Chapter 71: Planning

8:30 PM on February 24th.

While Di Ye was explaining the uses of the internet to Lu Hanming in Yuncheng, Tang Renrong was at the Red House Western Restaurant on Huaihai Middle Road in Pujiang, dining with Kan Zhidong, the General Manager of Shenyin Securities who had rushed back from Hong Kong, and happened to mention him.

Kan Zhidong was known for his conservative personality and was nicknamed "Kan Twenty Cents," meaning that as long as he made twenty cents in the financial market, he would run away; he simply did not believe Di Ye was that capable, and analyzed: "What kind of thing is Liaosheng Guofa? You and I both know very well. Think about it carefully: if not for this Di Ye, would you have agreed to let Gao Ling borrow your company's proprietary trading positions?"

Tang Renrong thought intently for a moment and hesitated: "In all likelihood, no."

"Then let me ask you again: on the afternoon of the 23rd, if not for this Di Ye, with the bullish trend already established, would you have forcibly closed Gao Ling's position given your usual style of doing things?"

Tang Renrong was even more hesitant, and only after thinking for several seconds did he say: "In all likelihood, yes."

"Then that's it. As the saying goes, suspicion creates ghosts; this Di Ye actually did nothing, it is you yourself who imagined him to be very capable."

Tang Renrong and Kan Zhidong were of similar age, one 42 and the other 43; they not only interacted frequently on business but also had a good private relationship, so they addressed each other quite casually, saying: "Old Kan, even if these were things I imagined myself, he is just a university student. A single person managed to raise over 20 million during one winter break, then took all that money to Pujiang to speculate on 327, and made a fortune—isn't that capable enough?"

"You believe whatever he says? How do you know he raised the funds alone? And how do you know that money was definitely raised? The mainland isn't Hong Kong; hardly anyone likes watching movies. Can that so-called video disc player really have such great appeal? Never mind a backwater place like Yuncheng, even in Pujiang, how many families are willing to take out 2,500 yuan to sign up for a so-called disc rental package?"

Kan Zhidong's series of rhetorical questions left Tang Renrong speechless. After eating a few bites of food in silence, he said: "Then what about him having his girlfriend interview Guan Jinsheng and predicting the bank run this afternoon?"

"What kind of personality Guan Jinsheng has—does one need to interview him personally? Just find a passerby at the entrance of Wanguo Securities and ask, and you'll know. As for the bank run this afternoon, it's a common occurrence in financial history; I thought of it on the plane from Pengcheng to Pujiang, what's so strange about that?"

Ever since founding Haitong Securities in 1988, Tang Renrong had seen tens of thousands of speculators, but he had never encountered a young person as maverick as Di Ye, so his first impression was extremely strong; later, he was manipulated by Di Ye, who used his curiosity to apply various suggestions, and unknowingly became a die-hard fan.

Now, being lectured by Kan Zhidong, the filter of brilliance was torn away, and he suddenly realized that Di Ye did not seem as miraculous as he had imagined, and he couldn't help but smile bitterly: "Hunting geese all day, I never expected to be blinded by a goose instead; truly shameful."

"Shameful is not quite the word; this Di Ye still has some ability. His vision is good and his courage is great. At his age, you and I would absolutely not dare to gamble over 20 million in the futures market."

"That is true."

The topic of Di Ye was just an appetizer; the two soon changed the subject to discuss how to resolve the mess of the 327 Treasury Bond Futures.

"According to the stock exchange's rough estimates, Wanguo Securities now holds nearly 10 million lots of 327 Treasury Bond Futures short positions. Based on Pujiang's closing price of 151.8 today, the loss is at least several billion. If calculated based on the closing prices of over 153 yuan in Beijing and Pengcheng, the loss would be over ten billion; bankruptcy is a certainty."

Tang Renrong first briefly introduced the loss situation of Wanguo Securities, then frowned and said: "Wanguo Securities has over 400,000 clients of all sizes across the country and has collected a total of over 3 billion in margin. If they go bankrupt, the consequences will be unimaginable."

"What does Guan Jinsheng plan to do?"

"This matter is no longer up to him to decide; at this very moment, he should still be in a meeting at the Municipal Government."

Kan Zhidong picked up his glass, took a small sip of red wine, and speculated: "Old Shen also went to the meeting, saying it was to study how to prevent a bank run next Monday. Industrial and Commercial Bank of China is the clearing bank for all securities companies and will definitely provide loans to Wanguo for emergency relief. Tomorrow and the day after are the weekend; I estimate Old Shen will use these two days to turn Wanguo upside down, looking for high-quality assets that can be used as collateral."

Old Shen was Shen Ruolei, the Chairman of Shenyin Securities and also the President of the Pujiang branch of the Industrial and Commercial Bank of China. Hearing him say this, Tang Renrong was astonished: "You at Shenyin want to take the opportunity to swallow Wanguo?"

