Reborn in America, I am a legendary short seller on Wall Street.

Chapter 232 A premonition of danger

At 8:30 a.m. on Saturday, Larry arrived at Goldman Sachs alone.

The air was thick with the cold scent of mimeograph ink and newly minted coins, and the employees continued their bustling, busy work, each going about their own business. It made one wonder if the people at Goldman Sachs never took a break.

When Larry arrived, Henry Goldman wasn't there. The chubby saxophonist greeted Larry politely and served him black tea with sugar cubes.

Sachs wasn't very talkative, but Larry often tried to get him to talk. Larry really enjoyed listening to his deep, muffled voice, which always reminded him of Fang Shu'an from the storytelling tale "The White-Browed Hero" in his past life—a voice that was quite comical.

The two sat in the client reception room for a while, exchanging a few casual words. A short time later, the door opened, and Henry Goldman strode in, a tired yet sharp smile on his face, holding a not-too-thick, but neatly bound document.

When Sachs saw Henry Goldman enter, he quickly made an excuse to leave, as if deliberately avoiding any business related to Larry and Henry Goldman.

“I hope I didn’t keep you waiting too long, Mr. Livingston.” Goldman placed the documents on the mahogany table and pushed them towards him. “Bausch & Lomb. Everything you requested, in more detail than some on their board might know.”

Larry picked up the document; there were no markings on the cover, but the texture he felt under his fingertips suggested its weight.

Larry quickly flipped through the report, his eyes scanning the densely packed data, charts, and annotations like a scanner. When he saw something important, Larry pointed to it with his index finger, occasionally checking the numbers in his mind.

Every figure in the report is very detailed, and it uses charts and tables to compare figures from previous years. Some figures are listed in great detail, while others are only given a range of a few numbers, which likely indicates that even with their best efforts, they may not have been able to fully verify the data.

In order not to mislead readers, Goldman Sachs' report this time fully reflects the spirit of prudence: knowing what you know and not knowing what you don't know.

This should be the limit that Goldman Sachs can achieve at this point.

"Their cash flow is slightly exaggerated than publicly disclosed, but I think that's understandable, given that their payment cycle is mostly at the end of the year."

Goldman sat down to the side, his tone as flat as if he were commenting on the weather.
"They've taken on a heavy short-term debt to expand their new factory in Rochester, and they have a huge commercial paper bill due next quarter. In the current climate of tight short-term lending, I think this is one of their most obvious vulnerabilities."

Larry's fingertip hovered over an asset list. "As you said, their plant and equipment were undervalued. It was valued using the replacement cost method from ten years ago. If calculated at current liquidation value..." he did a quick mental calculation, "it would be two and a half times what it was before."

“Absolutely correct. Land prices in Rochester have risen significantly recently.” Goldman smiled with satisfaction. More than admiration for Larry's mental calculations, he seemed to be praising the thoroughness of his own report. He continued,
"In short, the company is definitely worth the price, but the value we can see now is not much different from our first estimate. We have just refined the issue, and this refinement was done at your request. I assure you, all the data is sourced, and you can do whatever you want with this report. But we at Goldman Sachs cannot endorse your report on behalf of the company."

“Very good.” Larry looked up, his eyes gleaming with the light of a hunter spotting his prey. “This is a report I’m satisfied with. By the way, tell me, when was their last shareholders’ meeting?”

“May 12th is Dr. [Name]’s birthday, and also the date Bausch & Lomb was founded.” Henry Goldman smiled meaningfully.

Larry pondered for a moment, then suddenly asked, "How old is the old gentleman?"

"62 is old."

Is it really necessary to strip an old man of his life's work on his 63rd birthday?
Larry hesitated for a moment, but after a brief thought, he closed the report, his tone becoming decisive.
“My friend said that Bausch & Lomb is sick, and this report is the surgical plan. Okay, we can talk about other things later. I need to reimburse you for this consultation fee first.” As he spoke, Larry took out his wallet from his pocket, which currently contained $2480.

Larry counted out $1000 and handed it to Henry Goldman.

