MTL - The Son of Finance of the Great Age-Chapter 29 The downfall of space capital

  Chapter 29 The Destruction of Space Capital

  Zhong Shi never expected that his casual words would become Andrew's investment philosophy. When Andrew became famous in the future, he would spread this investment philosophy everywhere. However, he always kept Zhong Shi's teachings in mind, and did not dare to disclose any information about Zhong Shi to the outside world.

After finishing everything here, Zhong Shi told Andrew, "Your company should prepare the stock index futures seat as soon as possible. Whether it's the Dow, Nikkei or Hang Seng, I don't think it will be a few years before these major global capital markets will open up." index market."

   "Okay, I will reflect your opinion on it."

   Andrew said respectfully. At this moment, Zhong Shi is no different from a **** in his heart. Just imagine, a child less than ten years old making waves in the international financial market has accumulated wealth that ordinary people can hardly match in their lifetimes in just a few days. What is genius?

  Zhong Shi nodded and left with Liao Chengde. He still has close to 20 million cash in his hand, and needs to find another brokerage to invest the money in RB's stock market. Now that the news about the appreciation of the yen is spreading in the market, it is a good time to buy the bottom of the RB stock market.

  At this time, the Hong Kong stock market was also in a bull market, and it was hard to say which was better. However, the Japanese yen still has an annual rise of nearly 5%, which is incomparable to the Hong Kong dollar.

After HSBC exchanged all the Hong Kong dollars in its hands into Japanese yen, it opened an RB stock market account with its brokerage firm and invested about 10 million Hong Kong dollars worth of Japanese yen into the constituent stocks of the Nikkei Index. Just let it go.

  Liao Chengde followed suit and bought the same shares as Zhongshi. Now he obeys Zhong Shi's words, even if Zhong Shi asks him to get rid of his yellow-faced woman and remarry a young woman who is about the same age as his son, he will do it without hesitation. Of course, he is more than happy to do so!

  After everything was in order, Zhong Shi joined his parents and began to enjoy leisurely tours in Hong Kong.

  …

   On Wall Street in Manhattan, Davis had a hard time. Although aware of the appreciation of the yen, some of the orders were thrown away last Thursday, but there are still thousands of orders in hand. Although I was lucky enough to close some orders on Tuesday, I still lost tens of millions of dollars. Fortunately, at that time, the RB consortium made efforts to stop the rising momentum of the yen, but at this time Davis was already frightened. Selling empty orders regardless of cost, the RB people in Japan were so angry that they cursed "Bage".

  Finally at the close on Tuesday, Davis barely squeezed the loss into seven figures. Losing millions of dollars in one day this year is already an astronomical figure. What's more, Davis has no hedge in his investment portfolio, which is a serious violation of the hedge fund operating system.

   Such people are not uncommon in later generations, and people give them a nickname, called "Devil Trader". The so-called devil trader refers to this kind of trader who is completely independent of others when trading, typically does not consider other people's ideas, is reckless and sloppy, and usually causes damage to customers and the organization that employs him, causing huge losses.

  For example, the trader of Société Générale, Jerome Cowell, invested in European stock index futures without authorization, causing Societe Generale to lose 4.9 billion euros (7.16 billion U.S. dollars) before tax. After discovering Cowell’s illegal transactions, the Industrial Bank closed their positions, triggering market speculation, which led to a sharp drop in global stock markets, and then the Federal Reserve announced an emergency interest rate cut of 75 basis points, so some people joked: “This may be the key to avoiding recession in the world economy.” 'Inflection point'."

   Another example is the "King of Nikkei" Nick Leeson, who suffered a huge loss of US$1.4 billion in Singapore's futures market in 1994, which led to the bankruptcy of the 233-year-old Barings Bank.

  These are things that happened decades ago, and it may be a bit boring to say. In fact, just last year, in 2012, a trader named "London Whale" Axil was targeted by hedge funds because he exposed his position. , The company he worked for also lost 2 billion U.S. dollars.

Davis's loss is naturally not as much as the above-mentioned people, but the banks behind these traders are incomparably wealthy, which is not comparable to the small hedge fund he works for. Davis can already imagine his own losses. It's over.

   Just as he was packing his things on the table with a cardboard box, he heard a voice calling himself: "Hey, Davis, the boss is calling you!"

  Davis felt a pain in his heart, thinking that what should come has finally come. He straightened up, put on an indifferent expression, walked straight to the largest office, knocked on the door and entered: "Boss, did you call me?"

   "Hey, look at our hero! Incredible genius!"

  An old man wearing a wide-framed black mirror stood up and introduced to the two medium-sized Orientals beside him.

