Wall Street of the third generation chaebol

＜ Shanghai Panic. (1) >

“But Master, will foreign banks in Shanghai take over currency swap contracts? If the Chinese financial district in Shanghai is devastated, they will have a lot to lose.”

Lloyd’s Insurance Hong Kong Branch.

James frowned and asked me. He always asks me if he has any questions. It’s a good habit.

I closed the book I was reading and looked at James.

“I’m not getting anything, so I’ll make a contract.”

“Yes? No, what is that…”

“James, you don’t have enough faith. You just have to trust the director and see.”

Tub.

Robert, who was sitting still and listening, placed a hand on James’ shoulder. If you trust and follow the Detroit Director, gold will run out, but in Robert’s eyes, James was always full of distrust.

James looked at Robert with a puzzled expression.

“Do you believe it?”

“I’m sure… you’re the Detroit director, aren’t you?”

Robert shrugged.

There was something about Robert that smelled of fanaticism, but he wasn’t completely wrong. I smiled brightly.

“James, as Robert said, this time around, it’s going to be a lot of fun.”

Yes.

This is the test I give them.

It was a kind of economic experiment that stimulated human greed.

“Let’s see.”

The golden apple has already been thrown to the hyenas.

***

Shanghai City Council (SMC).

Also called Study Bureau, it was an economic institution that monopolized most of Shanghai’s public works. Established after the influence of the British Empire, SMC monopolized public infrastructure projects such as gas supply, electricity supply, and water business, and was a trust that operated like a de facto monopoly.

Its leadership was in the hands of HSBC, and the meeting began with a solemn atmosphere.

“First of all, let me tell you something. Our board of directors of HSBC has recently secured a large amount of peso currency swap contracts. The bank will attach it regardless, but it’s a significant amount of contracts.”

currency swap.

There is no one who does not know its reputation among the businessmen in this position. The new power that defeated the Qing Empire, the contract of the century that sank the Japanese Empire.

It was also known as the Devil’s Contract.

“As you all know, the desk heads in their home countries think of the Japanese Empire as a monkey’s amusement park. But isn’t it?”

At least, Japan was a much more powerful force than the small similar powers in continental Europe. The Japan Settlement Bank, which devoured Japan, quickly emerged as the largest bank in East Asia.

HSBC, which used to be the most powerful bank in East Asia, has already far surpassed it.

“We expect that the size of the Japan Settlement Bank will be at least 10 times that of our HSBC. However, as you know, the Japan Settlement Bank is a privately held company established in Switzerland, and the accounting documents are not disclosed, so there is no way to know the exact number. .”

For reference, 10 times is the minimum number taken.

At HSBC’s remarks, the inside of SMC began to stir. A bank that did not even exist last year has grown into the largest bank in East Asia in less than half a year.

“Ten times as much as HSBC?”

“Actually, since we ate the economy of Japan, 10 times seems to be more than 100 times.”

“HSBC is a bank that operates exclusively in Shanghai and Hong Kong. It is different from the Japan Settlement Bank, which swallowed up the whole of Japan.”

“Then, wouldn’t it be possible to compare it to the banks in Europe?”

“for a moment….”

The Shanghai monopolies hit the speed calculator. The Japan Settlement Bank and the country’s largest banks that devoured Japan.

No, I can’t count

“Chairman. I have a question. So, is the currency swap contract the same as the contract that the Japan Settlement Bank earned a lot of money from?”

“It’s a little different. Unlike the Japan Settlement Bank, most of them have limited limits. Unlimited ones are mixed, but there are few. Of the tens of thousands of contracts, we are only going to take over thousands of contracts.”

can’t afford it alone

The HSBC Board of Directors decided so. The reason for the acquisition is the same.

“They said that the customer must put a collateral and provide a 30% commission to qualify for the acquisition. However, HSBC does not have the capital to provide all the collateral. It is a total of thousands of contracts. So, share it with all of you. I’m going to do it.”

“A security deposit? How much did you ask for?”

“10,000 dollars per contract.”

“Ten thousand…!”

“For reference, unlimited is $100,000.”

Breathtaking amount.

