strong neon economy and the combination of bullish trends.
Investment banks such as Lehman and Merrill Lynch.
Over the past two years, I have made very good profits from long USD/JPY positions. Lehman Brothers currently holds more USD/JPY buy orders than Merrill Lynch.
Merrill Lynch only has 50,000 to 60,000 hands.
Wall Street Bulldog, who is always so brave, currently holds more than 100,000 lots of USD/JPY.
But after confirming Smith Capital earlier, in this general trend.
In fact, he defied the general trend and started shorting USD/JPY in large quantities. Richard Fuld was immediately happy, thinking that this was a good opportunity to cut the flesh and bones of Smith Capital.
As soon as there is an open position in the market, he wants to buy.
It's just that someone acted faster and removed the listing before Lehman Brothers did.
"Madfake, has anyone seen it?"
Richard Fold frowned and thought.
Although USD/JPY has risen recently, the range is narrowing. But still as strong as ever.
During the previous two years, there had been many brief massacres.
Richard Fuld estimates this will last at least six months.
He estimates that this six months will continue to increase.
Furthermore, Richard Fuld felt he could afford it. Lehman Brothers holds more than 100,000 long positions, with a total profit of 200 points, expected to bring in 1.2 billion USD.
Such a high floating profit made Richard Fuld full of confidence.
In line with USD/JPY's recent trend over a week.
This was completely consistent with Richard Fuld's previous inner judgment, making Richard Fuld a little happy.
Richard Fuld made a similar observation as Stanley O'Neill. He plans to continue supporting the USD/JPY uptrend and start building positions!
He thought this was a good opportunity to take advantage of the general trend and cut a big chunk of meat from Abe Smith, who couldn't see the general trend clearly!
Because everyone has already made it clear.
There is no way to be a minion, only opponents or friends.
So these Wall Street veterans won't be polite!
Thinking of this, Richard Fuld, who was more courageous, immediately sent out 20,000 more hands.
USD/JPY returns to 107,500 again.
(end of this chapter)