Exploiting Hollywood 1980

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 collapsed. The stock markets of about 19 countries fell 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 relative decline, only half of ours. "

Simmons' fund, where Donna is a member, has experienced 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 I first joined the industry, I was able to watch a stock market crash that was comparable to the Great Depression, but I didn't actually lose money in it. It was a rare experience for her to work tirelessly until midnight.

"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. Everyone in Hollywood today is talking about the stock market crash. It’s as if they care more than Wall Street and are professional stock traders.

“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.

This should not be a prelude to the Great Recession. Our American companies are all making very good profits. "

"It's just a big drop without any sign. The people here are a little abnormal." Ronald saw that the mental state of ordinary people in Los Angeles was a little wrong. The stock market has been in a good bull market for the past two or three years. Many people have invested their retirement capital in an attempt to increase their value. The impact of the stock market on the public is actually very large. It is far from being comparable to the proportion of stock investors during the Great Depression.

"If there were signs of a stock market crash that everyone could see, it wouldn't be a stock market crash. I'm talking about one person's opinion here. I heard that when the Great Depression started, 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 total 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."

"What do you mean?" Ronald heard that Donna had her own thoughts on the stock market crash, and he took it a little seriously. This cousin has been smart since she was a child, and the advice she gave her before has produced good results.

I'd rather 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 made some observations of her own. 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 can place orders and complete buy and sell transactions 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 transactions 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 the stock market this morning was affected by the London Exchange. When the market first opened, many globally deployed funds had to sell stocks today to obtain the required positions because they did not complete delivery on the London Stock Exchange yesterday.

But everyone uses computer programs to trade, so there is a rush to sell. Within a few dozen seconds after the market opened, there was a large amount of selling, resulting in many more selling orders than buying orders.

This caused a short-term decline in stock prices. After the 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 was originally sufficient became insufficient due to the rapid decline in stock prices, and the automatic selling order continued to be triggered by the program. Just like that, the vicious cycle began to reinforce itself. It fell, the position was not enough, the program automatically sold, and the decline continued.

"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 was also very developed. They could manufacture all chips and accessories from CPU to memory. There was 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 Federal Reserve. When our stock market fell unilaterally, their officials had already had tea with the four major securities brokerage companies 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.

"Moral persuasion, what's the use?" Ronald didn't believe that the Japanese would be moral 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 anxious."

"I forgot, oh my 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 is really hard to say whether there is still confidence that the stock market will stabilize and rebound tomorrow.

Roger Corman finally called, having lost a lot of money on his stock market investments. Coleman was very embarrassed. The cash he had available already had problems with the original filming plan. Coleman proposed postponing the filming of "Ecstasy" until he could adjust the funding for the film.

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. When the stock market is in turmoil, a salary of US$5 million seems so attractive.

Bruce Willis really wants to postpone filming until next year so that he can get a huge sum of 5 million. Otherwise, next year, this kind of good thing may not come around.

The most anxious one is Twentieth Century Fox. One of their bosses, Barry Diller, personally called Ronald and asked him to make the movie as planned.

He specifically proposed 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 requirements to modify the script and participate in this movie.

"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 has changed dramatically, and Joel Silver desperately hopes to unify his position with Ronald. So just come to 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 Twentieth Century Fox has always relied heavily on Wall Street's leverage financing. After the big boss from Australia bought Fox, he used it as collateral to borrow large amounts from 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 to film Cleopatra. That was 44 million in 1963."

"Did this movie make money?" Ronald was surprised. Let alone 1963, even a large-scale production of more than 40 million US dollars is still very risky.

"Thanks to Elizabeth Taylor and her scandalous affair with Richard Burton, audiences flocked to theaters to see Taylor flirt with her lovers 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 Tower, and now it seems that the renovation progress is coming to a halt."

"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. .

"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 on Wall Street regardless of the low valuation. This old slick guy's sense of smell is really keen. Although the valuation is a bit low, he can't raise financing now.

In difficult times, those with cash 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 can be replaced, but it is not easy to replace such a rich and popular director.

…

“Consistent with its responsibility 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, Federal Reserve Chairman Alan Greenspan began giving a televised speech. He wears small round glasses and looks a bit like the famous Hollywood director Woody Allen. Like Woody Allen, Greenspan is also a musical instrument enthusiast and has a professional saxophone playing level.

"Federal Reserve sources said that this brevity was 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 watching the TV screen, and Ronald did not blame them. It was related to everyone's net worth, and there was no way to avoid paying attention to such a big matter.

The stock index continues to rise. By noon, looking at the momentum, it will be able to recover less than half of yesterday's loss before the market closes today.

"Let's go, it's almost done here, let's go to the hospital."

Seeing that the trading volume became smaller at noon and the exponential curve lay 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 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 that people of Italian and Jewish descent should adopt that kind of etiquette. 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, who 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. This was not the first time that Niceta had a child. He had a child with his ex-wife. But it was Paula's first time giving birth.

"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 prepared by the studios have been suspended. They don't know when they can resume."

"Please stay with Paula. In this situation, we can only take a break. I hope I can rebound a little more this afternoon. I can't come back even half."

"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 working as a model in New York full-time. 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."

…

Back home, Ronald was about to call his aunt to report on his vacation to New York. The news on the TV started broadcasting 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.

With the news of the Federal Reserve’s major unconventional measures in the news, the Dow Jones Index began to turn downward again...

Then...continue to move down, losing all the lost ground recovered in the morning, from green to red.

"The Fed began to act as a lender of last resort in response to the crisis. Providing liquidity through open market operations and morally persuading banks to lend to securities companies were the last steps. Greenspan fired all the bullets at once."

The guest economist looked dejected, 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 any stocks, did you?" Ronald looked at Little Bud's uncomfortable look.

"I didn't buy it, but Lucy did. We were planning to save up for the wedding."

"It's okay. If you have any difficulties, just tell me directly."

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 for 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 that 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 take the phone, invited Ronald to get together next time he went 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 so much anymore. 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. The Stock Exchange announced that the market would be closed until the weekend.

On the third day, the stock market continued to fall, but at a much slower pace. 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 1987 Saint Laurent new clothing conference.

At least the beauties in the fashion industry can still laugh at themselves.