Wall Street funds hoped that global speculators would unite and work for them, but once the number of people involved increased, things began to spiral out of control.
Thailand's internal problems are being studied by major short-selling funds, who are excited and believe that the Thai baht has at least 70% short-selling potential.
Soros and Robertson began to realize the seriousness of the problem. Their short position in the Thai baht was about 50 percent, and all the baht they held was borrowed from institutions through contracts, with the longest term being three months and the shortest being two months.
If they continue shorting at their pace, they can drive the Thai baht down by 50% in just over two months. Then they can buy back cheap shares from the market and return them to those institutions.
The problem now is that Thailand hasn't exhausted its own funds. As soon as they start buying back Thai baht, it's obvious that Thailand will immediately release the most accurate domestic data and use the remaining funds to fill the gap left by the decline. International speculators will immediately turn into bulls and create a short squeeze.
If Soros joins these people in shorting the Thai baht, driving it down to 70 or even lower, the rebound will be even faster when they go long.
If he only had a few million, he could buy back the cheap Thai baht instantly. The problem is that it's close to 3 billion, which is definitely a behemoth in the small currency foreign exchange market.
This problem was very difficult for Robertson and Soros, as if they were caught in a guerrilla war. If you wanted to short the currency, I would dare to drive it down to its lowest point, but if you tried to buy it back, the other side would immediately rush in.
Their own size is extremely large, making them far less agile than those with smaller capital.
When that time really comes, the outcome Soros fears most will happen: a short squeeze!
"I can't believe this is happening. They've frozen everything. It's insane. The person who came up with this idea is out of their mind, and the person who carried it out is even more insane," Soros yelled on the phone.
Robertson sighed as he listened to Soros's complaints and said, "They're telling the world that it will definitely recover within half a month. Now we're betting on what will happen in half a month, or even this strategy. We don't know if it will last a week. We need to be prepared for both scenarios. If Thailand collapses within half a month, we will win decisively. If it pulls through, we'll have to find someone to take over."
Soros strongly agreed with Robertson's suggestion. Once Thailand weathers the storm and a short squeeze occurs, it will be a stampede-like exodus, and the key point is that such a large amount of capital will not be able to escape.
what to do?
The best way is to find a major scapegoat to take over, paving the way for your own escape and making it easier to withdraw.
The two discussed it at length on the phone and concluded that the only country in the world with such a large scale that they could be fooled was Europe.
The largest company in the City of London is Schroders.
Thailand's desperate, do-or-die approach has shocked economists not only on Wall Street but also around the world. When some of China's top economic leaders heard that Lu Feng was behind the plan, they called him, hoping he would persuade Thailand to abandon the plan.
Over the phone, these bigwigs advised that the economy is not simply about GDP; one must consider international geopolitics and alliances. To put it bluntly, which country in the world is poor and which country is rich is determined by the strong, and has absolutely nothing to do with how hard the people of small countries work.
Thailand is right next to my country. If its economy collapses, geopolitical instability will occur. Not to mention the border will become unstable, if those people go crazy and sell a piece of land to some country, it will be even more troublesome.
To put it bluntly, it means that brothers can't drive Land Rovers, and they can't live too hard a life!
Lu Feng was getting a headache from what these people were saying. He kept denying that he had come up with the idea. Now that Maha and his group had decided on this path, Lu Feng was powerless to stop them. He couldn't afford to take the blame for such a huge mess.
Thailand's suicidal attempt to protect the baht has become a major international concern, with some even suggesting that Thailand has become a gateway for Asia, from which the continent will begin to crumble.
The higher-ups are still in a tug-of-war over the Jiafeng Group issue. John may have received instructions to have a proper discussion with Lu Feng.
In the evening, Lu Feng received a call from John, who said he could pay more money to buy out the deal.
"Just tell me directly, how much do you want to give?" Lu Feng asked bluntly.
“Jiafeng isn’t really worth much right now, but let’s not discuss that much in this situation. Let’s still value it at 10 billion. You take 1 billion and you’re done.” John offered his price.
"One billion?" Lu Feng laughed and said, "How about this, you originally came in with a valuation of 10 billion, we won't cheat you, we'll let you leave with the same valuation of 10 billion. I'll personally contribute 1 billion, Shenzhen Municipality will contribute 1 billion, you'll only have contributed 2 billion in total, take the money and leave."
"Lu Feng, what do you take us for? Two billion yuan used for over two years, without even paying interest? Where in the world is there such a good deal? We put in so much money, what power do we have on the board?" John said angrily. "Did you deliver on everything you promised during the initial financing? After you took the money, your obsequious attitude, your arrogance on the board—which investor could tolerate that? Do you have any sense of rules? Everything we signed in black and white is just a load of rubbish!"
"You still have the nerve to say that? Have all your investment accounts been settled? What about the missing 1 billion? According to the regulations, do you enjoy all the rights and interests on the board of directors? I'm not breaking the rules? You are?" Lu Feng shouted.
"So it was you who broke the rules first? Let me tell you, out of all the countries in the world, your protection of investors is the worst. What have we received after paying for our money? How many violations and oversteppings of authority have you made in the past two years? The senior management is all your people. Even when we first put the regulatory team in, they were ostracized. I've been patient enough!" John yelled into the phone, "If I hadn't been told to talk to you, would I have fucking called you?"
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