Chapter 264: Methods
Outside the exchange.
A group of people there cursing the Japanese, all of whom had bought cotton yarn related stocks.
A group of people there watching the excitement, discussing buying new clothes, deliberately to anger that group.
When cotton yarn rallied they didn’t get in, but with the Japanese controlling cotton yarn price, it really must be said, clothing prices could indeed become cheaper.
Each with different joys and sorrows, the same is that everyone is waiting for the opening, to see today’s cotton yarn tragedy.
“Do you think it’s possible…”
“No chance.”
“I haven’t even finished speaking.”
“No need to say it, last year when the Japanese forced requisition, cotton yarn grain and such plummeted to what extent, today cotton yarn will plummet to that extent, I tell you, don’t hold any illusions, the main force might later maintain the stock price a bit, but this is definitely shipping out, and what you need to do is run fast.”
“It’s over, how can we run now, those with leverage will inevitably face margin call.”
They were discussing here, soon after, the exchange opened.
Suddenly, a dozen figures shot out like arrows off the string, there were youths in their twenties, there were aunties in their fifties, at flying speeds rushing toward the counter not yet open for business, fighting desperately for the first position, fighting so fiercely they almost started brawling.
At the door, some stockholders with insufficient seniority watched dumbfounded.
“What is this? Is it necessary?”
“Of course it’s necessary, the earlier you enter the earlier you trade, the first to report up, then you can lose a bit less, if you have money, open some short positions again, maybe today you won’t lose money.”
As the people beside explained, they suddenly understood, damn it, suffered the loss of inexperience, if they had known, they should have rushed up to fight for position too.
Immediately, a crowd surrounded the window.
But it was of no use.
“Opening, opening.”
At the window, people were still shouting trades and buys in a hubbub, bombarding the public brokers inside the counter.
Upstairs, VIPs with dedicated brokers directly started trading quotes.
All stock prices in the central hall rapidly changed on the blackboard under the wiping of the staff.
“Falling, falling, falling!”
Cotton yarn related stock futures plummeted across the board, prices continuously dropping without resistance.
Main force smashed the market and fled, retail investors’ quotes one by one joined the battlefield, prices plunged again.
The exchange’s mood fell into gloom.
Half an hour later, cotton yarn futures price fell to 250 bucks.
Half an hour, stock price halved!
Suddenly, massive buy orders surged in, retail investors’ thrown chips were all taken, and it oscillated upward all the way.
Washout!
Undoubtedly!
“This is the main force creating a chance to cut losses, run fast.”
Retail investors selling on one side, main force eating on the other, if not for only a few counter windows, retail investors would almost have sold out.
Price stood above 300!
Even if it’s washout, it still has to fall, those who sold slowly and didn’t grab front positions in the queue gradually weren’t so urgent, first step out to watch.
After all, those who entered at over 400 bucks, at this price still losing over 100.
Stock price continued rising with resilience beyond everyone’s imagination.
The higher the price went, the more people wanted to sell, these were all those with various loss amounts decreasing, afraid the stock price would suddenly turn down for a plummet again, afraid they couldn’t bear it psychologically, find a loss position they could bear, stop loss and exit.
Thus the rise became slow, but still rising.
Morning close.
330.
Afternoon close.
370.
Scary.
“The main force’s washout, isn’t it too deep?” Stockholders were all stunned.
The main force has some skill, defying the Japanese price limits?
“What do you know, this is luring the enemy deeper, when you don’t believe it he pulls, when you believe it he smashes.”
“Makes sense.” Old stockholders thought the same.
“But honestly, if there was no Japanese meddling, I would absolutely think this morning’s drop was the main force deliberately smashing to wash trading, how many people handed over chips, right?”
“Right.”
“Unfortunately, without Japanese, I could see 600 bucks, now it’s the end of a strong enemy, Japanese opened short positions, cotton yarn won’t change at 70 bucks.”
Old stockholders deeply agreed, new stockholders looked forward eagerly.
The next day, stock market opened again.
Morning close.
390.
Afternoon close.
430.
“Can’t understand it.”
Old stockholders were completely baffled, this didn’t look like washout.
Almost back up, everyone almost breaking even, this can be called washout?
“The more this time the calmer you must be, the main force wants exactly this suspicious feeling of yours, if you get tempted and buy, you’ll get trapped, watch, the main force is about to distribute chips.”
Old stockholders still teaching experience, new stockholders already counting money, those who believed early this wave ate over 100 bucks, grinning ear to ear!
