Manhattan Reborn 1978

Chapter 427 Arrangement and Analysis

new York.

Stanley fourth floor.

After a night's rest, David felt rejuvenated.

He got out of the elevator and was about to walk into the office when a voice came and made him stop.

"Hi~ boss, good morning!"

David looked around and saw that the person he was greeting was Bob Rockefeller, who had returned to San Francisco for vacation a week ago to reunite with his family.

"Hey~Bob!"

"How was your Halloween in San Francisco?"

"It's okay~"

Bob, who came here specially to wait for David to go to work, suppressed the complicated emotions in his heart, walked up to David, accompanied him into the office, and chatted about some anecdotes about the family gathering.

. . .

After Bob Rockefeller received his MBA degree from the University of Chicago, a well-known domestic institution, he came to New York full of enthusiasm and longing, ready to flex his muscles and create his own career and wealth. .

John Rockefeller Sr., the mythical figure who created the wealth of the Rockefeller family, is an elder and life idol that Bob has respected and admired since he was a child.

John Sr. has five sons. Bob’s grandfather, Louis, is John Sr.’s third son.

Although Bob rarely heard his grandfather Louis comment on and talk about his father's life, he heard a lot about John Sr.'s family history from other people's mouths.

Therefore, after spending his youthful rebellious period, Bob's first goal in life was to follow in the footsteps of John Sr. and add a strong and exciting chapter to himself and the Rockefeller family. .Legendary history?

Bob's life goals are very clear and his ideals are lofty, but the reality is not what he imagined. . So easy~

It didn't take long for him to come to New York, Wall Street, and David's company.

But he actually witnessed Stanley's frequent personnel changes during the period of change.

A large number of elites with various academic qualifications and work experience, holding their thick resumes, lined up to walk into Stanley's interview office, just to get themselves a good job.

University of Chicago MBA, is it awesome?

hehe~

If Bob had not followed the advice of his family, he would have accepted the job arranged by his grandfather Lois.

The so-called "rocket engineers" who came out of NASA all face the embarrassing situation of hitting a wall when looking for a job on Wall Street, let alone a young college student who has just graduated and has no work experience?

Even if he could find a job on Wall Street, he would be just like a handyman running errands and buying coffee~

On Wall Street, there is never a shortage of highly educated, thoughtful, and unscrupulous "elites"~

. . .

in the office.

David threw his briefcase on the table, pulled Bob to sit down on the sofa, and chatted for a while.

A week ago, when Bob left, among his familiar colleagues Leon, Sam, Yuri and others in the office, only Yuri was left who had not yet chosen his target.

After David thanked his secretary Maggie who brought him coffee, he asked Bob: "Have you chosen your work direction and goals after you reunited with your family this time?"

David knew very well that Louis gave his grandson Bob to him, not to let him use Bob as a big animal. .

After Bob thanked his secretary Maggie who had poured him coffee, he watched her go out and close the door, then he pondered for a moment and said.

"My parents actually don't want me to work on Wall Street~"

"But they all listened to my grandfather Louis's advice and gave me the freedom to choose my life~"

Bob took a deep breath, sat up straight, looked at David sincerely and said, "I am just an ordinary employee of your company now~"

"My personal thoughts are not important~!"

"Whatever you want me to do, I will work hard to complete it, and I promise to do it perfectly and impeccably~"

"Hmm~"

David snorted softly, feeling very surprised by Bob's basic understanding and positioning as a laborer~!

Could it be that this kid got enlightened after a trip to San Francisco?

David picked up the coffee and took a sip. He decided to test it again and said with a smile: "ok~"

"Sam and Mu Brandes are helping me watch the futures market."

"Leon, I arranged with him to form a risk control department~"

"What about you? Which job do you prefer?"

"Do you prefer trading in the market? Or do you prefer data research and analysis?"

Bob smiled and replied without blinking: "I follow your arrangement!"

"are you serious?"

"Yes, boss!"

"...Okay~"

David leaned back and let himself sink half-up into the sofa. The smile on his lips slowly faded and he said softly.

"Relax, man~"

"Just... casual chat~"

"The young people of our generation generally go into careers they like~"

"Just like... When my former high school classmates were asked about their ideal careers, some would say that they would be the president of the United States in the future, some would say they wanted to be a general... and some would say they wanted to be an aerospace scientist. Astronauts go to Mars to realize the dream of humans traveling in the universe."

"But where are they now?"

"All of them have forgotten those heroic words that they once said~"

"Most of those who have good academic performance enter university, find a comfortable job after graduation, marry a girl they love as their wives, and live a harmonious and happy life with a harmonious family."

