It was almost early in the evening before Donna called again to report that everything was safe.
"Today, all the stock markets in the world have collapsed. The stock markets of about 19 countries have fallen by more than 20%. The trading system in Britain has not yet fully recovered, and the stock markets of New Zealand, Australia, and Hong Kong have also continued to fall.
That fell below today's Dow Jones decline...
The crisis is spreading, and it seems that only Japan's Nikkei Index has a smaller decline, only half of ours."
The Simons fund where Donna is a member has seen relatively good declines. Their fund does not use super leverage, so it has not encountered the crisis of margin liquidation.
Donna is more excited now. When she first entered the industry, she was able to watch a stock market crash that was comparable to the Great Depression, but she didn't actually lose money in it. It made her work tirelessly until midnight. This kind of experience is very rare.
.
"What happened? Our economy isn't as bad as it was during the Great Depression, right?" Ronald couldn't figure out what was going on. Today, everyone in Hollywood was talking about the stock market crash. It seemed like they were more concerned than Wall Street.
, like a professional stock trader.
“Some people feel that the Prime Minister’s tax increase proposal has triggered panic. There will be no tax benefits for every capital gain in the future, and tax deferral is no longer feasible.
Some people also said that it was the hurricane in London that caused many yesterday's transactions to not be completed, causing panic.
It shouldn’t be a prelude to the Great Depression, our American companies are all making very good profits.”
"It's just a big drop without any sign. People here are a little abnormal." Ronald saw that the mental state of ordinary people here in Los Angeles is a little wrong. The stock market has been in a good bull market in the past two or three years, and many people have retired.
Capital is invested in an attempt to increase value. The scope of the stock market's influence on the public is actually very large, far from being comparable to the proportion of stock investors during the Great Depression.
"If there are signs of a stock market crash that everyone can see, it is not a stock market crash. I am here to speak for myself. I heard that when the Great Depression began, it was also so inexplicable that no one could explain the reason."
"Ah... no way? Is there really going to be a Great Depression? Is this a general collapse that is unavoidable when society develops to a certain stage?" Ronald was also a little panicked.
"You sound like Mikhail, the general secretary-general of the Soviet Union, hahaha." Donna was amused. "Actually, I have an idea. This stock market crash seems to be the result of technological progress."
"How do you say this?" Ronald heard that Donna had her own thoughts on the stock market crash, and he took it a little seriously. This cousin had been smart since he was a child, and the advice he gave him before had good results, so he wanted to hear her thoughts.
"I'm not sure, but I discovered a phenomenon when I was hanging out with various investment banks and fund managers on Wall Street..."
Donna shared some of her observations. Since the 1980s, Wall Street investors have begun to use computer technology to make profits for themselves. Many fund managers have begun to use a tool called program trading.
Originally on Wall Street, those traders with quick hands and good connections were the most popular. They could place orders, buy and sell as quickly as possible in the ever-changing stock market.
But computer programs are faster than people. They have no emotions or hesitation. As long as the set conditions are met, they will execute the planned trading plan without emotion.
Therefore, many funds that engage in hedging trading have taken a fancy to the benefits of these computers, which are faster and more disciplined than humans, and have begun to set up a large number of program transactions. One of the major functions is to stop losses.
As long as the stocks and stock index futures on their plates fall by a preset percentage, they will start selling automatically.
But this morning's stock market was affected by the London Stock Exchange. When the market first opened, many global funds had to sell stocks today to obtain the required positions because they did not complete delivery on the London Stock Exchange yesterday.
However, everyone uses computer programs to trade, so there is a rush to sell. Within a few dozen seconds of the opening, a large number of selling orders resulted in many more selling orders than buying orders.
This caused a short-term drop in the stock price. After the stock price dropped to 5%, the trading program in New York began to trigger and continue to automatically sell stocks.
Gradually increasing the position in this way, the position that could originally be satisfied became insufficient due to the rapid decline in stock prices, and the program continued to trigger automatic selling. In this way, the vicious cycle began to strengthen itself, falling, and the position was not enough, the program automatically sold, and continued to fall.
"It's like when a crowd of people is in danger, they start running around and trampling on each other. There is a term in economics to describe this, called herd intuition." Donna explained to her lay cousin.
"What you said makes sense. Then why did the stock market in Japan have the smallest decline? Don't they use program trading?"
Ronald felt that there was something unreasonable about Donna's theory. The computer industry in Japan is also very developed. They can manufacture all chips and accessories from CPU to memory. There is no reason not to use computers to trade stocks?
