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Why did Soros succeed in profiting from the Asian financial turmoil?
Entering 1997, the southeast Asian financial market, which has been calm, is in turmoil. Since May, the foreign exchange market has fluctuated. Thai milling, Philippine peso and Malaysian ringgit have been depreciating sharply, and the currencies of Indonesian rupiah, Singapore dollar and other countries have not escaped this catastrophe, and they are all under siege and tottering. Although the central banks of the countries concerned have taken various emergency measures to crack down on currency speculation in the market and tried their best to maintain the stability of their market value, they have failed to get out of the predicament despite repeated prohibitions. On July 2, Thailand was forced to implement a floating exchange rate system, and the Thai baht plummeted by 20% in one day. At the same time, the soon-to-go-bankrupt government of the Kingdom of Thailand issued an application for emergency financial assistance to the international monetary fund, Japan, the United States and other financial giants, which finally surfaced the Mexican-style financial crisis that Thailand had been brewing for a long time and made the world see its face clearly.

In the early 1990s, when the western developed countries were languishing in the recession and the decline of western civilization seemed to pass by, the economic growth in Southeast Asia was unstoppable and invincible, which amazed the world. Even the white bosses who have always been arrogant are ashamed and full of jealousy.

In the mid-1990s, Southeast Asian countries started the Great Leap Forward and accelerated the pace of financial liberalization, thus driving a new round of high-speed economic growth. They took it for granted that 2 1 century was the century of Asia and the century of Asia was the century of Southeast Asia, so the center of world power would shift to this budding region. However, the top-heavy drinkers in Southeast Asia ignore the most basic fact, that is, the main driving force of economic development in Southeast Asia in the past few decades is the increase of external investment, not the increase of unit input and output. Therefore, on the basis of such a limited growth model, relaxing financial supervision is undoubtedly building skyscrapers on the beach, which is full of hidden dangers and easily broken by external forces.

This, the wily Soros has long seen in his eyes and kept it in mind. Soros is a person who is used to obsessing and finding fault. There is such a huge financial loophole in Southeast Asia that he can't escape from it. He has been waiting for the last chance to come. He wants to make a lot of money and create another miracle similar to hitting the whole Britain.

In fact, as early as 1995, crosby Securities Company made a research report on the economic situation of seven Asian countries, pointing out that the labor quality in Southeast Asian countries is low. The trade balance deteriorates, inflation rises, and the economy is in danger of overheating; On the other hand, these countries will encounter "growth recession" due to overcapacity, high debts of enterprises and lack of higher education and skilled workers, and may fall into a terrible economic crisis. Crosby Company believes that due to the rapid economic growth, Southeast Asian enterprises generally overestimate the supply of real estate, the production capacity of manufacturing industry and the size of company personnel, thus causing "optimistic mistakes". The authorities concerned will accelerate the pace of financial market liberalization, which will add fuel to the fire and add fuel to the fire. By then, the economic operation of the whole country will be characterized by high speculation, the bubble economy will expand everywhere, and the whole market will be blinded by a false and prosperous seven-color aperture, thus creating an excellent attack opportunity for "financial flies" like george soros.

However, Southeast Asian countries immersed in the joy and dreams of "East Asian miracle" turned a deaf ear to the above advice, and their attitude was similar to that of Gauz. All this, Soros has been secretly happy in his heart. As early as 1992, people in Thailand's economic circles, especially those in the financial sector, came up with a strange idea that Bangkok should replace Hong Kong, which is about to return to China, and become the financial center of Southeast Asia and the second Hong Kong tour. Driven and stimulated by this unrealistic idea, which is almost equivalent to the Great Leap Forward, the Thai government opened its financial market to foreign investors with wishful thinking. Sure enough, foreign banks brought a lot of low-interest dollar loans, and Thailand's financial industry tasted the sweetness. With the financial resources rolling in, they began to have a strong interest in basic industries such as real estate. As a result, many banks rushed to invest nearly 30% of their loans in the real estate industry, which made the real estate industry develop blindly like the little fat people in China and Beijing, and the supply and demand were seriously unbalanced. The subsequent downturn in the real estate market led to a sharp increase in bad debts of banks, many loans were difficult to recover, and the quality of assets deteriorated seriously. According to the relevant data of Thailand cited by Daiwa Comprehensive Research in Japan, by the end of June, 1997, the total amount of risky creditor's rights of Thai financial institutions was 486 billion baht, accounting for 3 1.5% of the total loans. Some people even estimate that the bad debts of Thailand's financial industry are as high as 8O00 billion ~ 900 billion baht (about 310 ~ 35 billion US dollars). The profligacy of low-interest capital and the huge deficit of needed projects can easily lead to financial crisis. 1996, Thailand's required project balance has been equivalent to 8.2% of its GDP, while in 1994, Mexico's financial debt crisis was only 7.8%. In this way, it is normal for Thailand to have a crisis.