Henry Goldman grinned like a hyena, glanced at Larry's wallet, and then suddenly slapped his forehead, as if he had just remembered something.

“Mr. Livingston, if you don’t have too much to do today, how about I take you to Lehman Brothers? I remember telling you last time that Lehman Brothers is the best futures broker I could find on Wall Street, even in the United States. You can feel the pulse of wheat and cotton there!”

Larry turned to look at him, then at his own wallet, feeling that opening it in front of him was a mistake. After all this time, this guy was still thinking about that $100 referral fee!
Larry took $100 out of his wallet, handed it to Henry Goldman, and then asked, "Do you also have information on futures trading?"

Goldman pondered for a moment, then finally nodded. "If you're referring to the cotton market, we know. You know Percy Thomas, the cotton king, right? He often publishes his cotton analysis on page four of the Wall Street Journal, and he's also a close friend of ours."

Larry nodded and smiled, thinking to himself that if Goldman Sachs were to be humble, it would prove that they simply didn't have the ability, because even if they were 3% sure, they could exaggerate it to be 8%; now that they were only talking about relationships and not about certainty, it proved that they had no certainty at all.

“Then let’s go!” Larry stood up, picked up the report, and said, “Thanks, Mr. Goldman. You’ve helped me again.”

“Mr. Livingston, I have a small request!” Henry Goldman put away the $1100, his face showing sincerity, and then said solemnly.

"May I call you Henry from now on? I think you should know me by now, after all I've done for you."

Larry nodded and waved to him. "Come on, take me to Lehman Brothers, Henry!"

The two walked out of the reception room side by side, through the busy lobby of Goldman Sachs, out of the building at 43 Pine Street, and headed straight for Liberty Street on the other side.

Pine Street and Liberty Street may seem like two separate streets, but they are actually very close to each other. Not only are they both located in the financial district of downtown, but they are also adjacent to each other, with a walking distance of about 2-3 minutes.

As Henry Goldman walked, he told Larry that Lehman Brothers was founded in 1850 by the three brothers Henry, Meyer, and Mayer. By then, some of the brothers had passed away, and others had retired due to illness. The company was now run by Herbert Lehman.

Henry Goldman and Herbert Lehman were inseparable best friends.

Soon, the two arrived at the Textile Exchange Building at 119 Liberty Street. The ground and second floors of the building housed the futures trading floor rented by Lehman Brothers.

Because it was Saturday, which also happened to be the day the April contract was settled, the hall was noisier than usual.

The ringing of telephones, the shouts of quoting clerks, and the clicking of telegraph machines blended into a sea of ​​adrenaline. Goman entered the trading hall and unconsciously craned his neck to peer behind the counters.

Larry felt that this place was more approachable and had a more down-to-earth atmosphere than the brokerage firm. While waiting for Henry Goldman, his gaze inadvertently swept over a huge blackboard displaying quotes.

Lehman Brothers started out in commodity trading and naturally had memberships in the Chicago and New York Mercantile Exchanges, which is why Larry wanted to open a futures account there. At the same time, they also traded over-the-counter futures, such as niche trading in Alabama orange juice, tobacco, cotton thread, salt, etc., where they started, and even acted as agents for forward liner contracts for train cars and ships.

Naturally, they also acted as agents for some stocks, but they were secondary agents of the New York Stock Exchange and, at this time, lacked sufficient funds to offer leverage services. The Lehman Brothers trading floor also had large price boards, but the market data there primarily focused on futures contracts such as corn, wheat, and cotton, with stocks and over-the-counter trading playing a secondary role.

“Mr. Livingston! I’ve found you someone who can speak for you, Herbert Lehman!” Goldman’s voice was cheerful as he appeared beside Larry.

Larry turned his head and saw a short, dark-haired man being led over by Henry Goldman, who had his arm around his shoulder as if he were being held hostage.

That short man was Herbert Lehman. Although he was small, his eyes shone with shrewdness.

“Hello! Mr. Livingston!” Herbert Lehman quickly extended his hands. Clearly, he had been warned by Henry Goldman to be sufficiently respectful to this “little money god.”

Larry smiled and extended his hand to shake his.

At this moment, a sudden change occurred.

