1928: The rise of giant merchants

It is estimated that about 500,000 Americans held securities before World War I.

By 1929, this number had risen to 20 million.

It is unlikely that all of these individual investors are familiar with the basic principles of stock valuation.

At the end of 1920, there were only 40 investment trust companies in the United States, and their market influence was minimal.

However, between 1927 and 1929, in less than three years, 700 investment trust companies and investment holding companies were established to meet the public's demand for investment management expertise.

In 1929 alone, 265 new investment trusts were established, with subscriptions totaling $3 billion.

In the past September, half of the 1.2 billion shares of capital on the New York Stock Exchange were raised by investment trust companies.

During the market's peak, the industry raised at least $8 billion.

Many trust companies indulge in extremely risky investment practices, such as buying illiquid stocks, buying stocks directly from management, manipulating the prices of the stocks they hold, using funds to buy stocks that failed issuances by related parties, high debt ratios, and allocating stock dividends to Managers and investments are too concentrated, etc.

Various problems are piling up. Some people are aware of them, and some people haven't noticed them yet, but these strange voices are all covered up by the high stock market prices.

As long as you stand up and say something bad at that time, you will become a laughing stock like Ye Luo and be ridiculed by the financial tycoons on Wall Street——

No matter who you were before, how many achievements you had, or how famous you were.

And this fictitious U.S. stock market bubble is finally about to burst.

The FBI intervened to investigate the illegal listing of Hartley Company on the New York Stock Exchange, which instantly caused a sensation in the American financial circle.

Regardless of whether Hartley Company really broke the law or whether the New York Stock Exchange's trading department really had private transactions with them, it seems from the mere occurrence of this incident that the US stock bubble problem has been entrenched and is about to be put on the agenda.

When the market closed on September 20, the Dow Jones Index was still hovering around 350 points. Many stock prices fluctuated slightly, but they were all within the market range. Even the stock of Hartree Company, which had fallen a lot, did not let speculators Lose confidence.

But now.

There are already many people who can't wait until tomorrow.

Before the conclusion of the FBI's investigation came out, Franklin, then the governor of New York, held a press conference and sadly informed the public that the British investment giant Hartree Company, which was preparing to enter the steel industry, was suspected of forging bills and had debts of several billion. Tens of millions of pounds, and the boss, Clarence Hartley, was suspected of bribery and financial fraud, and was restricted from credit by major banks, and declared bankruptcy that afternoon.

The London Stock Exchange has delisted Hartley Company, and the New York Stock Exchange is still conducting a thorough investigation, but it is obvious that the company's shares will not be visible tomorrow.

The delisting of Hartley Company will not cause much harm to the New York Stock Exchange. How much money can a British company that is not even considered top-notch in the United States take away?

The impact of its delisting is mainly a magical attack, which makes those wavering speculators feel the panic of a possible bear market. Once the will of these people is shaken, the stock market will usher in terrifying oscillations.

Livermore and others were already preparing to go short, but Ye Luo told them to wait a little longer and not to rush.

Because the U.S. stock bubble has not yet reached its true bursting stage.

Why do you say that?

On the night of September 20, waves of people rushed to save the market.

Just like when Ye Luo and Huixin shorted U.S. Steel, there will always be predators who will come out to stabilize the morale of the military.

Previously it was Citibank.

Leading the charge this time is the Harvard Economic Association.

As a graduate of Harvard University, Ye Luo was expelled from his "student status" by his classmates and kicked out of the Harvard Economic Association due to his previous wrong remarks.

Many members of the Harvard Economic Association jointly declared: "Only after money becomes excessive and banks have to encourage credit expansion, the U.S. stock market may oscillate. From the stock market conditions in September, we can see that stock market trading is currently entering a stage of readjustment. In the mid-term of the stock market, stock prices will inevitably decline, but it should not cause a significant drop, nor will it turn into a Great Depression in the stock market."

On the other hand, speculators with strong financial resources invariably laughed at the timid retail investors: "You are so conservative! How can you make big money if you are so timid?"

These people are represented by William Durant, Arthur Carton, the Fisher brothers, and John Raskob. They buy crazily regardless of the stock price. They believe that the current stagnation in national production is only temporary and will not be affected. The economy will improve soon, so there is no need to worry.

Since you are worried that the delisting of Hartree Company is a sign, then we will buy it for you!

Hoover had just returned from a pleasant weekend at his Rapidan River camp into the dizzying heat of Washington.

After hearing this shocking news, I was surprised that the Bureau of Investigation had bypassed me and went to the New York Stock Exchange to investigate privately, and at the same time, I convened an emergency cabinet meeting.

The meeting was said to have lasted from 10:30 pm to 2 am.

There will be no record of what happened at this meeting.

Discussions could turn to arms talks with Britain, or some thorny issue of adjusting tariffs, or the risk of war between China and Russia over the China-Russia railway.

No one knew what they said until six o'clock in the morning the next day, when it was dark, Hoover distributed the meeting charter and the results of the cabinet discussion to other senior White House officials via text message, and gave some instructions on the U.S. stock market issue.

Hoover's comments took a turn for the worse.

He now claims that the speculative frenzy in the stock market is an unhealthy phenomenon.

He has supported the Federal Reserve's efforts to stem (ineffectively) the flow of credit to speculation, and he shares the concerns of many about the possible consequences of a collapse in stock prices.

But by now, the surge is completely out of control unless very drastic measures are taken, which could lead to the kind of collapse that was originally intended to be avoided.

Fortunately, the bankruptcy of Hartley Company has sounded the alarm to everyone. Stock investment should not be so blind and prosperous, and people should look at this market rationally.

The White House will cooperate with the Federal Reserve and many other departments to resolve this stock market risk issue.

Hoover expressed his belief that the storm of speculation would probably subside on its own and everything would be fine.

Yelo read this nonsense in the New York Times at eight o'clock in the morning.

He was wearing pajamas, and Huixin snuggled lazily between his legs. Since Ye Luo officially took over these tasks, she has become very leisurely, and can finally enjoy the little happiness that a woman should have after giving birth.

She felt like the second young master's mistress. She liked this kind of life very much, except for the problem of breast enlargement that always appeared from time to time.

Huixin's only regret was that she couldn't breastfeed Li Siye by herself. She also had a headache about how to explain to her daughter that she didn't have a surname of Ye when she grew up.

As for work and the stock market, she is actually not very interested. With Ye Luo doing it, she is even more lazy to pay attention to it.

Seeing how attentively he was reading the newspaper, I crawled over, lay on his chest and watched curiously.

"It seems like the stock market is picking up again?" she asked with a smile.

No matter what, Hongxing United Group will lose US$19.19 million due to Hartley Company, and most of this money will flow into Ye Luo's pocket.

that's enough.

"Soon." Ye Luo smiled. (End of chapter)