My absurd experiences in North America over the years

The widespread collapse of US stocks exacerbated panic in the financial markets, and the safe-haven appeal of the US dollar began to emerge.

There are two currencies in the global foreign exchange market that possess safe-haven characteristics.

One is the US dollar, and the other is the Japanese yen.

The US dollar is the global reserve currency and naturally possesses safe-haven attributes. When panic arises in the financial markets, funds will choose to buy US dollars as a safe haven.

The appreciation of the US dollar exacerbated the euro's precipitous fall against the dollar, which by mid-August had fallen from its historical high to around 1.48. Those unfamiliar with the foreign exchange market may not know that, under normal circumstances, the euro's daily fluctuation against the dollar is about 30 to 60 points.

The index dropped 1200 points from 1.6 to 1.48, which can be described as a bloodbath over a two-month period.

Li Fu entered his short position at 1.6010, which represents 80% of his total capital. On average, a one-point fluctuation would result in a profit or loss of approximately $1.6 million. If the price fluctuates upward by more than 40 points, he would face a margin call.

Conversely, a drop of 40 points would almost double his investment.

1200 points means over $19 billion in profit.

Such extreme leveraged trading is usually only seen in small amounts of money held by retail investors; there are very few users with such large sums of money as him.

The nearly $20 billion profit shocked Wall Street.

The entire company was stunned that day; it was a scene they had never imagined.

Thompson and Lina, both assistants, had trembling hands.

Almost everyone thought Li Fu would liquidate his positions.

Because the entire financial market now feels that the US economy is in terrible shape, and the dollar has little room to rise.

However, Li Fu remained unmoved.

Instead, he called Cole.

He needed to confirm that if the company continued to make a profit, he would be able to receive the money.

Legally, JPMorgan Chase must protect its clients' interests and allow them to cash out when they wish to do so.

However, this is only in a legal sense.

If Li Fu were just a retail investor or a small company, JPMorgan Chase would have a hundred ways to take advantage of him.

This is the cruel reality of the capital market.

Keep in mind that this is $20 billion, and there's still a lot of room for profit if it continues.

"How much did you say?"

When Cole heard about the profit of over 19 billion, he almost thought he had misheard.

It hasn't been long since he earned $6 million. $19 million was already enough to shock him, let alone $1.9 billion.

Li Fu repeated it again.

This completely silenced Cole.

Even a powerful family like his considered it a huge sum of money.

"Don't worry! JPMorgan Chase wouldn't dare to do anything reckless," Cole replied after a long pause.

Before capital takes action, it will investigate the background.

The Forrest family owns 30% of Li Fu Investment Company. If you want to do something shady, it means you are making an enemy of the Forrest family.

Even setting aside the fact that their family has many business dealings with JPMorgan Chase.

For JPMorgan Chase to force this money would be a thankless and arduous task, and could even damage the company's reputation.

"Okay, I understand. It will probably take some time before it can be monetized. You can continue with your work and I won't bother you anymore."

Li Fu now felt more confident.

"Wait a minute..." Cole called out to him, "You mean there's still room for profit?"

"Yes, I estimate it could reach three billion!"

Li Fu actually underestimated the situation. Strictly speaking, the downside potential is quite vast, and the euro may even have reached a historic low of 1:1 against the dollar in another eight or nine years.

If the investment had materialized then, and continued, it wouldn't just have made JPMorgan Chase; it could probably have bought the entire United States.

Of course, this is unrealistic.

No one would allow him to hold onto it until that time.

As his profits grow, he will inevitably become a target of public criticism sooner or later.

He will withdraw when it's time to withdraw.

Three billion?

Cole's brow twitched. He wanted to advise Li Fu against taking the risk, but ultimately didn't say it, given the successful precedents.

He hung up the phone and immediately arranged for his legal team to prepare for potential risks should JPMorgan Chase default.

The amount is too large. If the other party takes a risk, then we'll make them regret it.

One day in late August, Li Fu's private phone suddenly received a text message from a private number in New York.

The other party claimed to be the president of Citibank and wanted to meet him. He didn't know how the other party got his contact information.

Li Fu deleted it directly.

Forget about Citibank; if it weren't for Lucy and Cole, he wouldn't even believe the Forrest family.

Just then, Thompson knocked on the door and came in, bringing a research report written by Lina about the financial situation of several Nasdaq-listed technology companies.

After examining the details, Li Fu felt that it was too early to make the acquisition and that they needed to wait.

In September, the weather in Nashville was getting a bit chilly.

The oak leaves are starting to turn yellow, and they fall down with a rustling sound when the wind blows, landing on the ground where they feel soft and spongy underfoot.

Li Fu would take walks by the river behind the neighborhood on weekends, sometimes alone, sometimes with Lucy.

Lucy's work at the city government was getting busier and busier, and she sometimes had to travel on business on weekends, so the two of them could only see each other once a day, and once or twice a week.

October 9th, Sunday.

Li Fu was watching TV at home when the news channel broadcast the news that the Treasury Department had announced on the 7th that it would take over the troubled mortgage lending institutions Fannie Mae and Freddie Mac.

He knew the real show was about to begin.

On September 8, the Dow Jones Industrial Average plummeted, marking its biggest single-day drop since 2000. The market realized that if the US government had to intervene directly, the situation could have spiraled out of control.

The free market and the government often go against each other.

On September 9, a massive sell-off erupted in the CDO market, rendering mortgage-backed securities with AAA ratings and collateralized debt obligations (CDOs) listed as "highly liquid assets" on the balance sheets of major investment banks virtually worthless.

The $200 billion injected by the Treasury into Fannie Mae and Freddie Mac is a drop in the ocean compared to the behemoths they hold in terms of mortgage-backed securities exceeding $5 trillion and debt they guarantee exceeding $7 trillion.

Panic and despair swept across the United States.

Soon after, Lehman Brothers Holdings filed for Chapter 11 bankruptcy protection under the U.S. Bankruptcy Code.

This is the fourth largest investment bank in the United States, with a history of over 150 years, and was once the largest mortgage bond underwriter in the United States.

Its sudden collapse heralded the global subprime crisis.

The financial tsunami spread from the heart of Wall Street in all directions, causing a sharp decline in liquidity in almost all global financial centers, including London, Hong Kong, Tokyo, and Paris, and an unprecedented wave of business failures.

The day Li Fu had been waiting for had arrived.

As the economic crisis spread globally, the value of the US dollar as a safe-haven asset increased once again.

This is the strange logic of the financial market.

Despite the fact that the United States had the worst economic situation and that the crisis started there, the return of global capital to North America was still due to the hard currency nature of the US dollar.

As the dollar strengthened, the euro's exchange rate against the dollar plummeted again, falling as low as around 1.41.

Li Fu anticipated that the 3 billion yuan profit would come sooner.

He chose to close out two-thirds of his position, and raised the stop-loss level for the rest, continuing to hold.

The transaction, exceeding $20 billion, broke records for JPMorgan Chase's private banking division, a feat likely unprecedented in Wall Street history.

Legends about him spread throughout the streets and alleys.

The Wall Street Journal devoted a large section to the story.

Everyone wants to know who exactly created this wealth myth.