After Chen Qing left, Simon's afternoon work continued to be focused on China.
While Charlotte Brenita had concealed some of her own thoughts, it was also impossible for Chen Qing to be completely transparent with her.
Upon returning from China, Chen Qing had brought Simon the latest research reports from the Cersei Capital Economic Research Team on major Chinese companies. This was a project Simon had initiated after his first trip to China last year. Initially, a team of just 15 analysts was dispatched, but over the course of a year, with additional staffing and local recruitment, the research team based in Shanghai had grown to over 100 people.
The Cersei Capital China Economic Research Institute was now officially established.
Over the past year, Simon had invested more than $20 million into this project. The team traveled extensively throughout China, investigating more than 2,000 companies across various industries, generating enough data to fill a personal computer with dozens of gigabytes of information. Although Chen Qing was responsible for bringing the files back, the laptop containing the documents was off-limits to her without Simon's explicit permission.
Even in an age where the internet connected the globe, manual file delivery remained a tradition within Simon's inner circle.
This was primarily for security purposes.
However, this did not mean that the team was engaged in illegal activities like corporate espionage. The Cersei Capital China Economic Research Institute (Shanghai) was a properly registered company, and institutions of this type were not uncommon in China at the time. The difference lay in the professionalism and specific research focus.
Most of China's official economic research institutions focused on macroeconomic analysis.
Simon didn't bother to comment on that.
As for private research firms serving companies, many simply cobbled together public data to sell so-called research reports for a few thousand dollars, which left much to be desired.
To invest in a market, the first step is to have a deep understanding of it. The larger the company, the more importance it places on such foundational research. For a financial empire like the Westeros system, neglecting this would be disastrous.
Since China didn't yet have a mature consulting and research industry like the West, Simon had to build one himself.
In fact, many ambitious international giants seeking to enter the Chinese market were doing the same.
Unlike the lofty theories of official Chinese institutions or the patchwork reports from private firms, the Cersei Capital China Economic Research Institute was highly professional and specifically focused on the Westeros system's plans for China. The team conducted in-depth research into the sectors of entertainment, fashion, technology, and finance—areas that the Westeros system prioritized—while also honing in on micro-level, industry-specific companies, scrutinizing both their strengths and weaknesses.
Consequently, the team also served an additional function: headhunting.
Simon's greatest need in his broad expansion into China was talent. As the research team investigated various companies, they quietly compiled executive profiles, tracking and evaluating potential candidates.
Over the past few years, and particularly in the last year, Simon's investments in China far exceeded the few projects handled by Chen Qing.
After returning from China last year, Simon instructed all core companies within the Westeros system to send teams to China to establish operations, including Danelys Entertainment, Cersei Capital, Egret, Melisandre, Cisco, AOL, Arya, Tinkercorp, Verizon, and the numerous subsidiaries they directly or indirectly controlled.
Even Elite Model Management, the modeling agency giant Simon acquired just a few months ago, was prompted to expand its business in China under Grace's leadership.
When Simon first issued this directive, he didn't set any specific targets.
But six months later, Simon personally reviewed the business performance of these companies' teams in China. Those who performed well were rewarded; those who were sluggish received warnings; and those who were passive were simply fired. In total, hundreds of people were dismissed.
Overall, most of the core subsidiaries had managed to establish a foothold in China.
Companies like Danelys Entertainment, Cersei Capital, Cisco, and Melisandre, which had begun laying the groundwork much earlier, had grown rapidly in China, capturing significant market shares in their respective sectors.
Recently, the Levison Group, controlled by the Westeros system, successfully acquired a plot of land along the Huangpu River in Shanghai's Pudong New Area, marking the system's first large-scale real estate project in China. The Cersei Capital China Economic Research Institute played a key role in supporting this effort, helping select local partners, determine the land's bid price, and define the market positioning for the development.
Without the support of accurate and reliable industry information, even Simon, an outsider, wouldn't have risked getting involved in China's real estate market.
It was too deep of a pool.
Too many pitfalls.
One misstep could lead to massive losses.
The institute's precise analysis of Pudong New Area's development potential had impressed Simon. Although China had been developing the area for five years, many still doubted the project's viability, as most attention was focused on the Pearl River Delta rather than the Yangtze River Delta.
But Simon knew that within a decade, due to various factors, the Yangtze River Delta's economic scale would far surpass that of the Pearl River Delta, which currently enjoyed preferential treatment.
The research team didn't have Simon's advantage of foresight, yet they had arrived at a similar conclusion through their investigations alone. This confirmed to Simon that the $20 million he had invested in the past year had been well spent. He had already decided to further increase the team's budget.
