Chapter 467 Coming for Morgan
Every era has its own blue chip stocks, such as railways thirty years ago, steel today, automobiles later, electronics after World War II, and the Internet in the twenty-first century. The stock market always needs these blue chip stocks to become the kings of the market and revitalize the broader market. As long as the stock market exists, there will be stocks of these companies, and they can serve as a weather vane for the stock market.
The most important part of the stock market now is steel-related stocks, including two steel companies with a market value of more than $400 million, Carnegie Steel, which was taken over by Sheffield and Rockefeller, and the United States Steel Company, which was merged by Morgan. If there is another one that is similar to it, it is the Tennessee Mining and Iron Company in the hands of Morse.
In the early 20th century, growth in the United States was also built on infrastructure. The demand for steel naturally made steel the most important part of the stock market. Therefore, once there were problems with steel company stocks, a stock market crash would really come. Now bank runs are out of control. Once there are problems in the stock market, the financial industry will be at risk of collapse.
When doing things, especially bad things, you must act quickly and not drag your feet. After all, the first rule of the slave owner's code is, what is the biggest disadvantage of doing bad things? The answer is that you don't do bad things to the extreme.
As a member of the upper class, Morse understood Sheffield's purpose. He wanted to bring down the stock market and cause a run on the major banks. Once the banks went bankrupt and were liquidated, the depositors who had not withdrawn their money would lose everything. If the stock market crashed, the entire financial industry would fall into the abyss. After understanding this, he looked at Sheffield with some fear, "It's so scary. Why is this happening?"
"Your own bank went bankrupt because of the bankers, and your speculation failed, yet you still have time to feel sad for others, Mr. Morse, you are such a kind person!" Sheffield said sarcastically, "I wish I had known you earlier. The more friends like you have, the less competition there will be in business. How good is that? Think about your trust company!"
At that time, trust and investment companies enjoyed many businesses that banks could not operate, and government supervision was very lax. All this led to trust and investment companies excessively absorbing social funds and investing in high-risk industries and stock markets.
The reason for the bubble is the general environment. Heinze and Morse are just two of them, and this trend is not started by just two of them. Any trust and investment company, if it does not invest most of its funds in the stock market, will have a much lower rate of return than other companies in the same industry, which means that its customers will abandon them without hesitation and turn to other trust and investment companies that are willing to invest in the stock market.
A freer environment and greater profits, isn't that why trust companies were attacked by bankers? Don't be pitied by others after you cheated them once. Morse is really kind.
Listening to the slave owner's ridicule, Morse felt deeply ashamed. He actually still had a conscience? He calmed down and said, "I want to know the specific method and why I have to do this."
"Although this Wall Street civil war has nothing to do with me, I think this is a good opportunity. However, I can't fight against a group of bankers with rich financial means through normal means. The current rules are set by them, which is very unfair to me. Then the only way is to make the rules non-existent, and the crisis will become more serious. If the current rules are broken, they and I will be at the same starting line." Sheffield opened a bottle of red wine and poured a glass for the people in front of him.
"But once the financial system collapses, it will eventually be transmitted to industrial companies." Heinze linked the two sides together. Financial institutions and real companies are not completely separated and cannot be separated.
"I know this kind of basic connection!" Sheffield picked up the wine glass and said easily, "So I am not worried about the decline of the listed part of our company. As for other industries, I can only stay basically calm. There may be bankruptcies and unemployment in a short period of time, and small and medium-sized enterprises may not be able to bear it, but so what? It's only temporary. When these small and medium-sized enterprises go bankrupt, the market will be vacant and my company will only become stronger. And this is good for you. If the crisis ends here, you guys are just losers, without any other attributes."
"If the crisis is faster and more severe, the bankers who attack you will also be losers, then you will be equal, right? I am doing this for your own good."
"So I have to take the initiative to let the stock of the Tennessee Mining and Iron Company that I control collapse, bankrupt the last industry in my hands, and complete Mr. William's plan, right?" Morse snorted and laughed. There is no such thing as a profit without pain. If Sheffield does not offer certain compensation, how can he agree to this matter?
"Dear Mr. Morse, I can give you $5 million in cash. It's not a promise, but cash you can get right now. When you return to New York, I can ask Mr. Blair to cash it out immediately. Stock value is money only if someone takes it. If no one takes it, it's just a piece of waste paper." Sheffield put himself in his shoes and said, "Even if you do nothing now, the shares of Tennessee Mining and Iron Company will be delisted in ten days. If you take the initiative to sell the shares, in the best case scenario, you can cause the already falling stock market to collapse in one day. Think about this problem carefully."
