The penniless son of the penniless ...

Chapter 275: Big Mao overturns the table, and international speculators are in trouble

Senior executives of banks and financial industries in Russia have also realized the seriousness of the problem and have actively held meetings to discuss solutions.

Finally, on August 8, the Russian government announced that it would devalue the ruble, default on domestically issued government bonds, and suspend repayments to foreign creditors. On the same day, the Russian government and its central bank issued a joint statement, which said that the Russian ruble would depreciate significantly and the exchange rate against the US dollar would expand from 17 to 5.3 rubles to the dollar to 7.1 to 6.0 rubles to the dollar.

Russia's ruble-denominated debt will be restructured to avoid large-scale defaults by local banks, with restructuring measures to be announced separately. Payments on some banks' liabilities, including debt and currency option transactions, will be suspended for 90 days.

Once this news was reported, the financial institutions that had been opening champagne to celebrate their huge gains from shorting the ruble in Russia were completely dumbfounded!
The funds that were invested in short selling were almost frozen by the Russian authorities! Want to cash out and run away? Sorry, it will take at least 90 days!
But the exchange rate, which is a highly policy-driven short-selling operation, changes almost instantly. Perhaps unexpected changes will occur in the next second, causing their original short-selling plan to fail. And this time, the big Russians' reckless approach directly buried all the international speculators who were full of confidence before!
Everyone knows that Russia's current economic situation is not good, and the exchange rate of the ruble to the US dollar has also dropped significantly as they expected, but they have no way to cash out now. They can only watch and curse Russia's lack of martial ethics. There is no other way!

Expecting the bigwigs in the US to contact Russia on their behalf and ask them to cash out the borrowed funds? Isn't this just telling Russia that it was the Americans who instigated a bunch of financial institutions to do this? !
……

Wall Street, Goldman Sachs headquarters.

The atmosphere in the conference room was quite quiet, and almost no one took the initiative to speak. They were badly fooled by Vice President Jacqueline Bernard's investment plan to short the ruble. They had previously agreed to a one-time start-up capital of 20 billion US dollars for the operation under the lobbying of the other party.

But he never expected that the investment that he thought was easy to make would run into Damao, a reckless man who did not follow the rules. Now all the money he invested was lost in an instant, and it would take at least three months before he could withdraw the money.

Who among those present would not know that this time it was clearly a case of "throwing meat buns at a dog, there is no way back"!

When he thought about the fact that his company's cash flow of 3 billion US dollars was trapped, even if he could get it out in three months, he might not get back half of it. In order to increase his profits, the confident vice president Joaquin Bernardo even increased the leverage by 4- times, trying to fully prove his investment ability and means through this investment.

As a result, such a big problem has arisen now. Not to mention protecting the principal, even those big Russian banks that helped him provide leverage will cause trouble for him and Goldman Sachs because of their overdue failure to repay the borrowed funds!
With such a huge loss now, even President Henry Paulson, an old man who has seen many storms, finds it difficult to bear for a moment.

Matto Walls, who had always been at odds with Jacqueline Bernard, took the opportunity to complain, "Remember half a month ago, I made a mistake in the short position I bought in the futures market against Goldman Sachs, resulting in a loss of tens of millions of dollars. Our vice president, Jacqueline Bernard, has emphasized that the person responsible for the mistake must be punished accordingly!"

"If we can't give the other party a corresponding punishment, then whoever makes a mistake in the future can use his past merits to try to offset his mistakes? How can we convince others in the future? Mr. Bernard, am I right?" Mato Walsh smiled brightly at the other party's extremely ugly face, and continued to stab him without caring at all. It is said that fortune changes over time, but I didn't expect that it has only been such a short time, and it is the turn of this hateful guy to be in trouble!

"...Mato Walsh, don't go too far! This investment project was reviewed by everyone. Who could have predicted Da Mao's unilateral move..."

Joaquin Bernard, who was mocked directly by his competitor, was naturally very annoyed, but at this point, he could only force himself to explain. As for letting him take the blame alone, it was definitely impossible!

……

Seeing that his colleague Joaquin Bernard was trying to drag them down at this moment, even CEO Henry Paulson couldn't hold back! It was obviously your idea, and you were the one who led it. Now that such a big problem has arisen, you want to pass the blame to us? Isn't this too unfair? !
Henry Paulson, who was a little annoyed, criticized Joaquin Bernard in front of everyone. At the same time, as Matt Walls had just said, since there was a mistake and the company suffered losses, everyone must bear the corresponding responsibility, without exception.

Seeing this, the others also spoke up. Seeing that many company executives who had a good relationship with him chose to defect at the last minute, Jacqueline Bernard was very disappointed at this moment. He knew that this time he was completely defeated. Unless a miracle happened, he would have to retire from the top of Goldman Sachs Group!
After all, the losses amounted to hundreds of millions or even billions of U.S. dollars. Such sky-high losses are too much to bear even for a Wall Street giant like Goldman Sachs. There must always be a big shot with sufficient status to be responsible for this matter. Only then can they give an explanation to the outside world and restore the reputation of Goldman Sachs as much as possible.

Perhaps due to the failure of shorting the ruble, the liquidity in Goldman Sachs' current account has become noticeably tight.

Part of the investment funds available in their accounts come from the company's major customers. If any negative news emerges in the future, leading to large-scale collective withdrawals by customers, they will probably find it difficult to cope with it. At that time, it will be an extremely troublesome public opinion crisis for Goldman Sachs!

President Henry Paulson decided to seek help from several other financial institutions to obtain a certain amount of capital turnover, and at the same time urged the vice president in charge of the company's listing to speed up the process.

As long as Goldman Sachs Group goes public, the company's stock will be able to obtain huge amounts of financing in a short period of time through stock market speculation and price increases. By then, with a large amount of funds to circulate, they will be able to quickly survive this sudden crisis.

(End of this chapter)