Blackstone Code Chapter 152

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Chapter 152: The Last Straw

The upper-class cocktail parties were dull and tedious. While Lynch was chatting and networking, he also noticed some local "female celebrities," including two famous female hosts from Sabin City's TV station.

Young, beautiful, and always appearing in a positive light in public, but the men accompanying them at this moment were old enough to be their fathers. However, maybe Lynch's thoughts were too cynical; perhaps they really were their fathers.

He redirected his attention to the short man in front of him, who was enthusiastically sharing his ideas about his company and its inevitably brilliant future.

He said that as long as Lynch was willing to join his plan, there would definitely be big money to be made, and that many people had already decided to invest in his project. Moreover, he also mentioned that he was offering Lynch an investment spot purely because he liked him.

"Maybe the bank would be interested in your project…" Lynch took a sip of his wine, causing the short man's expression to freeze instantly.

If the bank's risk control had approved, why would he need to seek investment everywhere? It was precisely because the bank suspected a scam that they refused to loan him the money.

Lynch looked at the short man, waiting for his response. However, under Lynch's gaze, the short man squirmed uncomfortably, apologized, and quickly left.

After donating 100,000 bucks, Lynch had become the center of attention, drawing many people who wanted to know him. Some were well-meaning, but others had malicious intentions.

Some wanted to get to know this young tycoon, especially since it seemed he had a good relationship with the mayor, which was worth noting.

Not all tycoons had a good relationship with the mayor. The market in Sabin City was only so big, and each industry couldn't be dominated by just one person or company. Federal laws also wouldn't allow it.

With competition came conflict. When some people obtained orders or policies through their relationship with the mayor, it would inevitably cause dissatisfaction among others.

But overall, everyone wanted to maintain a good relationship with the mayor. After all, the mayor was the highest leader and planner of a city. With the mayor's help, everyone's business could become easier and more profitable.

People continuously exchanged business cards with Lynch, briefly discussing their businesses. Their first meeting wouldn't involve deep conversations, mostly just a simple understanding of each other's identities and businesses.

In the future, when they needed a "familiar face," they might remember Lynch.

Of course, the most talked-about topic was finance, an unavoidable subject for any tycoon or socialite.

After initial exchanges, people formed circles, discussing their triumphs in the stock and securities markets. People exclaimed in awe at those numerical miracles, thoroughly engrossed.

Lynch watched from the outside, finding it amusing. In reality, most people involved in the financial game had little understanding of finance, stocks, securities, or futures.

Take Fox and his son, for example. Not long ago, they had discussed this matter with Lynch. Given their new status among the wealthy, the bank had upgraded their level and assigned a service manager to handle their financial operations.

This female manager first told them how unwise it was to leave money in the bank, possibly because she wasn't clear about what business they were in or how much money was in their account. After all, she did not have the authority to directly access depositors' information that wasn't relevant to her duties.

She gave examples of people achieving financial freedom and wealth myths by investing in the financial market, which moved Fox and his son.

Since meeting Lynch, Fox and his son had become interested in earning money through legal means. The bank even offered to use its money to help them make more money, requiring only one buck of their own as capital to get an extra five or ten, or even dozens or hundreds, of "extra funds" to trade with.

If they bet right, one buck could turn into one hundred or even several hundred overnight. The prospect of such enormous profits captivated them, and they almost opened an account.

But Mr. Fox's caution led him to contact the only person he thought might know the inside story: Lynch. Lynch's answer was simple: if he wanted to go bankrupt, now was the time to enter the financial market.

Leveraged financing, or "margin financing," was a surefire business for banks, though not entirely foolproof. Sometimes, risk control would exceed the bank's estimates, like mistaking a meteor for a storm. But most of the time, banks were sure to win.

Suppose someone had 100 bucks and bought a stock. If the stock rose by 10%, he would earn 10 bucks.

But if he applied for margin financing and the bank gave him a limit of 10,000 bucks, and the stock still rose by 10%, he would suddenly earn 1,000 bucks.

