"As of yesterday's close, the Dow Jones plummeted 508 points. The overall loss in the US stock market reached $503 billion."
"Is 1987 the new 1929?"
"Panic continues to spread; SEC officials urgently clarify: No plans to temporarily close stock exchanges."
"James Baker should resign for his inappropriate remarks."
"CME S&P 500 Index Futures long positions show $3.52 billion in paper losses; immense pressure for margin calls."
"Federal Reserve holds emergency meeting, demands major banks provide sufficient credit to exchanges to prevent trading defaults from worsening market crisis."
"Chicago Mercantile Exchange Chairman Leo Melamed issues statement: CME clearing banks have received $3.7 billion in margin calls; exchange will open normally at 8:30 AM Central Time."
"…"
"…"
A plunge curve almost identical to 1929's kept countless people awake all night.
The 1929 stock market crash triggered a series of severe chain reactions: bank failures, factory closures, farm abandonments, eventually leaving nearly one-third of the US population without any income. At its worst, food shortages even caused nationwide malnutrition.
From 1929 to 1933, in just four years, the US death toll reached 7 million, equivalent to 7% of the US population of 100 million at the time, a mortality rate far exceeding the average of normal years.
In 1987, those at the pinnacle of the American pyramid largely still carried vivid memories of the Great Depression. Therefore, within a single day, the federal government rapidly launched a series of all-out market rescue plans.
Early on October 20th, Federal Reserve Chairman Alan Greenspan, who had taken office just over a month prior, 'opened the floodgates,' directly announcing a sharp 0.75 percentage point cut in the federal funds rate. The Fed also subsequently injected $12 billion in liquidity into major North American banks through bond purchases.
Following this, from the White House down to state-level local banks, the entire nation began taking substantive market rescue measures.
Stimulated by a series of positive news, the market opened on Tuesday with the Dow Jones index rebounding, rising from yesterday's close of 1738 points to a high of 2035 points within half an hour.
However, the stock market bubble accumulated over five years, once burst, couldn't be hastily remedied in a short time.
After a brief rebound, the Dow Jones index plummeted sharply once again.
On the other hand, the S&P 500 index, closely linked to the Dow, followed an almost identical trajectory after opening.
The S&P 500 closed at 201 points on Monday. At Tuesday's open, it also surged to 245 points within half an hour before crashing again.
Los Angeles.
In the Palisades mansion, yesterday, Simon had closed a cumulative 8,300 short positions in the S&P 500 index between 200 and 210 points, generating over $350 million in single-day profit.
Simultaneously, Westeros Company established 3,500 long contracts between 200 and 210 points.
At Tuesday's open, Simon patiently waited for the S&P 500's brief surge and subsequent decline, then adjusted the closing range, setting an upper limit of 220 points to begin selling, while continuing to establish long positions within the same range.
Additionally, Simon withdrew $200 million from yesterday's profits, shifted to the New York Stock Exchange, and began aggressively buying up the planned selection of stocks at bargain prices.
Chicago.
Time flew by to Thursday.
7:00 AM Central Time. Noah Scott, who had averaged less than five hours of sleep nightly recently, rushed into Lehman Brothers' Chicago branch, his eyes red and swollen, bloodshot.
As a Vice President at Lehman Brothers, Noah Scott managed his own trading team of six analysts and had his own private office.
Tossing his briefcase and today's newspapers aside, Noah Scott sat behind his desk and turned on his computer. While waiting for it to boot, his mind wandered: Just how much did that guy make?
While James Robinson decided to observe, Noah Scott hadn't given up. He borrowed $1 million from his father and discreetly bought 55 S&P 500 short contracts.
Roughly the same 80% position size Simon used before.
Noah Scott really wanted to bet on whether the man that girl—whom he and all his classmates had pursued unsuccessfully—chose was truly that miraculous.
And then.
On Monday alone, Noah Scott got a small taste of overnight wealth.
All 55 short contracts were closed at the S&P 500's low of 200 points. Noah Scott easily made $2 million.
However, looking at the profit figure in his account, Noah Scott couldn't feel happy at all. His mind kept circling back to the money Simon had withdrawn from Lehman Brothers.
Over $350 million. If it was still an 80% short position, that would be nearly 20,000 short contracts.
Closing all 20,000 contracts exactly at the S&P 500's lowest point was unlikely. But even based on Wednesday's closing index of 259 points, Simon short positions would still generate massive profits.
Furthermore, without being too greedy, over Monday and Tuesday, Simon could absolutely have closed all his positions. Even better, if he reversed and established long positions, his gains would increase substantially.
Noah Scott was a man with strong self-control. After closing those 55 contracts, he stopped.
Despite the federal government's timely and forceful rescue measures, no one could be sure if the US market would continue falling like in 1929.
Now, looking back at the S&P 500 curve from Monday to Wednesday, and considering the young man's past operations, Noah Scott was almost 100% certain he would have reversed to long positions, making another fortune in the process.
Monday gapped down, S&P 500 closed at 201.
Tuesday surged briefly then plummeted, S&P 500 still closed low at 212.
Wednesday gapped up, opened at 237, closed at 259, market began stabilizing.
If he were Simon, he should have closed all short positions on Monday and Tuesday, established long positions during that time, and surely made another massive gain on Wednesday.
$350 million principal. 20,000 short contracts. 80% position size.
Just thinking about it is thrilling.
Now.
Noah Scott wanted more and more to know: Just how much did Simon make?
$1 billion?
Even if not that much, calculating with the previous principal, Simon Westeros, that young man still only 19 this year, was probably already a billionaire-level wealthy individual.
