章節 855: Chapter 855: The Choice of the Bahraini Bank
All eyes were focused on him, putting Curtis Bard under immense pressure.
Although it was the Rothschild family who had asked him to short LME copper futures and LME aluminium futures, he could not say so, unless he wanted to go to prison.
Curtis Bard was very anxious, and his forehead seemed to have become moist.
Barrett Balling frowned and said sternly, 'Manager Curtis Bard, I have read your investment application report, but it is not enough to explain why you have invested more than 700 million US dollars in short selling in such a short period of time. Your actions are too aggressive, which has led to this dilemma. I need an explanation.'
At present, the floating loss is only 25.55 million US dollars, which is not considered a lot for Barclays Bank. It seems that it has not reached a level that would alert Barrie T. Baring, and yet a high-level meeting was still held in such a big way.
But if you think about it, you can understand Barrie T. Baring's concerns.
Previously, when Barclays Bank went short, it was only gradually entering a disadvantageous position, and there was still room for manoeuvre.
But the news that broke one after the other this afternoon means that the bulls are about to take off, and the room for manoeuvre of the shorts, led by Bahrain Bank, has instantly been compressed by 80 to 90%.
Right now, the losses are only 25.55 million US dollars.
But what if the prices of LME copper futures and LME aluminium futures double?
Then Bahrain Bank will have to lose as much money as it has invested!
Right now, it has invested 749 million US dollars, which is a huge amount!
If it all goes sour, it's enough to take the Bank of Bahrain down with it!
Although the London Metal Exchange has a margin system in place, under normal circumstances, if the margin is lost, the exchange will force a close-out of the position, and the loss does not seem to be too great.
But nothing is absolute, and there are always extreme situations, such as being unable to close out a position.
On the premise that everyone is bullish on the market, the Bank of Bahrain was unable to buy enough futures contracts to close out the position because it held on to its futures contracts.
As a result, they had to watch helplessly as the futures price rose until the contract expired.
In theory, the futures price can rise indefinitely, so the loss from short selling is also infinite.
For example, when the Hunt family went long on silver futures, the price of silver futures was around 2 US dollars per ounce at the beginning. By 1980, the price had reached a high of 50 US dollars per ounce, an increase of 25 times.
Assuming that the short seller who went short from the beginning never closed out the position and waited until the price reached its peak to be delivered by the long seller, the 100 million US dollars worth of silver futures sold would have to be bought back at a cost of 25 billion US dollars, resulting in a loss of 24 billion US dollars.
Of course, in a few months, it would not lose more than 20 times. But if the bulls were too strong, it was not impossible for the price to rise by one or two times.
With such a huge contract volume, it would be extremely difficult for Bahrain Bank to close all positions successfully when the bulls were gaining momentum. It would be considered good if they could escape with a loss of 100 million to 200 million US dollars.
It was precisely because he had a hunch that it would be like this that Barrett Bahrain could not sit still at home, and urgently called a meeting of all senior executives.
Curtis Bard's forehead was covered in fine beads of sweat as he hurriedly explained to himself: 'Chairman, I'm sorry I underestimated the power of the bulls. I thought we could use our strong capital to quickly end the battle, but I didn't expect the strength of the bull capital. By the time I reacted, it was too late. I was planning to attract more capital to join the short camp.'
'But before it was formally implemented, what happened this afternoon, the Rocker Fund of the Howard family, for whatever reason, went long and it is not yet known.'
'But as far as I know, Sumitomo Corporation has suffered heavy losses in the LME nickel futures, LME zinc futures and LME lead futures markets in recent days, and has withdrawn all its funds. They must be trying to recoup their losses in other markets, which is why they have increased their efforts to go long on LME copper futures and LME aluminium futures.'
'G.S. Warburg's actions were completely unannounced and unrelated to our investments, but they have caused us sudden trouble.'
'Chairman, although there are multiple reasons for the current situation, I also made some aggressive investments, and I'm sorry for causing trouble for the company.'
After saying this, Curtis Bard lowered his head in shame, as if he was ashamed to face Barrett Balin.
Curtis Bard learned this trick from George Monroe in an emergency, leaving Barrett Balin with nowhere to vent his anger and almost suffocating him with internal injuries.
