I'm back in 1990

Chapter 455: Short Selling

In April, international capital once again began to impact Hong Kong's exchange rate. This time, the momentum was much stronger than before. Hong Kong authorities struggled to stabilize the situation, but both the stock market and futures index fell.

Meanwhile, Zhang Sui, Zhang Yun, Ding Yi, and others entered the fray to profit from short selling. International capital got up early but arrived late, reaping meager gains and failing to meet their expectations. However, they still held a large amount of Hong Kong dollar loans and financial derivatives. If they could not achieve their goals, they would return empty-handed, which would be unacceptable to them.

So they began to gather their strength to make a final, all-out effort to completely destroy Hong Kong's exchange rate and reap what they wanted.

Seeing that the situation had temporarily stabilized, Ding Yi returned to Shanghai from Hong Kong. After returning to Shanghai, he went directly to the school to find Huang Xiaochuan.

He easily found his way to the Economics Department, casually grabbed a student, and asked, "Excuse me, do you know where Huang Xiaochuan is?"

The student, carrying books and heading to the library, pointed towards the classroom: "It seems Professor Huang is teaching a class right now. Why don't you go check the lecture hall?"

Ding Yi smiled and patted the student on the shoulder: "Thanks!"

He then headed towards the classroom, followed by two men in black and a man who looked like an assistant at a distance, which made the student carrying the books take a few more glances.

Upon arriving at the lecture hall, Ding Yi glanced inside through the window and then told his assistant and entourage, "Wait for me outside."

After speaking, Ding Yi went to the back of the lecture hall and found a seat.

Huang Xiaochuan, standing on the podium, is asking: "Why do companies lay off employees during an economic recession? What should the government do?"

One student answered, "During an economic recession, consumer spending doesn't pick up, so businesses naturally suffer. They can only rely on layoffs and other methods to get through this phase. What the government needs to do is boost the economy and stimulate consumption."

Huang Xiaochuan laughed and said, "That's a very good answer!"

Then Huang Xiaochuan changed the subject and said, "But that's plain language. We can use professional terms to summarize why companies lay off employees. I've summarized three reasons: first, the transmission effect of shrinking demand; second, the financial pressure on companies becomes explicit; and third, strategic adjustments in corporate expectation management."

In the event of an economic recession, I believe the government needs to intervene in four areas: first, strong demand-side stimulus; second, precise intervention in the labor market; third, guidance through structural reforms; and fourth, ensuring corporate liquidity. Below, I will explain the connections between these technical terms one by one.

"Let's start by explaining what the transmission effect of shrinking demand is."

When the bell rang, Huang Xiaochuan began to pack his things. At that moment, Ding Yi followed the students to the front of the classroom.

However, he didn't rush to greet Huang Xiaochuan. Instead, he stood aside and watched, because Huang Xiaochuan was surrounded by seven or eight students who were asking him questions.

After the students left, Ding Yi smiled and joked with Huang Xiaochuan, "Teacher Huang, your lesson was great!"

Huang Xiaochuan put the teacup into his briefcase and then asked, "When did you get back? I saw you as soon as you entered the classroom."

"I came straight to you as soon as I landed."

Huang Xiaochuan nodded: "Let's go! To my dorm."

The two started chatting as they walked.

Ding Yi pushed aside the willow branches blocking his way: "I just don't understand why you insist on staying cooped up in school. Aren't you worried about all those businesses you have outside?"

"What's there to worry about? It's not like I'm ignoring it. Besides, this doesn't conflict with being a teacher. I'm combining theory with practice." Huang Xiaochuan said to Ding Yi while responding to the students who greeted him.

"Let's have dinner together tonight. We've made quite a bit of money this time."

"I'll make arrangements for tonight. We'll go to my brother-in-law's place, and I'll treat you to a welcome dinner."

"Okay! I don't feel guilty about eating your food. You earn much more than me. You're really something. You just talk and people will run themselves ragged for you. You make money without saying a word. I wish I had learned from you."

Huang Xiaochuan rolled his eyes at Ding Yi: "You've got it all mixed up! One minute you're saying what I'm always doing at school? The next minute you want to be like me. Are you out of your mind?"

As the two were talking, they ran into Sang Weihong.

"Hey, isn't this Ding Yi?"

"Senior Sang, how come you still have such a great figure?"

Sang Weihong raised an eyebrow: "Ding Yi, are you praising me or insulting me?"

"It's definitely a compliment, senior. Where are you going?"

"I have some errands to run, I have things to do, I can't talk to you anymore, goodbye!" After saying that, Sang Weihong said goodbye to Huang Xiaochuan and Ding Yi and left.

Ding Yi shook his head as he watched Sang Weihong's departing figure.

Huang Xiaochuan didn't understand what this guy meant: "Why are you shaking your head for no reason?"

Ding Yi suddenly asked Huang Xiaochuan with a gossipy look, "Hey, tell me, you really never had feelings for Senior Sang?"

Huang Xiaochuan was furious: "Damn it, I think you're just bored. You wait, when I see your sister Huan, I'll tell her all those lewd things you did."

Ding Yi quickly begged for forgiveness: "I was just joking with you, why can't you understand a joke?"

Upon arriving at the dormitory, Huang Xiaochuan began boiling water to make tea.

Ding Yi looked around Huang Xiaochuan's dormitory room. Huang Xiaochuan had transformed this single room into a lounge and tea room, as well as two small bookshelves.

"Big spender, I've noticed you really know how to enjoy life. I really need to learn from you in that respect."

"What's there to learn? Anyone can enjoy this kind of thing, as long as they have the right conditions. Come on, have some tea!" As he spoke, the tea was already brewed, and Huang Xiaochuan poured a cup for Ding Yi.

Ding Yi's main purpose in coming to see Huang Xiaochuan today was to discuss the current economic situation in Hong Kong. In Ding Yi's view, Huang Xiaochuan has unique strategic vision, which has been proven by several events. The Hong Kong financial crisis is a case in point. If it weren't for his prediction and reminder, he might have already lost a fortune.

"Xiaochuan, what do you think will be the next move by international capital?"

Huang Xiaochuan did not answer the question, but instead asked Ding Yi, "Tell me your opinion first."

"Me? Fine, then I'll offer my humble opinion."

"I think they definitely won't give up easily. After all, they've planned and invested so much over such a long period of time. Giving up would mean huge losses. It's not like they can just back down now."

Huang Xiaochuan agreed, "That's right. It's the same principle as fighting a war. Before the outcome is decided, you have to at least try. And even if you retreat, you have to make a retreat plan, otherwise it will turn into a major defeat."

Ding Yi then asked, "Do you think their next step will be to reveal their true colors?"

"That's for sure. There's a cost to such a large amount of capital. The longer it drags on, the more disadvantageous it will be for them. They didn't meet their expectations the first two times, so they will definitely go all out next time. Once they do that, you should do what I told you before and switch from short to long positions, because this may be the final battle."

Ding Yi downed his tea in one gulp: "Don't worry! Although I don't have your strategic vision, I'm better at financial tactics than you. Just wait for my good news."

While the two were chatting, Huang Xiaochuan received a call from Xu Hui.

"Brother Xu, is something the matter?"

"Okay, I'll go right now!"

After hanging up the phone, Huang Xiaochuan said to Ding Yi, "The old man needs to see me. Wait for me here. I'll be right back. I'll go straight to my brother-in-law's restaurant later."

Ding Yi took the teapot from in front of Huang Xiaochuan, poured himself a cup of tea, and said, "Okay!"

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