Chapter 463 Everything Needs a Catalyst (Bug Fix): Every Crisis is an Opportunity

"It's fallen! It's fallen!" Secretary Sun shouted as she ran towards Secretary Fang's office.

As the top secretary to the provincial party committee leader, his loss of composure was truly inappropriate.

But neither Secretary Fang nor Deputy Director Xie, who came to the office to report on his work, cared about his rudeness and both kept asking, "Did you really fall?"

"It's fallen! It's fallen!" Secretary Sun nodded vigorously, "It's already fallen below 6000 points!"

Good heavens! Everyone in the office gasped.

Wow, that's a pretty sharp drop. In early October, the Dow Jones Industrial Average was still above 8,000 points.

Wait a minute! They're all cadres from Jiangdong Province, busy as bees every day. Where would they find the leisure to care about the rise and fall of the US stock market?

Keep in mind, this is 1997! Separated by the Pacific Ocean, China and the United States are practically two different worlds. Understanding each other's affairs is not so simple; it takes a lot of effort.

But the thing is, wasn't Secretary Fang previously acting as a middleman to persuade Wang Xiao to go to Hong Kong to stabilize the Hong Kong stock market?

Although Wang Xiao refused at the time, he did provide a public relations plan and predicted that the Hong Kong dollar exchange rate would definitely be preserved, but the Hong Kong stock market and housing prices would not be preserved and would inevitably plummet.

At that time, Sun, the chief secretary in charge of recording, became curious: Could this CEO Wang also tell fortunes?

Hey! As Newton said: I can calculate the motion of celestial bodies, but not the madness of men.

Whether a stock goes up or down is truly a matter of fate.

Mr. Wang said Hong Kong stocks would plummet, so let's wait and see.

Upon seeing this, Secretary Sun was truly dumbfounded.

The market is crashing, crashing like the sky is falling. Hong Kong stocks are crashing, property prices are crashing, and people are lining up to jump off rooftops. It's like a scene from the movie "The Greed of Man".

The most amazing thing is that as Hong Kong stocks continued to fall, they dragged down US stocks as well, which in turn had a reverse effect, causing Hong Kong stocks to fall even more sharply.

And then, the whole world was watching the spectacle the Asian revenge plan was creating in the United States. Just when things had calmed down, it started again.

The commotion was like a frog jumping into the water, leaving no time to react.

Deputy Director Xie gasped and asked curiously, "So, did the US stock market fall for two days and then rebound? Last time I read an analysis by a financial expert, they said that this time the US stock market fell because of the South Korean financial crisis and the spread of panic, and it didn't really have much to do with the US. The US economy is still very healthy, and the market will rebound soon."

Secretary Sun slapped his thigh and shook his right hand like a rattle: "No, no, no, this time the situation is really different. It's America that's in trouble. Did you see the news? That waste management company committed financial fraud, and they did it for five years! Now their sky has fallen."

Deputy Director Xie shook his head: "One company can't cause the world to fall apart. If we're talking about fraud, take Shenzhen's Yuanye Industry, one of the old five stocks. Chinese people used Chinese money to impersonate foreign capital for investment, and the chairman emptied the company's coffers. So what if there was a huge uproar? The stock market crash happened after the August 10th Incident. How many stocks were there back then? As one of the old five stocks, its influence was limited. What about the US? It's even less of a deal. How many stocks are there in the US? If one company has problems, how can it affect everyone?"

If that were the case, the US stock market would have collapsed long ago.

With so many companies, if you really investigate, which one doesn't have some dirty secrets?

Secretary Sun waved her hands frantically: "You don't know, if this company had an accident at any other time, it probably wouldn't have affected anyone else. But it just so happens that it had to be exposed at this time, so the problem is huge."

He listened to a lot of storytelling when he was a child, and this time he couldn't help but indulge in it, practically acting like a storyteller. "Think about it, how did Americans talk about Korea before?"

He picked up an old newspaper from the newspaper rack, placed it on the table, and pointed it out to Deputy Director Xie. "Isn't that right? Look, the Americans say that the reason South Korea made such a big mess is because their company management is not standardized and their financial management is a mess. It's because South Korea only started to adopt international accounting standards in 1996. Before that, their financial arrangements and related-party transactions were all a mess, and their profits were all overstated. It's completely different from standardized American business."