Upstairs private room.
Sato watched a day’s price changes.
Concession capital doing washout is certain, massive goods can’t get out, the losses to bear would be too much, he could understand concession capital’s operation.
Since they gave the opportunity, then just continue adding shorts.
Chance to add shorts at high levels isn’t common, before had to do it sneakily, now openly short selling.
One day, two days, three days, four days!
Magical scene appeared, Shanghai Chinese Territory 70 bucks cotton yarn, Shanghai concession 470 bucks cotton yarn futures!
Even the stupidest stockholders already realized, this time it’s really not washout, this price created new high, still washout?
But what happened really made them unable to understand, this isn’t right, how can spot futures differ by 400 bucks, what is cotton yarn really worth?
And upstairs.
Sato kept thinking when exactly the concession people would smash the market, he thought they would smash, but the broker told him.
“Either their shipping technique is too brilliant, I can’t see it, or they haven’t shipped at all, the Public Works Bureau strengthened control over the exchange, severe punishment for leaks, I can’t get exchange data information.”
“Not shipping impossible.” Sato thought, suddenly thought of a point, “Could they want to drag to delivery?”
Futures have deadline, besides cash settlement, there’s also spot goods settlement.
Cash settlement all their shorts below 400 would lose money, and if spot goods settlement, they have no spot goods at all, still have to pay default penalty.
“No way?” The broker was startled, of course he knew next settlement in eight days, but he never thought someone would want spot goods.
Cotton yarn only 70 bucks, opponents’ long position cost over 400, if adopt spot goods settlement, equivalent to using over 400 bucks to buy 70 bucks cotton yarn.
Who would be so stupid to use over 400 bucks to exchange for 70 bucks?
Behind his boss which enterprise isn’t cotton mill major producer, if really concession wants cotton yarn, they’d be thrilled.
Sato instantly stood up with serious expression, the broker didn’t know they had already dealt with the military supplies goods, they now had no cotton yarn on hand at all.
Once concession opponents demand spot goods settlement, if they can’t deliver, it’s certain defeat.
Sato swiftly picked up the phone to call his partner, “Concession people want to adopt spot goods settlement, they must have known our warehouse has no goods, exhaust every way, raise cotton yarn! Yes! The more the better!”
Snap, Sato hung up the phone, looked at the broker, “If spot goods settlement, how much cotton yarn do we need on hand?”
The broker stuttered a bit, “That would be a lot, specific orders all in various hands, I estimate possibly 500,000 packs.”
Sato’s mouth twitched, picked up the phone to call Fu Xiao’an, “Mayor Fu, on behalf of Gendarmerie Headquarters I order, immediately inventory all cotton mills’ all inventory cotton yarn in the city, not a single piece allowed to be sold!
Including your factory!
Notify customs, wharf, station, all cotton yarn not yet shipped completely intercept!
Don’t ask me the reason, I tell you to do it you do it!”
Time racing by the second, Sato then called Gendarmerie Headquarters, called Greater East Asia Ministry, had them notify all ports, intercept ships transporting cotton yarn, have them return to port immediately.
Then called various area persons in charge, had them urge their respective areas’ factories, all cotton yarn machinery must not stop, must produce cotton yarn nonstop twenty-four hours!
Then dialed his company’s Nanjing person in charge, Suzhou person in charge’s phone, requisition all cotton yarn in the area, transport overnight to Shanghai at fastest speed.
All arrangeable channels arranged, farther distances even if have cotton yarn time wouldn’t suffice, almost got played, Sato sat down, now just see if cotton yarn quantity is enough.
Soon, Fu Xiao’an’s feedback call came.
“Mr. Sato, Shanghai’s cotton mills I asked all around, inventory cotton yarn already all sold out, and cotton yarn not yet produced in the recent month already all ordered.”
“How possible not a single piece? Who ordered?” Sato had a bad premonition in heart, but still asked.
Fu Xiao’an, “Sha Shun.”
As expected, Sato narrowed his eyes, suppressing anger, “From today, not a single piece allowed to sell.”
“Already ordered out.”
“I don’t care if you ordered out or not! I say not a single piece to sell!”
Days passed one by one, all Shanghai all cotton mills produced with full effort, batches of transport ships originally thought sold to other places were driven back.
Various bosses who had made big determination to buy this batch of cotton yarn at high price, watching their cotton yarn unloaded from ships, stored into Wusongkou wharf warehouse, anxious beyond measure.
