Exploiting Hollywood 1980

  Chapter 844 Global Shock

  It was close to the wee hours of the night before Donna called again to report her safety.

"Today all the stock markets in the world have collapsed. The stock markets of about 19 countries have fallen by more than 20%. The trading system in Britain has not yet fully recovered, and the stock markets in New Zealand, Australia, and Hong Kong have continued to fall. Breaking below today's Dow Jones drop...

   The crisis is spreading, and it seems that only Japan's Nikkei index has a relatively small decline, only half of ours. "

  The Simmons fund that Donna belongs to has experienced relatively good declines. Their fund does not use super leverage, so there is no crisis of margin liquidation.

  Donna is more excited now. Just entering the industry, you can watch a stock market crash comparable to the Great Depression, but you don't really lose money in it. It is a very rare experience for her to work tirelessly until midnight.

   "What happened? Our economy isn't as bad as it was during the Great Depression, is it?" Ronald couldn't figure out what was going on. Everyone in Hollywood today is talking about the stock market crash. It seems that they care more than Wall Street, and they are professional stock speculators.

   "Some people think that the tax increase proposal of the Grand Commander triggered panic. There will be no tax incentives for each capital gain in the future, and deferred tax payment is no longer feasible.

   Some say it was the hurricane in London, which made many transactions yesterday not delivered, causing panic.

   It should not be the prelude to the Great Depression. Our companies in America are very profitable. "

   "There is no sign of a big drop, and the people here are a bit abnormal." Ronald saw that the mental state of ordinary people here in Los Angeles was a bit wrong. The bull market in the stock market has been very good in the past two or three years. Many people put their retirement capital into it in an attempt to increase their value. The impact of the stock market on the public is actually very large, and it is far from comparable to the proportion of stockholders in the Great Depression.

   "If there are signs of a stock market crash that everyone can see, it won't be a stock market crash. I'm talking about it one by one here. I heard that when the Great Depression started, it was also inexplicable. No one can explain the reason."

   "Ah... no way? Is there really going to be a Great Depression? Is this a total collapse that cannot be avoided at a certain stage of social development?" Ronald was also a little panicked.

   "You sound like Mikhail, the general secretary of the Soviet Union, hahaha." Donna was amused. "Actually, I have an idea. This stock market crash seems to be the result of technological progress."

   "How do you say that?" Ronald heard that Donna had her own thoughts on the stock market crash, and he took it seriously. This cousin was smart since she was a child, and the advice she gave her before had good results, so I want to hear her thoughts.

   "I'm not sure, but when I was on Wall Street with various investment banks and fund managers, I discovered a phenomenon..."

  Donna shared some observations of her own. Since entering the 1980s, Wall Street investors have begun to use computer technology to make profits for themselves. Many fund managers have begun to use a tool called program trading.

  Originally on Wall Street, those traders with quick hands and good connections were the most popular. They can list, buy and sell at the fastest speed in the ever-changing stock market.

  But computer programs are faster than humans. They have no emotion and no hesitation. As long as the set conditions are met, they will execute the planned trading plan without emotion.

   Therefore, many funds that do hedging transactions have taken a fancy to the benefits of these computers, which are faster and more disciplined than humans, and have begun to set up a large number of programmed transactions. One of the functions is to stop loss.

  As long as the stocks and stock index futures in their plates fall by a preset percentage, they will start to sell automatically.

  But the stock market this morning was affected by the London Stock Exchange. When the market first opened, many funds with a global presence had to sell stocks today to obtain the required positions because they did not complete the delivery on the London Stock Exchange yesterday.

   But everyone is trading with computer programs, so there is a rush to sell. Within tens of seconds of the opening, a large number of selling orders resulted in much more selling orders than buying orders.

   This caused a short-term decline in stock prices. After falling to 5%, the trading program on the New York side also started to trigger, and stocks continued to be sold automatically.

  In this way, the position is gradually increased, and the position that could be satisfied before has become insufficient due to the rapid decline in the stock price, and the automatic selling order continues to be triggered by the program. In this way, the vicious circle began to strengthen itself, falling, the position was not enough, the program automatically sold, and continued to fall.

   "It's like when the crowd is in danger, they start to run around and trample on each other. There is a term in economics to describe this, which is called herd instinct." Donna explained to her lay cousin.

   "It makes sense for you to say that. Then why did the stock market in Japan drop the least? Don't they use programs to trade?"

