In the blink of an eye, three months had passed, and it was now October of 1989. As the turmoil on the mainland gradually subsided, the property market in Hong Kong began to warm up.
Despite the upheaval in Hong Kong, the final outcome was generally satisfactory. At least on the surface, not many people were harmed, and no one was sentenced to death. Under a tacit agreement, most of the prominent figures left the country through various channels.
However, due to the series of events, the country's economic policies inevitably became more conservative. The market, which had just opened up, showed signs of further tightening. In just a few months, Liao Chengde's factory on the mainland was subject to several joint investigations by law enforcement. Fortunately, Liao Chengde had already taken timely action and changed the factory's main focus to toy production. Moreover, as a well-known Hong Kong businessman in the central government, even if local authorities were intent on making things difficult, they did not dare to go too far.
After the property market recovered, Liao Chengde, with Zhong Shi's approval, gradually released his properties through intermediaries. To ensure Hong Kong's stability and prosperity, some mainland conglomerates quietly acquired assets in Hong Kong, including some of the properties. They approached Liao Chengde discreetly, offering prices nearly 20% higher than the market rate.
Liao Chengde, naturally, did not refuse such a profitable deal. In a friendly and harmonious atmosphere, some of his properties were quietly transferred.
After the dust settled, Liao Chengde calculated his earnings and found that in just a few months, his profits had doubled. Without counting the properties he still held, he had already made over 100 million Hong Kong dollars from the sales. This was just his share; Zhong Shi had made a staggering 500 million Hong Kong dollars.
Since the transactions were conducted in secret, the media was completely unaware. Otherwise, it would have caused a significant stir.
...
Let's turn to another story. In Japan, after the American, British, and Japanese local forces reached an agreement, funds were continuously transferred to a dedicated account. Representatives from all sides gathered at the base of operations—Kobe, a port city in central Japan.
The reason for not choosing Tokyo was that it was under close surveillance. Any slight disturbance could lead to a crackdown, and it would be easy to frame these foreigners. A mere suspicion of espionage could result in their deportation, nullifying all their preparations and even seizing their funds.
Kobe, on the other hand, was the headquarters of the largest Japanese yakuza organization, the Yamaguchi-gumi. The Yamaguchi-gumi's influence was so strong that it often overshadowed the police. In the 1970s and 1980s, several anti-yakuza campaigns were launched, with the Yamaguchi-gumi being the primary target. During these conflicts, yakuza members armed with submachine guns drove the police into retreat, severely tarnishing the police's reputation.
However, the Yamaguchi-gumi later erupted into an internal war over the succession of the leader, splitting into two factions. After years of assassinations, the split faction, the "Ishikawa-kai," led by Yamamoto Masahiro, was dissolved and its leader retired, ending the internal conflict.
In April 1989, Watanabe Yoshinori became the fifth-generation leader of the Yamaguchi-gumi. With ambitious goals, he vowed to restore the organization's former glory. Following the strategy of his deputy, Takami Katsutoshi, he avoided confrontation with the police and expanded the organization's influence across the country. Under his leadership, the Yamaguchi-gumi's influence extended to the Kanto region (Tokyo, Yokohama, etc.), often clashing with local yakuza groups like the Sumiyoshi-kai and Inagawa-kai.
The yakuza controlled industries such as gambling, prostitution, and drugs, amassing vast amounts of money. However, this money could not be spent legally, a significant problem for the underground world. In the United States, the police often arrested notorious mafia members for tax evasion when they couldn't find evidence of their crimes. Even a famous mafia godfather lamented that he could commit murder and arson but forgot to pay his taxes to the federal government. This godfather was sentenced to hundreds of years in prison for tax evasion and died in jail.
The Japanese yakuza understood the importance of this charge and actively sought ways to launder money, especially large sums. In this context, some American financial companies operating in Japan found common ground with the Yamaguchi-gumi, and they reached a private agreement to launder money.
