novelno Chapter 178 Leading but not walking, hitting but retreating
Chapter 178 Leading but not walking, hitting but retreating
Chapter 178 Leading but not walking, hitting but retreating
In Lower Manhattan, the Goldman Sachs headquarters at 20 Wall Street resembles a steel fortress, its cold, hard gleaming in the morning mist.
At 8:30 a.m., Henry Paulson, the head of Goldman Sachs, pushed open the heavy wooden door to his office and went straight to his large desk. The desk was already neatly stacked with briefing documents prepared by the secretariat. He casually unbuttoned his suit jacket and scanned the contents of the documents with his eagle-like gaze. On it was a chart showing the fluctuation of the Thai Baht exchange rate against the US dollar.
The battle to defend the Thai Railway is raging, and both sides are at a crucial juncture. The entire Wall Street community is focused on this issue, which is also the most important thing on Wall Street right now.
At 8 p.m. Bangkok time last night, the Bank of Thailand suddenly announced the implementation of capital controls, which is now like a boulder thrown into the ocean of finance, stirring up huge waves on Wall Street.
Traders across Wall Street worked almost all night as the battle to defend the Thai Railway entered its most dangerous and stalemate phase, with every second of exchange rate fluctuation affecting hundreds of billions of dollars in transactions.
"Interesting." Henry's Adam's apple bobbed slightly, and a hunter's gleam, like the shrewdness of finding a weakness in his prey, flashed in his eyes, mixed with a strange excitement about this financial storm.
He raised his hand and pressed the intercom button. "Hendrick, come in."
Thirty seconds later, Secretary Hendrick quietly walked into the office.
"Sir, have you read the briefing?" He bowed slightly, his tone calm and composed.
Henry pushed the document to the center of the table, his knuckles tapping on the bolded text: "Banning Thai banks from lending Thai Railways to international capital." "The actions from Bangkok are more intense than expected."
"This is indeed beyond expectations. In addition to the lending ban, the Thai government has ordered the closure of the headquarters of three media outlets that published false financial reports. Last night, the police special task force raided the Bangkok Stock Exchange and the Financial Supervisory Authority, taking away seven traders suspected of maliciously shorting Thai Railways."
"Currently, trading in Thailand's SET index futures is suspended, foreign exchange market liquidity has plummeted, and the entire financial system is almost paralyzed."
Henry picked up his coffee cup, the steam casting blurry shadows on his angular face. "Anyone with eyes can see that the Bank of Thailand's foreign exchange reserves simply cannot withstand the depletion."
Given the Bank of Thailand's current foreign exchange reserves, if international speculative capital is determined, the Thai Railway will definitely not be able to hold on.
Unless the Thai government intervenes directly, shuts down the financial market, acts unscrupulously, and closes financial transactions.
This would put the entire trading market on hold, and the massive daily borrowing interest of international speculative capital would bankrupt them.
Hendrick added, "Now they're playing a game of cutting off the supply chain by banning local banks from providing Thai Railway ammunition to foreign investors—this move—"
"That's a terrible move," Henry interrupted him. "They think cutting off the lending channels will stop short selling? How naive. International capital had already accumulated a large amount of Thai baht through offshore accounts six months ago, and now it's just accelerating its depletion."
He walked to the floor-to-ceiling window and looked down at the bustling morning rush hour traffic on Wall Street. "What's really serious is that they messed with the police."
What do financial markets fear most? The collapse of the rules. When the police storm the exchange, all investors will vote with their feet.
Hendrick nodded in agreement, "Local capital has begun to flee in panic. Last night, there was a run on private banks in Bangkok. The wealthy frantically exchanged Thai Railways for US dollars and euros, and the Bank of Thailand had to use its reserves to inject emergency funds into commercial banks."
"Those who reap what they sow." Henry's voice carried a chilling sneer. "Do they think they can reverse economic laws through administrative means? It's only been a few years since the ruble collapsed! Wasn't the lesson of the 1992 sterling crisis profound enough?"
He turned around, his eyes sharp as knives. "When the government starts using its power to suppress market signals, it's tantamount to announcing to everyone: We can't hold on any longer."
These words stirred something within Hendrick. He recalled the Mexican peso crisis of 1994, when the Mexican government also tried to use foreign exchange controls to stop capital outflows, but instead triggered even greater panic.
