America’s Road To Wealth

  Chapter 346 Combine Vertical and Horizontal Smith

  The financial crisis that occurred in 1997, to be precise, should be the Asian financial crisis.

   That crisis started in July 1997.

  The first country to suffer was the Dai country, and then quickly spread to Malaysia, Singapore, Nihong and Han countries.

  The currencies of countries such as Dai, Indonesia, and Han depreciated sharply during this period, and at the same time caused a sharp drop in most major stock markets in Asia.

  At the same time, this crisis has also impacted the foreign trade enterprises of Asian countries, causing the closure of many large enterprises in Asia, unemployment of workers, and social and economic depression.

   Reflected on the economic level, it broke the previous scene of rapid economic development in Asia.

  Basically, it is actually led by American financial capital and supplemented by European financial capital.

  Initiated by them at the same time, a blow and plunder aimed at the economies of emerging countries.

   It can be said that it is their old business.

   It’s just that they replaced the blatant robbery of their ancestors with the financial plunder that now looks more technical and modern.

   But essentially they are the same. .

  The consequences for Asia are similar to those of a hundred years ago.

   At most, it’s just that so many people don’t have to die.

  That is to say, from the beginning of this crisis, the economies of some Asian economic powers began to slump, and the political situation in some countries also began to be chaotic.

  The power of the Rim Asia and Greater Asia, which was originally rising, was interrupted.

  In that crisis, Huaxia was in the best situation. If it weren't for the protection of Hong Kong Island, it can even be said that there is no problem at all.

   Followed by the vv area, due to the special circumstances at the time, international hot money did not dare to do anything, so it was a lucky escape.

   This is a typical dollar tide dominated by dollar hegemony.

  The so-called U.S. dollar tide, in simple terms, means that the Federal Reserve reduces the attractiveness of the U.S. market by lowering interest rates, allowing a large number of U.S. dollars to leave the U.S. and spread to the world.

  After these dollars are distributed, they bring a lot of investment to the local area, as well as job opportunities generated after investment.

  It can be of great help to the economies of countries around the world in the short term.

  So whenever the U.S. dollar enters a period of several years of interest rate cuts, it is often also a time when the economies of emerging regions in the world are developing rapidly.

  Once the time is right, or when the domestic economic situation in the United States is sluggish.

   When the vampire is hungry and needs to **** blood.

  Then the Federal Reserve will gradually increase the benchmark interest rate accordingly.

  The consequence of this is that the dollar capital invested by the United States in the past few years will gradually flow back to the United States.

  Capital has always pursued stable high profits. When the interest rate of the Federal Reserve is high, they will return to the United States to earn interest.

   After a large amount of funds were withdrawn, after losing foreign investment capital.

  The situation of those emerging economic regions that have been developed with the help of external forces will immediately be in crisis.

   In a very short period of time, the vitality was severely damaged, and the exchange rate fell wildly.

  Generally at this time.

  The international hot money headed by Soros will act as a thug and start harvesting emerging countries whose immunity has been broken by the dollar tide.

   Wait for these robbers to leave with their pockets full.

  What is left behind is the emerging regional countries with a sharp rise in unemployment, currency depreciation, a lot of economic and GDP declines, and even the positive situation may begin to be turbulent.

   But don't worry, it'll be a while.

  The Federal Reserve will lower the benchmark interest rate again.

   Dollars will start leaving the US again and re-entering these countries that were "robbed" not so long ago.

  With the entry of a large amount of foreign capital, the economy began to recover again, and workers began to have jobs again.

  Obviously, a new round of tides has begun.

  Since the end of World War II, the U.S. dollar has determined global economic hegemony. The Marshall Plan successfully revived the European economy and turned it into a puppet.

   Such dollar tides have been happening for decades.

   This is a bit like some kind of magic cultivator in Huaxia fantasy novels.

  The big devil disseminated his own skills and techniques to his disciples, asking them to practice and increase their cultivation base.

  After they become masters, before they have been happy for two days, the big devil will attack and absorb all the skills of these apprentices.

  But it will not kill them, but after a while, give them new skills and let them continue to practice.

   Just like this, the cycle continues, and the big devil can roam the world with this trick.

  At the same time, you can use this method to suppress the second, third, and fourth, and determine your own hegemony.

  The rise of later generations is like China. Under this approach, at most they can only protect themselves, and they will even be affected by it.

  It can only be done so that it will not be as helpless as those younger brothers in emerging regions and the United States.

   But it's just that, because of the hegemony of the dollar tide.

   To put it bluntly, it is ultimately based on the unique combat power of the United States in 2001.

   It's like borrowing money to buy a tank.

   When your tank is really bought, and the creditor wants to ask you to pay back the money, you have to consider whether it can withstand the shelling of your tank.