“Well, that’s not all of Shanghai’s battlefields (financial companies) or marks (banks), no.”

“No. Thousands of contracts were all made in Shanghai. You know how many Qing Empire financiers are in Shanghai.”

Shanghai financial district.

After the Taiping Rebellion, a large number of financiers from the Qing Empire flowed in. In the trading of raw materials and company stocks on the Shanghai Stock Exchange, the power of the Qing Empire financiers is growing.

“The Shanghai financial district is in a state of strange warfare between the financiers of the Qing Empire and our European financiers.”

Concession is like that. It is still the land of the Qing Empire.

Most of them were either the Shanghai branch of Shaanxi Province’s Pyoho, or those of Anhui Province. Increasingly, their influx is increasing. At this rate, SMC is also at risk.

Members of the SMC group them together and classify them as modern bankers.

“and.”

The chairman of HSBC picked up a handful of contracts with a grim expression.

“This is a joker that can overwhelmingly reverse this relationship.”

hot.

At one point, the inside of the SMC conference room heated up.

***

tongue.

At the end of the SMC meeting, the two French financiers who threw glass bottles into the trash were looking at each other.

France was not originally a member of SMC, but had been given a special permission to participate.

“Anyway, isn’t $10,000 per contract too expensive?”

Whittinger Bank.

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One axis of the huge French banknote. The young director of the Shanghai branch in charge of Asia complained.

“For 10,000 dollars, that’s a lot of money to buy a mine. Even a small gold mine!”

“To be precise. $10,000 was set as collateral for each contract. It’s not set as the amount of the acquisition.”

Societe General.

Along with Whittinger, a tycoon in charge of the French banking sector. Societe Generale was thinking a little differently.

“To put it bluntly, the price per contract is $0. The collateral is $10,000. The fee is only 30%, depending on the worst conditions.”

“Isn’t that what it sounds like!”

“You have a narrow field of view. It’s worth 10,000 dollars. It’s a currency swap. A currency swap is a magic paper that can turn silver ingots into pieces of paper.”

“It is possible only with an army! Can a proper army come because the people of high rank rule the colony?”

“Well.”

It’s not a military issue.

The director of Societe General whispered quietly to Whittinger, who was only complaining.

“If you don’t take over the currency swap contract, you’re almost bankrupt, are you saying that?”

“Yes? No. What is the causal relationship between giving up a currency swap contract and bankruptcy?”

“Think about it.”

The senior director of Societe Generale took a deep breath and informed me step by step. The youngsters of the fortress only looked ahead, and their lack of insight was a flaw.

An adult should tell you.

“Isn’t what you are saying that if you take over a currency swap contract, it can be a benefit or a loss.”

“you’re right.”

“Let’s think about it the other way around. Let’s say you didn’t take over the currency swap.”

In a way, Whittinger’s concerns are right.

The foreign banknotes in Shanghai are already mixed with the capital of the Qing Empire.

If a bank in the Qing Empire goes bankrupt, the aftermath of the panic will certainly be felt by foreign banks in Shanghai. Therefore, the loss and gain could not be calculated.

But if you think about it the other way around, you can see how absurd this trap is.

“The total amount of silver ingots of the banks of the Qing Empire is fixed. However, there are many banks that are targeting this silver ingot. Even if you get an unlimited peso currency swap contract, you can rip it off as much as you want.”

“Are there many competitors?”

“Yeah, if you disappear, other banks will be swept away, even your silver bars.”

In other words, if Whittinger Bank runs out, the silver bars of Whittinger Bank are divided among the banks that have other currency swap contracts. They are more likely to benefit from harsh collateral and fees.

Even if Whittinger Bank did not intervene, there were many companies aiming for currency swaps.

“Then you?”

“…without saving a single penny, the bankruptcy of the Qing Empire’s banks is being hit by the panic aftermath.”

“Yeah, if you take over a currency swap contract, you might lose money. But if you don’t, you’re almost 100% bankrupt. Banks that have accumulated silver bars through currency swap collection will survive the panic.”

demonic

There was no devil’s circuit that pinpointed the banks’ rivalry.

