章節 1312: Chapter 1312: Rothschild's desperate move
Everyone is a master of human intelligence. As soon as Aubrey de Marey said this, everyone was silent.
Martin Brian of the Progressive Conservative Party hurled mud at the Liberal Party, criticising the Liberal government for its poor governance in financial policy.
But now that Joseph Chrétien's press conference was over, the mud would not stick to him.
Because he had already made up his mind, Martin Brian's lies were directly refuted.
In this way, the approval ratings of the Liberal Party and Joseph Chrétien are likely to rise sharply.
That is the last thing anyone here wants to see.
The Liberals must go, they must lose the general election next month and be reduced to opposition status.
Harris Losh said in a deep voice, 'Over the next month or so, we all need to work together to support the Progressive Conservatives and fight the Liberals.'
'Martin Brian is very capable, and we have given him enough support to continue to maintain his advantage,'
'And we ourselves have more important things to do.'
Aubrey Harris pondered for a moment and nodded slightly in agreement with Harris Losier's opinion.
'We will assist in political matters, and leave the rest to the Progressive Conservatives.'
'But we ourselves must solve the biggest crisis. The offensive of foreign capital is getting stronger and stronger, and our strength is weakening. The situation must change, otherwise we will all be finished!'
'Not to mention the actual losses, the invasion of foreign capital into Canada will definitely cause social unrest, which will have a knock-on effect and very likely cause the Liberal Party's support rating to soar and even overtake us.'
'If it leads to the Liberal Party winning the general election and remaining in power, we will be hit twice, losing the bank and we will be drained of blood.'
'Oh, no, I still have the support of Great Northwest Life Insurance Company, and I can hold on for now, but you guys...'
At this point, Aubrey de Mare did not continue.
However, the darkening of everyone's faces showed the change in their state of mind.
'I believe everyone still has resources to mobilise, the reason why they are not used is that no opportunity has been found to fight back strongly and turn the situation around in one fell swoop.'
'If we are unable to turn the situation around, even if resources are invested, we will lose our ability to resist in the end, and this risk is too great.'
Andre Sfield's aged voice sounded out, voicing everyone's concerns.
'Andre is right. The short positions are getting stronger and stronger. Everyone is gathering strength to let the exchange rate fall lower without touching the liquidation line, which can increase the cost of short selling and reduce our cost of buying.
'Everyone wants to fight back, but right now we're missing an opportunity.'
'Time is so tight, sigh...'
...
Everyone was holding back a breath, and they all agreed.
Although the words were jumbled, the core meaning was that the opportunity to strike back had not yet arisen. Even if all resources were thrown in, it was not certain that the situation could be turned around. If the situation failed to turn around, the ability to resist would be completely lost. This was too great a risk!
'What if, I could weaken the power of the short sellers?'
At that moment, Harris Losier's gaze was awe-inspiring, as he spoke quietly.
In an instant, everyone fell silent, their gazes all directed at him.
'Harris, what's your plan?'
'How much can we weaken them?'
After a few seconds of silence, Joyce Gracy hurriedly asked.
'I have just found an opportunity. If we do it right, we can make the Chicago Consortium withdraw all their funds!'
Everyone's spirits lifted when Harris Losier said this.
'Really?'
'What is this opportunity?'
Even Aubrey DeMare was surprised and couldn't help but ask directly, without caring about his airs.
No wonder he was so nervous.
If Harris Losier could really get the Chicago Consortium to withdraw its funds, it would be enough to reverse the momentum of the offensive and defensive!
Although the short positions are now extremely complex, the main force is still the four major banks and many financial companies of the Chicago Consortium.
With the withdrawal of the Chicago Consortium, it will be difficult for the shorts to organise their forces in the short term, which is the best chance to turn the tables!
However, in the face of Aubrey DeMare's question, Harris Rothschild did not immediately answer, but instead said something even more enticing: 'The impact is not limited to this. If it is done well, it can also make American capital shrink a little.'
'Harris, just tell us, everyone can't hold back anymore,'
Joyce Gracie impatiently urged.
Harris Losier's mouth curled up slightly, and he said slowly, 'That is to completely ignite the crisis of the Continental Illinois Bank and cause a run on the Continental Illinois Bank!'
Aubrey de Marey's gaze sharpened, and after a moment of pondering, he took a deep breath and nodded, saying, 'Harris, this method of yours is highly feasible and definitely worth a try!'
The reason Aubrey de Marey said this was because he had thought about the particularity of the Continental Illinois Bank.
It can be said that among the four major banks of the Chicago Consortium, that is, the Continental Illinois Bank, there is a possibility of being plotted, and this method is not very threatening to the other three major banks.
It is not that the other three major banks do not have hidden crises, but it is almost impossible to make these three major banks erupt in crises that are fatal in a short period of time.
But if you replace it with the Continental Illinois Bank, it will work.
The key lies in two points.
The first is the business model of the Continental Illinois Bank, which involves the laws of the state of Illinois.
Illinois is a state that practises 'single banking', which means that banks are not allowed to set up branches within the state. As a result, after Continental Illinois Bank built a new bank building, it had to build a footbridge across the street in downtown Chicago to connect the two buildings of the head office, so that they would be considered the same building legally. This was a typical example of wasting money and effort.
But it is also precisely because Illinois law does not allow the establishment of branches that Continental Illinois Bank is the bank with the most capital affiliates in the United States.
Most of the capital of Continental Illinois Bank is borrowed from other banks or issued through holding companies as commercial paper and then transferred to Continental Illinois Bank.
The other three major banks in the Chicago consortium are also the three largest banks with the closest and largest capital operations with Continental Illinois Bank.
Of the more than 30 billion US dollars in deposits at Continental Illinois Bank, more than 90% are foreign deposits that are not insured and deposits that far exceed the protection limit of 100,000 US dollars.
In the United States, the Federal Deposit Insurance Corporation does not insure deposits over 100,000 US dollars.
Therefore, if Continental Illinois Bank is exposed to the risk of bankruptcy, it will definitely suffer the most severe run on its deposits, because the funds of these 10% of depositors are not insured, and if Continental Illinois Bank goes bankrupt, their money will truly be gone!
The reason why Continental Illinois Bank can operate with this business model is that its interest rates are higher, and of course the bank's management capabilities are also extremely strong, and the capital utilisation rate and turnover rate are also extremely high.
It is also because of this situation that Continental Illinois Bank, which ranks seventh among the largest banks in the United States, is the largest commercial lending bank in the United States.
The second reason is because of the crisis that Continental Illinois Bank encountered the year before.
In 1982, the Bank of Bonneville, which had lent the most money, collapsed, and Continental Illinois Bank was implicated because it held $1.3 billion in loan bonds.
Of course, a more serious problem was the Latin American sovereign debt crisis, which also had an impact, making Continental Illinois Bank's credit portfolio a higher-risk business, which indirectly increased its financing costs and credit rating dropped quite a bit.
In other words, the Chicago Consortium managed to get one of the world's three major rating agencies, Moody's, to continue to give Continental Illinois Bank's holding company an AAA long-term debt rating, which fooled the vast majority of people.
The loophole has always existed, but no one in the United States has bothered to fix it. After all, bringing down Continental Illinois Bank would trigger systemic financial risks, and according to US law, other banks cannot stand idly by.
People in the United States who have the ability to mess with the Continental Illinois Bank don't mess with it, and ordinary people who don't have the ability can't find out about it or do anything about it.
But if you replace them with the desperate Harris Rothschild, it's still no problem...
This is the last resort of the Thirty-Six Stratagems!
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