This back and forth wasted how much time, this miss, winter’s market trend might be completely gone, key is now they still didn’t know what happened, all forcibly driven back by Japanese Army patrol boats.
This group all listened to Fu Xiao’an’s words to buy the cotton yarn, Japanese not explaining to them, they could only go find Fu Xiao’an.
Fu Xiao’an just said this all Mitsui Company requirements, want to solve problem, you go find Mitsui Company yourselves, remaining matters nothing to do with him.
This group could only use their respective relationships, make phone calls, send telegrams, contact hometown networks, try to pressure Mitsui Company.
However Mitsui Company ignored these small fries completely.
No explanation, no compensation, no follow-up.
Fortunately eight days not too long.
Things soon changed.
Sixth day.
Per futures trading, the party providing goods source needs to transport goods source to exchange’s warehouse, registration entry, prepare settlement.
Sato ordered men from Wusongkou warehouse, transport cotton yarn loaded into large trucks, transport to concession exchange.
Then at concession entrance, convoy met British Army obstruction.
“Why not let in?”
“Need to pay tax?”
“This is what the exchange wants! Your exchange!”
“Still need tax? How much tax? Cotton yarn twenty percent?”
Mitsui Company’s manager pinched his nose and accepted, trading with concession via normal channels counts as international trade, indeed needs tax.
“70 bucks, twenty percent that’s 14 bucks per piece, here is…”
Words not finished, British brought out cotton yarn market trend price.
“Cotton yarn in our concession is 500 per piece.”
“What what? 500 per piece? 100 bucks tax per piece? Why not go rob!”
British gave a look of you think I didn’t, extremely punchable.
Manager called Sato to communicate, Sato absolutely couldn’t accept this price!
100 per piece, ten thousand pieces is one million, 500,000 pieces is 50 million!
How could he accept this blackmail!
Called Fu Xiao’an, demanded Fu Xiao’an solve this matter.
Fu Xiao’an, “Ah? Me?”
Called consulate, demanded consulate lodge solemn protest, this is unreasonable squeeze on Japanese capital enterprise!
Public Works Bureau said this is market regulated price, they also unable to interfere prices.
For friendship, can give ninety-five discount favor.
Seeing time passed another day, only last two days to delivery deadline, Sato directly threatened, if Public Works Bureau doesn’t solve today, Empire of Japan army tomorrow will charge straight into concession, then don’t blame him for not reminding beforehand!
For Sato’s threat, response was cotton yarn futures price from morning opening, massive rally, in half hour rushed to 550 bucks!
Stockholders really stunned!
Completely stunned!
550 bucks cotton yarn, really sky is cotton yarn’s limit!
“Hahahaha.”
Market filled with crazy laughter.
550 bucks cotton yarn, what concept?
If someone from 70 bucks to now, just need open double leverage, this one long position, could exchange for a two-story residence in Chinese Territory.
Countless people got rich, those firm doing long persisting to now all got rich.
Now, they just need choose sell out, money directly to hand.
One day before settlement, sell or bet tomorrow still rise, depends on each choice.
Retail investors impossible accept settlement, certainly choose close position, so tomorrow’s price certainly like doomsday crazy.
Upstairs, Japanese broker tense sweat already flowed down.
Sato’s short positions average opening price around 400, plus leverage, already at edge of margin call.
Either choose smash price down, or continue add deposit, or accept loss close position.
“Add deposit!”
Sato impossible accept this loss, he now without poise, watching cotton yarn futures price expression ferocious, voice cold.
“You stay here ensure no margin call, the rest leave to me.”
Sato went out directly to Japanese barracks, soon large Japanese Army moved out, surrounded concession.
Concession all entrances sealed, armed Japanese Army aimed at British Army at passage mouths, situation tense.
Concession Public Works Bureau immediately inquired Gendarmerie Headquarters what Japanese side this move means, about to start war?
Gendarmerie Headquarters at this time only knew Sato’s act without authorization, this overstep provocation not authorized by Gendarmerie Headquarters at all, and would bring diplomatic trouble to Japan.
But questioning phone, immediately pushed back by Sato together with various chambers of commerce Shanghai persons in charge.
No one understood the severity better than this group, once this batch goods can’t enter concession, they only accept loss forcibly pay penalty close position by exchange, and this penalty per their opening volume, amount over 200 million silver dollars.
Even dispersed to several chambers, each bear, each minimum loss over 30 million!
This result they absolutely cannot bear.
Not cannot afford 30 million loss, but they not qualified to represent respective chambers lose 30 million.
