Rebirth of the Financial Overlord

As soon as Soros returned to New York, he called Robert John.

Robert is a currency expert who is in the process of resigning from Bankers Trust to join the Soros Fund. Now, Soros is sure the lira will fall on Schlesinger's speech, but now that he's looking beyond that, it's time for more game-changing.

It is undoubtedly the best course of action to consult with a trusted currency expert now.

However, Robert John did not answer Soros' question, which made the excited Soros have to wonder if it was because of the quality of the call.

"Robert, what do you think of the pound?"

In the marketing department office of Beifu Bank, Robert John looked around at his colleagues and hesitated for a while. There were people everywhere, and it was obviously not the time to discuss this issue.

"I think I'd better go find you."

Manhattan is not a big place, and Wall Street is not far from Seventh Avenue.

Walking out of the BF Bank office, John hailed a taxi and arrived at Soros' office at 888 Seventh Avenue in five minutes.

The office carpet was patched with tape, and Druckenmiller was contemplating several computers on the computer table. Seeing John coming, the two greeted each other and walked into Soros' office together.

A small small conference table, no outsiders around, not even Druckenmiller's full-time secretary is qualified to be here, as for the rest of the Quantum Fund. Well, although the Quantum Fund has more than fifty people in New York employees, but right now, Soros doesn't know more than three at all.

“With the strength of the German side, the Italian lira must bear huge downward pressure. I am sure that as long as we sell enough positions, the Bank of Italy will not be able to stop it. But now, I want to know, if we build a huge amount on the pound position, how much risk we will face."

Before thinking about victory, think about defeat first.

Clearly, Soros is a risk averse.

"Well, the British pound is very liquid. If your position is unfavorable, you can exit at any time." John replied, paused, and added: "You may lose about 0.5 percentage points at most."

"So how much profit can we make on this position if the pound falls?" Druckenmiller asked.

"If the pound fell sharply, Quantum could theoretically make a profit of 15 or 20 percent. I think the pound could depreciate by at least that much."

"What are the chances of something like this happening?" Druckenmiller asked.

"Within three months," Johnson replied, "there's about a ninety-percent chance of that happening."

Before working for Bankers Trust, Robert John was a mathematician. Ninety percent of what he said made George Soros and Stanley Druckenmiller unable to sit still.

What does it mean that there is a 90% probability that the pound will fall by 15% to 20%?

The market has a ceiling. After all, the United Kingdom is an old developed country in Europe, and it is not comparable to countries such as Finland and Italy. If the pound falls by 20%, it means that a larger position can be established in the pound.

Both Druckenmiller and Soros glanced at each other. After all, they both saw each other's excitement when they cooperated.

"How much is your own foundation investing?"

asked Soros, referring to John's investment management portfolio at Bankers Trust.

"This is an unprecedented opportunity. There is a 90 percent chance of winning. There is no higher probability. I will use marginal leverage to seize this opportunity. If possible, I will invest three percent of my existing capital." to five times."

John's portfolio assets managed by Bankers Trust are as high as one billion US dollars, three to five times, that will be a very scary figure.

Druckenmiller is still very young after all, just like Soros often teased him, he has always been very timid, and when he heard that John would use three to five times the leverage, his eyes widened and his muscles They all instinctively contracted, and as the blood flow accelerated, they breathed heavily, just like a basketball player jumping and shooting.

Leverage has always been a double-edged sword. If it is used correctly, it will indeed bring about multiplied profits, but if it is used wrong, the loss will increase exponentially.

And leverage, when too large, is almost indistinguishable from suicide.

"Oh, buy Karma! Are you sure you want to use three to five times leverage?"

"Yes, I'm sure. The Bank of England only has reserves worth £22 billion." Johnson went on. There are very few other buyers. The only place that could buy pounds to support the value of the pound is the Bank of England."

Under the short-selling mechanism, there is an unbreakable relationship between borrowing, selling, and buying.

If you want to be short on a target and want to make a profit, you must first borrow it. Now, if you want to sell the pound, you must first borrow enough pounds.

This point is not difficult.

The British pound has a long history, and British banks and financial institutions are equally old. As long as you have enough assets, it is not difficult to find more money from banking institutions.

The problem is selling.

If you want to sell a commodity, you must have a buyer. It is predictable that as Schlesinger's speech is fermented under the guidance of the media, the only major buyer who may buy the British pound is the Bank of England. , There will also be some nomads, but individual speculators are all like cannon fodder and can be completely ignored.

This means that once the Bank of England's foreign exchange reserves are exhausted, it will be impossible to further sell the pound. Therefore, $41.4 billion may be the biggest ceiling in the pound market.

With such superficial knowledge squeezed out, none of the three present could understand.

Glancing at Soros again, and getting Soros' support, Druckenmiller took a few deep breaths.

"Maybe we can get a share of 15 billion dollars." Druckenmiller said, "Quantum Foundation will increase the size of the existing position by ten times."

"How long do you think they'll last?" Soros asked.

"It won't last a few months."

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After the short meeting, Druckenmiller returned to the office, picked up the phone, and called Scott Besan in London.

Soon, the call was connected.

When Besan heard Druckenmiller's worries, it was as if he had been injected with chicken blood, and he went crazy.

"Listen, Stanley. You have no idea how bad things are in England right now. The arrogance and arrogance and stupidity of that Lamont guy has completely pissed off Germany, and Schlesinger has made it clear that he can't decide future rates. He's pretty much saying, Definitely not going to cut rates.

But now, houses in the UK are like a whore who has found a wild man. No one wants them at all, and the British government dare not raise interest rates at all.

Given Finland's experience, given the choice between the death of a deeper recession and a depreciation of the pound, the British government would definitely choose devaluation, which would make the pound less valuable than anyone expected be early.

Don't forget that the devil in the East has already shown the terror of triple killings in stocks, bonds and exchanges. "

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