"Most of those who have poor academic performance have learned some vocational skills, found a relatively stable job, married a wife, had children, and lived a normal life~"

Bob tilted his head slightly and couldn't help but asked curiously: "What about you? When you were in high school, did you ever think about what the future would bring?"

"No~"

David recalled that high school experience that was not his own, shook his head and said with a smile: "When I was in high school, I was very dull. I didn't have any particularly big dreams, and I didn't have any ideas about future plans."

“I came to New York to work because I wanted to leave the small town of Morrison, where I had lived for nearly 20 years, and go to New York to open my eyes in this big city~”

"Um...that's it?"

"Yeah ~ that's all ~"

David unbuttoned his coat, found a more comfortable position for himself, and smiled.

"We...are different~"

"Everyone has different circumstances~"

(Ahem~ The above two sentences are lyrics, I won’t write more below.)

. . .

David looked toward the window, his eyes full of memories, chatting with Bob about his ideals, work, workplace, reality, etc.

In a daze, he recalled the topics he had talked about when he met a successful senior after graduating from college in his previous life.

Bob, listened very carefully to David’s questions and some of his personal insights, and tried to write them all down in his mind~

David is right!

them. .Different~

If the two of them were to switch places, Bob doesn't think he would be more successful than David Coleman is now. .

In just a few months, he started from scratch and won the appreciation and recognition of many big bosses with his endless good ideas. .

Bob was at the family gathering table on Halloween. The elders and grandfathers all talked about David with his cousin Leslie~

John Sr.’s sons, among the five Rockefeller brothers, Lewis, who had the most contact with David, spoke very highly of David~

Bob clearly remembers what his grandfather said: "If that kid always chooses to stay on Wall Street... Leslie, you must pay more attention to him when you go back!"

"The Wall Street of the future... will be more interesting with him!"

----

Northeastern New York.

Massachusetts.

Boston, Cambridge District, inside a three-story old house.

Harvard University professor Armstrong Bartley and Morgan, the elder of the Morgan family, were sitting in the brand-new study room on the second floor, drinking top-notch Brazilian coffee brought by the elder Morgan and chatting.

Old Morgan put down the coffee cup in his hand and said with a smile: "The heating equipment in your old apartment is very old and very unsafe~"

"You can live here for a while, wait until the heating equipment is replaced and renovated, and then move back~"

Giles' mentor, Professor Bartlet, also put down his coffee cup, nodded without any politeness, and smiled.

"Haha~ Tell me, have you encountered any problems again?"

Old Morgan smiled casually, spread his hands and said, "You are still... so direct~"

Professor Bartlet crossed his hands, put his elbows on the table, and shook his head: "My time... is running out~"

"..."

Of course old Morgan knew about Professor Bartley's heart disease.

He also persuaded his old friend Bartlet many times to try to go to Stanford University Hospital to get a healthier heart. .

But Professor Bartley answered clearly every time: "No, I will never carry other people's hearts in my life and continue to live."

. . .

Under the gaze of his old friend, Old Morgan was silent for a while, sighed and said.

"exchange rate!"

"My plan... requires constant currency settlement in the international market~"

"Changes in the international exchange rate market will determine the success of the plan~"

"So, I would like to hear your analysis and opinions on the dollar exchange rate and the international currency market~"

Armstrong Bartlet, as a well-known economics professor at Harvard University and winner of the Nobel Prize in Economics, has been conducting in-depth research on this issue of old Morgan for many years~

. . .

(I would like to mention here that the Nobel Prize in Economics, its English name is: NobelMemorialPrizeinEconomicSciences, translated as the Swedish Central Bank Prize in Economics in Memory of Alfred Nobel.)

(It is the Nobel Prize in Economics established by the Swedish Central Bank in 1968 to recognize those who have made outstanding contributions in the field of economics. It is a newly established award.)

(The orthodox Nobel Prize, English: NobelPrize, refers to the five awards established according to Nobel's 1895 will. It includes: Physics Prize, Chemistry Prize, Peace Prize, Physiology or Medicine Prize and Literature Prize, aiming to There is no Economics Prize in recognition of those who have made the greatest contributions to humanity in physics, chemistry, peace, physiology or medicine, and literature.)

(Interestingly, at the 1974 Nobel Prize in Economics award ceremony, someone expressed his views on this new award to everyone on the stage ~ He claimed: Economics should not have a prize named after Nobel. , this move by the Swedish Central Bank is a smear on Nobel’s name.)

