novelones Chapter 250: Mexico Financial Crisis, Cayman Capital Encounters Public Opinion Crisis
Chapter 250: Mexico Financial Crisis, Cayman Capital Encounters Public Opinion Crisis
Cayman Capital entered the game several months in advance.
Lao Suo, who was extremely responsive, borrowed a large amount of pesos using the national debt of the United States as collateral.
When Lao Suo saw the calm Mexican foreign exchange market, he couldn't help but smile like an old fox.
"Looking at this situation, Cayman Capital is one step behind me after all."
"I, Lao Suo, am the real king of short selling!"
Within two days of his complacency, Tiger Management got wind of the news.
"Lao Suo, is it true that our big brother didn't come?"
"probably."
Lao Suo's tone was not very firm, because if Tiger Fund could discover something, does Cayman Capital really know nothing about it?
"Perhaps his old man no longer values this small amount of money."
There is indeed not much room for short selling in Mexico, and it will only hold up such a large market.
Thinking of these two people, they were a little lonely.
"Then what are you waiting for? Let's get started!"
The two major short sellers had a tacit understanding and frantically sold the borrowed pesos together and converted them into U.S. dollars.
At this time, several months had passed since Man entered the market, and the peso was declining with a weak trend every day. By the time the two major short sellers entered the market, it had fallen to 3.4 to 1.
A large amount of currency was converted into U.S. dollars in a short period of time, finally alerting the Mexican authorities.
The other party realizes that someone is shorting the peso!
Without any experience, they finally realized that Mexico had a huge trade deficit and the actual purchasing power of the peso was greatly overestimated.
They met overnight to think about how to deal with this coming crisis.
People's understanding of things is always limited by the times.
The first thing that experts on the Mexican economy think of is to learn from the excellent experiences of foreign powers.
The most instructive thing is Dragon State's initiative to devalue its currency in January this year.
Longguo realized that the exchange rate was higher than the black market. In order to prevent foreign capital arbitrage, solve the problem of imports exceeding exports, and protect domestic enterprises, it actively devalued the exchange rate against the US dollar.
They instantly felt that this was a good idea worth imitating.
The conservative ones also thought divergently and thought of the Hiroshima Agreement between Sakura and Beautiful Country. In order to solve the problem of excessive imports, Beautiful Country also took the initiative to devalue the US dollar!
Just slap them on the head. We don’t need short sellers to make any articles to exclude us. We can just take the initiative to depreciate the peso ourselves.
What Big Brother can do, we can naturally do too.
It's better than others doing it short.
The method is right, but the bad thing is that they are too indecisive and their reaction speed is a bit slow.
The bullet has already been discharged from the chamber, and you just say you want to surrender, and you still ask for surrender, and you lose half of it.
Isn't it a little late?
On December 12, Mexico announced that the peso would depreciate by 20%.
15%?
The short sellers all laughed and didn't even bother to write a short-selling report. They just watched the Mexican financial shock in silence.
Even a fool realizes that Mexico's economy is in serious trouble. Why don't you run away and wait for death?
Almost everyone is taking advantage of this moment to sell the peso and buy other currencies.
On the 21st, the peso fell 13%, and on the 22nd, it fell another 15%!
In just two days, Mexico lost US$50 billion in foreign exchange reserves, leaving only US$30 billion in reserves.
Mexico's foreign exchange is a bit unable to withstand the run.
Under unprecedented pressure, Mexican officials gave up their resistance and simply lied down, announcing that they would abandon the fixed exchange rate and let the market determine the decline of the exchange rate.
This further worsened the situation.
There are doubts about Mexico's ability to repay short-term debt.
The psychological defense collapsed, and a new round of peso selling began, causing the peso to depreciate by another 15%.
More foreign capital is fleeing Mexico.
As a result, the peso exchange rate fell to 5.9:1 in just one month, almost doubling its value.
Of course, Cayman Capital does not look down on these small sums of money, and a mere US$20 billion cannot satisfy the appetite of the big short sellers.
Their real money-making business was shorting the Mexican stock market.
To short the stock market, you have to rent the other party's stocks and make bets with insurance companies. You can no longer keep a low profile.
When Laosuo and Tiger Management tried to do this, they found that someone had already got there first.
"MD, Cayman Capital made a new vest out of nowhere, and it actually got ahead of us again."
When he said this, it was a lie that Lao Suo was not discouraged. ,
Cayman Capital is like a big mountain, weighing them down a little bit.
The key is that Cayman Capital didn't even leave any soup for them.
The main reason is that Mexico's financial market has only just started a few years ago and is not that big. Robert only used a little effort to swallow up the entire short market.
Lao Suo and Tiger Management could only watch Mexico's stock market crash again and again, fall again and again.
You must know that most stock market investors in Mexico are investors from the beautiful country (low interest rates and low taxes have created an investment boom).
They suffered heavy losses in the financial crisis in Mexico. Many people were slow to run and were deeply trapped in the stock market.
The biggest specialty of beautiful Chinese people is that they like to double standard others. They know that Cayman Capital has made billions of dollars in speculation in Mexico.
And his own organization lost billions of dollars.
Many small institutions closed down because of this, and they suddenly became red-eyed.
They found the Financial Industry Authority, the Securities Exchange Center, the Office of the Comptroller of the Currency, the Federal Reserve...
They complained to all the management agencies that they could complain to.
Lao Suo suddenly no longer envied Big Brother. With so many organizations putting pressure on the government, Cayman Capital was inflicted with public outrage.
After hearing the news, Wang Lei couldn't help but sneered:
"Are these people stupid? It's not us who caused their losses. It was them who were too greedy and their poor investments that led to the financial crisis.
Even without us short sellers, the peso will fall sharply sooner or later. Do they still expect that the stock will never fall? "
If you lose a bet and blame others for patting you on the shoulder, you are just looking for trouble.
Listening to the boss's complaints, Robert smiled and said:
"Boss, they are just having fun. We haven't broken any laws and we pay taxes according to the law. What can they do to me?"
According to Robert's temperament, he didn't want to deal with these unreasonable people at all.
It is also unrealistic for these people to demand sanctions on Cayman funds.
The IRS of the beautiful country was the first to refuse.
Where can I find a good company that is so cooperative in paying taxes?
What should I do if my big taxpayer is being intruded upon? Of course I should knock on the door and say hello?
Don't forget, the tax department of the beautiful country also has guns, and its force is comparable to a mountain division. When these people who wrote the complaint letters were targeted by a team of IRS with large guns and small guns, they suddenly panicked.
“You didn’t pay your taxes to the federal government on time and now you’re under arrest!”
Uh……
The people who caused the trouble were arrested by the IRS and investigated, so naturally nothing happened to Cayman Capital.