The Son of Finance of the Great Age

  Chapter 759 The Death of Small Fund (6)

   "In fifteen minutes, they will announce the news!"

  The two sat for a while, and Jiang Shan didn't hear such a sentence until Zhong Shi stopped fiddling with the phone.

"what?"

  Jiang Shan was taken aback for a moment, then realized, and hurriedly asked, "They? Who?"

   "Spanish Government!"

  Zhong Shi said lightly, "Today, whether it is the German government or the Spanish government, they will announce the relevant fiscal deficit and explain the financial situation. It is not expected that the situation will be very optimistic."

"what?"

  Hearing Zhong Shi's words, Jiang Shan's expression changed instantly, and he asked again and again, "This...how is this possible? Germany will do it too?"

  Germany is the largest economy in the Eurozone. It and France account for more than half of the GDP of the Eurozone. If there is a problem with the German government's fiscal deficit, then the entire euro zone may be plunged into turmoil.

  That's why Jiangshan's reaction was so violent.

  In fact, when formulating the annual budget, the finance ministries of various governments must inform the outside world of the expected situation. Explaining the fiscal deficit is basically equivalent to explaining the growth of GDP this year, because expenditure can be regarded as a relatively fixed figure to some extent, while fiscal revenue depends on tax rates and GDP growth. Therefore, if there is no large-scale fiscal policy stimulus, the increase in the fiscal deficit will mean a decline in GDP growth or even a regression.

   "Germany may not necessarily be in trouble, but Spain may be in trouble!"

Faced with Jiang Shan's doubts, Zhong Shi shook his head slightly, with a disapproving expression on his face, "As the fifth largest economy in the euro zone, although it will not encounter such things as economic crisis or bond downgrade, once their data is released Going out will inevitably cause severe panic in the market. On this day, Germany will also release corresponding data. It is really interesting. If the data released by Germany tends to be positive, it may offset the Spanish data to some extent. It is a pity that the data they announced may exceed market expectations."

"you know?"

  Jiang Shan's face changed drastically again, the muscles on his face twitched violently, he could hardly believe his ears, "Zhong Sheng, you actually know these data?"

   "What do you think?"

  Regarding Jiang Shan’s reaction, Zhong Shi couldn’t help shaking his head secretly, and asked instead, “Do you think the reason why I let you set up such a situation without such information as a support, I might take the risk?”

   "So it is!"

  Jiangshan fully understood, "So, you knew this would happen a week ago? God, this is really terrible!"

  “Although the economic data of various countries are declared confidential before they are released, no one can truly keep them secret!”

Zhong Shi said leisurely, "Before the release of important data, every investment bank will make predictions based on the data it has investigated, and the results are only a hair's breadth away from the real data. And in some cases, for some specific For humans, these data are not classified. As long as they do not go too far, the authorities will turn a blind eye."

   "I get it, I get it all!"

  If there is a problem with the Spanish government, then they are most likely to choose to seek help from the European Central Bank. In the discourse system of the Eurozone, Germany and France are the two most important pillars, so it is very necessary to inform them. In this way, not only the data of Germany, but also the data of Spain are known to them.

   "That German did it!"

  Jiang Shan came to the conclusion categorically, then shook his head, and couldn't help but sigh, "I really didn't expect that he has such great energy!"

   "So we can't underestimate everyone!"

  Zhong Shi also sighed, "At least so far, everything we have done is going well!"

  …

   Later on February 3 local time, the Spanish government held a press conference to announce the budget for this year.

   At the press conference, Spanish Finance Minister Salgado announced that the economic growth forecast for 2010 will not be lowered, maintaining the previously announced growth forecast. In addition, the overall public budget deficit may account for 9.8% of GDP, higher than last year's level, but also far higher than the average level of the euro area.

   In his later speech, he also emphasized that the current deficit ratio only occupies a small part and will not cause trouble to the government's credit. And in order to solve the problem of excessive deficit, he will discuss with the prime minister and other high-level officials to launch an austerity plan of appropriate scale at the right time, hoping to reduce the deficit level in the next three years.

   At the same time that Spain announced the relevant data, the German Ministry of Finance also held a corresponding press conference.

  The German Finance Minister announced that the 2010 fiscal budget deficit is expected to account for 5.5% of GDP, which is much lower than that of Spain, but also exceeded market expectations.

  As soon as the two news were released, the entire market was shocked.

Although it is only an expected figure, the market is still very concerned, especially in the current general environment, when the debt crisis is beginning to emerge, after this rather unsatisfactory figure is announced, it means that Spain may also fall into trouble .

The fifth largest economy in the euro zone, with such bad data, will their bond rating be downgraded, will they have financing difficulties, will they have massive unemployment, and so on, and so on. It appears in the minds of investors like a spring.

  The most important thing is that Germany's fiscal deficit is expected to exceed market speculation. Does this mean that Germany may not have more financial resources to assist these countries? If a similar situation really happens, will the entire euro zone fall apart?

   These have become the focus of the market!

  Naturally, the consideration of these issues is a bit too in-depth. After all, Germany’s economy is not that bad, and the entire world’s economy is also in the recovery stage, and with Greece’s economic scale, it is not enough to shake the cornerstone of the entire Eurozone. For Spain, these figures are still only expected in 2010, they have the time and ability to change all this.

