I am farming in the real world

Chapter 159: Dealing with Robbers Requires Off-the-Books Tactics (Subscription Requested)

"What?"

"Petroleum Treasure?!"

Upon hearing this term, Zheng Yinhua's entire face changed.

Because the three words 'Petroleum Treasure' were like a pillar of shame erected on top of Bank of China Futures!

On April 20, 2020, affected by the plunge of the US WTI crude oil futures May contract to negative numbers, the 'Petroleum Treasure' product under Bank of China Futures suffered a huge loss of more than 30 billion, causing more than 60,000 customers who bought Petroleum Treasure to go long to be silently liquidated overnight, and even absurdly owing Bank of China principal.

The incident was heavily reported and sensationalized by the media, causing a great response on the Internet.

Later, after professional analysis, everyone discovered that this loss of up to 30 billion was not an act of God, but a man-made disaster that could have been avoided.

Because according to the 'Petroleum Treasure' contract rules, Bank of China Futures was originally supposed to start the operation of shifting positions to the next month's contract at 22:00 on April 20.

However, that night, the operator in charge of this matter within Bank of China Futures didn't know what they were thinking and actually forgot to shift positions.

As a result, the Chicago Mercantile Exchange seized the loophole in the trading rules, instantly pulled the plug and cut the network cable, driving the settlement price of the May WTI crude oil futures to -$37.63 per barrel, forcibly liquidating the funds in Bank of China Futures' 'Petroleum Treasure'.

You read that right!

That is, a barrel of crude oil was sold at a negative price.

Theoretically, it meant going to the seller, the Chicago Mercantile Exchange, to buy a barrel of spot crude oil, without spending a penny on the oil, and the other party would even pay you $37.63.

But the problem was that the Petroleum Treasure's capital pool had already been forcibly liquidated by the Chicago Mercantile Exchange, and the futures contract was voided.

This theoretical 'buying oil and getting paid' thing didn't happen, and the losses caused by the penetration were all borne by Bank of China Futures' 60,000+ customers.

As a result, customers naturally didn't want to do it.

They came to Bank of China Futures to invest in crude oil futures, intending to earn some extra income to supplement their household and beat inflation, but as a result, they lost all their principal and even owed Bank of China a large sum. What the heck was that?

This wasn't just cutting leeks with a sickle, it was uprooting the leeks!

So the two sides began to take legal action, and finally went to court for several years before the farce was calmed down.

As a result, Bank of China Futures lost all face, and the leaders and investment managers in charge of crude oil futures were all removed from their positions and criticized by the village chief.

Zheng Yinhua was also appointed to the position of Deputy Governor in charge of Bank of China Futures after the Petroleum Treasure incident, under emergency orders.

As for the Chicago Mercantile Exchange, the initiator of this 'Petroleum Treasure' incident, in the end, nothing happened to them.

After harvesting more than 30 billion funds from domestic investors in Petroleum Treasure, they issued an announcement like 'Who told you not to adjust your positions?', shamelessly patting their butts and leaving.

It was almost like slapping Bank of China Futures in the face and insulting them.

So when Chen Jue mentioned Petroleum Treasure, intending to help Bank of China Futures get back at the Chicago Mercantile Exchange.

Zheng Yinhua's left eyelid twitched fiercely!

The so-called 'left eye jumps for wealth, right eye jumps for disaster'.

Looking at Chen Jue's mysterious smile, Zheng Yinhua felt that if this matter could be accomplished, he would not only become famous in the entire international futures market.

But also help Bank of China Futures wash away the shame of the past 'Petroleum Treasure'.

With such a huge achievement and credit falling in front of him, no state-owned enterprise executive could sit still.

So he looked around and made sure there was no third person nearby, Zheng Yinhua lowered his voice and asked: "President Chen, do you mean that we, the Bank of China Futures department, should cooperate with your 5 billion funds to enter the market and cut the Chicago Mercantile Exchange in soybean futures?"

Chen Jue smiled mysteriously: "That's about what I mean! But this plan is a bit big, I have to go back and lay it out properly to see how to play it specifically when the time comes."

Seeing Chen Jue's serious look, Zheng Yinhua began to be a little suspicious: "President Chen, the total capital pool of US soybean futures is nearly 350 billion US dollars! Although your capital volume is large, it is not so reliable to use it to leverage the entire US soybean market. Even if we cooperate with Bank of China, small market fluctuations can be expected in the short term, but as for the explosive rise and fall..."

"Who told you that I want to use formal hedging methods?"

Chen Jue rolled his eyes and immediately gave this Bank of China Deputy Governor a 'you know' expression.

After all, for the American capital groups, things like pulling the plug and not recognizing debts to make money from investors have been done a lot.

Pulling the plug on Petroleum Treasure is considered light!

Like closing Silicon Valley Bank, self-destructing the bank's stored data, and so on.

In short, pulling the plug + off-the-books tactics come together, with a series of dirty tricks, specifically targeting Chinese investors.

After these old tricks are used up, if it doesn't work, they will impose sanctions, freeze accounts, and directly rob them.

Take Binance founder Lao Zhao as an example, this guy has been caught by the Americans for almost a year, and he was just released from court one moment, and then locked up again the next.

Such repeated operations, bursting more than 10 billion US dollars worth of Bitcoin from Lao Zhao three times in a row, before there was hope of letting him out.

Dealing with such an unreasonable opponent who likes to use off-the-books tactics, formal methods are definitely not feasible, we must 'fight back with tooth and nail'.

"Not using futures funds to hedge, then what to use? Wait... Since President Chen and that Director Xiang are from the same hometown, could it be that you plan to learn from青山控股's previous nickel plate battle, using spot delivery to force US soybeans to explode?" Zheng Yinhua seemed to have thought of something, and his face suddenly became suspicious.

Because he couldn't imagine which grain merchant in the world has more soybean inventory than the Chicago Mercantile Exchange futures market.

That's a full 50 million tons of soybean share!

That is 1 times higher than the entire year's soybean production in China!

Looking at the whole world, only South America's total soybean production of 220 million tons is qualified to fight with US soybeans.

"A promising student!"

Chen Jue saw that the other party seemed to have understood his meaning, and stopped there, no longer revealing the specific implementation details.

Because if you want to really detonate US soybeans, the power barriers that need to be opened are not only Bank of China Futures, including several domestic grain and oil giants, such as COFCO and China Grain Reserves, Chen Jue has to find ways to visit them one by one.

Under this situation, the fewer people who know his plan, the better, and the later the better.

So before leaving Bank of China Futures, in order to increase the other party's confidence, Chen Jue gave this Governor Zheng a business card, and by the way, asked him to pay attention to the funds injected into his futures account.

Once the subsequent 5 billion funds arrive, it will mean the moment when the market starts to encircle and hunt US soybeans.

Seeing this, Zheng Yinhua also became active, feeling that this was a great opportunity, and immediately sent Chen Jue out of the business hall with enthusiasm.

After Chen Jue got in the car and left, Zheng Yinhua picked up the business card in his hand and looked at it carefully, and his whole person fell into contemplation: "Hongxing Trading Company Chen Shang? The name of this company sounds familiar! I seem to have heard someone mention it before!"

I worked overtime today and got home a little late. I'm very tired. There will be only one update tonight~