Chapter 331: The Plaza Accord
Chapter 331: The Plaza Accord
Just as Wu Ziyue was eating at home, his phone rang, prompting him to immediately put down his chopsticks and pick up the call. Startled by the news he heard, he asked, "What did you say?"
The voice on the other end replied, "A few moments ago, five nations, including Japan and America, signed the 'Plaza Accord' at the RB Plaza Hotel. The agreement stipulates a significant appreciation of the yen and the Deutsche Mark. Get back to the company right away."
Snapping out of his daze, Wu Ziyue said, "Alright, I'm heading back to the bank now."
Wu Ziyue's wife, seeing his haste, quickly grabbed his briefcase and helped him into his coat. As he put on his shoes, she took a frozen package of bread from the fridge, put it in a bag, and handed it to him.
Waiting for the elevator, Wu Ziyue munched on the bread while pondering Lu Jiaxin's contract. Although he hadn't stopped her from using such high leverage, he had effectively signed her death warrant. Any fluctuation in the exchange rate of more than three percent would result in a margin call, wiping out her entire investment. Who could have anticipated an agreement like this?
At this moment, Wu Ziyue was incredibly grateful that he had hedged his bets. This Lu Jiaxin must have received insider information to dare to short the market with such high leverage. However, her timing was impeccable; it was Sunday, and the markets were closed. With this agreement in place, the greenback/yen exchange rate would surely drop when the markets opened tomorrow, and Miss Lu would reap a substantial profit from this trade.
Nie Zhan also received the news promptly and immediately called his broker on Wall Street, instructing him to sell all the currency in his account and buy greenback/yen. Subsequently, he called the senior managers at Bank of America and Standard Chartered, directing them to transfer all his funds into foreign currency accounts to short the greenback/yen.
Once these arrangements were made, Nie Zhan called Lu Jiaxin to inquire about her current liquidity. "Give me your money, and I'll invest it for you."
Foreign exchange trading was a form of financial investment, albeit a risky one, usually done with extra funds.
"What investment?" Lu Jiaxin asked.
Nie Zhan briefly explained the content of the Plaza Accord, adding, "With this agreement, the yen will appreciate significantly, causing the greenback/yen exchange rate to plummet. Shorting this pair now will definitely yield profits."
"When was this agreement reached?" Lu Jiaxin asked.
"Half an hour ago. Jiaxin, we need to act fast. The news will spread quickly, and if you don't act now, there won't be any orders left for you to place."
Lu Jiaxin marveled at the advantage of having a wide network. In her case, she wouldn't have received this news until the markets opened tomorrow, by which time it would be too late.
Seeing her hesitation, Nie Zhan thought there might be a problem with the call. "Hello? Jiaxin, can you hear me?"
Lu Jiaxin stammered, "I... I only have about 1.5 million left in my account. The rest is invested elsewhere."
Nie Zhan was taken aback. "I thought your money was in the stock market. What other investments are you making?"
Lu Jiaxin evaded the question. "That project is definitely profitable. Don't worry about me. If you have money, you should act fast!"
Realizing that she wasn't going to confide in him, Nie Zhan felt a twinge of disappointment. It seemed that Jiaxin didn't fully trust him. However, he couldn't force her, so he said, "From now on, whenever you plan to make a significant investment, consult me first, and I'll give you some advice, okay?"
"Okay," Lu Jiaxin agreed readily, though she had no intention of changing her ways. She had previously hesitated to share any information with Nie Zhan, but today's events made her realize that it was entirely unnecessary. He had such a vast network that he could seize opportunities without her giving him a heads-up. Well, she could always give him a subtle reminder about the stock market crash in two years—an unforeseeable disaster.
Recalling what Nie Zhan had said earlier, Lu Jiaxin tried calling Wu Ziyue but couldn't get through. After a while, her calls went straight to a busy tone.
Lu Jiaxin felt that she couldn't wait any longer, so she immediately grabbed her coat and, accompanied by Gu Wenfeng, said, "Let's go to the HSBC."
It was Sunday, usually a day off for most people. However, when Lu Jiaxin arrived at the bank, it was bustling with people coming and going.
After waiting for over half an hour, Lu Jiaxin finally met with Wu Ziyue. Once the office door was closed, Wu Ziyue congratulated her.
Lu Jiaxin smiled and said, "It's too early to say that. I'm using 30 times leverage. If the exchange rate rises by just 3.3%, I'll blow up my account and lose everything."
Wu Ziyue felt that she was being too modest. "With this agreement, the dollar/yen exchange rate will surely drop tomorrow. There's no way you'll blow up your account. It just depends on when you decide to close your position."
"I'll close my position after the exchange rate drops by 10%, and then I'll reopen a new position with 10 times leverage," Lu Jiaxin said. "Mr. Wu, I don't know if that's possible."
With the news of this agreement, those in the know realized that shorting the market would be profitable, and orders would be snapped up. However, Lu Jiaxin was special, and Wu Ziyue wanted to foster a good relationship with her.
After a moment's thought, Wu Ziyue said, "Miss Lu, what's your take on this agreement?"
Lu Jiaxin shook her head and replied, "After this agreement, the island nation's economy will experience a false boom, followed by an economic downturn."
Wu Ziyue, adept at grasping the key points, asked, "So, Miss Lu, you're saying the dollar/yen exchange rate will keep falling?"
"There will be fluctuations, but the overall trend within a year will be downward," Lu Jiaxin asserted.
Wu Ziyue made up his mind and said, "Miss Lu, I need an exact date to reserve the order for you."
Lu Jiaxin thought for a moment and said, "October 1st. Regardless of how much the exchange rate has dropped by then, I'll close my position. Leave $10 million in my account, and I'll reopen a new position with 10 times leverage on the rest."
Wu Ziyue considered her request, finally agreeing to it.
Given the substantial amount of money involved, a verbal agreement wouldn't suffice, as it could harm one party's interests. Thus, the two signed a letter of intent. Of course, this agreement was premised on Lu Jiaxin making a profit; if she blew up her account, the agreement would be worthless.
Lu Jiaxin shook hands with Wu Ziyue and said, "Thank you, Mr. Wu."
Seizing the opportunity, Wu Ziyue added, "Miss Lu, I hope we can further our cooperation in the future."
That was the real reason he was willing to sign the agreement. As for whether it was due to luck, he only believed in strength and not in luck.
Lu Jiaxin smiled and said, "We'll have many opportunities to work together in the future."
Among the managers she had met, Wu Ziyue had left the best impression on her. He was not only dedicated but also had strong professional ethics, which was why she had chosen to deposit her money in HSBC for this short-selling endeavor.
When Lu Jiaxin returned home, she found that Nie Zhan had already arrived. Feeling a bit guilty, she asked, "Why are you here?"
Seeing her expression, Nie Zhan decided not to inquire about her investment. It was her money, and she probably knew what she was doing with it. If he kept pressing her for information, it might affect their relationship.
Nie Zhan took the bag from the bodyguard and, opening the zipper, said, "This is a phone I bought for you. With this, we can stay in touch at all times."
Lu Jiaxin had seen a friend's collection of early mobile phones and assumed that those old-fashioned models were bulky. But compared to what Nie Zhan had just taken out, they were like child's play.
"Isn't this too bulky? My hand will get sore just from holding it to make a call," Lu Jiaxin remarked.
Nie Zhan glanced at Gu Wenfeng and the others and said, "You don't have to hold it. They can carry it for you. I also have one, so it will be convenient for us to stay in touch."
Lu Jiaxin nodded and asked Qian Xiaoxiao to take the bulky device.
(End of Chapter)
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