Money laundering is a global issue, and the only difference is whether the regulatory authorities catch it. In the future, HSBC and Standard Chartered were accused of money laundering by European regulators and settled for billions of dollars.
The American allies briefly explained the situation to the Yamaguchi-gumi, and these highly loyal yakuza members readily agreed without asking for specifics. After all, who would dare to cause trouble in the Yamaguchi-gumi's territory!
If they knew that these foreigners were plotting to destroy the Japanese economy, they would not have agreed so easily.
After gathering top traders from the United States, Europe, and Japan, Jim, as the organizer of the operation, naturally took the lead. The team of dozens of people summarized opinions from all sides and, after two weeks of discussion, finally formulated what they believed to be a perfect strategy.
Starting in October, large sums of money flowed into the Singapore futures exchange. Most of these funds, often in the tens of millions of dollars, were invested in Japanese stock index futures. Although these funds caused a stir in the market, in a daily trading volume of billions of dollars, they were just a small ripple that quickly disappeared.
At the same time, funds from the temporary base in Kobe also flowed into the Japanese market. These funds were broken down and used to buy stocks of certain large Japanese companies through dozens of accounts. This was part of their strategy to hedge the risks from the Singapore stock index.
Of course, this risk could not be completely hedged. The Japanese market was so large that a single index point change represented billions of dollars, far beyond what a few Japanese company stocks could reflect.
"How's it going?" Jim asked Maxim, who was nervously operating the screen. As Jim's most capable assistant, Maxim was also part of the team.
"Not good. The Nikkei index is still rising, and the bull market isn't over yet!" Maxim wiped the sweat from his forehead and shook his head slightly.
"Don't worry, keep buying the short positions. This operation involves a much larger sum of money than before, so we don't need to be overly concerned about a few million dollars in losses," Jim reassured him.
This time, the gathered funds amounted to about 5 billion dollars, with 2 billion from the United States and the United Kingdom, and 1 billion from Japan. It wasn't that they lacked money, but mobilizing more funds in a short time would attract the attention of Japanese regulators. The American and British funds did not need to enter the country, but Japanese funds flowing abroad required certain procedures, and no one knew if regulators were involved.
For such a large sum of money, a few million dollars in losses were insignificant. However, the funds operating in the Japanese market did make some profits, at least on paper.
"Keep adding to the positions, but pay attention to the final short side," Jim instructed, then turned to check the other traders' transactions.
These busy traders did not realize that the funds they were gathering were just a probe. These funds were meant to test the market's reaction, like a lead sheep in a flock. The forces behind them hoped to attract more funds to attack the bulls, causing a market collapse in Japan.
The traders, serving as cannon fodder, were unaware of this. Jim was fully aware, so he did not worry about the losses.
By the end of October, they had used 500 million dollars to establish a significant position in Singapore. The continuous establishment of short positions finally caught the attention of market participants. However, after thorough investigations, the background and information of this account remained a blank.
Even so, market participants clearly sensed a conspiracy. Rumors began to circulate, with some saying the money came from Japan, others from the American Stanley Corporation, and still others claiming it came from mainland China.
Behind this account, some followers gradually emerged. Although their funds were not comparable to the account's, their numbers were significant, forming a considerable force.
In the Singapore Nikkei index market, the bullish funds had always been dominant, and the bearish funds were mostly short-term. In the face of the strong bull market in Japan, no one dared to hold long-term positions.
Without sufficient bearish funds, there couldn't be enough counterparty positions. After a period, the bullish funds also began to hold short-term positions, engaging in battles with the bears in each trading day and each wave. Long-term holdings became rare in the Singapore exchange.
However, since this account appeared, those with a keen sense began to investigate its past transactions. They found that this account rarely closed positions and continuously established short positions.
This was clearly a sign of resistance against the Japanese stock market.
This discovery excited the market. The bulls were happy to finally have a counterparty, while the large bearish funds watched from the sidelines. Small investors hoped the market would become more volatile, allowing them to profit in the gaps.