His principal remained 100 bucks, but without margin financing, he would only earn 10 bucks. With leverage multiplying his funds a hundredfold, he would be able to earn 1,000 bucks, which was 100 times of the original profit!

And he only needed to pay a few dozen bucks for this. The stark contrast between a few dozen bucks and 1,000 bucks profit would make many people lose themselves, ultimately becoming cannon fodder.

Of course, this was just a simplified example; the actual margin trading situations needed separate verification and calculation.

For the bank, no matter how much the margin trader earned, the bank would always win. But what if the trader's stock or futures fell?

The bank's risk control system would kick in, immediately requiring the exchange to liquidate positions as soon as fluctuations approached or exceeded their safety indicators.

Most of the time, it would be too late because the three major exchanges still relied on manual filling and telephone matching, causing delays.

If, after liquidation, the bank found its margin trading unscathed and its profits intact, the matter would end there. As for the client's losses, it was irrelevant to the bank.

But if, after liquidation, the bank found it hadn't even recovered its due share and part of the allocated funds was trapped, it would start the formal procedures.

First, it would freeze the margin trader's bank account. If the savings weren't enough to repay the bank, it would auction off the trader's property, cars, and anything valuable.

If that was still insufficient, the trader must declare personal bankruptcy, and the bank would offer them a job. After that, apart from essential living expenses, everything else would go directly to the bank's account.

As long as the person was still alive, the debt would never disappear—though this didn't extend to family members because the investment was personal. The trader's family didn't benefit from it, so they weren't obligated to repay the debt.

This was why some people chose to jump off buildings. At least the death of one person was better than dragging the whole family to hell.

However, the people in front of Lynch at the moment were mostly unaware of this. Their stock and futures accounts were managed by their financial managers or brokers, including all margin trading activities.

For those managers, getting clients to margin trade would earn them commissions, and banks would give them some kickbacks. All they needed was for their clients to sign a margin application.

Whether the clients would jump off buildings afterward was none of their concern. After all, they had already made their money and became loyal bank partners.

As Lynch looked at those boasting, he couldn't help but pity them. In the end, they might not even know why they jumped from the rooftop, ending their brief and tortuous lives.

After the cocktail party, Lynch returned home with a pocketful of business cards. In the next few days, he still needed to sign agreements with other investors to sell his company for a good price.

Meanwhile, it was already late at night, but the president and cabinet members were still awake, not attending any cocktail parties. They were in a meeting room next to the president's office.

Currently, they were facing a major issue. The Baylor Federation had maintained neutrality in the international war, avoiding involvement by essentially paying protection money or buying peace.

The Baylor Federation, in the name of the state, had purchased war bonds from the key countries of both major camps. Combined with an isolation policy, this allowed the Baylor Federation to escape the world war unscathed.

However, now neither the victorious nor the defeated countries were willing to honor these bonds, leaving them in a tough spot.

If it had been a few years ago, it wouldn't have mattered much. Back then, the Baylor Federation's economy and finances were thriving, and they could afford to ignore those bonds. But the situation was different now.

A large amount of capital flight had caused the economic development speed to suddenly slow down. What was even more terrifying was that this capital flight had also led to a downturn in the real economy — many factories had closed, workers had lost their jobs, no jobs meant no income, consumption capacity and standards continued to decline, more factories couldn't sell their products and had to shut down. This was a vicious cycle.

People were forced to invest in the financial market to avoid losses in real business. At least the financial market seemed prosperous.

Redeeming these bonds could somewhat stimulate the domestic economy. Even if it couldn't reverse the current situation, it could at least prevent further decline.

But regardless of whether the request came from individuals or the state, the international community had not responded positively; they simply refused to communicate!

Billions of bonds were now piled up in their vaults like waste paper. The president, who hadn't appeared on the screens for several days, had even developed several cold sores at the corners of his mouth from the stress.

"We have to do something, gentlemen!"

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