  In this context, Soros and those international hot money can only be regarded as thugs at best.

   Soros himself is the leader of the thugs, and it is used as a command direction.

  Charlie Brown's Pizzeria.

  Hearing what happened to Alberti in 1997, Soros actually didn't feel humiliated.

   The finance capitalist lacks this feeling, especially since it is his strong point.

  What is humiliation as long as it is profitable?

  “From June 1999 to May last year, in a total of 11 months, the Federal Reserve raised interest rates six times in a row, with a rate increase of 1.75%.”

  Soros talked to Abel: "Don't you think this is the clarion call to charge?"

   "So you chose Hong Kong Island?" Abel asked.

  Soros nodded, "I have been buying Hong Kong dollars for half a year. You know what I mean."

Abel thought for a while, and said softly: "The Federal Reserve has raised interest rates six times, 1.75%. But don't forget that from last year to now, in response to the Nasdaq crisis and the September 11 crisis, it has cut interest rates twice. Second, the benchmark interest rate is now 1%. The repatriation of dollars is over."

"And don't forget. Last time China was able to protect Hong Kong Island, they will make the same choice this time. If we do this, we are not dealing with Hong Kong Island at all, but with the foreign exchange of a big country. confrontation."

"That's right." Soros said: "I will invite you. This time it's not just you and me. This time, Bridgewater Fund, Bridgewater, Greenwich, and Renaissance Technology will all end. Count you With Smith Capital, we can amass over a trillion dollars!"

  Abel knows all the companies that Soros mentioned. They are several well-known hedge fund companies in the United States.

  Generally speaking, the main components of international hot money are also these hedging companies.

  One of the characteristics of these companies is high leverage. Like Soros, he dared to pull 20 times the leverage in many cases, which is even more exaggerated than Aber's Smith Capital.

  So for these hedge funds, their managed assets are generally not exaggerated, at most tens of billions to hundreds of billions of dollars.

  As long as a part of the money is taken out, with exaggerated high leverage, tens of billions of funds can already be operated.

  The risk of this model is high. Every time it takes a large group of people to act together, it is possible to muster a terrible financial attack.

  Ultra-high leverage multiples bring exaggerated interest. The higher the interest rate, the higher the cost of capital.

   Therefore, the operations of hedging companies are basically short-term transactions, generally not exceeding two months.

   Facing Soros's proposal, Abel groaned, looking as if he was thinking about it, and this situation lasted for a few minutes.

  Soros didn't bother him, but quietly looked at this pizza shop that was said to be Abel Smith's favorite.

  Because Abel likes to bring people here to talk about things, gradually this pizzeria has become somewhat famous in the upper class of New York.

   Many rich and famous people in New York have come here to eat.

  After some people ate it, they praised the food here, and they came here often.

  As for whether the food here is really that delicious, or whether these people come here to eat because they want to bump into someone.

   Then it is unknown.

"How about this."

  Abel's soft voice pulled Soros' gaze back from his surroundings.

  He sees Abel say, "As long as Warren is in, I'll be in. How?"

   thought Soros, if you want to say no, just say so, Warren Buffett. That guy never does that kind of thing.

  Soros opened his mouth, wanting to persuade him again.

  But he heard Abel say to him: "George, are you interested in investing in Smith Capital?"

  Before the words of persuasion that he had just thought of were spoken, Soros was stunned.

   "What do you mean?" Soros looked at Abel.

   "Just like Warren and Michael. Invest in Smith Capital."

  Abel offered the conditions: "Use the shares of Soros Fund Company, plus the shares of American Express Company. The ratio is the same as theirs, how about 4%?"

   "What about the valuation?" Soros asked without hesitation.

  If Soros heard the exaggerated valuation of Smith Capital last year, he would have laughed it off, thinking it was a joke.

   After Buffett became a shareholder, Soros began to face up to Smith Capital.

   Wait until after PNC Financial Services Group becomes a shareholder.

  Soros has begun to study Smith Capital seriously.

   Later, after Bloomberg also took a stake.

  Soros has approached Bloomberg in private, and the two big oil men have talked a lot.

  After that, in fact, the sword of Wall Street already had some ideas about Smith Capital.

  At that time, Soros still disliked the high valuation of Smith Capital.

  Before listing, the valuation is 400 billion US dollars.

  This figure is too exaggerated no matter how you look at it.

   But then in London. Soros and Abel met and witnessed how Abel made money.

  Soros began to really move.

  In this year-end reception of Smith Capital.

  As suspicious as Soros, he is also completely attracted to Smith Capital.

   Now facing Abel's proposal, he naturally asked it without thinking.

