Author: Guigu Meng

The next day, as soon as the market opened, SIMEX's Thai baht contract quickly rose from yesterday's closing "26.42" to "25.98". However, the short side did not give up and continued a day-long fierce attack on the Thai baht from both markets.

However, this time they encountered the joint intervention of two central banks. The Lijiapo Monetary Authority and the Bank of Thailand joined forces and used a total of more than 12 billion US dollars in foreign exchange reserves to not only stabilize the Thai baht within the fluctuation range, but even slightly increase the quotation of the Thai baht in the spot market.

, the speculative capital on the short side suffered a double blow, especially the main force, which suffered heavy losses.

Who is the main force on the short side?

Quantum Fund and Tiger Fund, these two funds can be said to be brother funds. They have joined forces many times before and made a lot of gains. This time Quantum waved the flag and Tiger immediately followed.

At the moment, Tiger Fund is in trouble, big trouble - the overnight lending rate of Thai baht that Thai commercial banks lend to foreigners initially soared to 1,000%, while Tiger Fund's previous channel has become 1,200%.

Julian Robertson had previously predicted that the Thai government would use raising interest rates to respond to the impact of the foreign exchange market, and had made corresponding preparations. But he never expected that the Thai government would dare to ban local commercial banks in Thailand from providing foreign exchange transactions.

Foreign speculators lent money, undoing his preparations.

The original plan of Tiger Management was to lend a huge short-term loan through a local commercial bank in Thailand and sell it on the market.

This kind of short-term loan is ultra-short-term such as 7 days, 14 days, etc. After the loan expires, the corresponding amount of baht is borrowed from other banks, and the previous baht loan is repaid, and the position is maintained through repeated borrowing cycles.

Generally speaking, interest rates such as overnight lending, 7-day lending, and 14-day lending show a gradual upward trend. Although the overnight lending rate is the lowest, it is impossible to short the Thai baht by borrowing overnight lending because the time is too short.

The 7-day and 14-day loans are very operable, and Tiger Fund can use this period of time to destroy the Thai baht.

It is now impossible. Tiger Fund can no longer borrow rollover loans from local commercial banks in Thailand. If they want to maintain their positions, they must borrow Thai baht from multinational banks with Thai baht business at an interest rate of 1,000% or even higher.

In the Tiger Management office, Julian said with hidden anger, "How much have we lost in the futures market?"

In addition to borrowing the Thai baht, Tiger Fund, like other hedge funds that shorted the Thai baht, also shorted the Thai baht exchange rate contract. When Thailand announced two measures to deal with hedge funds, the futures contract responded immediately, and Tiger Fund suffered heavy losses.

"$24 million."

Robert Cetron, Head of Emerging Markets at Tiger Management. Before becoming Head of Emerging Markets at Tiger Management, he was responsible for emerging investment markets at Fidelity Group, the world's largest fund company, for four years. He has experienced many world-famous financial markets.

Major events, such as short selling the Japanese market in 1990 and short selling the Mexican peso in 1994, etc.

On SIMEX, LIFFE and IMM, Tiger Fund sold a total of more than 700 Thai baht short contracts. The strong rebound of the Thai baht not only wiped out their previous profits, but also made them pay an extremely heavy price.

After Cetron finished speaking, he looked at Julian cautiously and carefully asked: "Should we stop the loss and leave?"

"No!" Julian directly objected, "Not only will we not close our positions, we will further increase our short selling efforts until Thailand admits defeat."

Although he suffered heavy losses, Julian did not care. He was a tolerant person and a temporary defeat would not shake his determination.

"But...according to our current position, the daily interest is a huge amount." Cetron felt it was necessary to remind Julian that based on the interest rate of the Thai baht that can be borrowed now, as long as the Thai baht does not declare a devaluation for one day,

Their holding costs are astronomical.

"How much exactly?"

Julian's face was calm, as if he was talking about something that had nothing to do with him, but the slight trembling of his hands betrayed his true thoughts.

Cetron picked up the pen and calculated on the paper. After waiting for a few seconds, he raised his head again. His face had become very ugly, and he stumbled and said: "If we want to maintain our position, the interest we have to pay every day is 13 million."

Dollar."

"so much?"

Although Julian was prepared, he still couldn't help being surprised when he heard the exact number.

However, he did not give up his determination to short the Thai baht. He just murmured: "It seems that the Thai baht will be destroyed as soon as possible."

Seeing that Julian had no intention of giving up, Cetron could only shake his head and turn to do his own thing.

The situation encountered by Tiger Fund is also happening in other hedge funds and commercial banks that have no business in Thailand. All short sellers are aware of a problem. If the Thai baht cannot be destroyed in the next day or two, it will be difficult for them to maintain their positions.

They have arrived at the Wujiang River, and there are no Jiangdong elders on the other side. They can only fight to the death, or die themselves. They will sell Thai baht without any scruples in all places where they can short-sell Thai baht.