As a result, banks were forced to win even one more acquisition contracts competitively.

‘…After all, there are many hyenas who aim for contracts, and only banks that give up avoid them.’

gulp.

Whittinger’s young director swallowed.

So, the director of Societe General said to him quietly.

“Which side will you stand on?”

***

A week ago.

Hong Kong.

“Is it a ranking game?”

Lloyd’s Insurance Special Room.

I had a meeting with the old director of Societe Generale. Before the SMC meeting in Shanghai was held, I wanted to make one in advance.

‘This person is the right person.’

Societe General.

They are Rothschild-affiliated French banks.

The Rothschilds are ubiquitous and not ubiquitous. If you dig in the shadows, there are always Rothschilds everywhere. And the Rothschilds were our allies.

His reaction was also very favorable.

“Dear Rothschild, I’ve heard a lot from the Detroit Director, but this is another fresh perspective. It’s a ranking game.”

rank game.

It is one of the game theories commonly referred to as the ‘prisoner’s dilemma’ in modern times. At this point in time, it was called Jean-Jacques Rousseau’s Ranking Game.

I applied this game theory a bit this time.

“It’s a simpler game theory than you think.”

simple.

But this simple principle gave a blow to Adam Smith’s laissez-faire. As such, it is an important theory for economists, and game theory was a new paradigm that took laissez-faire away from the position of absolute truth.

“A murder has occurred. The police have two suspects sitting in an interrogation room separately and make a proposal.”

The two suspects are interrogated at the same time in a separate interrogation room. These two suspects cannot talk to each other and cannot retaliate against each other.

Block all external factors.

“The police offer each one a confession.”

This novel was posted at https://readwn.com

One year in prison if neither confesses to each other

If both confess to each other, they get 3 years in prison.

If only one confesses, the confessor is released and the other is sentenced to 10 years in prison.

“In other words, from an individual standpoint, if you confess, you get three years in prison, or if you are lucky, you get released.

is risk management.

Up to 3 years if you confess. If you’re lucky, you’ll be released.

Up to 10 years if you don’t confess. Fortunately, one year in prison.

To be honest, worrying about it makes me feel like a fool.

“If you were in this situation, what would you choose? Would you confess? Would you not?”

“Umm…”

Societe General’s director shed a sigh of relief.

“I’ll make a confession…”

“Yes, and I will give SMC this option.”

Let’s apply the prisoner’s dilemma to this transaction.

If everyone takes over the currency swap contract, there is a possibility of ‘loss’.

If everyone gives up on the currency swap contract, nothing happens.

If only one side gives up the currency swap, he goes bankrupt, and the rest is shared up to his silver ingot.

“If you sign a contract, you may lose money, but if you are lucky, you can even sweep away the silver ingots from the side you gave up on.”

“…If you give up on the contract, you’ll either go bankrupt or get lucky, but you won’t get any benefit.”

Acquisition conditions are harsh.

30% with sorghum and $10,000 as collateral for the acquisition.

Unlimited is $100,000.

Since it is a very expensive condition, you may incur losses if you take over a currency swap contract.

That is, there are two options.

1. If you take over the contract, you can ‘damage’ it, but if you’re lucky, you can even wipe out the silver bars of the side you gave up on.

2. If you give up the contract, you will go bankrupt, but if you are lucky, you won’t get any benefit.

‘If you give up the contract, you are bankrupt. You say you’re lucky and you get nothing?’

Are you kidding me?

Then, of course, you have to take over the contract.

‘This is crazy.’

What the hell is this vicious trap?

Societe General’s director was thrilled.

Detroit is a human being in front of you. There was a reason the Rothschild president praised him.

For a moment, the young man in front of him was afraid.

“I have no choice but to take over the contract.”

“No. Everyone can give up and live a ‘peaceful’ financial life in the original Shanghai, holding hands with the merchants of the Qing Empire and laughing hahahaha.”

“Huh, are you kidding me?”

eating.

Societe General’s director laughed. He waved his hands with a tired face.

“It’s a very peaceful place. If the banks of the Qing Empire keep coming in like cockroaches, in the end, foreign banks will have to lose money.”

