章節 1320: Chapter 1320: The stock and foreign exchange markets are both in a slump
With Xia Yu's unremitting efforts, the crisis of Continental Illinois Bank continued to spread and reached a dead end at an even faster rate.
Even after securing a loan of 4.5 billion US dollars from 16 banks, and selling assets to get 580 million US dollars from Wells Fargo,
by 4 June, Continental Illinois Bank's funding chain was on the verge of collapse.
The Office of Financial Institutions Supervision, together with a third-party accounting firm, found after consolidating the finances and assets of Continental Illinois Bank that the bank's non-performing loans amounted to 4.5 billion US dollars.
This is an appalling amount!
Even John Chris Morgan, who had been planning the takeover of Continental Illinois Bank, was dumbfounded and suddenly found himself in a dilemma.
In the end, he chose to temporarily suspend the takeover of Continental Illinois Bank and pass the burden onto the Federal Reserve and the US government, waiting until the situation improved.
No other consortium dared to take over Continental Illinois Bank at the moment, so after urgent consultations, it was decided that the government-owned Federal Deposit Insurance Corporation (FDIC) would step in.
The FDIC bought the $4.5 billion in non-performing loans of Continental Illinois Bank, and the discounted price of this large loan was $3.6 billion, in exchange for the previous $3.6 billion in debt.
In addition, Continental Illinois Bank issued an additional $1 billion in preferred shares, which were designated to be sold to the FDIC. In this way, the FDIC would become the absolute controlling shareholder of Continental Illinois Bank.
In this way, Continental Illinois Bank was basically nationalised, except for its name.
With the credibility of the US government and the endorsement of the Federal Reserve, which can print money, Continental Illinois Bank is definitely not going to fail. Customers will definitely feel at ease, and the run on the bank will naturally be resolved.
In this matter, James McCormick, with no way out, finally chose to agree.
He had no choice but to agree!
However, in doing so, the crisis of the McCormick family was exposed to the outside world and was about to explode.
The other three families and the three banks were also in for a bad time.
Both domestic and foreign consortia attacked the Chicago consortium, with competition at the surface and all wanting to swallow up more assets.
The First National Bank of Chicago, Harris Trust and Savings Bank, Northern Trust Company, Sinar Financial Corporation, State Mutual Life Assurance Company, Sears, Roebuck and Company, Associated Department Stores, Tiffany & Co., Marshall Field & Co., Esmark Corporation, United Food & Products Company, International Harvester Company, Deere & Company, Caterpillar Tractor Company, Standard Oil of Indiana, Texaco, Inc.
These companies are all well-known and influential companies in the United States.
For example, Sears, Roebuck & Co. was the leading department store in the United States, with sales of nearly 40 billion US dollars in 1983, and it was also the world's number one!
The Rockefeller family absolutely wanted to take control of these two oil companies, which were the core of the Rockefeller family's business. Now that David Rockefeller had the opportunity to regain control of the shares, he would not miss it. Caterpillar Tractor Company was also the industrial core of the Rockefeller family.
The Rockefeller Consortium absolutely wanted to get its hands on them. After all, these two oil companies were the core of the Rockefeller Consortium. Now that there was finally a chance to recover the equity, David Rockefeller would not miss it.
Caterpillar Tractor Company was also one of the core industrial companies of the Rockefeller Consortium, and the equity of this company was also to be recovered as much as possible.
Of course, John Chris Morgan, David Rockefeller's arch-enemy, also definitely wanted to take over these equity stakes and further infiltrate the Rockefeller Consortium.
A fierce battle was inevitable!
And Xia Yu's goal was also very clear.
There were hundreds of core companies and major companies with stakes in the companies under the Chicago Consortium. He didn't want too many, he just wanted the three companies: Northern Trust Bank, International Harvester Company, and Deere & Company.
His Polaris Capital needed a strong industrial company as its core!
Of course, as long as he took over Northern Trust Bank, one of the four major financial cores of the Chicago Consortium, he would naturally own the stakes of many companies, which was also one of Xia Yu's original intentions to target Northern Trust Bank first.
At the same time, Polaris Capital's acquisition of Dun & Bradstreet Group's equity was also underway.
The crisis of Continental Illinois Bank had dealt a huge blow to Moody's reputation. Having shorted its parent company Dun & Bradstreet Group, it had already gained a profit of 140 million US dollars, which would just be enough to use as ammunition to acquire Dun & Bradstreet Group.
As long as Moody's is in their hands, Xia Yu can't do whatever he wants in the US financial sector, but at least the deterrent effect of Polaris Capital will greatly increase, and the self-protection and counterattack capabilities of its subsidiaries will also be greatly enhanced.
As for Moody's credibility?
It has an impact now, but in a few years, it will still be able to do whatever it wants.
Since its establishment, has Moody's done less insider trading?
The other two major rating agencies have not done less than Moody's, and they have also been exposed to scandals, but now they are all doing well, aren't they?
Time washes away everything, and people are forgetful...
...
At a time when many consortia are hunting the Chicago consortium.
As time goes by, the situation in Canada is becoming more and more chaotic.
The Canadian currency market has been hit hard.
As of June 20, the Canadian dollar has fallen to around 0.7100 against the US dollar due to repeated short selling.
Compared to the peak before short selling, the drop has exceeded 0.1.
This means that if you had entered the market at the high point, short selling, with an entry of 100 million US dollars, the profit after delivery would be 10 million US dollars!
However, the Canadian dollar has fallen to this extent, almost to the bottom, and the rate of decline has been minimized.
There are multiple reasons for this, but the most critical reason is that the big short sellers have already harvested the Canadian foreign exchange market, and their capital has been transferred to the Canadian stock market and bond market.
The largest foreign exchange market in the market has been looted, and the second largest stock market has become the second target, while the Canadian bond market is the final target.
In terms of the stock market, in the face of short sellers' all-round short selling, the Toronto 300 Index has plummeted to more than 1,600 points and is still falling.
This has driven capital to flock to the bond market to preserve value.
However, Xia Yu had long since laid out in the Canadian bond market, buying more than 8 billion US dollars worth of bonds at low prices.
After the bond market was pushed to a peak due to the influx of capital, he kept selling the bonds that he had originally bought at low prices at high prices.
The financial situation had deteriorated to such an extent that it had had a huge impact on all walks of life in Canada. The Canadian people were full of grievances, and under deliberate guidance, all of these grievances were directed at the bankers. The calls for the nationalisation of the big banks grew louder and louder.
In this situation, the general election was drawing ever closer.
After more than 20 days in hospital, Joseph Chrétien could no longer bear to lie still...
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