  Ronald thinks that Donna's theory doesn't make sense. Japan's computer industry is also very developed. They can manufacture all chips and accessories from CPU to memory. There is no reason not to use computers to speculate in stocks, right?

  Why did Dongying’s Nikkei index only fall by half of the Dow Jones’s?

"Because Dongying's stock trading system is relatively advanced. Their stock market has an automatic protection mechanism. If a stock falls by more than 10%, 15%, it will automatically suspend trading. International investors over there are also not allowed to sell naked. , the margin for short selling orders will also be required to pay a larger amount as the price changes.

   And their Ministry of Finance has more power than our Treasury and Federal Reserve. When our stock market fell unilaterally, their officials had gone to the four major securities brokerage companies to drink tea, and persuaded them to buy stocks from a "moral" point of view, so as to prevent the market from falling further. "

  Due to the time difference, Donna watched the performances of multiple stock markets around the world without interruption.

   "What's the use of moral persuasion?" Ronald didn't believe that the Japanese people would still speak morally at this time.

   "It was very useful. After drinking tea, they began to buy a large number of stocks of the Dongying Telegraph and Telephone Company, and the Nikkei index stabilized as a result."

   "Okay", Ronald didn't expect it to be such a "moral" persuasion, "You remember to call your aunt, she can't get through to your phone, she is in a hurry."

   "I forgot, my God, I'll call her right away." Donna hung up the phone.

The more Ronald thinks about it, the more he feels that Donna's analysis makes sense. If her judgment is correct, then in fact, the major funds can slowly clean up the messy selling orders tonight. If someone comes out to save confidence tomorrow, the stock market can be stabilized. No longer falling.

   But confidence, who can say this kind of thing accurately?

   Today Ronald answered too many calls, and everyone panicked. It is really hard to say whether there is any confidence that the stock market will stabilize and rebound tomorrow.

  Roger Coleman finally called. He had lost a lot of money in the stock market. Coleman was very embarrassed. The cash he could use already had problems with the original shooting plan. Coleman offered to delay filming "Ecstasy" until he could adjust the funding for the filming.

   Ronald agreed, this kind of joint venture project between the two companies can only be postponed temporarily when encountering such changes.

  Bruce Willis' agent also called Ronald's agent Nisita to make a deal. When the stock market is in turmoil, a salary of 5 million US dollars seems so attractive.

  Bruce Willis would like to postpone the shooting until next year, so that he can get a huge sum of 5 million. Otherwise, next year, this kind of good thing may not necessarily happen again.

  The most anxious thing is 20th Century Fox. One of their bosses, Barry Diller, called Ronald himself and begged him to go ahead with the film.

  He specifically proposed that Fox had a good relationship with Harrison Ford because of Star Wars back then. If necessary, he could personally come forward and persuade Harrison Ford to give up some requests for script revisions and participate in this movie.

   "Ronald, have you finished your phone call with your cousin? Will it fall again tomorrow?" Joel Silver looked up and asked Ronald while eating the takeaway ordered by Ronald in the living room outside.

The money earned by Silver's "Lethal Weapon" has not yet been paid back from the movie theater, so he has not bought any stocks, or radical financial products based on the stock market. He is another rich man in Hollywood. A relatively detached person.

  The situation changed suddenly, and Joel Silver desperately hoped that he could unify his position with Ronald. So just come to Ronald for an interview.

"I don't know. Donna said that it is unlikely that the continued decline will become the Great Depression." Ronald nodded to Silver, and picked up a piece of salami and ate it, "What do you think happened to Fox? Barry Diller is also in such a hurry, is Fox also investing in stocks?"

   "They are not speculating in stocks, but they can't get financing on Wall Street." Jolf sighed.

  Wall Street has suffered heavy losses this time, and Twentieth Century Fox has always relied heavily on leveraged financing from Wall Street. After the big boss from Australia bought Fox, he turned around and used it as collateral to borrow a large amount from the bank to increase leverage.

   With the money he got, he began to buy up local TV networks in America again. Financially speaking, Fox was already overwhelmed.

   "You mean, they're going bankrupt?" Ronald asked.

   "It's not so fast. Twentieth Century Fox has always been like this. Back then, when Hollywood was facing a television crisis, they also put all their eggs in one basket. They invested 44 million US dollars to shoot Cleopatra, which was 44 million in 1963."

   "This movie made money?" Ronald was surprised, not to mention 1963, even a big production of more than 40 million US dollars is very risky.

   "Thanks to Elizabeth Taylor, rumored to be having an affair with Richard Burton, audiences flocked to movie theaters to see Taylor flirt with lover on screen, and Fox was saved from bankruptcy."

