[Chapter 849: Caught in the Crossfire]
The imminent collapse of Barings Bank was no longer in doubt. A rough estimate suggested losses exceeding a billion dollars. Even if they sold off Barings piece by piece, it would barely make a dent in the damage.
The sudden failure of a bank that had stood for over two hundred years sent shockwaves through the capital markets, and the fear was palpable. The situation in Mexico had not yet settled when an earthquake rocked Japan, and the unaware John Bull realized that the so-called financial crisis was not so far away after all.
As soon as the London Stock Exchange opened, financial stocks began to plummet. Despite Standard Chartered and HSBC issuing clarifying statements, the market responded with increased negativity. After those announcements, the stock prices dropped even more steeply.
"Who the hell is short-selling London? Has that bastard trader been caught yet?" confronted Chancellor Brown, who had nothing to say in response. This was definitely not his fault.
"Prime Minister, global investors are short-selling London. It all started with the White Fund and Quantum Fund."
"Damn it, I knew something was up. We need to rally public opinion. Oh, get me Clinton on the line. And what about Soros? I know he's trouble, but what's the story with William White? Has he jumped on the Fed bandwagon?"
"Not quite. He just whacked Soros in Japan. But if it weren't for that damned earthquake, things might not have turned out so badly."
"Bunch of idiots! Why can't these vampires settle down?"
The crash of the stock market resulted in losses far greater than Barings Bank's downfall. Investors, driven to madness, were shocked by the swift decline.
"People keep insisting it's just one bank; why should I believe that? And you claim it's just one trader behind this?"
"Damn it, do you even believe your own nonsense? Are bonds worth twenty billion just something an amateur buys? Is a hundred thousand contracts just a mistake?"
"Fine, we're not politicians. You go play your childish games while I take my leave. I may not be able to sell off right away, but I'll short-sell first."
"Mr. White, Mr. White! There are reports claiming you're short-selling the London stock market."
"Who are you?"
"Mr. White, can you say a few words? I'm a reporter from World News. I've heard your fund has been quite profitable."
Even as his bodyguards tried hard to keep the reporters at bay, the crowd wasn't giving up.
"Quiet down; I'll answer two questions. If you can't control yourselves, I will leave immediately."
Naturally, when William White spoke, the surroundings fell silent.
"Alright, let me address your question. Short-selling is just a tool. I have multiple stocks listed in London; there's no way I would hope for them to drop in value. As for short-selling, it's merely hedging.
And 'profitable'--what does that even mean? If I don't break a billion, how can you call it significant?"
Well, under a billion was just scratching the surface. The reporters could only internally scoff, as Barings Bank was bleeding ten billion and collapsing fast. Where's the fairness in this?
"Mr. White, Mr. White! I'm from the Wall Street Journal. With Mr. Soros also facing hardships, are you feeling satisfied about defeating the Quantum Fund?"
"Cough, cough, are you kidding? When did I ever battle Quantum Fund? Soros was bullish on the Japanese economy; so was I. It's just hedging. Are you an intern? Wall Street Journal? You should be asking a more professional question."
"Alright, that's enough. I have great confidence in the world economy. I hold stocks, so hedging is simply standard practice. I also hold gold and oil, and I'm short-selling too.
Lastly, let me remind you, I'm an industrialist, not a financial speculator."
As William White walked away, reporters exchanged glances. Clearly, he was an industrial player, and that was undeniable. What many considered a fortune was just a number to him, not worth making a fuss over.
"Damn it, you're short-selling financial stocks."
"Prime Minister, the White Fund has closed their positions and is aggressively increasing their holdings in financial stocks. They're ramping up fast, and both HSBC and Standard Chartered seem spooked. Just a moment ago, both issued buyback announcements."
"Wow, does this guy have no shame? What's he planning? A barbarian invasion?"
The financial system was relatively closed off, and John Bull didn't readily accept its little cousin. If this guy managed to crawl into the boardroom, it would be a real headache.
The quick trades weren't favored by everyone. Soros was clearly in a rough spot. What William White was doing was exactly what Soros had intended, but unfortunately, he had missed the boat.
Soros had heard White's comments, and this mess was originally his to deal with. Now, this jerk wasn't taking any responsibility and was throwing it right to him.
Sure, Soros was naked short-selling--hardly a legitimate investment. The fact was, he was simply a speculator. Unfortunately for him, this time, he was left empty-handed.
Even though his reasoning made sense, people on Wall Street wouldn't see it that way. There was simply no way to explain this mess to outsiders. If someone genuinely intended to pursue it, they would just be making enemies.
Would they dare to take their anger out on William White? Not a chance. The once-unassailable Soros had faced a few missteps, and those in the know recognized that the White Fund was cleaning house. Several culprits involved in violations had already been kicked out.
Making money was fine, but rule-breaking was rule-breaking. Their compensation would only be minimal at best.
With the White Fund busy with a major cleanup, there was hardly time for other disturbances. As for their profits, what that guy had said was pretty spot on.
If you checked his stock holdings and then looked at his short-selling ratio, no one would say a word.
What? Those short-sellers weren't even his holdings!
"Get lost, and don't come back. You're short-selling your own stocks?" What kind of madness was that?
"Alan, I don't understand his strategy at all. He holds a massive amount of gold yet is short-selling it. That's not just hedging anymore."
"Paul, you're underestimating the White family. Their gold holdings are deep. You can't see it in public data, but oil is different. As long as prices drop below fifteen dollars, he'll short-sell; those positions are highly aligned with his actual production."
In the midst of a storm, the former heads of the Fed certainly had to discuss the situation. They knew quite well that if they stepped on John Bull's tail, he would come looking for revenge.
Unfortunately, the excitement was lost. William White had slipped away like an eel.
If all of this were just nonsense, it would be pure trash talk. If White claimed otherwise, he would certainly be in trouble. At least, he could never escape the label of a financial disruptor.
Fortunately for him, the one in the crossfire was now Soros. Nothing more needed to be said; old grudges and new resentments piled up. If they weren't afraid of the Fed's reaction, then they were free to stir the pot.
Of course, even if Soros didn't care, it was still an issue of pride. Damn it, if I earned a billion, it would be a whole different story. Who cared about the disruption? Would I have had this chance if your financial system was solid?
Losing money and still having to take the blame? Now that was something he couldn't tolerate!
*****
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