Chapter 99

·

·

·

Protagonist:

Chen Yi

Lei Gongpo was rough yet meticulous, observing Chen Yi up and down as he asked, "How did you come up with these two questions?"

Simple small talk couldn't go very deep.

Chen Yi's questions, however, were problems encountered in reality. Especially the latter one—how to utilize a monopoly position—that alone could fill a book.

As a well-known professor at Jiangning University, Lei Gongpo had naturally studied this, but he was unwilling to waste time on an ordinary student, hence the question.

Chen Yi found it somewhat hard to answer.

However, he had his own methods.

Picking up a piece of chalk at random, he wrote on the blackboard as he said, "Professor Lei, suppose I now have a company with about 30 million US dollars in current funds, using bank leverage to guarantee 1 billion US dollars in capital, possessing a supercomputer with excellent computing performance, and occupying a monopoly position—this situation should be very advantageous, right?"

"Of course, a monopoly position is most suitable for market participants." Lei Gongpo watched his actions.

Chen Yi smiled and said, "But in this situation, I actually can't make money—how to solve it?"

He spoke of his own dilemma, smiling: "My supercomputer costs 1 billion US dollars, annual maintenance costs between 500 million and 1 billion US dollars, and the exchange membership fee is 500,000 US dollars per day... what should I do?"

"If you pay the exchange membership fee, that's lightning trading."

"Yes, I always mix them up." Chen Yi smiled.

He didn't need to pay the exchange membership fee, relying instead on the computer's superior performance, but for Wall Street brokerage firms, paying the exchange money was the better choice.

Because placing his computer inside the exchange, connected in parallel with their supercomputers, shortened the physical distance, saving about one-hundredth of a second. Whether from a competitive angle or a cost-saving perspective, it was worthwhile.

But "Siren" could not be connected in parallel with the New York Stock Exchange; Chen Yi decisively gave up that thought, anyway its current speed was sufficient.

Wait another half year, when brokerage firms' new supercomputers join the competition, then we'll talk.

Lei Gongpo tucked his lesson plan under his arm, pondered for a moment, and said, "The situation you describe could indeed occur, however, no institution would now use such an expensive supercomputer..."

"Only such a good supercomputer can create a monopoly and avoid vicious competition." Chen Yi boldly interrupted the professor's words, saying: "Suppose New York Stock Exchange's high-frequency trading and lightning trading are both monopolized by it, then the returns would be several times that of an ordinary supercomputer, isn't that right?"

Lei Gongpo suddenly laughed and said, "This student of yours is interesting; the situation you describe is indeed happening—what's its name?"

"Chen Yi."

"Hmm, not bad; come to class often."

The diligent students gathered near the lecture platform were envious enough to drool onto their crotches.

Lei Gongpo continued laughing: "Now on American Wall Street, there's a company called Gold Source International doing similar things; you can pay attention to it. Let's continue discussing the profit model of monopoly position..."

This was him admitting Chen Yi had the right to waste his time.

The latter showed a strange expression—some pride, some shock, some amusement.

He wasn't worried about being exposed as the owner of Gold Source International; compared with his identity as the third-in-line heir of the Chen Group, a small Wall Street company was far less conspicuous.

At least outside New York, it wasn't enough to attract attention.

Moreover, the Vatican Holy See, or some secret organization, could use powerful influence to obtain his data, but ordinary people didn't have that capital.

"To put it simply, monopoly price is the main means of obtaining monopoly profit; first remember this point." Lei Gongpo's voice seemed to come from afar.

Chen Yi trembled all over, focused his spirit, listening, and reacted very quickly: "But high-frequency traders seem unable to designate monopoly prices."

Lei Gongpo nodded: "Then what about the exchange rebates?"

"If demanding a higher rebate amount?" Chen Yi had thought of this long ago, instantly negating: "25 cents is basically the highest price they can give; any more, and the exchange will definitely use various methods to terminate the company's operations."

Without waiting for Lei Gongpo to speak further, he said as if talking to himself: "In the short term, the New York Stock Exchange perhaps won't do this, after all high-frequency trading brings them many benefits. But over a long time, they will definitely support other traders, giving them more discounts and help, thereby replacing us—wouldn't that plunge into a commercial war and instead reduce profits?"

"Commercial war should be the most rational war." Lei Gongpo evaluated, smiling: "Then what you need to do is make other traders have no strength or space to replace you at all, thereby obtaining excess profits. Whether the exchange supports them or not doesn't affect the big picture. American private companies must obey legal regulations; the exchange cannot go into battle bare-armed, cannot discriminate against trading companies. *** With these foundations, we can maintain a certain degree of monopoly; in Western economics, this is called 'market power'."

Chen Yi thoughtfully continued asking: "Then how to strike other traders?"

Professor Lei raised three fingers suddenly, saying: "Technological monopoly, administrative monopoly, market access formed by brand building. These are three commonly used methods; if it were you, which would you use?"

"Technological monopoly?" Chen Yi asked inquiringly. Brand building and such had a general role in financial markets. What he first thought of was more advanced computers.

Professor Lei laughed heartily and shook his head: "As expected, still young people, thinking technology and such are useful. Let me tell you, the simplest method is administrative monopoly."

"Administrative monopoly? How does America administratively monopolize?" Lin Yuan, leaning past Chen Yi, asked first.