Why did Japan's Nikkei Index only fall by half of the Dow Jones Index?
"It's because Japan's stock trading system is relatively advanced. Their stock market has an automatic protection mechanism. If a stock falls by more than 10% or 15%, trading will be automatically suspended. International investors there do not allow naked short selling.
, the margin for short selling orders will also be required to pay a larger amount as the price changes.
And their Ministry of Finance is more powerful than our Treasury and the Federal Reserve. When our stock market fell unilaterally, their officials had already gone to the four major securities brokerage companies to drink tea and "morally" persuaded them to buy stocks.
, to prevent the market from falling further."
Today, due to the time difference, Donna watched the performances of multiple securities markets around the world without interruption.
This chapter is not over, please click on the next page to continue reading! "Moral persuasion, what's the use?" Ronald didn't believe that Japanese people would still talk about morality at this time.
"It was quite useful. After drinking tea, they began to buy Japanese Telegraph and Telephone Company shares in large quantities, and the Nikkei Index stabilized as a result."
"Okay." Ronald didn't expect such "moral" persuasion. "Remember to call your aunt. She can't get through to you. She's so worried."
"I forgot, God, I called her right away." Donna hung up the phone.
The more Ronald thought about it, the more he felt that Donna's analysis made sense. If her judgment was correct, then the major funds could actually slowly clear up the messy selling orders tonight. If someone came out to restore confidence tomorrow, the stock market could be stabilized.
No more falling.
But confidence, who can say for sure?
Ronald received too many calls today and everyone was in a panic. It's really hard to say whether we still have confidence that the stock market will stabilize and rebound tomorrow.
Roger Corman finally called. His investment in the stock market suffered heavy losses. Corman was very embarrassed. The cash he had available already had problems with the original filming plan. Corman proposed,
The filming of "Ecstasy" must be postponed until he adjusts the funds for filming.
Ronald agreed. This kind of joint venture project between two companies can only be temporarily postponed when encountering such changes.
Bruce Willis's agent also called Ronald's agent Niceta to reconcile. At a time when the stock market was in turmoil, the salary of US$5 million seemed so attractive.
Bruce Willis really wants to postpone the filming until next year so that he can get a huge sum of 5 million. Otherwise, by next year, this kind of good thing may not be available.
The most anxious one was Twentieth Century Fox. One of their bosses, Barry Diller, personally called Ronald and asked him to shoot the movie as planned.
He specifically suggested that Fox had a good relationship with Harrison Ford because of Star Wars back then. If necessary, he could personally come forward to persuade Harrison Ford to give up some of his requests to modify the script and participate in the film.
"Ronald, have you finished the phone call with your cousin? Will it still fall tomorrow?" Joel Silver looked up and asked him while eating the takeout ordered by Ronald in the living room outside.
The money Silver earned from the previous movie "Lethal Weapon" has not yet been repaid from the movie theater, so he has not bought any stocks or radical financial products based on the securities market. He is another one of the many wealthy people in Hollywood.
A relatively detached person.
The situation changed suddenly, and Joel Silver desperately hoped to unify his position with Ronald. So he came to meet Ronald for an interview.
"I don't know, Donna said it's unlikely that it will continue to fall and become a Great Depression." Ronald nodded to Silver, picked up a piece of salami and ate it, "What do you think happened to Fox? Barry
If Diller is so anxious, is Fox also speculating in stocks?"
"They're not speculating in stocks, but they can't get financing on Wall Street." Jolfer sighed.
Wall Street suffered heavy losses this time, and 20th Century Fox has always relied heavily on leveraged financing from Wall Street. After the big boss from Australia bought Fox, he turned around and used it as collateral to make large loans to banks and increase leverage.
With the money he received, he began to buy local television networks in America. Financially speaking, Fox was already overwhelmed.
"You mean, they're going to go bankrupt?" Ronald asked.
"It's not so fast. Twentieth Century Fox has always been like this. When Hollywood faced the television crisis, they also made a desperate move and invested 44 million US dollars in filming Cleopatra. That was 44 million in 1963."
"Did this movie make money?" Ronald was surprised. Not to mention 1963, even a large-scale production of more than 40 million US dollars is still very risky.
"Thanks to Elizabeth Taylor's scandalous affair with Richard Burton, audiences flocked to movie theaters to see Taylor flirt with her lover on screen, saving Fox from bankruptcy."
"I see, they haven't had any big productions lately, right? Why are they so tight on cash?"
