Short-selling was a common financial transaction.
The stockbrokers in Bupenn used the simple and intuitive method of "buying big and small" to explain to customers who did not know anything what a short was. This simple and straightforward way of saying it made it easier for customers to understand what they were facing.
To be more specific, the price of a financial product was 100 yuan each. At this time, A borrowed one from B and sold it to other buyers, and A had 100 yuan in his hands.
After a period of time, when the product fell to 50 yuan each, A spent 50 yuan to buy back the product and returned it to B.
In this transaction, A used the price difference to make a profit of 50 yuan because the product fell. This was the process of making a profit by shorting.
If the product did not fall but rose, the amount of increase would be the amount of loss.
Of course, this was only a simple overview. In fact, there were some other factors that needed to be added to the overall calculation of profit and loss, but overall, this was the principle of shorting.
Lynch wanted to lend money to Mr. Herbers. Mr. Herbers would take the money out and exchange it for other currencies. When Galil became worthless, he would spend money to buy back the money at the price of waste paper and return it to Lynch. What was left in his pocket was his profit.
But would Lynch be such a kind person?
This was a problem, a big problem.
Mr. Herbers did not think that Lynch was a good person. The reason was simple. He had just stated that his purpose was revenge, revenge for a harmless joke two years ago.
So what he said now, could it be true?
Was he really helping him because of a matter of principle, or was this a new trap?
Mr. Herbers' emotions were very complicated at this time. It was difficult for him to concentrate on anything. The impending bankruptcy made him want to pee. He closed his legs and asked a question, "How much do you have?"
He asked how much money Lynch could lend him and how much Galil could he lend him. If Lynch had enough cash, he might be able to recoup his losses.
He thought about it briefly. Just like the previous business, he did not find any problems. However, at this moment, he did not allow himself to weigh the pros and cons. He had to find a way to solve these problems as soon as possible.
Once Galil completely collapsed, he wouldn't even have a chance.
Lynch looked at Mr. Herbers' unwilling expression and smiled happily. "Wait a minute …" He gestured for Mr. Herbers to take a seat while he entered the room and picked up the phone.
His voice faintly penetrated the open door and entered Mr. Herbers' ears. Lynch seemed to be asking these questions.
Thinking of this, he began to think again. Did Lynch also set up a trap for him this time?
On the other side, Lynch was on the phone with Lyme. "Do we still have Galil in stock?"
"Our hands are empty, but our clients still have a lot …" Lyme couldn't help but sneer as he spoke, "At least one or two billion yuan is in the hands of our clients."
"I've notified all our clients according to your instructions. Galil is a huge risk, and I don't recommend them to hold it. But as you know, Galil's price has been rising, and it's been rising quite a bit recently. So they took the initiative to use their entrusted accounts to follow the trend, so …"
Lyme didn't continue his sentence. What followed was his light laughter. Lynch knew what he was going to say, and he also knew that Lynch could guess what he was going to say.
When people were faced with problems they did not understand, they would often be in a state of polarization.
In the first state, an individual's knowledge, status, wealth, and power belonged to the middle and lower class of society. They lacked a distinct independent mind and had not achieved any success. These people were often persuaded by those who were more professional than them.
They were persuaded not because they were soft-hearted, but because they really had no confidence in these things that they did not understand. They could only rely on those professionals to provide professional advice. This was also why Boone's stock brokers often appeared in legal programs and publications as negative examples.
The individuals in the second state might not be very knowledgeable, but they were all successful people.
They had enough social status, wealth, and power. In layman's terms, these people were all successful people. Successful people had their own judgment and were not so easily persuaded by others. They believed in their own judgment more.
When there was an obvious conflict between their judgment and Lyme's hint, Lyme, who had not completely proven himself in front of people, did not have the ability to persuade these people. They did not believe in Lyme's judgment, but they believed in their own successful experience and feelings.
This also led to Lyme's clients, those who were slightly poorer (this part was actually at least the middle class, much wealthier than the ordinary class), to obediently not invest their money in Galil's operation. Those rich big accounts bought Galil one after another.
About 20% of the Galil in Lynch's hands were bought by them. The remaining part was also bought by various parties. After all, it was spot stock!
Not long ago, these people who made money with the good news were discussing Lyme's ability behind his back. But in the blink of an eye, Galil's bad news kept coming, and Galil took a sharp turn for the worse. Many people lost a lot of money.