Because the research team did not offer commercial services to outsiders, it generated no direct revenue, and Simon would never allow their research to be shared. However, the potential returns from investing in China based on the institute's information would far exceed the costs of maintaining the department.
That afternoon, Simon, prompted by Charlotte Brenita's suggestion, issued another directive to the Cersei Capital China Research Institute: to investigate China's private education sector.
The study-abroad business proposed by Brenita was secondary.
Simon was primarily interested in the rise of vocational training schools in China during the 1990s. The advertisements for some of these schools were nothing short of brainwashing. Upon reflection, it was clear that the vocational training market in China held enormous potential.
There was no reason not to get a piece of the pie.
With its foreign background, the Westeros system would have a significant advantage in entering this field.
Moreover, as various Westeros subsidiaries were setting up manufacturing plants in China, Simon had plans to support a network of specialized outsourcing factories. Delegating production tasks to experts would allow companies like Nokia and Tinkercorp to optimize their asset structures by outsourcing lower-tier production.
At the same time, Simon understood the importance of maintaining control over production. Even if Nokia and others outsourced production, Simon didn't intend to leave that entirely to external companies. Nurturing outsourcing firms under direct Westeros control was the smarter move.
This plan could easily tie into investments in vocational training.
After all, those who complete vocational training will need jobs, and the outsourcing companies would have a massive demand for labor. The two could complement each other perfectly.
As the week came to a close, the weekend passed, and by the start of the new week—December 11th—1995 was drawing to a close.
On Monday, December 11th, an SEC filing spread rapidly across major newspapers, television networks, and online media platforms in North America.
The Westeros Company announced that due to investment needs, it would soon reduce its holdings by selling 20 million shares of Danelys Entertainment Group stock.
At the start of trading that Monday, Danelys Entertainment shares were priced at $97.25, giving the company a market capitalization of $252.7 billion. Analysts on Wall Street and in North American financial media generally believed that Danelys Entertainment's market value would surpass $300 billion within a quarter, so the stock had been actively traded.
No one expected that a major shareholder would suddenly announce plans to sell.
The 20 million shares, based on Monday's opening price, were worth $1.975 billion—only 0.6% of Danelys Entertainment's 25.99 billion shares. If another institution had been selling, with careful handling, it wouldn't have caused much market disruption.
But this was Simon Westeros selling.
So, was it possible that this super tycoon had realized the market was peaking and might turn bearish at any moment, prompting him to cash out?
If anyone had insider knowledge of the Westeros system, they would have noticed that three months earlier, Cersei Capital's hedge fund management team had reduced its long positions in the U.S. stock market to less than $5 billion, and the leverage ratio was kept at a very conservative two to three times.
Over the past three months, the team had been prohibited from establishing any short positions in the U.S. market.
These two measures were taken to minimize potential losses and to avoid legal risks.
Due to the strict confidentiality of Cersei Fund Management, very few people were aware of this. Even if some information leaked, those in the know certainly wouldn't broadcast it—they would quietly make their fortune.
Thus, when the announcement was made, the entire market was caught off guard.
Simon and his team's phones didn't stop ringing all day Monday.
The market's reaction was swift.
In just one day, due to the announcement of Westeros Company's stock sale, Danelys Entertainment's share price fell by 5.1%, wiping out $12.8 billion in market value—over six times the amount Simon was selling.
The ripple effect was even more dramatic.
All "Westeros-concept stocks" plummeted that day. Egret, Cisco, AOL, and other tech leaders saw their share prices drop by more than 5%. As a result, the Nasdaq Composite Index fell from 2
,796 points to 2,687, a 3.9% decline. Given Nasdaq's total market capitalization of $3.6 trillion, this one-day drop wiped out $140 billion in value.
Egret had been on the market for just over two months, and Nasdaq's continued strong performance had left many short sellers in shambles. Most hedge funds, in an effort to cover their losses, had begun shifting to long positions.
No one had anticipated that Simon Westeros would pull such a move.
Was he trying to kill everyone?
However, the few remaining short sellers were ecstatic. When Westeros Company announced the sale of Danelys Entertainment stock, they immediately mobilized all available resources to maximize the impact of the sell-off.
The results were impressive.
That afternoon, the President of the United States called Simon to ask what he was trying to do.
What was Simon trying to do?
It was simple: curb the market's overheating.
And cash out.
Although the new technology sector was already red-hot, Simon knew that the Nasdaq's 3,000-point mark was a tipping point. After 3,000 points, the market would lose its sanity, doubling in less than a year to 6,000 points.
And then, it would crash.
