Chapter 234: Pound Crisis is Over
As the international foreign exchange market continued to experience the dumping of pounds and liras while buying up marks, the exchange rates of lira and pound dropped, forcing central banks to step in to stabilize the rates.
On September 8, the Finnish government suddenly announced the decoupling of the Finnish mark from the German mark, allowing it to float freely.
The British and French governments, recognizing the severity of the issue, suggested to the German government to lower interest rates. On September 11, the president of the German Bundesbank, Schlesinger, publicly declared that Germany would not lower interest rates.
Following Jim Colter's advice, Arthur immediately sold off the £500 million he had borrowed and bought strong German marks. The first to crumble was the Italian lira. On September 13, the Italian government had to announce the devaluation of the lira, adjusting its exchange rate down by 7%.
Then, led by Quantum Fund, international speculators targeted the pound. On September 15, the pound's exchange rate against the dollar dropped, and its exchange rate against the German mark fell to the lower limit, and then it dropped further.
On the evening of September 15, the British Chancellor of the Exchequer announced that Britain was withdrawing from the European Exchange Rate Mechanism, marking the failure of the defense of the pound.
By the end of September, the pound's exchange rate against the dollar had dropped, and Arthur, using a $100 million leveraged 10 times to short the pound and go long on the German mark, after deducting commissions and taxes, saw California Pacific Company's net profit reach an astonishing $1 billion.
"No wonder these Jewish folks love playing with finance. It's faster than robbing a bank," Arthur thought as he looked at the $1 billion in cash in his account, not including the cash flow he could mobilize from Galaxy.
The Quantum Fund's gains this time were certainly not less than $2 billion. Who knows if MI5 would send assassins to have a chat with them?
Subsequently, Arthur contacted Thomas H. Lee, the head of THL Private Equity Fund, and California Pacific Investment Company invested $67.5 million to acquire a 15% stake in Snapple.
That evening, at a live party at the Four Seasons Hotel in Beverly Hills, Thomas H. Lee smiled at Arthur, "Snapple is definitely a wise investment."
Arthur smiled, "I am indeed becoming more and more interested in finance."
"California Pacific Company must have made some gains in the pound this time as well?" Thomas H. Lee clinked glasses with Arthur.
"Yes, a little bit. We were just cheering from the back. The real champions were those who led the charge," Arthur said with a smirk.
Thomas H. Lee agreed, "Indeed, Quantum Fund leveraged over $10 billion and is now known worldwide!"
They had managed to bring down the Bank of England.
At this moment, Jim Colter approached Arthur and reminded him, "With the pound's exchange rate dropping, British stocks might be worth investing in."
Arthur smiled, "No rush!"
For stock investments, Arthur could easily buy some tech companies like Dell, Microsoft, and Cisco and just wait.
But it was still early; this cash could have even greater uses.
"Thomas, excuse me," Arthur said, patting Jim Colter on the shoulder. "Alright, I have something to do. I need to leave now!"
Arthur then headed straight to the Wilshire Hotel, as Vivian Chow had returned to Los Angeles after attending the premiere of The Joy Luck Club at the Toronto Film Festival with the crew.
"Vivian," Arthur embraced her as soon as she opened the hotel room door.
"Arthur, mmph," her words were cut off by his kiss.
After the kiss, Arthur sat on the sofa with Vivian in his arms, "How was it? Did you get a chance to see any houses in Vancouver while you were in Canada?"
"Yes," Vivian nodded. "I attended the film promotion in Toronto, then played in Montreal for two days, and finally went to Vancouver on the West Coast of Canada.
I just arrived in Los Angeles this afternoon. I originally wanted to visit Yellowstone Park, but I need to attend the promotional activities of The Joy Luck Club in Los Angeles, San Francisco, and New York!"
Arthur nodded, "These cities have a lot of Chinese, so they are key for promotion. You are quite famous among the Chinese now."
Vivian had a busy year with albums, movies, and TV series. If it weren't for The Joy Luck Club taking up so much of her time, she would have had seven Hong Kong movies released this year.
Compared to Yu Feihong, Vivian had a bigger role in The Joy Luck Club" Yu Feihong had already enrolled at USC, so she didn't need to participate in the film's promotional activities.
Vivian leaned in Arthur's arms, "The official release date of the movie is in late October, so we have half a month. Now it's mainly about the preview screenings."
"Hollywood is different from Hong Kong," Arthur said with a smile. "In Hong Kong, many movies go from start to release in less than a month."
"Hmm. Golden Harvest said they plan to co-produce an action film with Jackie Chan and Galaxy, starting next year!"
"Really? It seems they are ready," Arthur recalled his conversation with Golden Harvest's chairman Raymond Chow during his visit to Hong Kong.
The total investment was HK$100 million, with Galaxy contributing HK$40 million for the film's rights in North America, Europe, Australia, and Latin America. The most valuable Asian market remained with Golden Harvest.
For such low-level movies, Arthur wouldn't personally oversee them. Similar to Emma and The Crying Game," Galaxy mainly handled distribution after production.
It was good to start shooting quickly to let Jackie Chan break into Hollywood.
With Jackie Chan's fame, his old movies could also be released, with North American box office earnings reaching millions.
"Let's go out for dinner. You probably haven't had dinner yet," Arthur said, standing up and tossing his tie onto the sofa. "Lately, I have been attending various boring parties every day!"
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