Thailand is playing with fire, and Soros sends a message to his subordinates. From 1997, Thailand's real estate bubble began to lose its luster and soon tended to burst. Foreign investors failed to steal rice and sold Thai baht in succession. Soros saw that the time had come to fish in troubled waters, led international financial speculators and concentrated on attacking the Thai baht fortress built on the beach. For a time, Thailand's financial position was in jeopardy, filled with smoke, and its shock spread to the entire Southeast Asian financial market.

Attack in the third quarter! Attack! Attack again

In 1990s, the international financial market was full of storms and crises. Economists all believe that there is an invisible, intangible but obviously felt "giant hand" wandering in the international financial market, a terrible devil-like giant hand. Economists call this big hand a more popular term: hot money.

According to the rough statistics of the International Monetary Fund, there are at least 7.2 trillion dollars of short-term bank deposits and other short-term securities circulating in the international financial market, and there is a growing trend. The development of world economic integration makes it possible for huge amounts of hot money to flow rapidly around the world. To mobilize huge amounts of money, just make a phone call or pick up the keyboard. In the market, a huge transaction can be closed in one second. On the contrary, in order to avoid risks. It is also easy to quickly withdraw funds. Since 1992, when Soros led the troops to defeat the pound, 1994, Soros and other big families made a scene in Mexico, making the largest country in Central America almost sell iron. The international community really learned the power of Soros. When it came to the Yuan Dynasty and went to the Yuan Dynasty, all countries seemed to be in awe of him. Under the leadership of Soros, the hot money in the international financial market is as unpredictable as a runaway wild horse. When the return on capital in a certain field is considerable, hot money will flock to it, and once it happens, especially after achieving its goal, it will disappear without a trace.

1On July 25th, 1997, Malaysian Prime Minister Mahathir, who was furious, cursed george soros, a world-famous speculator, as the "black hand" for speculators to lead to the sharp depreciation of Southeast Asian currencies. There are indications that the "legendary" commander-in-chief hedge fund in western financial markets has targeted "hunting" at emerging Asian markets and waited for an opportunity since 1992 sold the pound. 1993 This group of managers in charge of hedge funds made their debut in Malaysia. At that time, investors generally believed that the market value of Malaysian currency ringgit was undervalued and it seemed certain to rise. So, under the call of Soros, international hot money began to encircle Ringgit, but Mahathir refused to buy Soros's account, resolutely defended Ringgit with low market value, Mahathir and Soros each commanded one side, and launched a fierce struggle in the financial market. 1994 65438+ 10, Mahathir ordered to strengthen the control of the capital market. Soros saw that there were not many opportunities. In desperation, he led all speculators to retreat, stop fighting and raise horses to fight again.

In a blink of an eye, two years have passed, and the economies of Southeast Asian countries have experienced explosive growth, and the degree of prosperity has become increasingly obvious. Due to the rising inflation and the growing threat of economic overheating, interest rates in Southeast Asian countries are rising under the guidance of the central bank. Although this can slow down the rise of inflation, it also attracts a lot of hot money arbitrage, sending troops to fight Soros and others. Created new opportunities. A senior executive of Citibank Bangkok Branch pointed out that Thai bankers handle overseas arbitrage hot money as high as $2 billion to $3 billion every day. In addition, bankers themselves borrowed US dollars, Japanese yen and marks with interest rates 3- 15 percentage points lower than those of Thai baht, ringgit and other currencies, and then sold these currencies to earn the profit difference. According to statistics, the total overseas loans of Thai commercial banks have exceeded 1 trillion US dollars, of which 95% are short-term loans for less than one year. According to the news of Singapore's foreign exchange market, the daily trading volume of Asian currency forward foreign exchange market in Southeast Asia is about 6 billion US dollars, of which Tabor's turnover is the fastest growing. 1In February 1997, the International Monetary Fund (IMF) issued a warning that only two years after the Mexican financial crisis broke out, a large amount of hot money was being injected into emerging markets such as Asia at a record speed, and "irrational enthusiasm" was widely appearing in these markets, which might lead to painful shocks.