"It's not like they've made any blockbusters, but they invested a lot of money in building the Fox Building, and now it seems that the renovation progress has stopped."
"Well...building a house is also a money-making giant." Ronald thought of Minahan Golan, his brother's cannon, who also started to build his own building. Although the scale and number of floors were not as good as Fox's, this time it was still quite impressive.
Already.
"In that case, didn't that old cunning guy Kerkorian slip by again?" Ronald then thought of the casino tycoon who was regarded as an unlucky guy just a few days ago.
Before the stock market crash, he raised nearly 90 million in Wall Street regardless of the low valuation. This old slick guy really has a keen sense of smell. Although the valuation is a bit low, he can't raise money now.
In difficult times, those who have cash in their hands are the winners. Many people who are short of cash have to exchange good projects for cash if they want to survive at this time.
"Let's wait, we still don't know what will happen tomorrow?" Ronald felt that at such a turbulent time, it was not appropriate for him to make big decisions before entering the market.
"What if Harrison is willing to compromise?" Joel Silver still misses Harrison Ford.
"I think his finances are quite stable, unlike Stallone who really had problems." Ronald felt that Ford would not compromise and he did not spend money like Stallone.
"What if he wants to?"
"Then I will quit directing, and we will find a suitable director to make a different story."
"No, no, no, let's have another look." Joel Silver saw that Ronald was unwilling to compromise. In comparison, Ronald's status to the project was more important. The star could be replaced, but this kind of
It is not easy to replace a director who has money and charisma.
This chapter is not finished yet, please click on the next page to continue reading the exciting content!...
"Consistent with its responsibilities as the nation's central bank, the Federal Reserve today affirmed its readiness to serve as a source of liquidity to support the economy and financial system."
Early the next morning, before the New York Stock Exchange opened, the Chairman of the Federal Reserve, Alan Greenspan, began to deliver a televised speech. He wore small round glasses and looked a bit like the famous Hollywood director Woody Aye.
Alan. Like Woody Allen, Greenspan is also a musical instrument enthusiast and has a professional level of saxophone playing.
"Federal Reserve sources said that this brevity is carefully considered to avoid misunderstandings. We have learned the lessons of the Great Depression in history and tried our best to avoid liquidity depletion..." The hosts and guests on the TV station began to analyze Greens
Pan's speech.
"Is this good news? Will it rebound?" Ronald and his agent Richard were watching the live TV broadcast in the office.
Countless people like them are also paying attention to the latest actions of the Federal Reserve.
"It's open, it's going up, it's going up..."
The stock index on TV bounced a few times, turned green, and started to rise following the good news before the market opened.
After more than two hours, the Dow Jones Index began to rise and gradually began to recover yesterday's losses. It had already corrected by about 100 points.
The employees in the company were all looking at the TV screen, and Ronald didn't blame them. It was related to everyone's net worth, and there was no way people wouldn't pay attention to such a big thing.
The stock index continues to rise. At noon, depending on the momentum, before the market closes today, it will recover less than half of yesterday's loss.
"Let's go, it's almost done here, let's go to the hospital."
Seeing that the trading volume at noon was getting smaller and the exponential curve was lying lazily motionless, Ronald took Richard with him and went to the hospital to visit Paula Wagner, who had just given birth to a child.
"The stock market has rebounded this morning." Seeing Niceta holding his wife Paula's hand in the hospital, Ronald whispered softly in his ear.
"Thank God." The two brokers and their husbands breathed a sigh of relief. Many of their clients were severely damaged by yesterday's plunge, and now almost all projects are at a standstill. If it still falls today, their situation will be very different.
That's very bad.
"Boy, what's your name?"
"Call Zachary" Paula Wagner looked very tired on the hospital bed and could not speak.
"Good name", Ronald also didn't know what kind of etiquette should be adopted by Italians and Jewish descendants. He asked Richard but got no answer, so he simply went to Chinatown to buy some gifts.
"When I went to China, they would eat these red eggs when they gave birth to a son. I happened to find someone from Chinatown to make some."
Ronald gave the red egg to Niceta and his wife, and they happily accepted it.
"Thank you", Paula wanted to get up and say thank you.
Ronald quickly asked her to lie down, "Did Tom give you a cake?"
"Hahaha...that's Christmas cake." Paula was very tired and grinned.
"It seems that she is in good spirits. Take a good rest, Paula." Ronald quickly asked her to lie down and rest, and he and Niceta came out to chat.
"How is the situation in Hollywood now?" The two leaned against the wall and smoked. It was not the first time for Niceta to have a child. He and his ex-wife had children before. But this was the first time for Paula to have a child.
