Berlin This bustling international metropolis had suddenly become eerily quiet. It was almost 11 o’clock, yet rows of shops remained closed and locked. A familiar yet strange term flashed into Hans’ mind—”strike.” As if struck by a realization, Hans immediately rushed to the telegraph company. However, upon encountering a protest march heading his way, he involuntarily came to a halt. Spotting a few familiar faces in the crowd, he turned around and left without hesitation. There was no other choice. The telegraph company’s employees had joined the streets in protest, making it impossible to send any messages back now. Meanwhile, at the Frankfurt Stock Exchange, Flores was intently analyzing the constantly updated trading data. This was one of the perks that came with renting the office space. There was no need to go to the main hall to check the data. Instead, he could simply send someone to fetch the reports directly from the backend. Lately, the stock market has generally stabilized. Apart from a few trapped stocks, the rest were showing slow but steady growth. Just then, a middle-aged man walked in with a smile. It was Fern, the owner of another securities company sharing the same office. Given that the three companies in the office were all in the same line of business, their relationship went without saying. In the stock market, where “the big fish eat the small fish, and the small fish eat the small shrimp,” banding together is a survival strategy for small securities firms. Flores asked with concern, “Fern, you seem to be in a good mood. What good news have you brought?” Information sharing was part of their collaboration. For securities dealers, staying updated on market changes and gathering intelligence was essential. Large securities firms had dedicated teams for this purpose, but small firms like Flores’, with limited financial resources, couldn’t afford such teams. Instead, they had to pool their efforts to collect information. Firsthand information was also a key factor that allowed securities dealers to outperform retail investors. Those who jumped in blindly, without any knowledge, would almost certainly be wiped out. Fern smiled and said, “News from Berlin. The Prussian government has decided to compromise. The stocks we’re trapped in will soon be freed.” Flores furrowed his brow, seemingly unmoved by this “good news.” “How is that possible? Given the Prussian government’s finances, there’s no way they can shoulder so much debt. What could they possibly…” He trailed off, swallowing the rest of his words. He didn’t think Fern would lie about this as verifying the news would only take a single telegram. Fern replied confidently, “Don’t worry. Just because the Prussian government is short on funds doesn’t mean they can’t get the money. It’s said that over a dozen major banks, including Deutsche Bank, Austrian Bank, and the Bank of England, are forming a banking consortium and are currently in negotiations with the Prussian government. A preliminary agreement has already been reached. The parties involved will jointly establish a new bank to issue 200 million guilders in bonds on behalf of the Prussian government. In return, they will take over Prussia’s currency issuance business.” As he spoke, a look of envy flashed in Fern’s eyes. Issuing currency was undoubtedly the dream of every financier. Everyone knew that the closer you were to money, the easier it was to make it. As long as a bank secured the right to issue currency, funding would never be a problem again. Flores was also aware of the banking consortium. However, it hadn’t caught his attention because of the negotiations with Prussia, but rather because of their “shorting of the mark.” In the financial world, it was common practice to collaborate with someone right after you’d just finished exploiting them. After a moment of contemplation, Flores asked, “What’s your plan? Don’t tell me you’re thinking of buying the dip?” Before Fern could respond, an employee rushed in anxiously and said, “Mr. Flores, good news! The stocks we’re trapped in have started to rise.” Fern’s face turned pale as he said, “Damn it, the news has leaked. We need to act fast, or we’ll miss out on the opportunity entirely.” … Many others made the same choice, and the stock exchange quickly became a hive of noise and activity. What they didn’t know, however, was that on the rooftop, the four major securities firms at the top of the food chain were already beginning their retreat. An elderly man sitting on a sofa, puffing on a cigar, asked, “How long can we keep the news under wraps?” A middle-aged man in a blue suit replied, “Mr. Will, at most two days, but it’s possible the truth could come out today. Although we’ve used the telegraph company to spread false information, the sudden interruption of telegraph communications between the two cities is bound to raise suspicions among the observant.” This was inevitable. Both Berlin and Frankfurt were major metropolises, with frequent trade and hundreds of telegrams exchanged daily. A sudden halt in communication would undoubtedly attract attention. Claiming it was due to line maintenance might fool ordinary people, but since the establishment of telegraph communication between the two cities, there had never been an interruption lasting more than eight hours. Yet, not