Wait.
Some portion of that should belong to Janet Johnston.
But.
$1 billion!
No matter what, Noah Scott understood he likely could never reach the wealth those two possessed in his lifetime.
Just.
Does a 19-year-old kid know how to spend that money?
Thinking this with some bitterness, Noah Scott suddenly remembered the news from six months ago about Simon Westeros and Janet Johnston nearing a lawsuit over the profit distribution for Run Lola Run.
Now, facing such an enormous fortune, even if they were in love before, wouldn't it inevitably lead to a fierce dispute?
Family ties often crumble before vast wealth.
Let alone love.
Harboring some anticipation with this thought, the door to Noah Scott's office suddenly opened. One of his analysts hurried in. "Noah, bad news! Rumors are spreading all over the exchange that we're going to sell thousands of contracts after the market opens?"
Noah Scott was momentarily dazed. "What?"
The analyst explained, "It's about the Quantum Fund batch. Someone leaked the news that we're planning to sell that block of contracts."
In early October, Soros's Quantum Fund and Simon's Westeros Company simultaneously began building large positions. However, completely opposite to Westwood Company's moves, Quantum Fund bought over 30,000 long contracts over the following weeks.
After the market crash, despite margin calls, some of Quantum Fund's long positions were force-liquidated. Yesterday, as the situation stabilized, Soros began exiting, but such a massive position couldn't be liquidated overnight.
Currently, Quantum Fund's account still held a total of 9,000 long contracts.
Even though the government's rescue measures showed initial results yesterday, everyone knew the S&P 500 wouldn't return to 300 points soon. Quantum Fund had no choice but to cut its losses and exit.
Lehman Brothers naturally had more than just Noah Scott's team. Major clients like Quantum Fund were handled by Noah's superior, a Senior Vice President at Lehman Brothers.
Hearing his subordinate's explanation, Noah Scott relaxed. "Charlie, that's not our concern, is it? If Will messed up, that's his problem." Saying this, Noah glanced at his watch, clapped his hands, and said, "Alright, gather everyone. We're starting soon; let's have a meeting first."
8:30 AM Central Time.
When the Chicago Mercantile Exchange officially opened, Noah Scott realized the severe impact of the leaked news about Lehman Brothers' planned massive sell-off.
With prior knowledge of Lehman's intent to dump a large block of contracts, all other brokers at the CME adopted a wait-and-see approach at the open, completely refusing Lehman Brothers' large sell orders.
Consequently, selling pressure built up, and the S&P 500 index plummeted straight down again. In just over ten minutes, the index crashed from yesterday's close of 256 points to 197 points.
Los Angeles.
In the Palisades mansion, still early morning, a somewhat numb Janet didn't get up early today.
Over Monday and Tuesday, the 26,700 short contracts—far exceeding Noah Scott's imagination—were now down to less than 5,000. Simultaneously, over Monday and Tuesday, Simon had established a total of 7,000 long contracts between 200 and 220 points, and closed 2,000 of them at Wednesday's high of 250 points.
Hearing the expected news of the S&P 500's renewed plunge over the phone, Simon issued orders to close the remaining shorts. If his memory served, he had less than three hours.
Nearing noon Central Time, after the morning selling pressure was absorbed, the S&P 500 would rebound again.
After several days, the traders at Goldman Sachs and the others were familiar with Simon's methods, requiring little explanation.
Simon then turned his attention to New York.
Over the past two days, Simon had allocated a total of $400 million, all invested in the New York stock market. His buying strategy was straightforward: Tech stocks.
Before the final maneuver, Simon had already compiled a list of target tech stocks. Apple, Microsoft, Intel, Oracle, SUN, etc., were all included. Of course, Simon didn't forget to mix in some 'sand' – less desirable choices.
From his memory, after the brief decline, the North American stock market would generally trend upward steadily until 2000. Therefore, the late October 1987 crash was essentially Simon's last chance to buy at the bottom.
Thanks to detailed prior planning, the entire $400 million was converted into stocks within two days. At yesterday's close, Simon withdrew another $200 million from the futures account for today's buying, and he planned to continue doing so.
Even if not held for over a decade, once past this crash crisis, the North American market would stabilize and recover. In the coming months, these stocks would still generate considerable profits.
The volatile day ended quickly.
The next day, October 23rd, Friday, was Final Destination's release date.
The S&P 500 closed at 237 points on Thursday. At Friday's open, with no further bad news, the index climbed back above 250 points.
Having closed the short positions on Thursday, Simon also liquidated all the long contracts acquired in the preceding days on this day.
And so.
The moment to tally the final harvest arrived.
The thrilling moment.
From October 19th to October 23rd, over five days, Westeros Company sold the 26,700 short contracts (established around 290 points) between 200 and 220 points, accumulating a profit of $1.068 billion.
Simultaneously, the 8,000 long contracts Simon established by reversing his position during the trough over three days were all closed above 250 points, generating another $165 million in profit.
Adding the original $387 million principal in Westwood Company's account, the five-month index futures operation turned Simon's initial $75 million into a staggering $1.62 billion.
After meticulously compiling the final financial data, both Simon and Janet sat stunned for several minutes.
In Simon's memory, there existed a case where someone turned $7 million into $2 billion in the futures market. But now, seeing the funds in hand magnified over twenty times in just five months, he still found it somewhat unbelievable.
Janet's reaction was more direct. After her daze, she moved closer, curiously poking and pinning Simon, and then said, "You little rascal, I regret it."
ko-fi.com/godofreader