As Secretary Sun continued, she couldn't help but laugh, "Well, this time the Americans have contradicted themselves. The scrap company did follow international accounting standards, but after all these years of fraud, its auditing firm, Arthur Andersen, knew about it, tacitly approved it, and even assisted it in its fraud."

This is a complete catastrophe for believers in the American economic order.

One minute they were smugly boasting about how standardized, advanced, and reliable their system was, and the next minute they were slapped across the face.

The person who was hit didn't feel any pain at all; they saw stars and everything went black!

Their former faith was shattered into pieces.

How could these foreigners not be driven to despair? They treat even the smallest things like gods. When it comes to their own wallets, it's no wonder they're tearing the market apart.

Secretary Fang listened with a smile to his secretary's stand-up comedy routine.

The latter clapped his hands and shook his head repeatedly, looking deeply moved: "You know, these things just happened to come together, didn't they? If any one of them had been missing, the US stock market wouldn't have fallen so much."

He couldn't help but gloat.

To be honest, the United States is too domineering.

In the past, with the Soviet Union in power, the United States would put on a show to win people's hearts.

Now it's something else entirely; it's as if it's afraid the whole world won't know it's the boss of the planet, it's incredibly domineering.

He wasn't the only one watching the spectacle; probably the entire world was enjoying it.

Secretary Sun counted on his fingers: "Southeast Asia, so many countries, I bet there are hardly any who aren't laughing, they all wish America would taste their own medicine. This time it's a real revenge, even more revenge than the Count of Monte Cristo."

It's not that he's petty and sees everyone as a villain, but rather that even though the International Monetary Fund has started providing aid to Southeast Asia, in reality, everyone who is asking for help is having a hard time.

They all harbored resentment.

Otherwise, it wouldn't have happened. On November 1st, the International Monetary Fund signed its first letter of intent, requiring 16 private banks in Indonesia to close. Then, on November 23rd, Indonesian President Suharto's son acquired the small bank, Andromeda Bank, and reopened it with great fanfare at its former site.

What is this if not a challenge?

besides--

"Iraq, Iran and Libya have been sanctioned and suppressed by the United States for a long time. Now their people are celebrating, saying it is a 'divine punishment' that foreshadows the decline of American hegemony."

That sounds absurd, they even brought up some divine punishment.

The fact that a country that entrusts its fate to God has not perished to this day only proves that the power of the masses is always trustworthy, and that we should never blindly trust the minds of the masses.

"If another Europe comes along, will they be sighing and worrying about the US? No way! They'll probably be laughing in their sleep. They finally got the EU up and running, and now they want to issue their own unified currency. What's the point? It's all to elevate their own status and compete with the US. If the US runs into trouble, they'll be happy for sure."

If these words were spoken publicly, it would clearly indicate a problem with one's thinking and a deliberate attempt to provoke diplomatic conflict.

But behind closed doors, they speak from the bottom of their hearts.

Deputy Director Xie nodded and laughed, adding with a hint of schadenfreude: "That's right, we never hoped it would be good."

Seeing that it was almost time, he guessed that Secretary Sun must have something to report to the leader when she came over, so he took the opportunity to nod and say goodbye: "Then, Secretary, I'll go out first. I'll report back to you after I've sorted out my thoughts."

Secretary Fang nodded and reminded him, "Be more meticulous and consult with more people. We really don't understand the internet, but we can't just ignore it."

It was only when they were analyzing the financial crisis that they suddenly discovered that this new thing called online chat rooms could, like an inn in a martial arts novel, bring together people from all over the country who would otherwise have no connection, and even when they didn't know each other at all, so that so many people could work together to do something big.

Afterwards, one can do as Li Bai wrote in his poem: "Having accomplished the deed, I dust off my clothes and depart, concealing my identity and name."

Putting myself in their shoes, I really felt my blood boiling.

But who is Secretary Fang? She is the top leader of Jiangdong Province, so she naturally views issues from the perspective of a manager.

What she saw sent chills down her spine, and her back was covered in cold sweat.

Imagine if something similar happened in your jurisdiction, causing a huge uproar. You had no idea that it was caused by a group of complete strangers, that the entire planning process, or how it was carried out. It was all done through casual conversation on some online forum that you knew nothing about.

Are you scared?

Secretary Fang felt that he would wake up in the middle of the night in fright.

Therefore, she believes that the internet definitely needs to be regulated.

However, it is a new thing, and the managers of the real society have no idea how far humanity has developed it; they can only explore it step by step.

Deputy Director Xie nodded and patted his chest, promising, "I will definitely get to the bottom of this."