"You mean—like the Mexican peso, the Thai people will follow suit?"
"Inevitable." Henry returned to his desk, tapping lightly on the Thai residents' savings data. "Thailand's savings rate is as high as 32%, and privately held Thai Railways cash exceeds 8000 billion. Once panic spreads and there's a nationwide run on foreign exchange—"
He made an avalanche gesture, saying, "The Thai central bank's pitiful reserves aren't even enough to fill a tooth gap. When the time comes, even without international speculative capital, the people themselves can crash the Thai baht."
Hendrick looked at the glint in his boss's eyes and realized that the outcome of this currency war was already a foregone conclusion.
"The monetary system in Southeast Asia may be affected by a chain reaction, with the Malaysian Ringgit and Indonesian Rupiah under pressure."
"The feast has only just begun." Henry smiled and sat back down in the boss's chair.
He began flipping through briefings from other departments: real estate market analysis, tech stock updates, energy futures reports—until a document labeled "Special Financing Project" made him straighten up abruptly.
"Both Leap Games and MGM are raising funds at the same time?" Henry frowned slightly.
Hendrick nodded, then shook his head. "No, according to our information, this round of financing came from MGM, while for Leap Games it was a combination of financing and equity transfer."
"A share transfer?" Henry Paulson asked, somewhat puzzled. "Ernst isn't short of money, is he?"
Although Ernst doesn't have much cash right now, his debt is low.
If he just asked, given his current credit rating, banks like JPMorgan Chase and Citibank would line up to offer him money, and the line of institutions wanting to borrow money would stretch from Upper Manhattan to Lower Manhattan.
At this point, YueDong Games' decision to transfer its equity will negatively impact its valuation for financing.
After all, no matter how well your company is doing, this still raises suspicions of an escape, making investors doubt Yuedong's future development.
It's not like the founder is cashing out to improve his life, so Ernst obviously doesn't need to do that.
Hendrick seemed to know everything about Ernst's situation: "I heard that he recently signed another $300 million loan with Wells Fargo, but it all went into his Ernst Asset Management company."
"A few days ago, they visited Enron's headquarters. It's said that the two sides reached some kind of cooperation agreement. Maybe they're going to set up some company and need funds."
Henry's eyes deepened. The entire Wall Street was closely watching Ernst's movements. This 26-year-old business prodigy was creating wealth at a speed that defied common sense.
For Ernst, not only Goldman Sachs, but the entire Wall Street or the entire American financial industry is paying close attention.
After all, this person has been consistently successful, and the speed at which he has created wealth is terrifying.
"And there's something different this time."
"Oh?" Henry Paulson became interested and looked at Hendrick curiously, asking, "Is there anything different?"
"Silicon Valley funds were also invited this time, and it is said that several VCs are already eager to pry open this door to wealth that was previously closed to them."
The two major investment hotspots on Wall Street are Silicon Valley and Wall Street.
Normally, a startup will first contact funding from Silicon Valley.
They not only dare to invest and are capable of investing, but they also give startups sufficient management rights.
Once the company grows large and stabilizes, Wall Street capital enters the market, while Silicon Valley capital cashes out and leaves.
Ernst's company, however, does not play by the rules. His company does not worry about initial funding at all, and can achieve huge growth in a short period of time.
Either you have unlimited potential like Google, where investors are willing to give you an astronomical valuation even if you don't make a profit and suffer huge losses.
Or like YueDong Games, which made a fortune right from the start, with its wealth growing so fast that everyone was drooling with envy.
Therefore, Ernst's company has consistently excluded Silicon Valley funds from its financing options, which has puzzled many Silicon Valley investors.
We aim to achieve great things with minimal investment, using a broad-based approach to catch as many fish as possible.
But that doesn't mean I don't have money. Can't I put a huge sum of money into betting heavily?
It's easy to imagine the consequences of Leap Games and MGM opening up to capital in Silicon Valley.
Henry Paulson immediately thought of the cocktail party he had hosted for Amazon a while back. At that time, all the Wall Street institutions present thought that Ernst's offer to MGM was simply unreasonable and a pipe dream.
"Revenge?" Henry Paulson chuckled.
Since you don't agree with my valuation, I'll find some investors who do.
If you can't seize the opportunity to eat alone, then don't blame me for picking up the whip.