"It's terrible. Stallone is at risk of going bankrupt. Many stars have also called and cried. What's worse is that all the major productions planned by the studio have been suspended. They don't know when they can resume."
"Please stay with Paula. In this situation, we have to take a break. I hope we can rebound a little more this afternoon, but I can't come back even half of it."
"In that case, I think Stallone can keep his house." Niceta also smiled and turned back to the ward.
"Do you want to take a vacation to relax?" Richard accompanied Ronald. He only had Ronald as his main client, so he was not as worried as Niceta.
"Where to go on vacation? What are your ideas?" Ronald knew that Richard was very thoughtful and considerate.
"Do you remember the model girl in the Pepsi advertisement?" Richard adjusted his glasses, "Christie Turlington is now a full-time model in New York. She was selected by Eve Saint Laurent (YSL) to be the model for the latest season.
main model.
"The designer Mr. Saint Laurent has always wanted to invite you to attend the press conference and walk in his fashion show if you have the opportunity. He is very optimistic about your modeling career."
"Hahaha..." Ronald laughed for a while and began to miss Turington's shy smile again.
"where?"
"In New York, if you're interested..."
"I can be a spectator, but I can just be a model."
…
After returning home, Ronald was about to call his aunt to report his vacation trip to New York. The news on the TV started to broadcast again.
“Today, the Federal Reserve injected $17 billion into the banking system through the open market—an amount that exceeds 25% of bank reserve balances and 7% of the entire nation’s monetary base
Ahem..."
The female host of the show suddenly started coughing while she was talking, and her tone even trembled a little with fear."
"It fell, it fell..."
Little Bud, who stayed with Ronald and also paid attention to TV, couldn't help but say it.
I saw that with the news of the Federal Reserve's major measures to break the rules, the Dow Jones Index began to turn downward again...
Then...continue to move down, losing all the lost ground recovered in the morning, changing from green to red.
"The Federal Reserve began to act as the lender of last resort in response to the crisis. It provided liquidity through open market operations and morally persuaded banks to lend to securities companies. This was the last step. Greenspan fired all the bullets at once."
The guest economist looked depressed, and the stock market reacted like a car accident victim who was sent to the emergency room. After receiving a cardiac injection, his blood pressure stabilized for a while, and then continued to drop.
"You didn't buy stocks, did you?" Ronald looked at little Bud's uncomfortable look.
This chapter is not over yet, please click on the next page to continue reading the exciting content! "I didn't buy it, but Lucy bought some. Originally we planned to save money for a wedding."
"It's okay. If you have any difficulties, just tell me."
Ronald patted Little Bud on the shoulder. The bride's father was originally responsible for the wedding, but the black girl's father...
"Ring ring ring ring..."
At this time, the phone rang, and a female voice said to Ronald, "Mr. Li? Here is your international long distance call from Xiangjiang."
"Hello? This is Ronald." Ronald waited for a while, and there was a click and the line was transferred to the caller's line.
"Luo Sheng, this is Aaron." Jackie Chan's voice came from the phone.
"Hello Jackie, do you have anything to do with me?"
"Sister Jiao, come and ask me, Luo Sheng doesn't understand Cantonese."
"Mr. Luo, I am Aaron's girlfriend Gillian. Aaron wants me to ask you whether the stock market will fall starting tomorrow? The Hang Seng Index here has fallen a lot..."
"I don't know about this either. The price here has dropped by nearly 25% in the past two days."
Ronald heard the tremor in the voice of the speaker opposite.
"Hey, forget it, I'm a great director, not a stockbroker." Jackie Chan came over to answer the phone, invited Ronald to get together next time he goes to Asia, and then hung up the phone.
"Don't worry, Aaron, you don't have much money in the stock market anyway..."
"But it will be miserable for some people... Hey, forget it, I can't control that much anymore. I'll let Aqiang sell it tomorrow."
This stock market crash, in this era of deep international financial integration, has transcended the scope of the country and spread to all parts of the world.
Jackie Chan had no chance to sell her stocks when the market opened, and the Stock Exchange announced that the market would be closed until the weekend.
On the third day, the stock market continued to fall, but the speed slowed down a lot. Staying in Hollywood lifeless, Ronald didn't want to see so many depressed faces, so he got on the plane arranged by Richard and went to New York to attend the Saint Laurent 1987 exhibition.
New decoration launch conference.
At least the beauties in the fashion industry can still laugh at themselves.