The office door closed—that's right, when power reaches a certain level, it transcends gender and the concept of avoiding suspicion.

Only someone with a problem in their brain would open their door wide when reporting to the provincial party secretary alone, to emphasize that they are upright and honest and have no personal feelings.

Secretary Fang looked at his secretary and asked, "Did Wang Xiao go to America?"

Secretary Sun was taken aback, not understanding why his boss would suddenly ask such a question. It seemed completely unrelated.

But he still reported very honestly: "No, she went to Moscow on October 25th and hasn't left since. After Russia announced the devaluation of the ruble on November 14th, she simply started living in the container market."

As she spoke, Secretary Sun added with a sigh, "She even brought the president's youngest daughter along, and they're selling their farm's products at the market every day."

That's the president's daughter.

Just imagine, if the chairman's daughter were to work behind a counter selling goods, wouldn't the products sell like hotcakes? Absolutely!

Secretary Sun sighed with emotion: "I've heard about it. At first, the Russians weren't interested in their domestically produced goods, thinking they were tacky and ugly. But then Ms. Tyachenko showed her face, and wow, so many people went to see her! There was tons of coverage on TV, radio, and newspapers, and it really piqued the interest of quite a few people. Now the products are selling very well."

Honestly, he admired the president's daughter for being able to swallow her pride.

It's important to understand that Russia's current situation is quite similar to China's in some respects.

Young masters and ladies using notes to gain special privileges and make money are considered to have inherited their family's honor and possess great ability.

If you were to stand behind a counter and hawk your wares yourself, that would be a completely different story. In other people's eyes, you'd look down on yourself and be considered undignified.

Her ability to overcome the discomfort caused by this undignified situation and continue working as a traveling merchant is a testament to her strong character.

Even Russian and other foreign media outlets praised her dedication at the Russian goods stall, saying it represented the pragmatic attitude of the new Russian government.

This stands in stark contrast to the previous hardline stance of the Soviet government.

Secretary Sun concluded definitively: "I reckon this was definitely Wang Xiao's doing."

The problems of the sons of high-ranking officials in the old Russian country are more serious than those on the mainland.

Only CEO Wang could persuade the First Daughter to endorse domestic products.

After he finished speaking, he looked up at his leader and found that Secretary Fang was actually daydreaming.

For a moment, he didn't dare to utter a sound and quickly fell silent and held his breath.

Secretary Fang noticed the sudden silence in the office and then came to his senses: "Oh, it's nothing. I just felt that all these things were happening at once?"

Secretary Sun didn't take it seriously: "That's why we call it a global village. When something happens in one place, another place reacts immediately. Even mountains and rivers can't stop it."

Secretary Fang didn't seem to accept his statement or not, and only replied absentmindedly, "I see."

She still felt it was too much of a coincidence.

If it weren't for one thing leading to another, the United States wouldn't have gotten caught up in this mess.

But she couldn't explain it; if it wasn't a coincidence, who could possibly have plotted against the United States?

Wang Xiao? That idea is simply too outrageous.

Moreover, Wang Xiao clearly didn't have the time or energy. Her refusal to go to Hong Kong to oversee the situation was probably because Russia had already planned to devalue the ruble in October. That's why she hurriedly returned to Moscow in late October, refusing Ivanov's offer to stabilize the rear.

However, Secretary Fang still felt a vague sense of unease.

Therefore, she asked again, "Mr. Wang, have you sent people to the United States? What are they busy with there?"

Those who can become secretaries to the provincial party secretary are no ordinary people. The leader hadn't inquired about this matter beforehand, but that didn't stop her from wanting to know more now. Secretary Sun blurted out, "I asked them a couple of days ago, and they're planning to acquire technology companies. They said that although these small companies aren't large, many of them have patents. If they acquire these patents, and Wuzhou produces products and sells them, it won't be easy for foreign countries to sue them for infringing on their patent rights."

Goodness, look at Wuzhou Group, look at their CEO Wang.

They've only just started this new industry, and they've already planned how to sell it all over the world.

This is truly taking one step at a time while thinking three steps ahead.

Oh no, it's looking at ten steps ahead.

Secretary Fang sighed inwardly. It was precisely because of Wang Xiao's calculating nature that she doubted what role she had played in this financial crisis.

Forget it, I don't want to think about it anymore.

How should we think about investing? It's someone else's money; they can invest it however they want.