   "You and Warren are almost a year behind." Abel said with a smile.

  Soros immediately said: "Not a year! Only nine months. Buffett joined your company in February last year."

   "Okay. Nine months off."

  Abel looked at Soros with a smile, "I really want to continue to use the valuation of 400 billion U.S. dollars. But now I am not the only shareholder in this company. I am responsible for Warren and the others."

"what do you mean?"

  "When the contract is signed. Let them be there. Or you go to communicate with them, as long as they agree to 400 billion US dollars, then I agree. If they don't agree, then I have nothing to do."

  Abel smiled and said: "But for the sake of our good relationship. I guarantee that it will not exceed 500 billion US dollars."

  $500 billion?

   Soros couldn't help frowning, the price is too expensive.

  For 4% of the stock, it will take 20 billion US dollars.

  Compared with Buffett and the others, they are directly 4 billion dollars more expensive.

   It can be said to be very expensive, because the market value of General Electric is now only about 340 billion US dollars.

   In other words, according to this valuation, Smith Capital is already more expensive than General Electric.

   And much more expensive.

  Soros didn't immediately agree, but he didn't refuse either.

  Because Abel still has some leeway, he has brought some benefits to the Buffetts, and he doesn’t have to be the bad guy himself.

  Cunning boy.

Soros thought for a while and said, "I will contact them. But on my side, I can't use all the stocks. If I am sure that I want to buy shares. In addition to the shares of American Express, I will take out 5 billion U.S. dollars in cash, and then Add a part of the stock of Soros Fund Company."

"This is impossible." Abel shook his head and said, "To tell you the truth, Smith Capital has no shortage of cash at all! Let me tell you a secret, the cash available to Smith Capital now exceeds 100 billion U.S. dollars. Biberk Hill Hathaway is worth twice as much. All I want is stock."

   "and."

  He spread his hands towards Soros: "Mutual holdings, cross-holdings, we can improve our trust in each other. Don't you think this is better?"

  Soros took a deep breath, and he said decisively:

   "20% of Soros Fund's stock, worth $3 billion. For the rest, I use stocks from other companies, such as American Express."

   Soros didn't agree, but he bargained with Abel in this way, basically meaning he was sure.

  In addition, the capital managed by Soros Fund Company is not very good in Wall Street, it is less than 30 billion US dollars.

   Among Buffett, Smith and Soros, he is obviously the poorest.

   Soros is not as rich as outsiders imagine. He has always been ranked around 30 to 40 in the richest list in the United States, with a net worth of 12 billion US dollars.

  Most of them are shares of Quantum Fund and Soros Fund Management Company.

  4%, worth 20 billion U.S. dollars in Smith Capital stock, cannot be eaten by Soros alone.

  Soros' idea is very simple, he can't eat it, but someone behind him can eat it.

  Like Bloomberg, 4% of Smith Capital shares have no less than five actual holders.

  Bloomberg is nothing more than a proxy and takes up the lion's share.

   Soros is now too, he will eat part of it. But the rest, Soros will allocate to other interested parties within his own interest group.

   Equivalent to these 4% of the stocks, Soros is not the only one holding them.

  Like Bloomberg's 4%.

  This is why Soros proposed to buy part of it with cash.

  Some people who intend to buy but do not want to reveal their identities are unwilling to take stocks and only want to cash out.

"Can."

  Abel stretched out his hand, smiled at Soros and said, "George, happy cooperation."

   "Happy cooperation." Soros also smiled for the first time, and shook hands with Abel.

   Karma—

  A crisp shutter sound sounded.

  Soros turned his head sharply, and saw David Jones, who often appeared beside Abel, holding a camera and aiming at the two of them.

  Just now is the sound of the camera shutter sounding.

"take it easy."

  He heard Abel's laughter: "Haha~ Take a photo as a souvenir. Then we will have a photo together in the future."

  Soros shook off Abel's hand angrily, and said:

   "If you do this, don't you worry about being said that we are acting in concert?"

   There is no need for Abel to explain, Soros knows what Abel is doing by asking people to take this photo.

  With this photo, Abel just needs to let his newspaper publish this photo.

   Then this photo of two people smiling and shaking hands, plus the location and time of shooting.

   Immediately, the stock of American Express, which is currently at a high level of around $43, will have a crazy decline.

   "Afraid of what?" Abel said indifferently:

   "Let the SEC and FINRA investigate. We are not really acting in concert. I am not the one who actively stirs up our hostile relationship. The board of directors of American Express has put in a lot of effort."

  Soros knew this too.

  The law on “persons acting in concert” is strict and prohibited.

   But this kind of thing also depends on the person, who is the person acquiring and the company being acquired.

  As long as it is not recognized as a "concerted person" acquisition model, it does not matter even if it is actually the case.