(Then... here’s the question~ Did Nobel not know the existence of economics before he was alive? Obviously not~)

(Adam Smith, who wrote famous works such as The Wealth of Nations and The Theory of Moral Sentiments, died in 1790.)

(Ahem~ Enough chatting, let’s get back to the main text!)

. . .

(The following is a conversation between Sr. Morgan and Professor Bartley on the historical changes in the international currency exchange rate market. Please feel free to skip it if you don’t like it.)

. . .

in the study.

Professor Bartlet organized his thoughts and spoke slowly.

"More than 30 years ago, after the Second World War, the relationship between the sovereign currencies of various countries took on a new pattern."

"No~"

"Actually, it should be said... long before the war ended, countries had already begun formulating a post-war world currency plan.

“In July 1944, at the International Monetary and Financial Conference of the 7 United Nations and Alliance Countries held in Bretton Woods, New Hampshire, the International Monetary Fund Agreement based on the White Plan was adopted.”

“Thus, the basic structure of the post-war international monetary order established is what we call the Bretton Woods system.”

Professor Bartley, seeing old Morgan nod slightly, indicating that he knew this period of history and the importance of the Bretton Woods system, he continued with a few simple sentences, skipping a large section of detailed explanation.

“Under the Bretton Woods system, the basic intention of the design of the exchange rate system was to avoid the kind of tightening pressure and competitive devaluation behavior that would occur in order to correct the balance of payments deficit under the gold standard.”

“However, in the actual evolution of the Bretton Woods system, countries’ exchange rates did not adjust as needed, but became increasingly fixed.”

“Countries are reluctant to devalue and often do so only after various other measures that could be used to change the situation have been tried and failed.”

"On the contrary, countries with trade surpluses are not under pressure to appreciate their currencies. Even if they appreciate, it will only happen after a long time lag and the magnitude will be smaller."

"This situation has restricted the development of post-war international exchange rate market research for a long time."

"When the international currency exchange rate is basically fixed, what will the international balance of payments depend on?"

"Many people can give different answers~"

"The post-war exchange rate theory research once broke out between the elastic wheel and the absorption wheel, two different arguments~"

"From my research, this debate is due to the fact that under the Bollington Woods system, the fixed exchange rate system characterized by periodic large-scale devaluation has a series of drawbacks, which has aroused people's interest in fixed exchange rates. Exchange rate system, and analysis of the pros and cons of a floating exchange rate system.”

“In 1953, Friedman first proposed the implementation of a floating exchange rate system, which can isolate a country from monetary disturbances from abroad; it can help coordinate the currency growth rates of various countries; and it can lead to a country’s smooth international exchange rate system. Balance of payments adjustment without a foreign exchange crisis or the need to impose controls on international trade and capital flows."

"Even if this floating exchange rate system theory was not feasible in the 50s, people like Mida, WMS Cammell, and Egon Sohmen chose to stand up and criticize Fried Mann expressed his approval and support.”

"If we look at it from the perspective of exchange rate studies, its significance lies in expanding exchange rate research into the field of exchange rate system research."

"It demonstrates a brand-new research idea, making people realize that not only should we study the exchange rate determination and changes under a given exchange rate system, but we can also jump out of the framework of the existing exchange rate system model and seek a new exchange rate mechanism to regulate international balance of payments and coordination of international monetary relations.”

"Moreover, it also guided postwar exchange rate research toward another central topic: the operation of various alternative exchange rate systems and their responses to various external shocks that may affect international transactions."

“Thus, post-war exchange rate research has taken a big step forward in depth and breadth.”

Professor Bartlet picked up the coffee cup and took a sip, then smiled at Old Morgan and continued.

"At that time, after I heard about the theories of floating exchange rate system, fixed exchange rate system, and the crawling peg system, wide fluctuation system, etc. in between, I became very interested and had in-depth discussions with many people. Through discussions and working with everyone, we came up with many proposals for the reform of the international exchange rate system."

“It was not until 1960 that Mondel and then J.M. Fleming proposed the policy matching theory of balance of payments adjustment in 1962 that the importance of international capital flows in exchange rate theory initially became The subject of exchange rate research.”

"This theory holds that a country should apply its policy tools to its most influential goals."

“Because under a fixed exchange rate system, if international capital is highly mobile and sensitive to interest rates, a country should use monetary policy to seek external balance and fiscal policy to seek internal balance.”

"The main contribution of the Mondel-Fleming model is to prompt economists to pay attention to such an important fact: the balance of payments is composed of current accounts and capital accounts."