She roused herself and instructed Secretary Sun, "See if Governor Zhang and Deputy Secretary Meng can spare some time today? The Provincial Party Committee can hold an impromptu meeting to discuss next year's work—no, how to proceed with the work for the remainder of this year?"

The financial crisis rolled from Asia to the United States and then spread globally, making her feel the rapid spread of danger and a strong sense of urgency.

On the surface, because the capital account is not open and the RMB is not freely convertible, international short sellers cannot directly attack the mainland's financial system. Therefore, when Thailand and other places were in chaos, the mainland's financial market did not actually feel much of a difference.

But in reality, mainland China is not immune to this crisis either. With surrounding markets collapsing, what are mainland businesses and investors supposed to think? Everyone is bound to be cautious.

If everyone around you goes bankrupt, would you still dare to spend money recklessly against the trend? You would definitely have to keep a close eye on your money and not spend it casually.

But if investors refuse to spend any more money, it means tightening.

Great! Some people think that fortune favors the bold, and since others don't dare to expand, I want to take this opportunity to expand my business.

Does that mean he's guaranteed to make a lot of money?

No, it's very likely the opposite will be true.

Asia has always been an important export market and competitor for mainland China.

With the economies of Japan, South Korea, and Southeast Asian countries sluggish and in recession, people have less money in their pockets, resulting in decreased purchasing power and a natural decline in demand for goods from mainland China.

For businesses, no orders means certain death.

Provinces like Jiangdong are particularly vulnerable, being typical export-oriented economies heavily reliant on exports to drive economic growth. The impact on their economies would be devastating if overseas orders disappeared.

Moreover, with the depreciation of currencies in neighboring countries, exported products have become relatively cheaper. However, if the RMB does not depreciate, it means that the relative prices of mainland China's exported goods will soar in the international market, severely damaging its competitiveness.

These two things combined became a sharp sword hanging over their heads, ready to fall at any moment and pierce them, leaving them bleeding profusely.

With this in mind, Secretary Fang felt that he couldn't wait until tomorrow, nor could he wait for a brainstorming session or a practical meeting. Every major conference must be preceded by a smaller meeting to set the tone.

When the top leader gives the order, everyone else, no matter how busy they are, can always find time to do so.

Half an hour later, the most powerful people in Jiangdong Province gathered in the small conference room and sat down for a meeting.

The core theme is only one: what should Jiangdong do next?

The Southeast Asian financial crisis, which everyone thought would end after summer, has now continued into winter and spread globally. They cannot remain unaffected and must come up with solutions.

Otherwise, if we repeat the failure of the price reform in 1988, which led to severe economic stagnation, mass unemployment, and a depressed market, things could really get out of hand.

Think about it. We just started focusing on large-scale layoffs and letting go of small ones, and a large number of workers in small and medium-sized enterprises have already been laid off. If we were to experience an even more severe wave of layoffs now, society would be in turmoil.

Given the current situation, another "August 9th Incident" might really lead to the collapse of the Red Flag.

After much discussion, the provincial officials concluded that the country was most likely to save itself.

In this massive economic crisis, if you want to go out and make money, not only do other people not have money themselves, but they also want to make money off you. Everyone is holding onto their wallets tightly.

The only hope is to look inwards.

Expanding domestic demand and stimulating economic development through Keynesian fiscal policy.

To be more specific, in practical terms, it means undertaking infrastructure construction.

For example, highways, railways, ports, water conservancy, etc., have always created a large number of jobs, stimulated enterprise production in the form of national orders, and provided infrastructure for subsequent economic development.

Now that we've discussed this in such detail, we must be pragmatic.

Jiangdong Province cannot make decisions on behalf of the central government regarding how to overcome the crisis.

All they can do is try to secure greater benefits for Jiangdong in the face of national policies.

For example, in infrastructure projects, whether it's railways, highways, ports, or water conservancy, Jiangdong strives to get projects implemented.

From a theoretical point of view, Jiangdong is already a relatively economically developed region in the country. It seems unreasonable for them to compete and grab resources so fiercely, completely disregarding the fate of cities in the central and western regions.

The problem is that the country subsequently undertook large-scale infrastructure projects with the aim of stimulating economic development, not alleviating poverty.

Only by investing money in areas most likely to generate benefits can we revive and develop the economy.

Otherwise, look at the Third Front construction of that era. It had extraordinary political significance, but its economic benefits were basically zero, especially in the short term, where the economic effects were completely negative.