   "I see, they haven't had any big productions recently, right? Why are cash so tight?"

  “I didn’t make any big movies, but they invested a lot of money in the construction of the Fox Tower, and now it seems that the renovation progress has come to a halt.”

"Well... Building a house is also a monster that attracts money." Ronald remembered that Minahan Golan, his brother's cannon, also started to build his own building. Although the scale and number of floors were not as good as Fox's, this time it was quite enough. .

   "So, didn't that old slicker Kerkorian slip past again?" Ronald turned to think of the casino tycoon who was considered unlucky a few days ago.

  Before the stock market crash, regardless of the low valuation, he just raised nearly 90 million on Wall Street. This old slicker's sense of smell is really keen. Although the valuation is a bit low, he can't get financing now.

  In tough times, cash is king. Many people who are short of cash have to exchange their good projects for cash if they want to survive at this time.

   "Let's wait, we still don't know what will happen tomorrow?" Ronald felt that at such a turbulent time, it was not appropriate for him to make a big decision.

   "If Harrison is willing to compromise?" Joel Silver is still obsessed with Harrison Ford.

   "I think his finances are quite stable. Unlike Stallone, there is a real problem." Ronald felt that Ford would not compromise, and he did not spend money like Stallone.

   "What if he wants to?"

   "Then I will quit the director job, and we will find a suitable director to shoot a different story."

   "Don't, don't, let's look again", Joel Silver saw that Ronald was unwilling to compromise. In contrast, Ronald's status to the project was more important. The star can be replaced, but it is not easy to find a replacement for such a rich and charismatic director.

  …

   "The Federal Reserve, in accordance with its mandate as the nation's central bank, confirmed today that it is prepared to act as a source of liquidity to support the economy and the financial system"

  Early the next morning, before the New York Stock Exchange opened, the chairman of the Federal Reserve, Alan Greenspan, began to give a televised speech. He wears small round glasses and looks a bit like Hollywood director Woody Allen. Like Woody Allen, Greenspan is also a musical instrument lover and has a professional saxophone playing level.

"Fed sources said that this brevity is well thought out to avoid misunderstandings. We have learned the lessons of the Great Depression in history and tried our best to avoid liquidity drying up..." The hosts and guests on the TV began to analyze Greenspan speech.

   "Is this good news? Will there be a rebound?" Ronald and his agent Richard watched live TV in the office.

  Countless people like them are also paying attention to the latest actions of the Federal Reserve.

   "The market opened, it went up, it went up..."

  The stock index on TV bounced a few times with the good news before the market opened, turned green, and began to rise.

   After more than two hours, the Dow Jones Index began to lift, and gradually began to recover the lost ground yesterday, and it has corrected by about 100 points.

  The employees in the company were all watching the TV screen, and Ronald didn't blame them. It was related to everyone's wealth, and there was no way for such a big matter to attract people's attention.

  The stock index continued to rise. At noon, depending on the momentum, before the market closes today, it will be able to regain a little bit of yesterday's drop.

   "Let's go, it's almost here, let's go to the hospital."

   Seeing that the trading volume at noon became smaller and the exponential curve was lying lazily, Ronald went to Richard and went to the hospital to visit Paula Wagner, who had just given birth.

   "The stock market picked up in the morning." Seeing Nisita holding his wife Paula's hand in the hospital, Ronald whispered in his ear.

   "Thank God." The two brokers and husband and wife both heaved a sigh of relief. Many of their clients were severely damaged in yesterday's plunge, and now almost all projects are at a standstill. If it goes down today, things are going badly for them.

   "Boy, what's his name?"

   "Called Zachary", Paula Wagner looked tired in the hospital bed, unable to speak.

   "Good name", Ronald also didn't know that people of Italian and Jewish descent should adopt that kind of etiquette. He didn't get an answer when he asked Richard, so he simply went to Chinatown to buy some gifts.

   "When I went to Huaguo, they would eat this kind of red eggs when they gave birth to a son. I happened to find someone from Chinatown to make some."

   Ronald gave the red egg to the Nisita couple, and they accepted it happily.

   "Thank you," Paula wants to get up and say thanks.

  Ronald quickly asked her to lie down, "Did Tom send you a cake?"

   "Hahaha...that's Christmas cake", Paula was very tired and grinned.

   "It seems that you are in good spirits, take a good rest, Paula", Ronald quickly asked her to lie down and rest, and came out to chat with Nisita.