"Any satisfactory analysis of exchange rate determination and balance of payments regulation problems must take capital flows into account."

“After the emergence of the Mundell-Fleming model, research on exchange rate systems began to notice the impact of monetary and fiscal policies under different exchange rate systems, and began to comparatively analyze the effectiveness of fiscal and monetary policies under different exchange rate systems. "

"Between 1971 and 1977, the development of exchange rate theory took a turn."

"The world has entered a general floating era!"

“With this comes massive flows of international capital and frequent fluctuations in international exchange rates.”

“The increase in international capital mobility has fundamentally changed the operating environment of international economic variables and changed the nature of the analysis model of international monetary phenomena.”

"At the same time, the collapse of the fixed exchange rate system also provides opportunities and empirical evidence for people to observe exchange rate behavior under the control of market forces."

"So, I think it no longer makes sense to explore what factors determine changes in the balance of payments and therefore the government's international reserves under fixed exchange rates."

“The behavior of exchange rates under a floating exchange rate system continues to confuse me more and more the more I study it.”

"Moreover, the exchange rate is more influenced by endogenous factors in each country than in the 50s and 60s~"

"Therefore, the focus of my research on exchange rate theory in recent years has turned to asking: What determines the behavior of exchange rates? And what is the role of exchange rates?"

"In recent years, the economic development of various countries has fallen into the dilemma of stagnation and inflation. Many theoretical models of exchange rates on capital accounts have emerged."

"The famous one is the monetary analysis method first systematically elaborated by J.A. Frenkel-Rodriguez in 1974."

"Exchange rate dynamics proposed by R.Donnbusch in 1976."

"The asset portfolio equilibrium exchange rate theory first proposed by W.Branson in 1975."

"The currency substitution model proposed by G. Calvo-Rodriguez-Robert Arro last year and this year."

"The reasonable expectations model proposed by Pentti Kouri in 1976, etc."

“These theoretical models all highlight the central role of the capital account in the determination of exchange rates and the regulation of the balance of payments, and all regard exchange rates as being determined in the financial market, rather than in the goods and labor markets. "

In the last sentence, Professor Bartley emphasized the words "financial market" and "goods and labor market".

Old Morgan frowned, and after Professor Bartley waited patiently, he asked thoughtfully: "What's your point of view? Do you think so too?"

Professor Bartlet smiled noncommittally, put down his coffee cup, and continued.

“In fact, most capital project models are dynamic, and the time factor is crucial in their analysis!”

“Under the given long-term equilibrium exchange rate, we focus on analyzing the current exchange rate, deviations from the long-term equilibrium exchange rate and the reasons behind it, and then analyze the process and speed of the current exchange rate adjusting around the long-term equilibrium exchange rate.

“This makes the daily fluctuations of exchange rates in the foreign exchange market an important subject of exchange rate research~”

“This was almost completely ignored in my previous research on exchange rates.

Professor Bartlet, when talking about "time factor" again, tapped the table twice with his fingers.

He paused for a few seconds and then continued: "Now many people on Wall Street have begun to focus on analyzing the short-term behavior of exchange rates and paying attention to the trend of the short-term equilibrium exchange rate~"

“Perhaps there is no analysis field in the world where expectations play such an important role as the analysis of exchange rate behavior.

Professor Bartley, on the word "anticipation", knocked on the table twice.

"The concept of reasonable expectations, which was first created in 1961 and used to explain price changes, has been applied to macroeconomics by scholars such as REJr. Lucas, TJ Sargent and N. Wallace. field."

"They believe that when the economy is about to change, people will tend to respond rationally and wisely in their own interests."

"These reactions often unexpectedly cause the government's fiscal and monetary policies to fail to achieve the expected results."

"Because people have taken these government actions into account when making their plans."

When Professor Bartley said this, he stopped, leaned back in his chair, and looked at old Morgan, who was frowning and thinking~

He talked about so much professional history, and the last sentence was a question to old Morgan, and he gave the last supplementary answer. .

. . .

Old Morgan carefully filtered the answer given by Professor Bartlett just now in his mind, and regarded "the exchange rate as being determined in the financial market, rather than in the goods and labor market"; "the time factor is in his analysis" ", is crucial"; and "the government's policies have been fully taken into account when formulating its plans" were repeated silently.

"Time", "events", "interests", "policies", "plans" and "expectations". .

These, coupled with more uncertain factors, determine whether Old Morgan's plan can achieve the ideal return maximization ~

He took a deep breath, picked up the coffee cup, took a big sip of the cold coffee, and asked his old friend.