"Kill the many!" Heinze, who was listening to the slave owner's thoughts, took a breath.
"That's right. I'm a long position but I'm ready to not make any money. After the crisis, whoever has cash in hand will be the real winner." Sheffield couldn't help but give Heinze a thumbs up. What is professionalism? This is professionalism!
Bulls kill bulls! Bulls kill bulls means that stock traders generally believe that the stock price will rise that day, so they compete to do long transactions after the exchange opens. However, the stock price does not rise significantly, and the longs cannot sell at a high price, resulting in a sharp drop in the stock price at the close.
Generally speaking, in the stock market, if there are more long positions, the buying power will be stronger, and there will be a phenomenon of oversupply in the stock market. The stock price will rise significantly, and the bulls will profit at this time. However, if there are more short positions in the market, the selling power will be stronger, and there will be a phenomenon of oversupply in the market, so the stock price will fall, and the shorts will benefit.
But in fact, the "multi-killing" is more suitable for financial attacks. Sheffield doesn't care what the stock market will be like in the future. Anyway, it's only the beginning of the century. The industrial base of the United States is so good that it will recover in a year or two. Now someone wants to be a long position, and this long position will follow other long positions and kill all the long and short positions.
Why can't the big stock market crash be stopped? That's because there is a situation where the more are killing the more. For example, in the stock market of the United States a hundred years later, there are actually many sovereign funds of oil-producing countries. These sovereign funds are generally oil-producing countries with small populations but rich. If the United States is extremely powerful and controls everything, these sovereign funds will be placed in the stock market of the United States to play the role of a support, and can also help the United States stabilize the stock market and show loyalty.
However, once the United States has a sign of economic crisis, if these sovereign funds feel that a major stock market crash is about to happen, they will cash out at all costs and try to recover as much cash flow as possible, and the bulls will kill the bulls. Ordinary bulls will be killed by these bulls composed of sovereign funds. In order to get as much cash as possible, they will kill everyone. Yesterday's bulls will become bears. It is common for bears and bulls to switch back and forth.
Some forces enter the market thinking they are short, but larger forces will treat them as long, and the previous shorts will naturally have their identities changed.
"I agree, but it's just that I really succeeded. I hope Mr. William will not forget my help. I won't say that I am a victim. It was our mistake to pay the tuition in the copper price. If we want to restore everything before, we still have to count on Mr. William." Morse thought for a long time, and on the premise of getting a 5 million deposit from Sheffield, he took out the other half of his industry and gambled again.
That's right! A bicycle turns into a motorcycle! Sheffield nodded and said, "Everyone else is dead, and I am the only one left to occupy the market. Am I not the winner? I am the winner, how could I forget you?"
"Let's go back overnight!" Having made up his mind, Morse didn't waste any words. While the major banks were scrambling to deal with the bank runs, he launched another battlefield in the stock market. Since he had been beaten by a group of bankers, he would fight to the end.
"If you gentlemen can turn defeat into victory, it will be a classic case in financial history. Mr. Barney, Mr. Heinze, Mr. Morse, your successful fight back in the face of adversity will be talked about by all financial institutions." Sheffield stood up with satisfaction. Everyone was leaving, and as the host here, he naturally had to give them a warm farewell.
So far, eight million US dollars have been spent on these people, but as long as the final result is good, Sheffield can fully accept this slight loss.
Looking at the three people's backs as they hurriedly left, Sheffield smiled happily, put his bare hands around the slave owner's back, and rubbed Edith Rockefeller's face against the slave owner's back.
"What's wrong?" Sheffield spoke gently without moving. Although he didn't like to turn his back on people, he had to distinguish between them.
"If the stock of Tennessee Mining and Iron Company plummets, given the current position of steel stocks in the stock market, will Carnegie Standard Union also be affected?" Edith Rockefeller said with some worry, "Will we also suffer losses in this way?"
"Good question. However, from the perspective of dispersed equity, it is not our company that is prone to panic cashing out, but the U.S. Steel Company led by Morgan." Sheffield lowered his head and touched Edith Rockefeller's bare hand. "This is aimed at Morgan. It just so happens that he is not in the country. That's great."
(End of this chapter)
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