Once loss reaches this amount, lightest result also stripped of Shanghai person in charge title, return Japan headquarters punished.
Now bet once, at least still chance.
This is desperate battle.
Confronting troops, suppressing atmosphere, continued until evening.
Stock market close, cotton yarn futures price fell to 579 bucks.
For Japanese, price up one buck, without leverage lose 500,000, just this afternoon up 29 bucks, 15 million gone again.
Concession entrance, onlookers more and more, both sides communication phones more frequent.
Sunset glow, accidentally someone pulled trigger, absolutely not confronting sides fired.
But this one shot, sunset side originally couldn’t see clear, heard gunfire thought started fighting, immediately chose fire.
You fire I fire too.
Gunfight imminent!
Both sides rifles blasting, Japanese Army Type 38 Arisaka rifles, British Army Lee-Enfield rifles, close range penetrate flesh, form through wounds, blood and flesh flying.
Especially Lee-Enfield rifle, bullet mass larger, close range hit, very easy form cavity effect on flesh.
Hit on Japanese, massive blood spurted, one hit no sound.
Intense gunfight lasted ten minutes, then became mutual cover, mutual shooting situation.
“Stop!”
Half hour later, both sides troops arrived, proper mediation of this accidental war.
Both sides actually didn’t want to reach this step.
Public Works Bureau gave mediation plan, taxation can discount to seventy percent, cannot less.
35 million, tomorrow final delivery deadline, compared to non-delivery huge loss, Sato could only pinch nose accept.
Just he still thought Sha Shun would give final negotiation chance, after all as long as he transports goods into concession, equals Sha Shun full take over.
What he want so much cotton yarn for?
Public Works Bureau wants cash, no arrears allowed, several big families together raised money, spent hours, gathered 35 million cash handed to Public Works Bureau.
Pay money, enter!
Exchange already off work, goods can first store in concession warehouse.
Sato to prevent time insufficient, mobilized large convoys, from Wusongkou and various factories’ warehouses pulled all cotton yarn to concession warehouse.
One night busy, next day exchange opened.
Today is cotton yarn futures settlement day.
Yesterday close after, happened at concession entrance Japanese-British clash news already known to all.
And their conflict reason, because cotton yarn settlement matter also spread out.
Now since Sha Shun wanted cotton yarn already transported into concession, this means both sides already negotiated.
No story left, retail investors holding long positions to the end decided find time close position today.
Stock market opening, futures long positions massive buying!
579 bucks, in 15 minutes, pulled to 599 bucks!
“Need to add deposit.” Broker reminded Sato.
“Add.” Sato watched coldly, he wanted to see what tricks Sha Shun still play.
Thirty minutes, 630 bucks!
“Need to add deposit.”
“Add.”
“Last time, we have no money on account.”
“No money then go get, need me teach you?” Sato suddenly roared back, “No matter situation, maintain to close for me!”
“Our cash used to pay tax.”
“Borrow from bank!”
Sato had one goal, hold to close.
Picked up phone call warehouse, asked how inventory going.
Subordinate reported, though speed not fast, but exchange people indeed seriously counting, no tricks, this let Sato slightly relieved.
Soon bank called, said provide fund support.
Thus Sato had no worries, expressionless watching futures price changes.
For people below, very exciting, main force like crazy, 650, 660, 680.
This price simply crazy, already old stockholders analyzing, main force possibly want pull to burst big shorts, just shorts strength strong, so main force can only keep pulling up, they rode coattails, made a fortune.
These situations Sato also knew, no matter, no matter price pulled how high, he wait close settlement fine.
Morning close.
Noon break.
Afternoon opening.
One hour later.
Ring ring, ring ring.
“Hello.” Sato lazily picked up phone, listening to subordinate’s urgent voice on phone, brain suddenly clear, like pricked by needle, jumped up.
“On fire? How on fire? How you watching?”
“A funeral procession blowing playing passed by warehouse here, possibly burning paper money floated up fell on cotton yarn, cotton yarn instantly caught fire, fire can’t be stopped.”
“Baka!”
“Ya!”
Sato’s face flushed red, swung hand swept all things off desk.
He calculated everything, just didn’t calculate British dare use such shameless means, burn down settlement goods!
“Ah!”
Sato drew gun from waist, rushed to balcony outside, bloodshot eyes scanning exchange crowd, finally fixed on cotton yarn futures price board.
Raised hand, fired!
Bang bang bang bang!
Stock market close.
Unable to deliver goods, confiscate deposit.
