Drucken Miller, one of the managers of Quantum Fund and one of Soros's four assistants. He hurried into Soros' office without knocking on the door. In Quantum Fund, Drucken is one of the four people who can enter Soros's office without knocking.
"Miller, what's wrong?"
"Mr. Soros, Thailand's XX Commercial Bank had lent out a large amount of Thai Baht futures contracts again. They are not our men."
Soros laughed. They are finally going to make a move? Soros is impressed by Feng Yu, and he felt Feng Yu's financial skills are not inferior to his four assistants.
But Feng Yu is from Hong Kong and has a high net worth. He will never be Soros's assistant. But Soros doesn't think Feng Yu can be on the same level as him.
That brat must be lucky to buy so many Microsoft shares. If not, how can he compete with Soros?
"Keep an eye on them and see if they are using the same tactics as us." Soros wants to see what Feng Yu can do. He had only agreed to cooperate with Soros but did not listen to him.
In the afternoon, Soros received news that a large sum of money had entered the market and bought some Thai banks' shares.
Soros knew Feng Yu is using the same tactics as him, and the next step is to use all sorts of methods to increase the debt ratio.
… …
Feng Yu used the borrowed money to buy shares, long-term bonds, etc. Basically, he borrowed as much as he could and bought as much as he could. After that, he would use the shares and bonds as collateral to get more loans. This cycle continued.
This way, 10,000 USD can buy a few hundred thousand USD worth of bonds, and the rest of the money is from Thailand's banks and financial institutions.
"Feng, what's going on? How come we have so many debts?" Kirilenko is panicking. Their debts are too high.
"It's good to have more debt. What do you think will happen if we sell all our bonds now?" Feng Yu asked with a smile.
"Ah? Dump all our bonds? Won't we lose money? "Kirilenko was shocked. What's wrong with doing this?! We are here to make money, and you will lose money if you do this!
Kirilenko's Chief Financial Analyst, Lennon, could not take it anymore. He reminded Kirilenko. "Mr. Kirilenko, did you forget that we had bought a lot of stock index futures in the past?"
"Short? We have shorted a lot of stocks? "Kirilenko asked excitedly. He turned to Feng Yu and asked." What do you mean by shorting stocks? "
Feng Yu and Lennon looked up at the ceiling at the same time. You don't know anything. You were so excited when you heard about short selling!
"Short selling means that we will first sell some stock index futures contracts, and then we will buy them back within a certain period of time to settle the contract. On the other hand, we only need to pay a 10% deposit, which can be understood as 10 times leverage. For one dollar, we've done a ten-dollar thing. "
Kirilenko was still bewildered. "And then?"
"Then there's what you said just now. Once we dump bonds, stocks, etc., then the stocks will definitely fall. If the stock market falls, the stock index will fall along with it, right? "
"Of course I know that!" Kirilenko rolled his eyes at Feng Yu. "Why are you asking me such a simple question?"
"When the stock index falls, it will stimulate the stock market to fall further, and it will form a vicious cycle. Lots of investors will panic and sell their stocks. Some foreign investors will also lose confidence in the Thai stock market and dump their shares. Look, we had sold these futures contracts for 10 RMB, and at that time, we do not have the stocks on hand. This is equivalent to borrowing money. When the stock index falls to 8 RMB, we will buy it back and return it to them. This way, we will make a profit of 2 RMB. With 10 times leverage, we will make a profit of 20 RMB. This is how we make money from short selling stock index futures. "
"But we had lost money in the past. Can we make up for our losses?" Kirilenko remembered what Feng Yu said. They might not make any money in the first two months.
"We might not be able to make up for our losses, but it will not be a big difference. It's mainly because our debt ratio is too high, and we will lose a lot of money from bonds and stocks. But don't forget, we still have a weapon. Forex contracts. "
Kirilenko blinked. He saw Feng Yu's angry eyes and did not ask any questions. He waited for Feng Yu to tell him.
"When the stock market and stock index fall, many investors will be pessimistic about Thailand's economy and Baht. Think about what we will do when Rubles depreciate. "Feng Yu reminded Kirilenko.
"I know. We will convert Rubles to USD immediately!" Kirilenko replied excitedly.
Feng Yu nodded and gave Kirilenko a thumbs up. "That's right. We will convert Rubles to USD, which is more valuable. Although I don't want to admit it, USD is the most widely used currency in the world. It is also one of the most important currencies in the world. "
Kirilenko's face turned black and did not say anything. He was not happy when he heard Feng Yu mention USD, but he had no choice as Rubles are not strong enough.
"Forex is the same as stocks. When a certain currency is dumped, what do you think will happen? For example, the exchange rate? "Feng Yu asked.
Kirilenko asked. "The exchange rate will drop?"
Feng Yu gave Kirilenko a look of approval. "That's right. The exchange rate will drop. From 24: 1, it will continue to drop and will exceed 30: 1. After that, the USD value will not change, and Thai Baht will depreciate. "
"That means we will make money from our Thai Baht contracts, right?"
"Of course. This way, we can make some profits from our Forex futures contracts. When Thai Baht depreciates, it will cause inflation, and Thailand's economy will go into recession. Their share prices will fall further. The only way we can make money is by shorting the stock index and Forex futures. "
"That's not right. We should be able to make money this way. Why are you saying we might not make money?" Kirilenko still does not understand. They are using 10 times leverage. Why can't they make money?
Lennon explained. "When we sell Thai Baht, we are also losing money."
Kirilenko is confused. He will lose money first, and then he can make money? He doesn't understand. Never mind. The financial market is too difficult, and not everyone is like Feng Yu. As long as I have money and a good friend like Feng Yu, I will follow him to make money.
Feng Yu looked at Kirilenko's confused face and can't be bothered to explain. Kirilenko had tried his best to explain to someone who does not know anything, but it's still difficult. Of course, this is also because of his previous life's work. As a financial broker in Feng Yu's previous life, how can he tell his clients all the details?
Some of the conditions must be hidden, and some must be ambiguous. That's why the clients will hire him. If everything is as simple as selling vegetables or buying vegetables, then who needs financial brokers?
"Brother Ki, you just need to know that we will be losing money in the next few days. You must calm down."
Kirilenko replied angrily. "Since when am I not calm down? I said I will let you all handle this, and I will let you all handle it. Feng, don't you trust me? I don't mind losing money, and I am willing to do it! "
Feng Yu rolled his eyes. You still have a good attitude? If you have a good attitude, you will not give up your hobbies of wine and women and sit in the office looking at financial data that you cannot understand. Forget it, if he wants to stay here, then let him.
… …
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