  But panic is inevitable, especially in commodities and foreign exchange markets.

   Following the previous trading day, the exchange rate of the euro against the US dollar fell again, and this is already the 11th time that the euro has fallen against the US dollar in the past 15 trading days. On that day, the euro fell from 1 euro to 1.3896 dollars to 1 euro to 1.3739 dollars, down 157 basis points, or 1.13%.

   In the follow-up, the momentum of being bearish on the euro still has no meaning to end. A week later, according to data from Barclays Capital, the risk exposure of U.S. capital in sovereign bonds of countries such as Greece, Ireland, Portugal and Spain reached 176 billion U.S. dollars, that is, the amount of funds without any protection on the sovereign bonds of these countries reached this level.

   As for the euro short position, more and more capital is bearish on the euro. After Spain and Germany released relevant data, a specialized agency released relevant foreign exchange data. The net short position of the euro has reached 8 billion US dollars, hitting a record high.

But in fact, many foreign exchange positions have not been truly disclosed. For example, Tianyu Fund has shorted at least US$20 billion in euro positions, but because it is long on the US dollar, the two offset each other, but on the book The net short position in euros shown is a measly $100 million.

  Naturally, for the Spanish local capital market, a huge panic is almost inevitable. The day after the release of the relevant data, Spain's Madrid Composite Index plunged more than 6%, its biggest drop in 15 months.

  In Frankfurt, Germany, the DAX index plunged 138.85 points that day, a drop of 2.45%. It was also the biggest drop recently, and on the following trading day, the momentum of this decline was still not stopped, and it fell another 98.90 points that day, and the cumulative decline in two days exceeded 4%.

   In the United States, the S&P 500 index fell 34 points that day, or 3.10%. In the next trading day, it even fell 20 points intraday, but finally rebounded, and finally fell only 0.24%.

  In short, because of these two pieces of news, the global stock market has undergone a bloodbath regardless of region.

  Naturally, as a very important part of the global capital market, the commodity market cannot be immune to it, and it has also been hit by no less than the capital market.

In the London copper market, on February 3, the price per contract plummeted by US$263.75, on February 4 it plummeted by US$213.50, and on February 5 it continued to fall, and each contract fell again by US$91.50. Up, more than 8%.

In the NYMEX crude oil market, the Texas light crude oil contract also fluctuated sharply. On February 4, each crude oil contract fell by US$3.87, a drop of 4.92%. It fell another $2.13, or 2.85%. Based on the two-day market, the market fluctuation exceeded 7%.

   On February 4th, the COMEX gold contract suffered panic selling, which was almost synchronized with other markets. It fell from the opening price of 1112.6 US dollars to 1063.5 US dollars, a full drop of 49.1 US dollars, a drop of up to 4.41%.

   On February 5th, the panic continued, and the price of gold fell again by $10.1 throughout the day, closing at $1053.4 per ounce, directly completing the task that the bears had exhausted in the previous two days.

  Many small funds were completely wiped out in such a sharp drop, and KS&JR was one of them.

  The time goes back to the moment before February 4th, before the market opened.

   "There will be panic in the market, there is no doubt about it. We have to quickly get rid of the long positions on hand and get the cash back quickly, so that we can survive in the market, right?"

  Although he and his right-hand man had already done a good job of communication, Collen Smithen couldn't stop asking at the moment when the opening was approaching.

"good!"

   This time Jack Mullen and Williams Roger said in unison. Such a tacit understanding has not appeared between the two of them for a long time. Both of them looked at each other in surprise, but the next moment they turned their heads in unison.

Because of Jack Mullen's suggestion, KS&JR not only operated with full positions during this period, but also added leverage. This kind of extremely aggressive operation is a very dangerous practice even in the stock market, let alone in the original stock market. Leveraged futures market. So when the Spanish and German governments announced their deficit budgets, Jack Mullen realized that there was a big problem.

   Not only him, everyone in KS&JR realized that something was seriously wrong.

   "Gentlemen, cheer up!"

  After taking a long breath, Colum Smith finally calmed down, and cheered up the traders, "Today's operation is related to our success or failure. I hope everyone can go all out!"

  Up to now, Collen Smithon no longer relies on strategies such as betting on the right direction, but relies on pure technology, that is, relying on the quick eyesight of traders to escape this unprecedented crisis.

   I have to say, this is very sad, but it is also their last choice!

   There was no expected answer, and what greeted him were just a lot of heavy eyes. When Colum Smithen looked at each trader, they avoided them again.

  As traders, why don’t they know that in such an era of quantification, the difficulty of relying on manual operations to place orders first is almost equivalent to getting out of a black hole safely.

   But everyone still has a glimmer of hope that today's market will not be a big drop.

   Thanks to book friends 830501, owner Oliver, cpower, and Jiangnan Liu Feiyan for voting monthly tickets! Thanks to the electromagnetist for continuing to reward! I hope that all book friends will continue to actively vote and recommend, and look forward to more book friends' attention, thank you very much!

  (end of this chapter)