Lyme did not feel uneasy. Instead, he felt a little happy. It seemed to be a very good thing to see these disobedient people suffer losses. When he talked to Lynch about this matter, his tone was full of joy.
"Well done, much better than I thought …"
He thought that he did not get rid of all the Galil in his hands. After all, if he wanted to get rid of ten billion Galil's spot stock in a short period of time, he also had to consider the volume of the market.
Before making the call, he thought that there might be about three to four billion Galil left. He would then take some back from his clients at a very low price and make up a relatively round number to lend to Mr. Herbers.
However, he did not expect Lyme to complete the task so well that he had already sold all the Galil. Of course, this also had something to do with the international speculators who had begun to crazily buy Galil.
The market was burning high, and all the participants had fallen into a frenzy. At this time, as long as Lynch had ten billion Galil's spot stock, the market would dare to buy it!
After praising Lyme for a while, Lynch hung up the phone. After a short pause, he called Mr. Trumann's desk.
"Are you in trouble?"
The moment the call was connected, Lynch heard Mr. Trumann's unique laughter.
In this era, international calls were still manually transferred, so before Mr. Trumann picked up the phone, he already knew who the caller was. There was only one possibility for Lynch to call him at this time. He was in trouble.
Mr. Trumann was very interested in trouble that even Lynch had to call for help. He wanted to know who had the ability to trouble Lynch.
Lynch also laughed twice. "Yes, I'm in some trouble. I need the right to transfer ten billion Galil's spot stock. I've thought about it, and only the Federation government can come up with it now."
This request was not within the scope of Mr. Trumann's expectations. He was a little curious. "Where's your ten billion?"
"It's all sold when it was about to reach its peak …"
Even though Mr. Trumann did not know much about economics and finance, he knew what this meant. Lynch had at least made tens of millions of profit from this deal.
This also reminded Mr. Trumann of Lynch's resistance every time he tried to persuade Lynch to work with him. Perhaps he was really suitable for this kind of thing. After all these years, no one could make money more easily than Lynch.
After a brief moment of absent-mindedness, he felt a little envious. Then, it turned into curiosity. "So, what do you want the money for now?"
"You know, I have a friend, Mr. Herbers, who wants to borrow a sum of money from me. Ten billion Galil's."
"I thought that since the Federation's money is just sitting there, it's better to use it for business."
"Within three months, the return is no less than 4.5% of the total loan. Using the Federation's Sol to settle the payment. Anyway, it's about the same …" Lynch quickly calculated the current exchange rate. "At least three million in benefits. This deal is very profitable."
Mr. Trumann's curiosity was obviously not here. "So, how much can you make?"
"About this amount …"
"Will this money leave the Federation?"
"Of course not!"
"When will the procedures be done?"
"Soon!"
…
Lynch, who came out of the room, smiled and sat back on the sofa. "I've negotiated for you. Ten billion Galil's spot cash. The repayment will be at a rate of 9.5%. Use the Federation's Sol to settle the payment. If there's no problem, you can get your people to go through the procedures now."
Seeing Lynch casually mention "ten billion" again, Mr. Herbers really wanted to ask, "Is the ten billion you're talking about my ten billion?"
However, he did not speak. At this time, he did not dare to offend Lynch. Moreover, this was his last chance.
If he exchanged the money he owed others and disposed of the other money at the same time, he calculated that he could still make money!
The reason he made money was that he did not intend to inform others. He planned to take the profits from the short sale alone. This way, he could probably still make some money.
It only took an instant to go from hell to heaven. At this time, he was not in the mood to care about the lives of others. He only cared about himself.
Not to mention a total interest rate of 9.5%, even if it was 15%, he was willing to take it!
"No problem, Mr. Lynch. So, how do I go through the procedures?"
He was a little impatient, and there was a smile on his face.
Lynch wrote down a number for Mr. Herbers. "This is the number of the head of the loan business department of the Jinhui Bank. You need to provide collateral. You know, I can't lend you ten billion Galil's for nothing. After you have enough collateral, you can see the money …"
After watching Mr. Herbers leave, Lin Qi dialed the number that he had given Mr. Herbers. "Hello … Yes, someone will go to your place in the next two days …"