Rebirth in 1985

Chapter 1091: The Beginning of the Collapse (Part 1)

Liu Mingzhang and Li Yunqing were happy, however, Lu Shaohua was naturally happy as well. Lin Yi's performance undoubtedly told him that after Liu Mingzhang and Li Yunqing, Phoenix Financial had another person who could take on the leading responsibility. Isn't this worth being happy about?

So, after Lin Yi finished speaking, Lu Shaohua looked at him meaningfully, and then expressed his opinion. "Sometimes you need to be resolute and decisive, and this time the financial storm is obvious. We can't just bear it like in 97, because even if we bear it, we can't stop the spread of the storm. It's better to wait until the end of the financial storm to increase the stock price and the market index."

Lu Shaohua's words undoubtedly agreed with Lin Yi's second plan. As for the later mentioned raising of stock prices and market index, it was all Lu Shaohua's plan. This plan could bring great benefits to Lu Shaohua and make him a huge fortune.

It is unwise to try to hold on to the market when you know you can’t hold on. At the same time, Lu Shaohua also knew that after the financial crisis really broke out, a large number of Hong Kong stockholders would call on Phoenix Financial to rescue the market. After all, in 97, Phoenix Financial stood up at the last moment and saved Hong Kong.

However, this time was different. Phoenix Financial was destined to be unable to turn the tide. Therefore, when adopting the second plan proposed by Lin Yi, Lu Shaohua also gave an order. "Lin Yi, hold a press conference in the name of Phoenix Financial tomorrow to let investors be careful. Well, don't make it too obvious. Just say that the recent stock market is a bit weird. Don't cause panic, otherwise the Hong Kong stock market will plummet."

Phoenix Financial has a strong influence in Hong Kong. If Phoenix Financial sneezes, the Hong Kong stock market will shake three times.

Since Phoenix Financial's sneeze can cause three shocks in the Hong Kong stock market, why did Lu Shaohua ask Lin Yi to hold a press conference? Isn't this a contradiction?

This is indeed the case, but Lu Shaohua still plans to do so. The reason is very simple, that is to give a reminder. As for whether the Hong Kong stock investors believe it or not, Lu Shaohua cannot be sure. The only thing he can do now is to give a reminder. If someone believes it, they should withdraw immediately, but he has no way to deal with those who do not believe it.

There is another reason, and that is Lin Yi. Although the outside world knows that he is the deputy general manager of Phoenix Financial, it is not his turn to come forward on normal days. It can be said that Lin Yi is a new face, and if he speaks out now, he will not have much credibility in the outside world.

In other words, few people would believe what Lin Yi said. If that were the case, the Hong Kong stock market would not be in chaos. However, it cannot be denied that Lin Yi represents Phoenix Financial Corporation.

After the financial crisis, people will remember that Lin Yi spoke out on behalf of Phoenix Financial to warn them, but they did not believe it and ended up losing all their money. Even if Phoenix Financial did not come out to rescue the market, they can only blame themselves for being greedy.

This is Lu Shaohua’s real purpose.

It was obvious that Liu Mingzhang and Li Yunqing both saw Lu Shaohua's purpose. They just smiled and said nothing more.

However, Lin Yi was a little confused and didn't understand what was going on, but it did not prevent him from following Lu Shaohua's orders. There was no other way, because Lu Shaohua was the boss of Phoenix Group, and he was just an employee under Lu Shaohua. He just had to do whatever the boss said.

Lin Yi's principle of doing things is to do whatever the boss tells him to do. Moreover, Lin Yi is very happy to have a chance to appear in the media.

"I'll hold the meeting tomorrow morning." Lin Yi responded in a deep voice.

"Okay." Lu Shaohua nodded with a smile on his face, and then he pondered for a long time before changing the subject. "Next, let's talk about the global situation."

Yes, it is time to talk about the global situation. Today is September 7th, but that is the time in Hong Kong. As for the American time, it is still September 6th and still in the evening, and nothing major happened in the United States that day.

But tomorrow will be different, that is, midnight on September 7th in Hong Kong, which is daytime on September 7th in the United States. On this day, the federal government took over Fannie Mae and Freddie Mac, but it still could not stop the crisis from intensifying.

In other words, the full outbreak of the financial crisis officially began on September 7th, US time. In the following days, the situation continued to deteriorate until it collapsed.

However, Lu Shaohua summoned Liu Mingzhang, Li Yunqing and others at this time, undoubtedly for a final mobilization meeting.