As the Nasdaq approached 3,000 points, Simon felt compelled to advance his planned stock sell-off, originally slated for next year.
After all, waiting until 3,000 points to act would significantly increase the risk.
Thus, selling Danelys Entertainment stock was just the beginning.
Danelys Entertainment was listed on the New York Stock Exchange, so theoretically, the sale shouldn't have affected the Nasdaq. But everyone knew that wasn't how things worked. Simon had chosen Danelys Entertainment deliberately.
Danelys Entertainment Group was the crown jewel of the Westeros system. In terms of market position, revenue, and profitability, it was rock-solid. Even if its valuation was high, there was little bubble. Selling shares of this company would, in theory, cause the least market disruption.
Of course, that was just the theory.
Although Simon had made many preparations, there were unavoidable risks, including the possibility of a "black swan" event triggering a market collapse.
But some things had to be done.
If successful, this action could delay the Nasdaq's peak by one or two years, giving the U.S. and global tech industries more time to grow.
It was also a way to buy time for the Westeros system.
Once the Nasdaq's tech bubble burst, the market would enter a period of recession lasting two to three years. While this might not seem long, it would severely impact many tech companies that had the potential for rapid growth. The Westeros system, with its heavy involvement in the tech sector, would be among the hardest hit.
Now, by preemptively cooling the market, Simon could buy extra time for companies like Egret, Cisco, and AOL to strengthen their foundations, improving their resilience against future risks.
This was the explanation Simon gave to the president.
Of course, there was also a personal incentive for the president.
Simon had always been a considerate man.
If the Nasdaq's overheating wasn't curbed now, the market might crash in the middle of Clinton's reelection campaign next year, erasing all the achievements of his first term.
By intervening now and keeping the Nasdaq within a controllable range, the Information Superhighway initiative would remain a success for at least another year. The U.S. economy wouldn't enter a recession, unemployment would continue to decline, and Clinton's reelection would be all but guaranteed.
Clinton wasn't entirely convinced by Simon's rhetoric and posed a sharp question: What if it fails?
What if it fails?
Simon's reply left the president speechless: "Would you rather see the Nasdaq crash now and spend a year trying to recover, or watch it collapse in the middle of your reelection campaign next November, leaving you helpless?"
Besides, if Simon wasn't confident, he wouldn't have acted so boldly.
Over the years, Simon had gained a deeper understanding of Soros's "reflexivity" theory, which posits that market participants can influence market trends.
In his earlier years, Simon had been just another "participant," a piece on the board.
Now, he was one of the players—a chess master.
The market volatility following the announcement of the stock sale was entirely within Simon's expectations.
Starting at noon that day, the entire Westeros system mobilized.
Analysts from financial giants like Goldman Sachs, Morgan Stanley, and Credit Suisse began issuing reassuring statements. Media outlets with close ties to the Westeros system published various articles aimed at stabilizing or confusing the market. Key figures within the Westeros system personally reached out to the heads of major mutual funds and insurance funds, persuading them not to follow the herd and sell.
The results were immediate.
The next morning, after a night of cautious anticipation, the Nasdaq rebounded by 2.1% within the first hour of trading. Danelys Entertainment, listed on the NYSE, also saw its stock price rebound by 3.6%.
Next up was the "boiling frog" strategy.
Using Danelys Entertainment as the starting point, Simon would continue to sell off shares of Westeros core companies. This would achieve two goals: raising large amounts of cash for the Westeros system's other investments, and delaying the Nasdaq tech stock frenzy for as long as possible.
This plan required coordination on multiple fronts.
Including Washington.
During Simon's hour-long call with the president on Monday afternoon, he hinted at his strategy and asked Clinton to pressure the Federal Reserve. Since the market was overheating, the Fed needed to step up its rate hikes.
The U.S. economy had been recovering since the Gulf War and was now at a peak. Previously, Washington had been reluctant to raise interest rates out of fear of a tech stock crash. After all, politicians often prioritized their own interests over what was best for the economy.
Simon's arguments, though subtle, likely made Clinton realize that the Nasdaq's 3,000-point mark wasn't its peak. Raising interest rates now to cool the market could prevent the tech bubble from bursting too soon, which would benefit Clinton's reelection.
As for whether the president would act, that decision wasn't entirely up to the White House. The "boiling frog" strategy also involved lobbying the Fed and other relevant bodies.
_________________________
[Check out my Patreon for +200 additional chapters in all my fanfics! $5 for all!!]
[w w w . p a t r e o n .com / INNIT]
[+50 PowerStones = +1 Chapter] [+5 Reviews = +1 Chapter]