However, Boehlmann's voice was not heard, which made Soros finally make up his mind to fight against the strength of the Southeast Asian nations group with his own strength. Faced with the prevalence of currency market speculation in various countries, the central banks in Southeast Asia have been hesitant about the rate of market value change, especially worried that the outflow of hot money will be as fast as the inflow into China, which will lead to large exchange rate fluctuations. But at this moment, it is very difficult to screw on this newly opened capital faucet. The central banks of Southeast Asian countries have reached the final stage.

Soros who seized the opportunity was out.

But this time, Soros and his men not only appeared cautious, but also selected the Thai baht, which has not become a regional currency since the 1980s. Although interest rates in Indonesia and the Philippines are higher than those in Thailand, Indonesia's exchange rate is often manipulated by Indonesian officials, so it is difficult to speculate. The Philippines also has a lot of control over the foreign exchange market, and it is not convenient to let go of your hands and feet to fight a big battle to decide the outcome. In contrast, Thailand has the highest degree of financial market opening among Southeast Asian countries, with free capital entry and exit; Apart from the high interest rate, the Thai baht has been pegged to the US dollar for a long time, and the exchange rate is quite stable with minimal risk. On the other hand, Thailand's economic "fake" prosperity is the most prosperous, and the depressed real estate market drags down the original financial industry, so the market value of Thai baht is actually the most unstable and easily broken.

The reason why Soros took the too-timid operation is that he took a fancy to the above advantages, that is, the so-called "catch the thief first, then catch the king." After breaking the Taimu fortress, he will be able to completely sweep Southeast Asia. In this way, Soros commanded his men to secretly transfer funds to Southeast Asia, and when the last time was ripe, they landed in Southeast Asia on a large scale and killed those who were still dreaming.

Soros finally quietly declared war on Southeast Asian countries.

1 On March 3, 1997, the Central Bank of Thailand announced that nine domestic finance companies and1housing loan companies had problems of low asset quality and insufficient liquidity. Soros and his men thought it was a hint that there might be deeper problems in Thailand's financial system, so they preemptively ordered the sale of shares in Thai banks and financial companies, and depositors withdrew a lot from all financial and securities companies in Thailand. At this time, the western shock funds headed by Soros are waiting for Southeast Asian currencies in large quantities and jointly sell the Thai baht on a large scale. Under the siege of many western "heroes", the Thai baht was irresistible for a while and kept falling. In May, the lowest jumped to 65,438+0 USD to 26.70 baht. The Central Bank of Thailand devoted all its efforts to the whole country, and launched an anti-encirclement campaign against Soros in the middle and late May, aiming at disintegrating Soros's will, making him retreat from difficulties and stopping leading the people to attack the Thai baht.

As the first step, the Bank of Thailand formed an alliance with Singapore and used a huge sum of about 654.38+0.2 billion US dollars to absorb Thai milling. The second step is to imitate Mahathir's strategy and tactics in 1994 and prohibit local banks from lending Thai wood to Soros's army by administrative order; Step 3: Raise the interest rate substantially, and raise the overnight rate from about 10% to 1500%. Three-pronged approach, cutting-edge weapons, strong counterattack, on May 20, Taimo rose to a new high of 2520.

Due to the sudden tightening of monetary policy and the sharp increase in interest costs, Soros's army was caught off guard and lost $300 million, which was a blow.

However, Soros is still Soros. According to his intuition, Soros thinks that the Bank of Thailand can do nothing more than that. After hard work, the Thais did not put themselves in a desperate situation and suffered relatively little losses. In a way, Soros thinks he has won. For Southeast Asian countries, the initial victory was only a flash in the pan before the disaster, which could not hurt his vitality at all, nor could it save the fate of the Southeast Asian financial crisis.

Soros has worked hard for this opportunity for several years, and this time he is prepared and determined to win. The first defeat of the vanguard troops did not stop there, and Soros had to fight three wars in Southeast Asia.

1June, 997, Soros sent troops again. He ordered the three armed forces to regroup, ordered hedge funds to start selling US Treasury bonds to raise funds, expanded Soros's army, and later launched another fierce attack on the Thai baht. In an instant, the all-inclusive market in Southeast Asia was filled with smoke, and the two sides started hand-to-hand combat. Thailand is in chaos and the war situation is complicated. The major exchanges are like boiling hot soup, and people are running and screaming wildly.

This is a personal war against the country, which looks incredible in form; However, judging from the results, it is even more puzzling.