Kan Zhidong nodded in admission and said: "Wanguo, Haitong, and Shenyin are only the three major brokerages in Pujiang; they cannot compare to the three national securities companies of Huaxia Securities Securities Securities Securities Securities Securities Securities Securities Securities, Guotai Securities Securities Securities Securities Securities Securities Securities Securities Securities, and Nanfang Securities Securities Securities Securities Securities Securities Securities Securities Securities. I have always wanted to strengthen Shenyin through capital increases and share expansion, but the People's Bank of China is very strict and refuses to approve it. If we could eat Wanguo, it wouldn't be a bad path for expansion."

"Kan Er Mao, oh Kan Er Mao, I never expected that while you are usually afraid of this and that, at the critical moment your courage is greater than anyone's; you actually want to pull chestnuts from the fire!"

Tang Renrong teased him and reminded him: "A lean camel is still bigger than a horse. You at Shenyin and Wanguo have been fighting bitterly for years, and there is a deep rift between the employees; wanting to swallow them will likely not be easy."

"Of course it's not easy, but it is imperative."

Behind Haitong Securities was the Bank of Communications, whose strength was far inferior to the Industrial and Commercial Bank of China, the leader of the big four banks, so Tang Renrong had no thoughts about Wanguo Securities. Instead, he was deeply worried about the regulation of Treasury Bond Futures and said: "Last October, 314 had problems, and now 327 has problems again. I expect more problems will appear in the future. I am preparing to write a proposal suggesting that the stock exchange suspend the trading of Treasury Bond Futures. Do you think it's feasible?"

"With a daily trading volume of hundreds of billions in Treasury Bond Futures, there is no such thing as stopping just because you say so. Moreover, the stock exchange does not have the authority to do this. Treasury bonds are under the Ministry of Finance, and futures are under the China Securities Regulatory Commission; it would only be possible to suspend them if both sides give the nod."

"Do my best and leave the rest to fate. After all, I am a director of the stock exchange and have the responsibility and obligation to maintain financial market order."

"I didn't expect that after all these years, you are still an idealist. Then give it a try, though I don't think there's much hope."

In early 1995, Pujiang implemented a system of alternating long and short weeks. February 25th was a long-week Saturday, so there was no work, but Tang Renrong still arrived at the company early in the morning. He spent several hours cooped up in his office, hand-writing a proposal of about 1,000 words, putting forward the 4 major hazards of Treasury Bond Futures and the 4 measures that should be taken.

After finishing, he checked it twice and felt very satisfied, so he called Wang Mishu in and said: "Help me type this proposal out; I want to submit it to the stock exchange."

Wang Mishu took the manuscript with both hands, glanced at the title, and said with a smile: "Manager Tang, what a coincidence. Di Ye just faxed over a manuscript reflecting on the 327 Treasury Bond Futures and would like to ask you to help recommend it to the Editor of the Pujiang Securities News to take a look."

Due to a rebellious psychological effect, after communicating with Kan Zhidong last night, Di Ye's image in Tang Renrong's heart had fallen from the clouds into a deep valley. He sneered: "The Pujiang Securities News isn't something that can publish just any article."

At this moment, Wang Mishu still had the filter in his heart and did not hear the sarcasm in Tang Renrong's tone. He walked quickly to the outer office, took a manuscript fastened with a paperclip from his desk, and said: "Manager Tang, I think what he wrote is very brilliant; it can be described as truly far-sighted. Take a look."

Tang Renrong took it and looked, discovering the title read "The 10 Major Problems Exposed by 327 Treasury Bond Futures and Corresponding Solutions," and was immediately enraged.

"I have been rolling and crawling in the securities market for over a decade and have seen countless storms and waves, only then summarizing 4 problems and solutions. You, a wet-behind-the-ears university student, actually came up with 10 problems? You truly don't know the height of the sky or the depth of the earth!"

Holding this mindset, Tang Renrong sat up straight and carefully read the manuscript, wanting to find faults in it so he could strongly refute it and slap Di Ye's face hard.

However, things went contrary to his wishes. After finishing the manuscript, Tang Renrong not only failed to find faults, but instead felt that sense of brilliance once again. Di Ye's image, which had fallen into the deep valley, soared back to the clouds, making him feel sour and overwhelmed.

"Lu Xun said Zhuge Liang was so wise he seemed like a demon; I think this guy is the same. He really is like a monster."

After sighing, Tang Renrong stood up, walked outside the office, and said to Wang Mishu, who was typing: "Little Wang, don't type my manuscript anymore. Take this one from Di Ye and make 20 copies; I want to take them to the stock exchange for everyone to see."