The previously steady clamor in the trading hall suddenly rose a notch, tinged with a barely perceptible sense of panic. Several young price clerks, no longer walking briskly, began to jog, their chalk screeching across the blackboard.

Larry's gaze unconsciously swept over the huge blackboard displaying prices that covered the entire wall, and his face suddenly froze.

Four stock ticker machines were clicking away, spewing out a continuous stream of price quotes. Clearly, the prices of several stocks on the New York Stock Exchange were experiencing simultaneous and significant fluctuations.

The young man guarding the quotation machine kept shouting out the latest stock quotes, while the quoting clerk climbed a ladder with one hand and kept wiping and writing on the quotation board with the other.

"What's going on? Why is it like last Saturday, with a sharp drop starting at 11 o'clock again?"

"Futures are fine... but stocks, my God, are we going to see that damn market crash we saw last week again?"

Several clients who noticed the unusual stock price movement frowned and discussed something.

Larry felt uneasy and quickly turned to Herbert Lehman, "Mr. Lehman, what exactly happened today?"

Herbert frowned as he looked at the price chart, then nodded and said, "Again, again, that kind of inexplicable drop... It was at this time last Saturday too!"

Then, Herbert pointed to the price board and said to Larry, "In just five minutes:"
Central Railroad of New York fell 2%.

American cotton textile companies fell 1.5%.

Even more striking were the United Gas Company and New York Fire Insurance Company. Their declines were not significant, but the sell orders were unusually concentrated and resolute, as if several invisible hands were relentlessly pushing the price down regardless of cost.

Goldman noticed it too. He frowned and whispered to a familiar assistant running past, "Carl, what's going on? Any news from the NYSE?"

“I don’t know, Mr. Goldman!” the assistant replied breathlessly. “There’s no news! But the sell orders are coming from several different brokerages, and the volume is huge, like…like they’re scrambling to sell!”

“Selling frantically…” Larry repeated the word, a chill creeping up his spine without warning. A concentrated sell-off without any negative news? This was definitely not normal market volatility.

His brain raced, forcibly piecing together the scene before him with the fragments of information in his mind:

The Astor family were key directors of the New York Central Railroad and Cotton Mill Company.

Union Gas has a pipeline network that spans Manhattan’s upscale neighborhoods.

New York fire insurance covers a large number of prime real estate properties in New York City.

These seemingly unrelated businesses all subtly point to the heart of New York's real estate market and...potential, enormous physical risks.

Larry's eyes suddenly widened, and he turned to Herbert Lehman to ask,
"You said it was around this time last Saturday, right?"

Herbert was a little surprised; clearly, he noticed the odd tone in Larry's voice, but he still nodded emphatically.

"Yes, sir! Last Saturday at 11 o'clock, these stocks were also falling, or rather, they were being dumped!"

Larry felt a chill run down his spine, because he remembered something: around 1 p.m. last Saturday, when King Astor IV was assassinated in the street!
After a moment's hesitation, Larry turned to the two men and said firmly, "I need to make a phone call. Where are your phones? Take me there now!"

Herbert was almost stunned. He quickly pointed behind him and said, "You, you come with me!"

Larry strode over.

Henry Goldman quickened his pace to catch up with Larry and asked in a low voice, "Mr. Livingston, what's wrong? If you've found anything, you can tell me; maybe I can help."

Larry initially didn't want to say anything to him, but Goldman's offer of "being able to help" touched him.

Without stopping, Larry turned his head and whispered to Goman as he walked.
“Some people aren’t betting on a market crash, Henry. They’re celebrating a disaster that hasn’t even happened yet. They know something we don’t know… something very, very terrible.”

As soon as he finished speaking, the clamor of the trading hall seemed to vanish in an instant. The confusion on Goldman's face gradually gave way to shock and a hint of fear. He followed Larry's gaze back to the price board, where the stark white numbers written in chalk now looked like a countdown to hellfire.

Larry said no more. He clutched the Bausch & Lomb report tightly, walked a few steps to Herbert's office, grabbed the phone, and dialed the number Astor IV had given him...

(End of this chapter)