I can’t see anything like that when I die.

I’m sure everyone at SMC thinks that the Qing Empire’s banks should be killed. If the lights went out now, Shanghai could be swallowed up by foreign banks.

Societe General’s director took his stance.

“There is a tycoon called Seongseonhoe. It is the financial district of the crazy Qing Empire, which owns the large banks of Shanghai Commercial Bank, Daechung Bank, and Transportation Bank.”

“I know. I heard that he is threatening foreign banks in Shanghai.”

Societe General’s director frowned.

“The financiers of the Qing Empire are too closed. They have a tendency to eat with each other after all, what is their Chinese ideology.”

“Chinese ideology. They consider themselves to be the center of the world. The Qing Empire can eat well and live well even if the country is isolated.”

“At the end of the day, the isolation of the country was not forced open by the great powers. Those who fell into that traditionalism do not know the flow of the world. They say they accept the general trend, but in the end, like a parrot, Chinese ideology and Chinese ideology.”

Everything boils down to neutralization.

And the Chinese ideology was an idea that could be made because it is a continent of 400 million people.

Even if the country is shut down, the domestic market continues, and neighboring countries treat them like foreign countries.

So why not think around them?

“That’s why all the foreign banks in Shanghai respect the bankers of the Qing Empire. Even if they lose a little, they want to take care of them. I am one of them.”

“Then there is only one option in the end.”

“Yes.”

indeed.

What is the probability that not everyone will sign a contract?

The answer is close to ‘no’.

“30% commission, $10,000 collateral. Despite these extreme conditions, most banks will take over the contract.”

Prisoner’s dilemma.

In a competitive system, its vicious presence is even more malicious.

And I make money from it.

$10,000 in collateral. Thousands of contracts total. I’ve earned at least $10 million in Shanghai alone in one sitting. I have no idea how much more I can earn if I add up to 30% commission.

‘After all, competition is always right.’

For reference, the value of the Unsan Gold Mine is $250,000.

In other words, the amount that can take over hundreds of Unsan gold mines.

Even if I threw the bait without needing to do anything, the situation was being sucked into the black hole by itself. And I decided to spur this sucking black hole.

“Director.”

“Yes.”

“Have you ever heard of a dreadnought?”

“If it’s a dreadnought, isn’t that the infamous battleship? I heard that you destroyed the former Spanish Navy.”

“Yes, that’s right. But what if we could push a dreadnought into the Qing Empire?”

“Is the North Sea Fleet also a dreadnought in the Sino-Japanese War? It’s really invincible. If you can push it to Shanghai, you don’t have that much strength… I guess.”

Societe General’s director widened his eyes as if torn in an instant.

I replied with a smile.

He is a strong ally who will help you with your collection.

Will the risk be greatly reduced?

so.

Kill each other from now on.

I’m on the dollar side.

***

“Heh heh heh heh heh heh…”

With the advice of Societe General, the Whittinger bank’s board rushed frantically to HSBC’s Shanghai branch. If this is the case, Woori Bank will survive only by sweeping out as many of the limited currency swap contracts as possible.

I have to sweep up the other party’s contract so that the rest will go bankrupt and I will survive.

This is not only an opportunity to kill Qing’s banks, but also a golden opportunity to kill its foreign banking rivals. After this event, the total amount of silver ingots held by each bank will re-order the banks.

Who doesn’t have a currency swap contract?

You will be slaughtered by the shock of panic.

To kill others.

i have to sweep it all

“Chairman! Chairman! Let me see for a second!”

The directors of dozens of banks who had already noticed were flocking in. The entrance of HSBC Shanghai branch was already crowded with people.

Whittinger’s director felt his blood cool.

The words bankruptcy, bankruptcy began to stir in my head. The Whittinger Bank in France is huge, so one branch in Shanghai will not go bankrupt.

“no…..”

But what about you as a director of the Shanghai branch?

career?

Directors look high, but in the end they are contract positions. He screamed and stretched out his hand and ran towards him.

“no!!!!”

my career.

I have to get one more contract to live.

＜ Shanghai Panic. (1) > end