But Curtis Bard was undoubtedly thinking too simply if he wanted to get rid of his responsibility so easily.
Seeing that the chairman was very annoyed, President Peter Nils gave Curtis Bard a glare and snapped, 'Curtis Bard, you are the one with the greatest responsibility. Now that it has happened, what you need to do is do your best to minimise future losses!'
'What are you going to do?'
Although he snapped at him, Peter Nils also gave Curtis Bard a chance to see if the latter could seize it and appease the chairman, Barrett Balling.
Curtis Bard immediately seized the opportunity and said sincerely, 'Chairman, President, I think if we want to reduce losses, we can do it in two steps. The first step is to do our best to create a bearish public opinion atmosphere, while at the same time wooing companies like G.S. Warburg that are likely to go short to join us on the short side. The second step is to take the opportunity to clear out of the market.'
To put it bluntly, what Curtis Bard was saying was to find a way to trick a few financial institutions into going short, and then take the opportunity to dump the blame and flee.
This method of stopping losses is very sinister, and it is typical of self-serving.
But the capital market is ruthless and only profits matter. If it really reduces your losses, Barrett Balin will definitely do it.
The head of Barrett Balin frowned for a moment, thinking that the operation was too difficult. After all, no one is stupid, especially not smart Jews. It is difficult to trick them into taking over!
However, because his attention was diverted, Ballit Bahrain's anger subsided slightly, and he looked at the others and asked, 'What do you think?'
'Chairman, I think it is too difficult to find an institution to take over the position, so I suggest taking other measures to hedge losses. For example, buying more spot goods, if the futures price rises, the spot price will follow, and the profit from the spot goods can be used to offset the loss from the futures,'
suggested one of the senior executives.
No one has ever said that a short position is always a short position. Long and short positions can be switched, and the key is to decide which side is more profitable.
'Chairman, I suggest...'
Everyone who could become an executive at Bahrain Bank had their own skills, and they all put forward their own opinions. Some made suggestions, while others offered their own analyses to inspire others.
This was the purpose of Barrett Bahrain's gathering everyone together, to pool everyone's wisdom to solve the problem.
At the end of the discussion, everyone's opinions gradually converged and could be summed up in three points.
First, it was believed that shorting had already failed, and that further investment in shorting should be stopped immediately to avoid getting deeper and deeper into debt.
Second, they should not give up and find someone to take over the position to reduce their losses.
Third, they should open another account and not short the spot market in the name of the Bahraini bank. They should send someone to major mining companies to buy spot contracts for later trading with metal buyers to hedge against short selling losses.
The meeting also assigned each person their respective responsibilities. Curtis Bard had the opportunity to redeem himself by finding a way to reduce his position and withdraw from the market as discreetly as possible.
After all, Curtis Bard was the senior manager of the metals trading department of the futures division, and he knew the LME copper futures and LME aluminium futures best. At this critical moment, it was the safest approach to let him continue to be in charge.
After the meeting, everyone went about their duties and took immediate action.
Barrett Balling, who was feeling uneasy, left the meeting room and went straight to the operations room to check the prices of LME copper futures and LME aluminium futures.
As soon as he saw the prices, his face instantly turned black.
The meeting had only lasted an hour, but the price of LME copper futures had risen to 1,387 US dollars per tonne, and the price of LME aluminium futures had risen to 2,824 US dollars per tonne.
Together, they caused the Bank of Bahrain's floating losses to rise by another 105.3 million US dollars, bringing the total to 36 million US dollars!
It is clear to see the impact of the two events that occurred one after the other at noon on the market.
Suppressing his anger, Barrett Balin glared fiercely at Curtis Bard, and only left after the latter repeatedly assured him that he would do his utmost to make amends.
The following day was Friday, and the prices of LME copper futures and LME aluminium futures continued to rise, putting the senior management of Bahrain Bank under immense pressure.
Fortunately, after the market closed on Friday afternoon, there would be a two-day weekend break, giving Bahrain Bank two days to act.
For example, they could go to various European countries to buy spot contracts for copper and aluminium.
Bright Fund and the Howard family were also buying spot, and it was absolutely impossible for the two parties to avoid encountering each other or for the news to remain undisclosed.
The only difference was that the people who learned of the news would have very different moods.
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