"Don't think too well of America; they have politicians and bureaucratism too." Professor Lei used the word "also," feeling his smile was perfect: "You're still young, no need to consider so much, but someday any one of you, opening a company, doing finance, never forget—the state is always the largest monopoly enterprise."

He patted the lesson plan in his hand, smiling: "Political economy—although economy determines politics, politics also guides the economy. Everyone can look at more cases in the library and online when you go back."

Chen Yi rested his chin on his hand, continuing to think, not even knowing the green tea in his cup had gone cold.

Lin Yuan looked at him with great interest, then at Han Jie.

She had a good impression of this girl who knew how to brew tea and looked especially kind, so she asked: "Are you familiar with Chen Yi?"

"Familiar." Han Jie answered without hesitation.

"Is he often like this?" Lin Yuan still used her specialty of gradual approach, slowly nearing her target.

Han Jie smiled and shook her head. She was actually also somewhat puzzled, feeling Chen Yi's recent performance was unfamiliar. However, she very well understood what the elders of the family stepping down meant for aristocratic scions.

Chen Yi being able to rally his spirit, think hard, and strive hard—couldn't be better.

The "ding ling ling" class bell rang from outside.

Footsteps in the corridor suddenly decreased.

Chen Yi was startled awake, said nothing, handed the cup to Han Jie, then grabbed his mobile phone and ran out.

Lin Yuan couldn't help but follow two steps; seeing he had already started dialing, she stopped, turned around, but saw Ren Yuan standing beside her.

"What's wrong?"

"Uh... I just wanted to ask him about the gathering." Ren Yuan was somewhat unhappy; establishing a comrade-in-arms bunk relationship with Liang Yu had been his main work in the past month.

Chen Yi's inaction had made his plan nearly stagnate.

Lin Yuan didn't have that many thoughts; she left smiling, and when passing near Chen Yi, she heard him shouting loudly into his phone: "I don't care if you're familiar or not, find me the person in charge. Does Wall Street not have anyone familiar? What do they rely on to make money?"

Regarding this, although Lin Yuan was a bit curious, she didn't associate it with anything.

A rather strange rich second-generation student in the class — could he possibly have some connection to Wall Street? Among Jiang University's teachers, those who can make it on Wall Street are rare as phoenix feathers and unicorn horns.

Han Jie still waited quietly in the distance, just as she always did.

After a long while, Chen Yi returned with his phone tucked away, and she immediately asked: "Do you need help?"

"A small matter. I'm preparing to make a trip to Grandpa's place, so I'll have to skip classes this afternoon."

He had absolutely no psychological burden about skipping class; saying it now was merely to avoid Han Jie making a wasted trip. If the water at Yuquan Mountain was heated and not used, it would be a waste.

"I'll send you there." Han Jie put the tea set into her bag seriously and said: "My car is parked in the underground garage; it'll take an hour at most to arrive."

Chen Yi thought so too. The two went out together, and upon reaching the garage, sure enough, it was still that dazzling red Maserati.

"What the ancients called 'fine clothes and spirited horses' must be this, right?" Chen Yi said with a laugh, sitting in the passenger seat, and added: "I'll definitely learn to drive next month."

Han Jie pursed her lips and smiled, said nothing, and drove seriously.

In roughly 40 minutes, the Maserati arrived smoothly at the old residence.

The French plane trees by the road stood tall and straight, like loyal guards. The once bustling scene of visitors seemed still there in memory.

Chen Yi knocked lightly on the door.

Since stepping down, Old Master Chen paid great attention to influence. Normally he didn't receive guests; even relatives, friends, and close acquaintances only met on one or two fixed weekends each month.

Fortunately, his few grandsons were not included in this rule.

The housekeeper came out to welcome him, then led Chen Yi along, saying as they walked: "Is it a family matter, or a company matter?"

"My own."

"That's good." The housekeeper had followed the old master for many years and had brought Chen Yi up since childhood. He smiled along: "When you have nothing to do, chat more with the old master. Busy at university?"

"Skipped military training, life's not bad." Chen Yi laughed twice.

Passing through the living room decorated in 90s style, Chen Yi arrived at the backyard.

The old master sat under a large persimmon tree basking in the sun. He slowly rocked his chair and waved: "A Yi's here. Is Jiang University good?"

"Pretty good." Chen Yi knew Jiangning University was the old master's favorite university, so he picked the good things to say, then said: "I came this time to ask for your opinion on something."

"Oh?"

Chen Yi licked his lips, then recounted one by one the Gold Source Company he had established. The basic content was much the same as what he told his parents. He also told today's Lei Gongpo's answer and asked: "I'm wondering, what kind of American politician could help me with an administrative monopoly?"

Unlike many elderly people, Old Master Chen was among those in China who understood the world best.

……

Aside from word count, explanation:

Regarding subway time: 1. This book's time background is 2003, no time-space travel.

2. Whether the protagonist is in Jiangning, New York, or Paris, it is merely physical displacement, no change in time; all are daytime due to time difference.

3. In the Saint Qiao Kingdom, the reason for having 3x to 4x time amplification is because of the great distance. According to Tun's Theory, this is like astronauts flying to a distant constellation; because the flight speed is extremely, extremely fast, approaching light speed, the astronaut's time flow slows down. But for the entire universe system, there is no change.

For the same reason, Chen Yi will not age because of this.

……