   "What's the situation in Hollywood now", the two leaned against the wall and smoked. It's not the first time that Nisita has a child. But Paula was having a baby for the first time.

   "It's very bad. Stallone is at risk of bankruptcy. Many stars have also called and cried. What's worse, all the big productions that the studios are planning are suspended. They don't know when they can resume."

   "You can stay with Paula. In this situation, we only have a holiday. I hope to rebound a little more this afternoon, and I can't come back halfway."

   "In that case, I think Stallone can keep his house." Nisita also smiled, and turned back to the ward.

   "Do you want to take a vacation and relax?" Richard accompanied Ronald. He only had Ronald as his main client, so he wasn't as worried as Nisita.

   "Where to go on vacation? What's your idea?" Ronald knew that Richard was very considerate.

"Do you remember the model girl in the Pepsi commercial?" Richard adjusted his glasses, "Christie Turington is now a full-time model in New York. She was selected by Yves Saint Laurent (YSL) for the latest season main model.

  "Mr. Saint Laurent, the designer, has always wanted to invite you to attend the press conference. If he has the opportunity, he will show his fashion show. He is very optimistic about your modeling career."

   "Hahaha..." Ronald smiled for a while, and began to miss Turington's shy smile again.

"where?"

   "In New York, if you're interested..."

   "I can be an audience, but it's okay to be a model."

  …

  Back home, Ronald was about to call his aunt to report his vacation trip to New York. The news on TV started broadcasting again.

   “Today, the Federal Reserve injected $17 billion into the banking system through the open markets—an amount that exceeds 25 percent of bank reserve balances and 7 percent of the entire nation’s monetary base

  cough cough..."

  The hostess of the show suddenly coughed while talking, and her tone was even trembling because of panic. "

   "Fall, fall..."

   Staying with Ronald and watching TV, Little Bard couldn't help but say it.

  I saw that with the news of the Federal Reserve’s major moves that broke the norm, the Dow Jones index began to turn down again...

  Then...continued word by word, lost all the lost land recovered in the morning, and changed from green to red.

   "The Federal Reserve began to act as the lender of last resort in response to the crisis. It provided liquidity through open market operations and morally persuaded banks to lend to securities companies. This was the last move. Greenspan fired all the bullets at once."

  The guest economist looked depressed, and the reaction of the stock market was like that of a car accident victim who was sent to the emergency room.

   "You didn't buy stocks, did you?" Ronald looked at Little Bard's uncomfortable expression.

   "I didn't buy it, but Lucy did. We were going to save for our wedding."

   "It's okay, if you have any difficulties, just tell me."

   Ronald patted Little Bard on the shoulder. The wedding was supposed to be done by the bride's father, but the black girl's father...

   "Ring ring ring ring..."

  At this time the phone rang, and a female voice said to Ronald, "Mr. Li? Here is your international call from Xiangjiang."

   "Hello? I'm Ronald", Ronald waited for a while, and there was a click, and he was transferred to the line of the caller.

   "Luo Sheng, I am Aaron." The voice of Jackie Chan came from the phone.

   "Hello, Jackie, what can I do for you?"

   "Sister Jiao, come and ask for me, Luo Sheng doesn't understand Cantonese."

   "Mr. Luo, I'm A-Long's girlfriend Gillian. A-Long wants me to ask you, will the stock market still fall from tomorrow? The Hang Seng Index here has dropped a lot..."

   "I don't know about it. My price has fallen by nearly 25% in two days."

   Ronald heard the tremor in the voice of the speaker opposite.

   "Hey, forget it, he is a great director, not a stockbroker." Jackie Chan came over to answer the phone, invited Ronald to meet next time he went to Asia, and then hung up the phone.

   "Don't worry, Aaron, you don't have much money in the stock market anyway..."

   "But it will be miserable for someone... Hey, forget it, I can't control so much, let Aqiang sell it tomorrow."

  This stock market crash, in this era of deep international financial integration, has surpassed the scope of the country and spread to all parts of the world.

  Jackie Chan has no chance to sell stocks when the market opens, and the United Exchange announced that the market will be closed until the weekend.

   On the third day, the stock market continued to fall, but at a much slower rate. Staying lifeless in Hollywood, Ronald didn't want to see so many dejected faces, so he got on the plane arranged by Richard and went to New York to attend the launch of Saint Laurent's new clothes in 1987.

   At least the beauties in the fashion industry can still laugh at themselves.

  (end of this chapter)