After a short battle, the Central Bank of Thailand, with a foreign exchange reserve of only $30 billion, announced that it had "run out of ammunition and food". Faced with the overwhelming Soros army, they could not keep the Thai baht at a fixed exchange rate. The Thais had to come up with a last resort, digging holes to mend wounds and implementing a floating exchange rate. Unexpectedly, this was expected by Soros, and he made various preparations for it. Various countermeasures have been implemented, and the fate of the Thai baht has been set on the cross of shame by Soros. The Thai baht continued to fall. On July 24th, the Thai baht fell to 32.5: 1 against the US dollar, the lowest point in history. Thoreau's slaughter of the Thai baht really made the world miserable, and the Thai people were even more frightened, lamented and complained.

However, after the Thai baht broke the city, Soros was not satisfied with it. He concluded that the Thai baht would depreciate sharply and other currencies would collapse, so he ordered to continue to expand the results and the whole army swept Southeast Asia. Soros secretly vowed that this time, all countries in Southeast Asia will be searched out and the dreams of these ungrateful people trying to replace the West will be completely destroyed.

I heard that Soros's army made waves and couldn't come. Other Southeast Asian countries tried their best to resist to death. The Philippines sold $2.5 billion, and Malaysia sold 1 billion to stabilize the local currency. However, in the face of Soros's powerful offensive, it is difficult to stop the devaluation of the peso and the ringgit. At the same time, the Indonesian rupiah and the Singapore dollar also fluctuated violently. For a time, Southeast Asian currency markets were surging. Is this a precursor to the financial crisis or the end of the financial storm? I'm afraid no one dares to jump to conclusions. Perhaps only one person knows the secret, and he is Soros.

After the war in Thailand, Hurricane Soros quickly swept through Indonesia, the largest country in Southeast Asia. In an instant, "Black Monday" appeared in Indonesia, the Indonesian rupiah was released greatly, and people rushed to buy dollars. Since July 2 1, the Indonesian rupiah exchange rate has fallen sharply, breaking the historical record. From the beginning of the year to August 20th, the Indonesian rupiah has depreciated by about 23% against the US dollar, far exceeding the annual target of 5%-6% set by the government, and the depreciation rate is second only to Thailand in Southeast Asia. Affected by the exchange rate, the stock composite index of Jakarta stock market also fell again and again. In the first three months of August alone, it fell by more than 20%, and it fell by 150.55 points in one month. Indonesia's banking, economic and social circles are crying and beating their chests.

After the devaluation of the Indonesian rupiah, the most obvious impact on Indonesia's economy was the sharp rise in manufacturing costs, mainly imported raw materials, which led to a sharp rise in the prices of products including automobiles and computers, building materials and major daily necessities, and also rose by 5%, reaching 13%. Industry economists believe that rising prices will increase the inflation rate from the expected 6% to more than 8% this year. Due to the devaluation of the shield market, the company's debt increased by 100% overnight, which will lead to a further increase in Indonesia's foreign debt, which has now exceeded 1, 10 billion US dollars.

Since the devaluation of Thailand's currency (20% on July 2nd), all countries in the region have experienced currency crises, from Kuala Lumpur to Jakarta and from Yangguang to Manila. "This is just the beginning," said Deutsche Bank Asia-Pacific Chief Economist. Everything we see now is just a small firecracker before the fireworks are set off. "He believes that the shock wave caused by the devaluation of the Thai baht may spread to more than a dozen emerging countries in Asia, Eastern Europe and Latin America.

So far, the domino effect of Thai baht depreciation has had a great impact on the currencies of the Philippines, Indonesia, Myanmar and Malaysia. On Friday (1 1), under the pressure of speculators, the Philippines had to let the exchange rate of its currency peso fluctuate and depreciate by nearly 7% within a few hours. On the same day, the exchange rate of Myanmar kyat in the free market hit a record low: 240 kyat 1 USD (this exchange rate has been maintained at around 160: 1 for several months, and began to decline a few weeks ago).

The change of exchange rate has an impact on commodity trade: the prices of some imported commodities have risen by nearly 30% in a few days. Speculation in ringgit (Malayan currency) is rampant day by day, and Malaysia has become a victim. Therefore, the central bank of Jijiangpo had to decide last Friday (1 1) to raise the interest rate from 9% the previous day to 50%. In this way, the cost of speculative activities (from bank loans to market sales) suddenly increased.

Japan, the most powerful country in the region, tried to put out the fire. The Japanese authorities decided to provide 1 billion dollars to maintain the stability of the Thai baht. The purpose of this move is to prevent a catastrophe similar to 1994 Mexican financial crisis from happening again. Tokyo is also trying to get the Asian Development Bank to take action. Hong Kong and Singapore also participated in the rescue operation. According to relevant sources, Bangkok is seeking $20 billion in aid. A delegation from the International Monetary Fund has arrived in Thailand to learn about the current financial crisis here and take corresponding measures as soon as possible.

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