After it was done, Shen Daoru said proudly, "Let's turn on the stove. I guarantee the house won't make a sound. If we want to have a good meal, we have to do this. If this thing makes a sound and the fire trucks come in, poor students can't afford to pay the fine. Compared to the United Kingdom, where fines are settled, the United States is more ruthless. A classmate of mine went to school in Atlanta, and in his second year of renting a house outside, the fire alarm came three times in one month. He didn't understand the situation himself, but in the end, he got a pile of bills.
Li He laughed. Ding Shiping still did not understand the situation and asked, "You mean the firefighters have to pay for putting out fires?"
He felt that it was a bit unbelievable.
Ding Shiping said, "What do you think?"
"Evil." Ding Shiping scratched his head and did not ask any more questions. He went to turn on the stove and put a pot full of water on it. He then stuffed the duck into it. "This old duck is delicious."
Shen Daoru also took the initiative to cut the broccoli.
Li He saw Guo Dongyun standing in the backyard on the phone and went over to ask, "Don't you have a banquet tonight? You can go first. We'll eat after we're done. "
Ever since Guo Dongyun helped the Bank of England to stop the US consortium led by Soros' Quantum Fund, she became famous internationally and was recognized by Downing Street. A Singaporean traveling thousands of miles for the UK's financial industry. What kind of spirit was this?
This was the spirit of internationalism. This was the spirit of communism. A person's ability could be big or small, but as long as one had this spirit, he or she would be a noble person, a pure person, a moral person, a person free from vulgar interests, and a person who was beneficial to the people.
More importantly, Downing Street hoped that Guo Dongyun could keep the funds from the Hong Kong Treasure Island trade in the UK. That was nearly 40 billion USD, which could help stabilize the British pound exchange rate.
Different from Li He's previous attempts to speculate under the guise of Goldman Sachs, this time, Guo Dongyun directly revealed her identity as a former director of Goldman Sachs to compete with Soros. She gained a lot of friendship, but naturally, she also attracted a lot of hatred.
In the spring of 1992, a year and a half after the UK joined the European Exchange Rate Mechanism, there was a serious problem with the fixed exchange rate under this system. Although the UK presented a positive image, the UK's financial department realized that the British pound exchange rate was "mispriced" compared to the Deutsche Mark.
The incentive for the pound not to fall was the British government's promise to maintain the pound's exchange rate, and the market believed it. As long as everyone believes that the British authorities will buy the pound around 2.95 marks, the current situation will continue.
However, Soros did not believe the British government's guarantee. He was confident but only invested a small amount. It was unreasonable for him to do so.
Since August of that year, Soros's Quantum Fund had established a 1.5 billion pound short position. He used the margin to the extreme and used 20 times leverage.
Schlesinger, the president of the Bundesbank, said on September 16 that even after the reconfiguration of the European exchange rate mechanism and the German interest rate cut, there would still be 1-2 currencies under pressure before the full French referendum. In the interview, he admitted that the actions taken had, of course, not completely solved the problem.
This seemingly innocuous indirect quote brought disaster to the Bank of England. The market no longer trusted the Bank of England's ability to maintain the pound's exchange rate, and it was this "trust" that ensured that the pound did not fall significantly before.
The day after German Bundesbank President Schlesinger spoke, Soros and his fund increased their short bets on sterling falling from $1.5 billion to $10 billion.
In addition to Soros, it included Bruce Kovner of Caxton and Paul Tudor Jones of Jones Investments.
Tudor Jones was the biggest winner of the US stock market crash other than Li He and his Goldman Sachs.
On that day, Soros and his followers' total bets reached almost $20 billion. With the addition of leverage, it was a terrifying scale.
Since the London market opened, the officials of the British Treasury also began to get busy. Tens of billions of pounds had been sold, and the pound's exchange rate was dangerously close to the bottom line of the European exchange rate mechanism.
British Chancellor of the Exchequer Lamont said before the exchange rate began to fall, he would borrow $15 billion to protect the pound, but in fact, the British government only bought $1 billion to protect the pound. This investment was unable to stop the pound from falling — the world was selling.
At nine in the morning, Chancellor of the Exchequer Lamont contacted British Prime Minister Major and told him that he could no longer maintain the exchange rate level. The British government's only option was to raise interest rates to attract buying back.
However, Major rejected this option. Britain was in a recession at the time, and raising interest rates would push the economy further into the abyss. This was undoubtedly political suicide.
What was done was done. The global capital continued to bet on the pound's decline. An hour and a half later, Lamont called Major again to ask for countermeasures. Major finally couldn't take it anymore. At 11 o 'clock, the British government announced an interest rate increase of 200 basis points, from 10% to 12%.
In the process of the pound's depreciation, the British Treasury had been constantly using foreign exchange reserves to maintain the pound's value. In the end, the pound's value shrunk by 1/4. It was estimated that this move cost the British taxpayers 33 billion pounds.
Faced with such a huge interest rate increase, how would the pound react?
There was no reaction at all. The pound continued its free fall.
At the same time, Soros already had a position of $15 billion. Including his followers, he far exceeded the British government's strength.
The market predicted that the British would be forced to devalue the pound. Neither the interest rate increase nor the selling of the pound could stop the pound's decline. Therefore, people believed that the British would eventually exit the European exchange rate mechanism, and the pound's depreciation would become a self-fulfilling prophecy.
Soros was preparing for his last stand, and Downing Street was about to be forced to devalue the pound. Lamont held another press conference, and the British admitted defeat.
But at this time, Guo Dongyun appeared with 30 billion funds. Including the Goldman Sachs portfolio, she had nearly 40 billion USD. She told Downing Street that they would fight alongside the pound!
A female Bodhisattva fell from the sky!
Downing Street did not expect this!
Soros didn't expect that he would be stopped midway when he wanted to stop someone else!
For Soros, this was almost a perfect trading strategy. The pound's upside was limited, but the downside was unlimited.
This was like betting on the heads and tails of a coin. If the coin came down, the profit margin was unlimited. But if the other side of the coin came up, then Soros would not lose much money.
In executing this operation, Soros and his assistants shorted about 7 billion USD of the pound, bought about 6 billion USD of the German mark, and bought a certain amount of French franc.
As a parallel trade, when they were still shorting the pound, they bought up to 500 million USD of British stocks. They expected the stock market to rise after the currency depreciated. Soros also went long on German and French bonds, while shorting these countries' stocks. Soros' reasoning for his actions in the French and German markets was: Rising valuation is bad for stocks, but it is good for bonds, because it will lead to lower interest rates.
But Guo Dongyun and the Goldman Sachs team were too fast, and they had such a large position!
Soros did not even have time to escape, and he lost 5.5 billion USD in an instant!
Facing more and more funds coming in, he had to react decisively. He quickly retreated with sadness, along with his followers.
Guo Dongyun was completely famous!
The Hong Kong Treasure Island trade was also known by investors all over the world!
The headline of the UK newspapers was a huge photo of Guo Dongyun, and the title was "Great Thursday!"
"Black Wednesday!"
"A strong woman!"
"She fought for the UK!"
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