interrupting the telegraph lines would have been even riskier, it would have exposed the truth in no time. Will nodded and said, “This is already quite good. Gaining this much time is more than I expected. We don’t have much time left. Everyone, get to work now. Close out your positions as quickly as possible and minimize the losses.” There was no other choice. The Prussian government had suddenly flipped the table, catching them completely off guard. Unlike the retail investors playing the stock market, they were shorting the mark this time. If they didn’t act fast, the losses would be catastrophic. … In stark contrast to the gloom hanging over Will and his team, the atmosphere at their neighbor, Bedford Securities, was far more harmonious. Like everyone else, they had been shorting the mark, but unlike others, Bedford Securities hadn’t been as greedy. They had exited the market after securing their profits. Thales remarked regretfully, “That old fox Will has finally been caught. But if he cuts his losses now, it shouldn’t cripple him.” In this industry, the fiercest rivalry often came from within. Despite the frequent joint actions of Frankfurt’s four major securities firms, which gave the impression of a united alliance, the truth was that these allies were the ones who most wanted to see each other fail. Philos chuckled, “Not necessarily. Losing money under normal circumstances is one thing, but the current situation is different. All signs point to an impending economic crisis. If you don’t have enough cash on hand now, who knows what might happen next?” Bedford’s CEO, Skvzhika, interrupted his two trusted aides saying, “Alright, gentlemen, whether Will faces ruin or not is a matter for the future. Now is not the time to kick him while he’s down. It wouldn’t look good if word got out.” “Mr. Skvzhika, a call from Vienna!” “Coming!” With that, Skvzhika hurried over. … After a while, Skvzhika walked out with an expressionless face. “Gentlemen, your work begins now. From this moment on, sell off all the stocks and bonds we hold as quickly as possible. Cash, we need a lot of cash right now.” Philos asked, puzzled, “Sir, the domestic economy is still in decent shape. Even with the impact of this incident, it shouldn’t collapse. We’ve already cashed out 80 million guilders over the past period, which should be enough to handle any crisis. Has something happened that we’re unaware of, or is the headquarters short on funds?” As a foreign powerhouse, Bedford Securities had become one of Frankfurt’s top four securities firms without ever being affected by external rules, a testament to the strength of its backing. Financially, it had close partnerships with several Austrian banks and had never faced a cash shortage—all thanks to the headquarters. Philos found it hard to believe that the headquarters could be short on funds. After a moment of hesitation, Skvzhika nodded and said, “Alright, I’ll tell you. You’ll find out eventually anyway. This time, we’re going big. Headquarters has decided to short the franc, and both of you will be among the key players. It’s not just us, half of the world’s top 20 securities firms will be involved. This is a joint operation between the British and the Austrian capitalists. You might have heard about the recent uproar over the international banking consortium. As for more details, I’m not privy to them either. Just be mentally prepared for what’s coming.” “Shorting the franc?” Even for two bold individuals like them, this news was utterly shocking. The franc was not like the mark. France’s economic scale was far larger. In the past, there had been attempts to short the franc on the international stage, but all had ended in failure. This time, with such a large-scale operation and even using Prussia as a cover, it was clear that things were far more complicated than they appeared on the surface. Thales raised his hands and said, “Shorting the franc seems a bit too ambitious. Can I just pretend I never heard this?” Skvzhika smiled faintly and replied, “I’m afraid it’s too late for that now. I suspect it won’t be long before someone is sent here specifically to ensure our ‘safety.’ You can try discussing it with them. However, I personally recommend that you both keep your mouths shut. If anything goes wrong, it could cost lives.” The two nodded reluctantly. Curiosity does kill the cat. If they had remained in the dark, they might still have had the option to refuse participation. But now that they knew about the plan to “short the franc,” backing out was no longer an option, unless they wanted to leave in a coffin. The much-talked-about international banking consortium was, as anyone with a bit of common sense knew, essentially a joint venture between British and Austrian financial circles, involving thirteen major banks. Seeing their low spirits, Skvzhika tried to reassure them, “Don’t be so pessimistic. It’s just shorting the franc, not a matter of life and death. Why the long faces?” After adjusting his emotions, Thales quickly regained his composure and put on an exaggerated expression. “No, Mr. Skvzhika. This is such a massive operation, and who knows how many powerful figures are involved. If things go south, who can guarantee they won’t take it out on us?”
[Previous | Table of Contents | Next]
Comments
Post a Comment