There's simply no way to turn things around in a short time.

If you want to get out of this quagmire quickly, you must use your resources wisely and give what you have.

Only by concentrating limited resources can Chinese enterprises, which were originally not very competitive in the international market, at least have a strong regional presence and be able to compete with foreign companies.

Jiangdong already had a road, rail, and waterway network. Starting in early 1996, we began the Grand Canal project to connect the land and water networks.

Jiangdong has also attracted a large number of German-invested enterprises, and through their technical guidance, we have vigorously promoted standardization. This is crucial for our products to enter the international market in large quantities.

Our Jiangdong region has a commercial city, a traditional area with the most frequent and largest-scale private trade exchanges with CIS countries. Moreover, the relationship between the two sides is well maintained and is likely to remain stable, with the potential for further market expansion.

Jiangdong has a large number of universities and research institutions, possessing abundant intellectual resources and human resources to support industrial upgrading.

One after another, everyone emphasized the regional advantages of Jiangdong.

In the end, everyone clenched their fists, regardless of the consequences, determined to fight to the bitter end.

At this time, you absolutely cannot be polite, and you certainly cannot be shy.

Falling behind at one step leads to falling behind at every step. If you don't seize the opportunity now, you will become a sinner for all time in the history of Jiangdong!

The clock in the provincial party committee building office ticked forward, one tick at a time.

At the financial trading center in southern Manhattan, New York, the red numbers on the electronic display screen are also gradually decreasing.

Zhou Liang stared at the constantly changing numbers, hardly believing his eyes.

He thought that the 554-point drop in the Dow Jones Industrial Average on October 27, which triggered the circuit breaker mechanism, was the upper limit for a single-day decline in US stocks.

As a result, the drop he saw today was even greater.

The stocks plummeted like sheep jumping off a cliff in a swarm.

The front page of the newspaper used striking artistic lettering to ask a horrified question: What on earth is happening to America?

This is also the question Zhou Liang wanted to ask.

What was originally just a minor financial shock that everyone thought would recover quickly has dragged on and become increasingly severe, like a terminal illness that has been lingering without a clear end, and it even seems to be on the verge of collapse at any moment.

The market has closed.

The investors who had been staring at the screen left looking pale and dejected, as if they were floating.

Only a handful of people were mixed in, their faces tense, the users trying their best to hide their joy.

Yes, there will be short sellers in every market, and even if they are Americans, it doesn't stop them from shorting US stocks.

Under market rules, any way of making money is a skill.

Without the involvement of these domestic short sellers, how could the US stock market have fallen all the way from October to December?

Zhou Liang's eyes were also fixed on the screen.

Standing next to him was his senior colleague who worked at an investment bank on Wall Street, his face full of anxiety, cursing, "This is fucking crazy! It's only getting worse. The whole of Wall Street should hire a feng shui master to come up with a feng shui guide and exorcise the evil spirits."

Don't say his words are outrageous; look at the current US stock market, that's what's truly outrageous!

He cursed for a while, but seeing that his junior brother didn't react, he turned to look at him warily: "You didn't buy at the bottom ahead of time, did you?"

"Die young!" The senior brother was unusually guilty.

It seems like it was during our last dinner that he said the US stock market had bottomed out and that the market would continue to thrive.

Zhou Liang shook his head: "It's just a small amount of money, a loss of a year's bonus, not much. I just find it a bit unbelievable, how could it have fallen so much?"

My senior colleague sighed, "Isn't that how the financial market is? Who can really explain it?"

Don't be fooled by the fact that a bunch of highly paid experts and analysts spend their days writing reports, doing analyses, summaries, and making predictions.

If they were truly that accurate in their predictions, they wouldn't be doing this job; they'd be stock market gurus by now. Wouldn't they make money much faster that way?

Zhou Liang rubbed his face and forced a smile: "That's true. Never mind, senior brother, I'll go back and rest for now. My mind is too messed up, I need to sort it out."

My senior colleague was equally distracted. He waved goodbye and said, "Alright, alright, you should get some rest. I need to go write my report too."

Damn it, what exactly are you asking me to write? Are you really going to write that the US economy has a serious bubble, which is why the stock market keeps falling?

If I were to actually write it like that, not only would I get a severe scolding from my boss, but the entire market might just collapse, and everyone would be forced to go home and starve.

Upon arriving at the hotel, Zhou Liang had neither appetite nor sleepiness. He couldn't resist calling his boss to report on the situation in the US financial markets.

