1928: The rise of giant merchants

The big drop on October 16 was like a heavy punch, hitting all speculators in the face.

By the time the market closed in the afternoon, the Dow Jones Index had fallen to 302 points and was about to fall below the 300 mark!

Those high-priced stocks also opened lower and moved lower one after another, languishing all day without any sign of rebound.

General Electric and U.S. Steel plummeted, from the opening prices of $172.5 and $182.6 to $144.7 and $159.8 respectively!

“Bounce back from bottom, suitable for bargain hunting!”

It’s just a lie!

Countless speculators are thinking this, but the funds in their hands have not loosened up at all.

As Ye Luo expected, if you don’t evacuate in time in early October and are still greedy for the last wave of recovery, you will eventually be unable to leave due to a large amount of sunk costs.

In this way, people and money were lost.

Therefore, data released by the New York Stock Exchange after the market closed on October 16 showed that trading volume did not fluctuate much, and the overall market value of U.S. stocks remained stable at around US$40 billion.

These people are mad at the stock market in their minds, but they are very honest physically and continue to invest money in it, hoping to get their money back.

Early in the morning on October 17, a large number of speculators gathered outside the New York Stock Exchange and Amax. They almost bought up all the newspapers of the newsboys. Some people even carried radios to listen to the latest economic news at any time.

The books and articles of famous economics and finance experts have been widely reprinted and read, and the private lectures and symposiums held by them in libraries and other places were packed with seats.

You must know that more than a month ago, this kind of symposium had to give out gift packages and meals in order to attract the audience.

People's frantic desire to understand the current economic situation reflects their uneasiness.

Later, these small uneasiness hidden deep in my heart were further magnified.

The market will open on October 17th.

The Dow Jones index fell below 300 points for the first time, reaching 299.1 points!

This was tantamount to a bombshell, which directly caused many speculators to break through their defenses.

Looking at the stock market, not only mid- to high-priced stocks have plummeted, but also low-priced stocks have begun to weaken. The overall market has obviously declined a lot.

This is the most typical bear market.

It is still unclear how big this bear market will be and how long it will last, but the money invested yesterday is almost confirmed to be locked up.

Forget about the earlier share capital, it has been tied to those stocks for a long time, and everyone will prosper and lose.

Many people feel very heavy, but the more times this happens, the harder it is for them to accept the facts.

News of the U.S. stock market reached the White House early in the morning. Hoover was sweating profusely and convened another emergency temporary meeting. This time he no longer hid it, and simply stated that he wanted the Treasury Department to cooperate with the Federal Reserve to save the stock market.

All the officials complained endlessly, but there was nothing they could do.

This is the U.S. stock market with a total market capitalization of US$40 billion!

What is the concept of US$40 billion?

Last year was a bumper year for the United States, with total government revenue of $5.9 billion.

If these officials cannot get 6 billion in revenue to save the 40 billion market, you might as well just let them die.

After the order was issued, these Ministry of Finance officials could only continue to exert downward pressure and let their subordinates rack their brains to save the market.

However, these middle- and lower-level officials still have their money locked up in U.S. stocks. Do you expect them to find a way to save the market?

With that method, they had already settled their own money.

With such layers of pressure, the final pressure is naturally placed on each enterprise.

Ye Luo didn't expect that a Chinese company like Hongxing United Group, which had just been established and was at the bottom of the contempt chain among American companies, would receive similar orders!

Huixin couldn't laugh or cry with the information. The Federal Reserve asked Hongxing United Group to continue to increase its efforts to discover potential customers, and it would be best to create another "fairy stock myth".

However, in fact, the penny stock department has been officially disbanded by Huixin.

Compared with the death struggle of the New York Stock Exchange, Amex has plummeted, falling from its original high point to dust in an instant, and returned to its original appearance.

When the market closed on October 17, Amax officially announced that a total of 176 stocks had been delisted!

These companies are the kind of companies that sell dog meat under the false pretenses. When the relevant departments went to check, no one was there.

The hard-earned money of the people at the bottom has been wasted in this way.

Originally, the investment in penny stocks was not much. However, the myth of penny stocks was so perfect that these people became so greedy that they even started buying penny stocks for tens of thousands of dollars!

Nowadays, any family with an annual income of US$2,000 can be considered middle class in the United States. If such an intensive investment loses money, it is tantamount to direct bankruptcy.

Things are not going well within Hongxing United Group either.

The deficit of US$19.19 million was placed on the stage, and everyone in the finance department saw it. No one dared to say anything, but everyone knew that the final outcome would be "death".

Later, Liu Xuenong continued to invest money in the stock market, and he had already neatly invested the 26 million US dollars he brought back from the Republic of China, plus the only 4 million left in Hongxing's book, and the 8 million provided by Edward and others.

A total of 38 million US dollars was invested in the stock market. Looking at it like this, it would be difficult to have even a few million left.

Where did the money go?

Naturally, it went into Ye Luo's pocket and became part of his huge capital for shorting high-priced stocks.

After the market closed on October 17, the trading floor of the New York Stock Exchange was completely silent. Looking at the Dow Jones Index that had dropped to 291.4 points, speculators felt more distressed than anyone else.

On the contrary, a few short sellers such as Ye Luo made big profits.

Looking at the falling stocks, it was like bundles of dollars entering my pocket, and I felt very comfortable.

At this point, they no longer doubted Ye Luo's vision, and followed the same pattern to build short positions, striving to short all the best 100 high-priced stocks before the 20th!

Livermore even proposed to move mid-price and low-price stocks, which was approved by Ma Murray, but Yello strongly opposed it.

The reason is simple.

They are not the only ones who are short-sellers. Others must drink some soup. If you only care about yourself, the big butcher knife will fall on your neck in the end.

They hold 5 billion share capital and try to compete with the 40 billion stock market. That is a fantasy.

He was going to annoy everyone and fight to the death. Ye Luo really didn't have the confidence to resist.

There’s no need to penny wise and pound foolish.

Fortunately, Ye Luo's prestige was high enough, and several people still adopted his suggestion, stayed put, and improved their concealment to prevent others from seeing through it prematurely.

This decline lasted for three days in a row.

Fortunately, there are still more leeks coming in. It turns out that the original leeks are not willing to die until they reach the Yellow River, and they insist on fighting to the end.

Coupled with the rescue actions of various banks and enterprises.

He just barely managed to hold down the decline of US stocks!

Livermore and the others are actually very satisfied.

This has almost reached the limit of short-selling games. The opportunity to make so much money at one time may only happen once or twice in decades.

But Ye Luo told them clearly.

It's not over yet!

"The U.S. stock market will collapse, and it will collapse to the point of triggering a global economic crisis!"

This was the general tone of his earliest papers.

But no one still believes it can be so scary. (End of chapter)