Western economists deride the Hong Kong Special Administrative Region Government's rescue action as a violation of the principles of free market economics. Many local economists in Hong Kong also believe that the Hong Kong Special Administrative Region Government's use of foreign exchange reserves to support the market is unreasonable and that it is market behavior.
Mr. Dong issued a statement that the SAR government will, as always, adhere to the policy of not intervening in the stock market and futures market activities. However, when necessary, that is, when there is an obvious connection between stock speculation and futures, the SAR government has the responsibility. Taking decisive measures to reduce market chaos, our economy needs a healthy environment to quickly complete adjustments.
China's announcement that it will maintain Hong Kong's prosperity and stability at all costs and protect its linked exchange rate system has given all sectors of Hong Kong society a shot in the arm and let the world know that China will maintain the stability and health of Hong Kong's financial market.
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On August 24, international hot money sold a large number of 33 Hang Seng stock indexes, causing the Hang Seng Index to plummet 300 points in a short period of time. The SAR government struck again and intervened in the market. The main bulls fought back, and the Hang Seng Index was quickly pulled back. At the close, the Hang Seng Index rose. 318 points.
At the close of the market on the 24th, the futures index was pushed up to 7820 points.
International hot money has 100,000 short orders for the August contract of Hang Seng Index futures, and the average price of the short orders is 7,500 points for the futures index.
If settled at 7820 points, it would be equivalent to a loss of HK$3.2 billion for international hot money on the Hang Seng Index futures August contract. Add in the high buying and low selling of Hong Kong dollars and the 33 Hang Seng Index component stocks, and the loss would not be less than HK$10 billion!
How could the arrogant and arrogant Soros give up?
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"Julian, John, Russia suddenly closed its bond market. Not only our funds were trapped in Russia, but also funds from Citigroup, Wells Fargo and Bank of America were trapped in Russia. Our application for a US$10 billion short-term loan was rejected by the three banks."
On the 24th, in the face of the full counterattack by the Hong Kong Special Administrative Region Government, Chinese-funded institutions and local funds, international hot money was retreating steadily. Quantum Fund President George Soros, Tiger Fund President Julian Robert and Ltcm President John Meriwether were in Singapore A meeting was held at the Hilton Hotel to prepare for the final battle four days later.
The complacent Soros is also worried. Quantum Fund, Tiger Fund and Ltcm, which have a winning chance, have a large amount of funds suddenly trapped in the Russian bond and stock markets, without even a chance to cut their flesh!
In early 1998, after completing his sweep of Southeast Asia, Soros left a group of people to continue shorting the Hong Kong dollar, Hang Seng Index and Hang Seng Index futures August contract. He led Quantum Fund, Tiger Fund and Long-Term Capital Management and other international investors. Hot money is aggressively attacking the Russian stock and bond markets in an attempt to harvest Russia as a whole, which also "incidentally" realizes the United States' ambition to "cut Russia into eight pieces."
What Soros did not expect was that the Asian financial crisis that he single-handedly caused would eventually overturn him.
The spread of the Asian financial crisis and the collapse of factories have caused global oil prices to plummet. Russia, which relies on oil and natural gas exports to earn foreign exchange, has seen a significant decrease in foreign exchange income. Interest rates in the short-term debt market have skyrocketed. Fiscal revenue is not enough to repay the interest. There are concerns in the market about the depreciation of the ruble and the imminent debt default. Rumors spread like crazy.
At the same time, the Asian financial crisis caused Asian countries such as Japan and South Korea to withdraw investment from Russia in order to relieve their own financial crises, causing Russia's stock and bond markets to plummet. When Russians saw that the economic situation was not good, they felt that the ruble would definitely fall like the Thai baht. They made the same mistake and went to banks to exchange dollars, causing the ruble to plummet.
International hot funds such as Quantum Fund, Tiger Fund and Ltdm, which have always shorted others, have been trapped in the Russian stock and bond markets.
Soros voiced his support for the Russian economy, called for Western support, and rescued Russia, but he could not save the Russian economy.
However, Soros did not give up. He decided to continue to use his three-dimensional sniper theory to continue to depreciate the ruble, short Russia, and make a comeback.
Soros, who thought he was smart, met pJ who didn't play by common sense!
On August 17, pJ, who was appointed to handle domestic economic affairs, directly announced the devaluation of the ruble by 50% and lowered the upper limit of the ruble exchange rate to 9.5:1. The repayment of US$15 billion of foreign debt will be deferred for 90 days, and US$20 billion of treasury bonds due before December 31, 1999 will be converted into 3-year, 4-year, and 4-year medium-term treasury bonds.
pJ also announced that trading in the Russian government bond market was suspended until the conversion was completed.
Soros, Robert and Meriwether were stunned. The Russian capital market was frozen, and it was too late to stop the losses.
The US$35 billion in funds that European and American countries intended to make a fortune in Russia was trapped in Russia.
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"Mr. Sun!"
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On August 24, Sun Jian took his family to Xiangjiang by plane and took his parents, father-in-law and mother-in-law to visit Xiangjiang.
Wang Dongming, Chen Huamin, Li Dong and others went to Xiangjiang Airport to greet him and exchange pleasantries.
Flood control in the Yangtze River has come to an end, and the Taobao Holdings Company's flood-fighting and rescue commando team was disbanded on the 22nd.
Xiang Dongping has been staying in Jiangcheng for the past three months to give birth and take care of her children, so she came out to relax.
Sun Liang traveled far away for the first time. In order to graduate their PhDs as soon as possible, Sun Yuan, Xiang Dongting and Liu Xin stayed in school to do projects during the summer vacation. They flew from the United States to Xiangjiang to visit Sun Liang and Sun Dong, and also spent a few days with their parents.
Sun Dong will go to kindergarten on September 1st.
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On August 26, there were two days left before the settlement date of the August contract of Hang Seng Index futures. The Hong Kong government wanted to know how powerful the stock market would be to compete with international hot money without the government entering the market?
President Ren personally called Sun Jian to tell Sun Jian, who had brought his family to visit Xiangjiang, but was actually present at the scene of the decisive battle.
At 3:08 on the same day, the Hong Kong government, which had always played a bullish role, suddenly stopped buying all stocks and futures, and actively sold the August Hang Seng Index futures contract, triggering international hot money to follow suit. In just two minutes, the Hang Seng Index plunged 160 point, the August contract of the Hang Seng Index futures fell nearly 300 points, with a transaction volume of nearly 10 billion. At this time, the Hong Kong government suddenly bought a large number of Hang Seng shares and the August contract of the Hang Seng Index futures, pulling down the stock index and the August contract of the Hang Seng Index futures. Return to original level.
This test made the Hong Kong government take a breath of air. The strength of international hot money cannot be underestimated. As the Hong Kong government expected, this time it shorted the Hong Kong exchange rate, Hang Seng Index and Hang Seng Index futures August contract. Quantum Fund and Tiger Fund alone mobilized With more than 50 billion U.S. dollars invested, including other European and American investment funds, the international hot money participating in this short-selling will not be less than 100 billion U.S. dollars. A fierce battle is imminent, and both sides are waiting for the best time to take action.
On August 27, the day before the settlement date of the August contract of Hang Seng Index futures, the US Dow Jones Index fell 217 points, and European and Latin American stock markets also fell sharply.