Li Yunqing knew it, Liu Mingzhang knew it too, and Li Zongen knew it even better, because they had the data provided by Lu Shaohua, and there were dates attached to the data files, so they knew exactly when the financial crisis would break out.

The only one who didn't know was Lin Yi, and Lin Yi was not a fool. He was sitting here today, and although Lu Shaohua had summoned him here, he knew very well that he had his work to do in the first half and had nothing to do in the second half. The only thing he could do was to be a good listener.

Now Lin Yi is playing such a role, not saying a word, just sitting there motionless.

Lu Shaohua was very happy with Lin Yi's performance. He nodded secretly in his heart and continued, "According to reliable information, tomorrow, that is, at night in Hong Kong time, the US government will take over some companies to try to prevent the outbreak of the financial crisis, but the situation has developed to this point, and the US government is destined to be unable to turn the tide."

Lu Shaohua's statement was agreed by Liu Mingzhang and others, and Liu Mingzhang even spoke out to help cheer. "The US government is so naive. The whole thing was caused by them. They undoubtedly know the situation best. Now they are still making their last efforts. What's the difference between them and filling the sea with money? If it were me, I would put the money in my pocket, warm and comfortable."

Liu Mingzhang seems to be gloating, but it must be said that Liu Mingzhang is just criticizing the US government in another way, saying that they are hypocritical.

"Hasn't the US government always been like this?" Li Zongen asked back.

Li Zongen's words really hit the nail on the head. The US government is often like this, hypocritical and pretentious.

"hehe…"

In response, Lu Shaohua smiled. Just as Liu Mingzhang and Li Zongen said, the American government is like that. However, now is not the time to discuss what the American government is like. What we are discussing now is the situation.

"Okay, now is not the time to talk about the US government, let's talk about this financial storm." Lu Shaohua interrupted the topic and then continued. "There are also reports that Lehman Brothers may not be able to hold on, and bankruptcy is only a matter of time. If Lehman Brothers collapses, then this financial storm will really take shape, and it will sweep the world at lightning speed."

Lu Shaohua's remarks were a bombshell, but what he said was true. According to Lu Shaohua's memory, on Sunday, September 9, Lehman Brothers filed for bankruptcy after the US Federal Reserve refused to provide financial support.

Lehman Brothers collapsed on this day, but that was not all. On the same day, Merrill Lynch announced that it was being acquired by Bank of America.

而这两件事标志着接下来这一星期2008年9月全球股市大崩盘的序幕，在9月15日（星期一）和9月17日（星期三）全球股市发生市值暴跌的情形。在9月16日，美国国际集团（aig）因持有许多信用已经违约的到期合约而被调低其信用评级，该保险集团自身也陷入了一场清偿危机（liquidity crisis）。

When American International Group (AIG) confirmed that it could not find lenders willing to provide it with loans and save it from bankruptcy, the Federal Reserve, at AIG's request, provided AIG with an interbank credit facility of up to $850 billion, on the condition that it obtained 79.9% of AIG's equity interest and had the right to suspend the payment of dividends or dividends on previously issued common and preferred stocks.

September 9th is definitely a day worth remembering, because it was the beginning of the global stock market crash and the fuse for the financial storm that swept the world. But it was not the end. On September 14th, a large mutual fund in the financial market, the Reserve Primary Fund, disclosed that it held Lehman Brothers bonds. Its share price fell below $9, which led to a significant increase in investors' demand to redeem their funds and further aggravated the financial crisis.

By the morning of September 9, in a market with a total market value of $18 trillion, the market value of "sell orders" requested by institutional investors reached $4 billion, while the liquidity funds injected into the market by the Federal Reserve System was only $5 billion, which immediately caused the market to collapse.

One day later, on September 9, the U.S. Treasury Department provided temporary insurance (akin to FDIC insurance of bank accounts) to inject funds into the money market. By the end of this week, the Financial Services Authority of the United Kingdom and the Securities and Exchange Commission of the United States suspended short selling of financial stocks in their countries; financial regulatory authorities in other countries have also taken similar response measures. Market confidence has also been restored to a certain extent due to the efforts and public relations of the Treasury Department and the Securities and Exchange Commission of the United States.

Recovery is recovery, but it is just recovery, and only a little at a time. It cannot last too long because the financial storm has already broken out. As the center of the storm, it is impossible for the United States to avoid it.

Yes, it’s wishful thinking to want to avoid it. Of course, the US government has announced a rescue plan, but is it useful?

……