Chapter 333: The Night Before the Crash

People always mocked other animals for being stupid due to their small brain sizes, like fish, which seemed to have only a seven-second memory.

It turned out that humans were also forgetful creatures, not necessarily superior to other life forms.

Humans' speculative desires only weakened such memories. It's quite funny, really -- American stock markets seemed to suffer from intermittent insanity, encountering a serious crisis every few decades.

The amusing part was that each time the reasons were almost the same. Frenzied speculators flooded into the stock market, continuously driving up stock prices.

Then, of course, it was free fall. After a group of fools was cut down, it usually wouldn't take long for the American stock market to become popular again.

...

"Sir, the stocks are still high, easily breaking the 2600-point barrier," someone reported.

"Gee, that's a trillion-dollar market cap? What should our tangible assets be worth?" William White said, baffled. Clearly, these people had lost their minds.

"Sir, there's an increased expectation of interest rate cuts, so perhaps this is a preemptive reaction. Also, the investors from Japan have been very decisive. According to our calculations, they've gradually bought up $20 billion worth of stocks this year," came the response.

William White found it hard to comprehend. Were those investors nuts? With the currency depreciating significantly, how many times did stocks have to rise for them to profit? If it were just a couple billion, they'd have to be very optimistic about some industry.

Twenty billion? That was not an amount a single institution could just throw around. Could it be that those Japanese investors had that much spare cash at their disposal?

"Filson, let's set aside the interest rates for now. What's going on with these investors? Don't they realize the exchange rate hasn't stabilized yet?"

"Sir, their banking system is already overflowing with money. To prevent us from repaying our loans early, they are actively lowering the interest rates they offer us."

"Wow, those rich guys sure need to buy some art. Those pieces must be skyrocketing too," William White grinned, a hint of mischief in his eyes, and Filson couldn't help but agree. It seemed the boss had developed a penchant for taking advantage of the Japanese investors.

"If the stock market is driven by capital, then the art market is downright insane. Those Europeans don't seem willing to part with their collections," Filson added.

"Haha, let's sell our holdings first and consider it my loss!" Filson marveled at his boss's shamelessness. In such a short time, those oil paintings had doubled in value, far surpassing those stock gains.

...

William White had already concluded that, like in the past, this century's stock market crash was inevitable.

According to data from Nielsen, viewership for NBC news was on the rise, especially for financial news, which had actually increased by five percentage points.

This number indicated that people who typically ignored the economy were suddenly tuning in to financial news.

Well, someone might say he was just pretending. If not for those memories, he would be just as clueless as those fools and wouldn't bother listening to the expert nonsense.

William White had to admit this was true. Now he was inferring reasons from conclusions, naturally seeing everything as a problem. If he didn't know the outcome, he believed he too might act recklessly.

Turning off the TV, William White decided not to listen to more expert babble. He figured he would rather spend that time playing games with his daughter.

Interest rate cuts? What did that matter? Did they really think lowering rates would prompt folks to borrow and jump into the stock market?

Sure, they had a point -- it would encourage consumption and investment. But I still have to wonder, with such lucrative stocks, who in the world has time to focus on real businesses?

Well, there were those like William White, who had their sights set elsewhere.

...

White Plaza was exactly what he planned to build.

"Filson, I'm going to start construction on twelve buildings. You all need to get busy. This plaza, including the hotel, shopping center, and office buildings, needs to be a landmark. Get the advisors to start evaluating," he said.

Looking at the sketches, Filson momentarily drifted. Good heavens, this wasn't a plaza at all; it was a complex of buildings.

"Sir, the hotel industry's return isn't high, the rooms can typically only be used for six or seven years before needing a costly renovation," he pointed out.

"Yeah, I know. That's why there will be two mixed-use buildings in this plan. Hopefully, they'll bring in good traffic. The main issue is, Filson, if I reduce my Japanese assets, what kind of projects could accommodate such a large sum of money? I've mentioned before, financial assets need to be significantly cut down."

"Alright, let's evaluate first." Filson understood the boss was right. With that much capital, it definitely needed a place to go.

William White felt he had no choice but to push for this plaza plan. His objectives were too clear; he couldn't quietly invest in anything. In fact, his venture capital fund had been struggling; whenever they were negotiating, someone always interrupted with complications.

After several incidents, William White finally got fed up. They could negotiate, but they had to sign agreements first, or he wouldn't entertain them. Most annoying was that Sequoia Capital, which always treated him like a stepping stone, was utterly outrageous.

Even unreliable venture capitalists had their followers; just imagine the rest of the investments. Thankfully, in recent times, William White's unorthodox strategies had diminished some of the trend followers.

However, he was well aware -- once he finished profiting off the Japanese assets, that gang would go crazy again, and any investment he made would attract attention.

Using the profits from the plaza deal to fund White Plaza, one couldn't help but note his peculiar taste. Would the angry Japanese investors even consider staying in that hotel?

Well, if the Japanese delayed their development, and if that crowd lined up to leap off buildings, it would be enough to drive him nuts.

...

The current stock market was clearly overheated, and it was astonishing that neither regulators nor the Federal Reserve provided any risk warnings. This was quite abnormal behavior.

This wave of speculation began in March. In just a few short months, the Dow Jones jumped from under 1700 and was set to hit the 2700-point mark.

This trending began in 1982. With such blatant price manipulation, how could no one notice?

Was someone trying to dig a pit for the unwary?

Not long ago, the U.S. had completely relaxed financial regulations. While there were pressures for the Japanese to open up their finances, the overarching aim was still to attract investors.

Filson's information wasn't just an isolated case; besides the $20 billion from Japan, there was significant investment from other economies as well.

William White thought to himself, first easing regulations, then cutting taxes, and now heading into massive interest rate cuts. Everything felt strangely off.

Were Americans really such good people?

Clearly not, so the result was obvious. America had dug a hole, preparing to stew those international hot money investors, otherwise such a bizarre situation wouldn't have arisen.

*****

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