By some strange twist of fate, he specifically mentioned the waste management company: "The timing of this revelation is like adding insult to injury, and the stock market is reacting particularly strongly."

He initially thought that his boss's continued bearish stance on US stocks during the rapid rebound was due to suspicion that Southeast Asian capital would make a comeback, and that he was resentful of the Wall Street short sellers' gloating and mockery, so he was planning another big move.

Unexpectedly, this second crisis had nothing to do with Southeast Asia. Without any intervention from other countries, the US stock market plummeted, even exacerbating internal problems within the US economy.

This exposure couldn't have been more timely.

Wang Xiao also sighed with emotion: "That's right. I originally thought that only the collapse of the South Korean economy would stimulate the decline of the US stock market. I didn't expect that the US itself would also have problems, and the result was such a drop."

Zhou Liang was stunned. He subconsciously guessed that the collapse of the waste management company was actually his boss's doing.

But judging from the boss's tone, he's betting on the global market panic caused by the depreciation of the Korean won.

In the hyper-stressful state of November, this is entirely possible.

Why did the news about the scrap metal company come out at this time? Was it really just a coincidence?

It really was a case of everything coming together at once. As the old saying goes, misfortunes never come singly. Once a car window is broken, the car will soon be torn to pieces.

The truth of the matter is, of course, not like that.

Wang Xiao wouldn't tell him that there are indeed all sorts of coincidences in this world, but most of them can be fabricated.

Otherwise, the Soviet Union wouldn't have collapsed so quickly.

Speaking of incompetent governments, just look at the late Qing Dynasty. It lost the Opium War in 1840, yet this incredibly weak government managed to hold out until 1912 before finally stepping down.

A full 72 years! How many feudal dynasties couldn't even last 70 years from beginning to end?

Therefore, if you want to advance something, you must inject a catalyst at a critical juncture.

For example, Lei, a waste management company, has indeed existed for a long time.

In 1992, Wang Xiao's business was just starting out, and he hadn't even thought about things in the United States, so it was impossible for him to have laid such a groundwork.

However, while she cannot decide the birth of the thunderbolt, she can control when it explodes to maximize her own interests.

There are quite a few similar mines.

For example, CUC International also engaged in large-scale, systemic accounting fraud. For over 12 years, company executives fabricated revenue to meet Wall Street's profit expectations and maintain a high stock price.

This company is now merging with another company to form a super industry giant.

Most interestingly, this company's auditing firm is the same as that of the waste disposal company—Arthur Andersen, one of the world's top five accounting firms.

It's visualized: when you find one cockroach in the house, there are already 100 hidden inside.

Wang Xiao felt she needed to think carefully about when to expose it to achieve the best effect.

Since we've already found it, we can't just let it go to waste.

What a pity. The KGB, which was lurking in the United States, really put in a lot of effort to find these things.

Good steel must be used where it is most needed.

————————!!————————

Note: The events involving these two companies are true. The scandal involving the waste management company broke in February 1998 when the company announced a massive restatement of its financial statements from previous years—the largest financial restatement in US history at the time. Upon the announcement, the stock price plummeted 33% in a single day, instantly wiping out billions of dollars in market value.

Cendant is a giant corporation formed in December 1997 by the merger of CUC International and HFS. Its business scope includes hotel franchising (Days Inn, Ramada), real estate brokerage (Century 21), and membership discount services.

Shortly after the merger, the new management discovered that CUC International had committed financial fraud.

In April 1998, the scandal broke. The company announced it needed to restate its financial statements for the previous three years, revealing that it had overstated profits by as much as $500 million. Within days of the scandal's exposure, the stock price plummeted by more than 80%, wiping out approximately $14 billion in market capitalization, setting a record for the largest single-day market capitalization loss in the U.S. stock market at the time.

This incident also severely damaged its auditing firm, Arthur Andersen.

Arthur Andersen later collapsed in the Enron scandal in 2001, which led to the Big Five accounting firms becoming the Big Four.

In reality, after the crash of October 27, 1997, the US stock market quickly rebounded. Coupled with instability in emerging global markets, capital tended to trust the US market more, leading to a large influx of funds and a strong stock market performance. The two major corporate accounting fraud scandals exposed in February and April 1998, due to the extended timeframe, had a limited impact on the overall stock market. For the US, the real financial crisis was the Russian debt default in August 1998, followed by the dot-com bubble of the millennium.