Now that Thailand has formulated measures, it is natural that it has also thought about the situation that will occur once the measures are implemented. The Bank of Thailand is not immersed in the joy of the Thai baht being defended. The top executives of the Bank of Thailand, headed by Mala Kaonan, are calling their allies.

The content of the call was nothing more than "Brother, save me."

The relationship between Li Jiapo and Thailand can be said to be very cold. If the short side hugs Thailand, it will definitely hit the rabbit of Li Jiapo. Moreover, Li Jiapo has long had the idea of ​​becoming one of the world's financial centers. The financial policy is very open, and Thailand can use it.

Li Jiapo couldn't use this method at all.

Therefore, Hu Cidao from the Lijiapo Financial Management Bureau did not wait for Mala Jianuan to call him, but he had already taken the initiative to call him.

With both well-intentioned reminders and actual assistance, Li Jiapo organized another six to seven billion US dollars, preparing to support this sworn brother of Thailand to the end and implement the so-called aid to Thailand and the anti-U.S. plan.

For Li Jiapo, the best situation is to defend the enemy from outside the country, and let the short-selling international hot money sink into the sand before they have grown stronger. After severely damaging their vitality, even if the international hot money is still obsessed with Li Jiapo, then

We must also defeat the Lion City.

Ma Lajia Nuan was naturally grateful for Hu Cidao's help in times of need. What does it mean to be a brother? This is it.

…

For some large investment banks and funds, there is not only one trading team, nor is there only one investment strategy. Although Nan's financial system is generally bearish on the Thai baht, in terms of details, it does not hurt to be bullish for a while.

Scarlett Fund has several investment managers who are bullish on the Thai baht in the short term. They teamed up and keenly seized the opportunity of the Thai baht's appreciation. They used a little leverage and made a small profit of more than 10 million US dollars.

As long as they maintain profits until the end of the year, they can get a hefty year-end bonus.

For Nanguo Bank, although it does not have a branch in Thailand, Creativity Real Estate’s previous real estate plan in Thailand and its own loan plan, coupled with Zhao Shixian’s short-selling plan, started to accumulate Thai baht a few years ago.

There are a total of 150 billion baht, which is why Zhao Shixian does not panic in the position.

However, although Nanguo Bank as a whole has the obligation to provide bullets to PY Securities, individually, Nanguo Bank also has to take care of its own profitability, so the 150 billion baht is not all lying there to sleep.

Instead, they took advantage of the increase in overnight lending rates to put funds in the lending market to earn some interest.

In fact, for Nan, he does not pay too much attention to making profits from the short-selling operation of the Thai baht in the spot/futures market. Even if he jumps out and acts as the main force of the short side and snatches Soros's seat, everything goes well and the profit is nothing more than two.

More than one billion US dollars is nothing compared to Nan's plan to establish a base in Thailand.

Of course, this is a relative term. In fact, shorting the Thai baht is also a part of Nan's Thailand strategy. Nan's vision is relatively long-term, targeting the recovery period after Thailand's economic bubble is burst.

Just by analyzing the IMF's past consistent style, we can roughly deduce the conditions for its loans to Thailand. Generally speaking, they are financial openness, market openness, and corporate bankruptcy openness. Through openness, Nan can divide his forces into two directions:

Along the way, Wangmu Fruit Industry (Thailand) was reorganized into a comprehensive group "Thainan", appearing as a local Thai company, and merging high-quality small and medium-sized enterprises in Thailand that were on the verge of bankruptcy.

Along the way, foreign capital appeared, merging, buying shares in Thai financial companies, opening the Thai branch of Nanguo Bank, buying shares in local commercial banks, following Thailand's policies, and taking as many shares as they could.

When the Thai government requires foreign investors to give up part of their shares, or stipulates that the shareholding must be reduced after a few years when investing in shares, Nan's foreign capital can transfer all or part of its shares to Tainan Group.

In addition, when Thailand's economy is in recession and industrial development is stagnant, it will definitely turn its attention to agriculture, which is already very advantageous. This is also a success for the Nan family.

In addition, there is real estate. In Bangkok alone, there are more than 10 billion U.S. dollars worth of unsold houses, and most of the housing loans that account for more than half of commercial bank loans have become bad debts. Revitalizing real estate is a must for the Thai government in the future.

Things to do.

To revitalize, the first step is to expand domestic demand, and the second step is to attract foreigners to buy.

If the Thai government wants to attract foreign investment to buy real estate, all it can do is relax the previous strict regulations on foreigners holding Thai real estate. In addition, it can continue to be ambiguous about the pornographic industry that has been judged to be illegal. It is blind to open its eyes in order to stimulate Thailand's tourism industry.

Rapid development.

The Tainan Group is a local enterprise in Thailand. In theory, the interests of the Thai government are consistent. It is the obligation of the Tainan Group to help solve the problem of unsaleable housing. With enthusiasm and hardship, it has earned a profit of only one or two billion US dollars.

It should be.

The profit can only be this small amount at most, and it cannot be more. If the actual amount exceeds this figure, it must belong to foreign investors. As a local enterprise, Tainan Group is naturally patriotic.
Chapter completed!