  Soros took the opportunity to make a request: "The share price of American Express cannot be calculated at $35."

   "$40, this is my bottom line. And you have to promise me a small request, not too much."

   "No problem." Soros agreed directly.

   Didn't ask what Abel's request was.

   It is estimated that Abel's request is too much, so his promise will also be invalidated.

  Paused, Soros said again: "Are you really not going to participate in the affairs of Hong Kong Island?"

   "Not participating."

"okay then."

   The U.S. stock market is closed in the afternoon. Tomorrow is Saturday, and the stock market will be closed for two days.

   Shares of American Express, stopped at $42.35.

  Abel Smith’s hostile takeover of American Express has attracted much attention.

   Not only because this is the largest hostile takeover after the outbreak of the September 11 crisis.

   It is also because of the offensive and defensive plots of the two sides along the way from the beginning to the present of this merger and acquisition case.

   It is almost comparable to the "barbarians at the gate" known as the most classic M&A battle in history.

  Whether it is a stock repurchase or a white knight raid strategy, it can be seen in the offense and defense of Abel’s acquisition of AmEx.

  However, after the previous rounds of offense and defense, Amex and Abel had contacts with each other.

  But none of them seem to really change the situation.

  Abe Smith's sudden silence and silence made the situation of this acquisition actually deadlocked.

  Except for the leeks and investors above, they want Abel to come and take over.

  Anyone with a discerning eye thinks that there is only one way left for the two sides, which is to confront each other head-on at the AmEx shareholder meeting.

   It will be held on November 20, which is the Amex shareholders meeting four days later.

  Abel Smith plans to nominate 5 more board members.

  If the goal is achieved, then Abe Smith can occupy a majority of the seats on the 9-seat board of directors of AmEx.

   And then obtain the leading right to pass the acquisition.

   It is worth noting that the board of directors of American Express released two consecutive news before the stock market closed to stabilize the falling stock price of American Express.

  The first of the two messages is that Jim Walton, one of the top 30 shareholders of American Express, has decided to vote for the director candidate nominated by American Express.

   What's more, Jim Walton said that he asked to postpone the shareholders meeting originally scheduled for November 20 for one month on the grounds of emotional tension during the war.

  The second news is that American Express announced at the same time that its 3.45 billion US dollars of overseas funds left overseas will be returned to the United States through investment channels and used to repurchase the shares of American Express.

  Part of this part of the stock is distributed equally to shareholders, part of the board of directors is rewarded in the form of dividends, and the remaining part is returned to the share capital.

  These two pieces of news stabilized the stock price of American Express before the market closed.

   "This is delaying time. Some shareholders thought that they could sit on the ground and raise the price to sell their stocks for more value."

  In Smith Capital, the office on the top floor of the Woolworth Building, Abel sneered when he heard the news reported by Alan Baker.

  Abel dismissed the dying struggle of the AmEx board of directors.

  Soros is on his side.

  Those so-called white knights, after knowing the news, there is a high probability that they will disperse.

  Without these troublemakers, the board of directors of American Express can't compete with themselves.

   "According to Glenda McNeill, vice president of American Express, who has decided to side with us."

   Alan Baker stood in front of the boss and reported softly—

"Many shareholders still insist that the value of American Express's stock is much higher than our quotation of 35 US dollars, even higher than the current market price. According to the preliminary voting results of shareholders, some directors of the original board of directors won more than 50% of the shareholders. support, with some directors only at around 40 percent.”

  In fact, in a listed company, there are not independent directors, but executive directors with real power in the company. Once the support rate among shareholders is lower than 80% to 90%, it means that there is a problem.

   Only 40% indicates that the problem is very big.

  This means that 60% of the shareholders do not support it. It is impossible for such an executive director to reassure the general meeting of shareholders.

   AmEx's board of directors is not ignorant of this.

   But they can't help it. They can only bite the bullet and bear it now, hoping that the white knight can repel the barbarians.

   "It seems that I really don't give up."

  Abel thought for a while, he took out his mobile phone and found a phone number on it.

   "Hey, Jess, how about a meal tonight?"

   "Haha, okay. You decide the location, I'm in New York right now. OK~OK. That's it, see you there."

Abel quickly finished the phone call, raised his head and said to Alan Baker: "Let AMC TV announce the photo taken by David. At the same time, we also announced that we have obtained their 6.9 from Soros Fund Company." % of American Express stock.”

   Alan Baker, knows who the owner of the phone call made by the boss just now is.

  Because of this call, part of it was suggested by the Smith Intelligence Group that Abel should make the call.

   "Okay. Then I'll get ready." Alan Baker smiled.

   "Go."

  (end of this chapter)