Mediterranean hegemon

Hoover knew very well that the US$4.4 billion was not a whole order, but a collection of hundreds of companies and hundreds of intended orders, with profits ranging from high to low. If the crisis had not broken out and everything was operating normally, The overall net profit after tax should be around US$1 billion. If it is discounted by 20%, there will still be a little bit of profit, but the space is already very small.

However, due to the economic crisis, all raw materials including labor costs are falling rapidly. Let alone 20% off, 40% off can save capital, so he proposed 30% off, and the lowest acceptable is 65% off, so that he can explain to the business community - this But it was an amazing victory, involving millions of jobs.

But now Contini is counter-offering at a 30% discount, and it also includes the previous deposit. This is simply causing these large companies to lose 1 billion in turn. How can they tolerate this?

He said unhappily: "Calais, I came to see you in the hope of having a good discussion about cooperation with you, not just talking nonsense here..."

"Your Excellency, I am discussing cooperation with you on a business-to-business basis. If it is our personal relationship, for example, if you have any business that needs special care, I will agree without saying a word."

Hoover nodded, this attitude was not bad, and said: "That's okay, we all said calmly, 30% off is really too low..."

"That is because you are looking at the problem based on the current situation and come to the conclusion that 30% off is still low. I am looking at the problem based on the future. My logic is - the main commodities, raw materials and labor costs in the United States will see a substantial increase next year. If it falls, I estimate it will be cut by another third to half based on the current level. Do you believe it?”

Hoover shook his head: "How is that possible?"

"Don't believe it?" Contini smiled, "Let's look at the data... The delivery price of Libyan standard crude oil in September this year was US$1.46/barrel, which is very close to the storage selling price of US$1.5/barrel, and the following forward delivery prices are The price of some varieties is higher, for example, the price for delivery in December is US$1.54/barrel, which shows that the market was very optimistic about the market outlook at that time. Now, in November, the situation has reversed significantly. Do you know how much the delivery price has dropped to US$1.02/barrel? , and the price for delivery in June next year is even lower, only $0.84/barrel. The market has turned from bullish to significantly bearish, and I dare to assert that the price will fall to $0.75/barrel soon, which is equivalent to falling at the highest point. Half of it fell off.

Let’s look at silver again. It stands to reason that this commodity has a little currency value in addition to industrial uses, but it has still fallen sharply. The price of silver in the London market in September was 0.58 US dollars per ounce, and now it is only 0.45 US dollars per ounce. It will fall further. The signs are clear - you know, everything is down except gold.

Let’s look at the lira exchange rate. This is a very important indicator for me. At that time, the lira was 20 lira: 1 U.S. dollar. Now the market is 30 lire: 1 U.S. dollar. It’s not even possible to stop. If you look at the price of the U.S. dollar, it’s a 30% discount. , according to the lira price, it is 45% off! If I go by the 30% discount you said, it’s equivalent to the full price in lira! "

Hoover suddenly realized, and finally understood why the perspective of looking at the problem was so different: if these equipment were placed in the United States, the 30% discount would be too low, and the used goods would also be 10-20% off... But in Italy, the price is indeed Not low anymore. Can we say that the lira has nothing to do with American products? The president wants to transport the equipment to Italy for installation, commissioning, production, and sales. How could he turn a blind eye to Lira?

He automatically said, "Or should we devalue the dollar?"

"The U.S. dollar has depreciated. Compared to the price of gold, both the U.S. dollar and the pound have depreciated by more than 15%!" Contini shrugged. "The fact is not that the U.S. dollar has appreciated, but that other countries' currencies have depreciated more, causing the U.S. dollar to seem to be appreciating."

“Then should I strengthen my depreciation expectations to boost exports?”

"Sir, it's useless. Now it's not a matter of competitiveness, it's a matter of demand. If the United States doesn't buy Italian products, why should Italy buy American products?"

"I didn't set any restrictions on Italian products?"

"But didn't you say you want to raise tariffs to protect American jobs?" Contini spread his hands. "Even if you don't raise tariffs, no one will buy Italian products, because Italian products are the lifestyle of the middle class. Now How can we buy these things when our days are almost unsustainable? So it is not tariffs that restrict trade, but poverty that restricts trade..."

Hoover sighed: Contini was talking about Italy's problems, why not also talk about Britain and France's problems? Now that the crisis is coming, Britain and France are also trying their best to find solutions for their domestic industries. Therefore, the trade frictions faced by the United States will become more and more severe. Once it falls into a "tariff war" or a "trade protection war", the only premise is reciprocal trade—— British-American trade must be reciprocal, and French-American trade must also pursue reciprocity. But the problem is that the United States is larger than the United Kingdom, France, and Italy combined. How can there be reciprocity? This is simply not balanced!

"So, what you are saying is that if the United States wants to continue exporting to Italy, it must sell at such a loss-making price?"

"I'm not forcing anyone to sell me anything. Your Excellency, you and the business community must adjust their mentality. It's a buyer's market now. Currency and cash flow are the most important. Goods and equipment are not that valuable - just old goods. I can’t collect them all, so I have to be responsible for myself and my capital, right?” Contini smiled and said, “Didn’t you also say that all my men are buying second-hand cars?” , the price of new cars is more than 1,000 US dollars, and many of them have only been driven for 1-2 years, and now they are sold for more than 100 US dollars. Is it a loss? Of course it is a loss, but the family cannot survive without selling, so they must do their best to survive - —Survival is the capital for future comebacks, and the same applies to companies. How many of these Wall Street tycoons can survive the crisis? If they can’t survive, it will be bankrupt. At that time, it wasn’t the price that I said was the price. In today’s world, don’t argue about losses or profits. Now it’s time to talk about how to live!”

"But your price is too low and they won't accept it. I can help you get a discount of up to 40% off..."

"That's because they haven't recognized the situation yet, just like the stock has reached 450 points and is still boasting that it will rise - the market will educate them. Don't worry too much. They will eventually recognize the situation one day." Contini laughed. Laughing, "Actually, I am doing you a favor by purchasing old factories and bankrupt assets now. I have solved many practical problems for you. If I hadn't purchased them, most of these equipment could only be recycled at scrap iron prices - you have to know Even scrap metal has dropped by one-third!”

Hoover knew that this conversation would never go on: Contini wanted a floor price—it might come in the future, but not yet; Wall Street wanted a breakeven price—a little higher than the current market price. , this difference is too big, Hoover is powerless. Besides, what Contini said makes sense. He cleared up bankrupt assets first, which indeed reduced a lot of trouble for the government.

"Then I'll go back and do their work..." Hoover stood up and said goodbye, and asked quietly, "Give me a limit, what is the maximum I can pay? Don't say such hurtful words as 30% off."

Contini hesitated and repeated: "30% off!"

Seeing that Hoover was about to get angry, he added in a low voice: "The deposit is not included..."

Hoover breathed a sigh of relief: The deposit was 500 million. At least it raised the price to a little over 40% off. It was not easy. Although there is still a long way to go from 40% off to 40% off, it was a good sign after all, wasn't it?