"How is this going?"

  Davis couldn't figure out the situation for a while, looking at the smiling boss Taylor, and the two oriental faces who were also smiling. As soon as he turned his head, he vaguely guessed who these two people were.

  If the guess is correct, these two people should be representatives of the RB consortium, and they are here to join forces with Space Capital to do something in the yen market. Looking at the respectful two people in front of him, Davis didn't dare to be complacent. These RB people look humble on the surface, which is due to their culture, but the strength behind them must not be underestimated.

   "Hey David (nickname), why don't you introduce your performance on Yen futures to your RB friends?"

  Taylor gave Davis orders with a proud face. He already knew about Davis' losses on short yen futures, and wanted to fire him, but at noon, RB's Mitsubishi consortium called, saying that they intend to inject capital into Space Capital, and wanted to Let them find a good trader and do arbitrage for them.

   This news immediately suppressed Taylor's anger. Taylor thought about it for a while, and decided to keep Davis.

   "Well, gentlemen, my strategy on the Yen is..."

   After realizing it, Davis was also refreshed and was about to talk. Suddenly there was a loud noise from outside, which was soon followed by a deathly silence.

   "What's going on here? Can someone tell me?"

  Taylor, who has long been used to the noisy working environment, is not used to this quiet environment, and he feels uneasy. Space Capital, a hedge fund, has been his painstaking effort for half his life. When he was young, he worked as a trader in a bank. After he was full-fledged, he jumped out to start this hedge fund. It's a mixed bag. He often lights a cigar in his office, looks at the busy traders in the hall, and recalls his youth.

"I gonna go see."

  Davis volunteered, then opened the door of the office, and saw two Caucasian men in suits and leather shoes, each holding a briefcase in his left hand, walking straight towards him.

  Following them were stunned traders, each with complicated expressions in their eyes. Davis couldn't tell what kind of look it was, a little sympathy, a little pity, or gloating?

  Two men walked up to him and asked blankly, "Jeremy Davis?"

   "It's me. What happened?"

  Davis didn't understand what was going on at this time, he just felt that the two people in front of him were too serious, which made him very uneasy.

   "We belong to the U.S. Securities and Exchange Management Commission. Now we suspect that you are engaged in insider trading and price manipulation. Please cooperate with our investigation. I think you should hire a good lawyer!"

  An older investigator took out his ID card from his pocket, flashed it in front of Davis, and said coldly. Naturally, he didn't miss out on the "Miranda Warning".

  The so-called "Miranda warning" is usually seen on TV "You have the right to remain silent, but what you say now, I will record it with paper and pen, and in the future it will serve as..."

  This warning is based on the right to silence in the Fifth Amendment to the US Constitution, which must be declared in advance when law enforcement agencies arrest criminal suspects.

   "SEC...God!"

  Although Davis is quite satisfactory in the futures market, he has had dirty behaviors in the stock market and bond market before. As the saying goes, "How can you not get your shoes wet when you often walk by the river", Davis felt his eyes darkened and knew that he was finished!

As soon as he heard the man introduced himself as a member of the SEC, Taylor, who was over half a century old, jumped up from the boss's chair, walked up to Davis, grabbed his collar and cursed: "You son of a bitch!" Yes, you're fired!"

   At the critical moment of negotiating with the RB consortium, being targeted by the SEC, the funds will definitely be smashed. Taylor knew that this accusation was by no means aimed at Davis alone. Maybe the entire space capital would be involved. He could already imagine the end of his half-life effort.

  Two investigators escorted the absent-minded Davis away, and then a large number of law enforcement officers rushed in from the outside, taking away a large number of computers and documents, which made the other people who were still in shock tremble with fear.

   "Since something like this has happened, let's not talk about our affairs for now, let's cooperate again when we have a chance!"

   The two RBs glanced at each other, got up and said some polite words, then said goodbye and left, and finally bowed at ninety degrees.

  Taylor, who was limp all over, lay softly on the sofa, and waved his hand feebly, as a farewell to the RB guests. At this moment, his mind is full of words like "redemption" and "close".

   Sure enough, after half a year of investigation, Space Capital finally reached a settlement with the SEC with a huge fine of 45 million. During the investigation, clients of Space Capital redeemed their shares in the hedge fund one after another. After the settlement, Space Capital’s funds were depleted. Not long after, the hedge fund announced its closure. As for Davis, after being confiscated of all illegal gains, he was sentenced to three months in prison and banned from entering the market for life. (I hope that all book friends will recommend and collect more, thank you!)

  (end of this chapter)