"Do you think there will be another oil crisis on the Iranian side?"

Professor Bartlet laughed and said: "I am an economist, just an economist!"

"This question of yours should be asked to the Secretary of State or the President, right?"

"Hahaha~"

Old Morgan laughed in agreement and continued to ask: "What if: the Federal Reserve decides to continue raising interest rates and the oil crisis breaks out again~"

"What do you think... will happen to us?"

Professor Bartley stopped laughing, shook his head helplessly and sighed: "It's not great~ It will only make the domestic economic situation worse~"

"How bad will it be? Will it be as bad as the Great Depression in the 30s~?"

"No~"

"Times... have changed. There is no comparison between the fundamental problems encountered now and the Great Depression of the 30s!"

Professor Bartlet paused and pondered for a moment, then continued with certainty: "On September 9st this year, the rice dollar pricing method was formulated and implemented, specifying the exchange rate expression method using the rice dollar as the standard to calculate how much foreign currencies should be exchanged. ~"

(The meter-dollar pricing method, also known as the New York pricing method, refers to the indirect pricing method for currencies of other countries in addition to the direct pricing method for pounds in the New York international financial market.)

(Until now, the rice-dollar pricing method is still the common pricing method in the international financial market.)

(Another: my country adopts the direct pricing method, and the exchange rate is understood as the price: an increase in the exchange rate = an increase in the price.)

"In the international currency market, the floating exchange rate system implemented by various countries must choose one of the international currencies, the rice dollar and the pound, as a comparative value scale."

"Because when countries set their own currency base exchange rates, they must choose a certain country's currency as the main currency value comparison object!"

"Usually this choice will be based on the country's largest proportion in international trade and foreign exchange reserves, which is freely convertible...the world currency, as the main value comparison object of the basic exchange rate."

"The rice dollar has played a monetary role as a commodity value measure and standard equivalent in many years of international commodity import and export trade and circulation."

"It can definitely be defined as one of the world's currencies!"

"Raising interest rates will not only stabilize the international currency status of the rice dollar, but also allow many countries that use the rice dollar as their international currency reserves to help the United States share and pass on some of the pressure caused by the stagflation crisis~"

"However, if this kind of monetary means is used to curb inflation, the consequences... it is difficult for me to predict~"

Professor Bartlet euphemistically expressed his opinion on the Fed's use of "raising interest rates" to make more people and more countries pay for the stagflation crisis in the United States, and he retained his attitude ~

Old Morgan did not give his own opinion on this~

Right and wrong, right and wrong, success and failure. .

Now that the stagflation crisis is becoming increasingly serious, the Federal Reserve Bank of America is faced with the dilemma of having to come up with a relatively reasonable solution!

These are not the problems that old Morgan is most concerned about~

Still let. .Some people and your Excellency the President, go ahead and have a headache~

----

new York.

Wall Street, Stanley [-]th Floor.

David and Bob chatted for a long time in the office~

Just as Bob stood up to leave, Leslie and Livlin, who were returning to New York with him, knocked on the door and walked in.

David smiled and opened his arms, and Livlin, who was nourished by love, gave Leslie a close hug in a generous and intimate way~

He patted Livlin on the back, raised his eyebrows at Leslie, and smiled softly at Livlin: "If Leslie bullies you... remember that I am still here~"

Leslie chuckled and waved his hands quickly: "You want it? Take it away now~"

Livlin broke away from David's embrace and looked at Leslie sideways, pretending to be aggrieved: "You bastard~ What do you think I am?"

David laughed, hugged Livlin's shoulders tightly, and continued to say: "Look, my dear~"

"He is such a playboy~ There is no need for you to waste your precious youth on him~"

"Haha~"

Leslie looked at Livlin with "Am I right again?"

Livlin smiled and punched David on the chest with her small fist, complaining in a moaning voice: "Hey, you made me lose ten swords! You and I will pay for it!"

"Hey~hiss~"

David was stunned by Livlin's electronic music, which aroused goosebumps all over his body. He quickly apologized and said with a smile: "I'm sorry~I'm even compensated!"

"As long as you say a word, I will compensate you with my whole body!"

"Hahaha~Okay, okay~"

"You are mine now! Hahaha~"

"Hi~"

"Huh~"

Leslie felt very numb as she hugged her arms, and a large number of goose bumps appeared on her skin. .

Bob, who was standing quietly on the sidelines, also took a breath and rubbed his hands, feeling that he had gained "new knowledge"~

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