Financial Tycoon

At present, his cash had reached 120 million.

Based on his judgment, those sharks on Wall Street would certainly not let the stock price of Bear Stearns continue to rise; 71 yuan per share was just about the limit.

He decisively used double leverage, taking 240 million in funds to short Bear Stearns across various positions.

At 1:30 PM, news came out of Wall Street that a bank had refused a normal transaction with Bear Stearns.

Consequently, the rumors became grounded in reality. Goldman Sachs urgently issued a notice stating that they had confirmed Bear Stearns' credit rating and would temporarily not support normal transactions, effectively closing the repo market to Bear Stearns.

This news exploded instantly.

Coupled with another piece of news—that the hedge fund managed by Bear Stearns now had less than 5 billion in available funds, a drop of 13 billion from the previous 18 billion—the situation worsened.

Terrified investors voted with their feet, frantically selling off their long positions, while investors with margin accounts turned around and began shorting Bear Stearns.

The stampede-like chaos caused Bear Stearns' stock price to plummet. Before the market closed, it triggered two consecutive circuit breakers, ending the day down 8.1%.

Before the close, Huang Xiuyuan cashed out his 240 million in short positions, directly reaping a profit of 86 million.

This brought his cash flow to 203 million.

At this point, he gave up on leveraged operations and chose to buy with cash directly to reduce the risks brought by leverage.

He continued to short Bear Stearns with 100 million in cash, while the remaining money was transferred back to Huang's International through various offshore accounts, totaling 75 million USD after a 15% capital gains tax deduction.

Meanwhile, Bear Stearns, ravaged by Wall Street, became increasingly precarious. In less than a week, the hedge fund's cash reserves dropped to 2 billion; Bear Stearns had lost almost all its cash.

New York.

Goldman Sachs headquarters.

In the president's office, a sharp-eyed white middle-aged man reported to an elderly man with a receding hairline:

"President Lloyd, today's hunt was very successful; many small fish have been wiped out."

"Hmm, very good."

"There is one more thing. The Federal Reserve is very worried that Bear will go bankrupt because of this and is discussing how to save the market."

The elderly man closed his eyes in contemplation. After two or three minutes, he opened them and instructed: "Continue with the previous plan and keep a close eye on the others."

"OK."

March 13.

Mired in a cash crunch, Bear Stearns had only a meager 2 billion in liquidity left. The stock price plummeted again, and market panic spread further.

Inside Bear Stearns, they were as anxious as ants on a hot pan, constantly seeking aid from the Federal Reserve in hopes of obtaining funds to stabilize their foundation.

Huang Xiuyuan, holding his cash, followed the other financial giants and reaped another wave of profits.

Bear Stearns fell into despair; their only hope of seeing tomorrow's sun lay with the Federal Reserve.

That evening, regulatory authorities led by the Federal Reserve and the Treasury Department held emergency consultations. However, the first problem they needed to solve was not how to save them, but whether they should save them at all.

It wasn't that Bernanke, Paulson, and the others didn't dislike Bear Stearns—though it was indeed annoying—but because official participation in market behavior severely violated the spirit of the American free market.

The last person to do this was Clinton during the handling of LTCM in 1998, and he ended up being cursed at relentlessly.

In the conference room.

Everyone present was weighing the pros and cons, considering whether it was necessary to defy the world and risk their own positions to save a company that everyone disliked.

Paulson, the former Goldman Sachs CEO, said solemnly: "If Bear Stearns falls, hundreds or even thousands of counterparties will no longer hold their collateral, but will instead try to sell it, driving down prices, which will cause even greater losses."

Good heavens! The coffin lid of LTCM could barely be held down; this was exactly the reason why the Federal Reserve arranged for private institutions to bail out LTCM 10 years ago, and Bear Stearns had refused to participate in that rescue operation back then.

"Fine! I agree, but how do we save them?" asked another senior official participating in the meeting.

This involved a difficult problem: although the Federal Reserve assumed the role of lender of last resort, Bear Stearns was not a bank and, in principle, did not fall under their supervision.

Bernanke, a professional at playing with finance, dug out the Federal Reserve Act and pointed to the little-known Section 13(3), which allowed the Federal Reserve to provide funds to "individuals, partnerships, or corporations" under "unusual and exigent circumstances."

This clause granted the institution supreme power, even exceeding the scope of authorization from Congress.

After a full night of preparation, the next day (March 14), before the market opened on Friday, the Federal Reserve issued a notice.

The general content was: The Federal Reserve would use JPMorgan as an intermediary to provide a temporary loan to Bear Stearns to help it weather the storm.

Far away, Huang Xiuyuan saw this news but knew that today would absolutely be Bear Stearns' darkest hour. Using his 100 million in short positions, he quickly financed through his broker to obtain 300 million in funds.

As soon as the stock market opened, Bear Stearns acted as if it had eaten croton; the stock price plummeted, falling 48.7% that day—even more terrifying than the 45.9% in Huang Xiuyuan's memory.

Having completed the harvest again, he dispersed and transferred his 190 million in profits. After paying the 15% capital gains tax, the funds returned to Huang's International in Hong Kong amounted to 161.5 million USD.

The remaining 100 million in funds continued to be held in various accounts. In this year's financial market, as long as one didn't use leverage and just shorted desperately, it was basically a guaranteed profit.

Looking at the 236.5 million USD quietly lying in the Huang's International account, the current USD to CNY exchange rate was around 7.11.

Through the Bank of China in Hong Kong, he converted 230 million USD of these funds into CNY and remitted them to the Suiren Company account, totaling 1.6353 billion CNY.

After finishing this task, he went to take a shower and sleep.

On March 15, Li Ce, the head of the finance department at Suiren Company, and several colleagues came to the office to conduct a routine check of the company's account funds.

After opening the account information, he couldn't help but take off his glasses to wipe them before putting them back on.

The account balance clearly displayed: 1,643,673,671 yuan. Li Ce turned his head: "Xiao Li, check the company's remittance records."

"No problem." Xiao Li also hurriedly started searching, and only after confirming once more with the bank did she say in a slightly excited tone, "Team Leader, it's true. Around 5:30 this morning, 1.6353 billion was wired in from Xiangjiang."

Upon receiving the news, Lin Baijie was just about to call the chairman to confirm, but he stopped himself, remembering Huang Xiuyuan's recent habits; he figured he was likely sleeping right now, so it wouldn't be too late to ask in the afternoon.

Coupled with what Huang Xiuyuan had said previously, Lin Baijie guessed that this must be the capital injection from the "parent company." With this money in hand, his anxious, unsettled heart finally felt grounded.

Inside Suiren Company, the atmosphere also became much more stable due to this influx of funds; after all, with grain in the storehouse, there is no panic in the heart.

Waking up at noon, Huang Xiuyuan stood quietly by the window. His series of preparations finally had a preliminary foundation, and he could appropriately loosen his grip on matters regarding the financial markets.

As for the two investment companies in Xiangjiang, they could now pretty much enter into normalized operations.