Chapter 1025: Cutting the Flesh in Pain

  Chapter 1005 – Cutting the Meat with Pain

Although the policy to stimulate the economy means a little rough, but the victory is simple and effective. Vienna government has just announced the “ring line railroad” plan, the market has responded.

April 26, 1894, the Vienna stock market opened, infrastructure plate to open 7 points higher to lead the market, the middle once broke through 20 points, and ultimately the plate rose 11.6% closing.

With the railroad construction related to steel, cement, engineering machinery and equipment, banks and other sectors have followed the upward rebound.

As a result, the Vienna stock market rebounded 3.62%, the largest rebound since the outbreak of the crash.

Then there is no then, since the outbreak of the crash, the Vienna stock market on the way down, the worst time compared to the peak of the overall decline of up to 74.3%, even if a rebound, the broader market index is only thirty percent of the peak period.

The market has fallen so badly, the market’s confidence collapsed to what point, can be imagined. There is no way, free development of the stock market is so arbitrary.

Relatively speaking, the infrastructure steel plate is quite good. As a mature industry, the ceiling of the market in front of everyone, the valuation itself is not high, and there is a post-war reconstruction of the big projects supported, naturally fell not where.

After this wave of rebound, basically recovered to the peak three-quarters of the market value, barely considered out of the crisis.

The hardest-hit area of the stock market crash is still the emerging technology industry, there is no performance support, just a “good story” to support up the market value, once the bubble is burst, it will fall even his mother do not recognize.

Fortunately, the vest, or Franz are now afraid to go out to see people. Technological progress is also need to pay the price, just rely on personal power is too small.

In order to accelerate the empire’s scientific and technological development, Franz unhesitatingly chose to let the enterprise go public to raise funds. Scientific research originally required luck, so often a project would have multiple research teams.

Catching a sheep woolgathering, the light efficiency was too low and obviously could not meet the demand. But it’s hard to beat Franz, anyway, there is no Internet these days, it doesn’t matter how many times a story is told.

From Vienna to London, Europe, but all the bigger financial markets, there are royal consortium of technology companies listed. If not for the immaturity of overseas markets, it is likely that all five continents are pastures.

Although woolgathering is a bit strong, but compared to his peers, Franz is definitely a conscientious entrepreneur.

Unlike later generations of high-tech winner-take-all, now just started, just pass in a track, can become a “great enterprise”.

The only regret is that the success rate is a little lower. In the last thirty years, the royal consortium invested in no less than two thousand listed technology companies, of which a quarter of the enterprises have gone bankrupt, and seventy percent of the enterprises in the struggle, only the last less than five percent of the enterprises are living a very prosperous life.

Just look at the data to know that these high-tech projects are how pitiful. It can’t be helped, who made Franz a school dud in his previous life?

Many times the project is launched, are the emperor’s head of inspiration. Specific technology is definitely not there, most of the time even the idea is not there, there are just functional requirements.

For example: can be refrigerated food refrigerator, able to cooling, heating air conditioning, able to play video TV, as well as unclear to understand the computer ……

A series of “high-tech” projects, no matter how many years ahead of their time, Franz just put forward the needs, and then the scientists evaluated them. If you can’t find a clue and don’t know where to start, then package it up and put it on the market for financing.

Anyway, the story is a good story, every family needs a machine to refrigerate food, and a machine that can regulate the temperature of the room is also a huge market potential.

As for whether it can be made, when can it be made?

Sorry, this is sacred scientific research. As long as the theory can be realized and the story told can convince investors, that’s enough.

The end result is obvious: the more advanced the project, the worse it dies. Only a very few lucky ones were able to come out on top. And these enterprises, and a large part of the run off the road, by unintentionally get out of the by-products to achieve profitability.

For example: the refrigerator did not come out, on the contrary, the freezer technology breakthrough; television did not come out, the movie projector came out first; the shadow of the air conditioner did not see, but the fan technology has been improved ……

The lucky ones are always in the minority. The vast majority of enterprises have no technological breakthroughs in their main business, and their side business has not been developed, so they can only rely on continuous financing to survive.

Before the outbreak of the stock market crash, fortunately, there are successful examples of stimulation, investors are still relatively tolerant of high-tech enterprises. Including many capital consortiums, are fooled into jumping into the pit.

After all, the royal consortium to get out of the high-tech enterprises, the indeed are engaged in scientific research. Financial accounts are also clear, in addition to not making money, that is the proper conscience of the enterprise.

After the outbreak of the stock market crash, all of a sudden the original shape. Everyone snapped, only to find out what kind of company they invested in.

Huge sums of money have been invested in it, and a company that has not made any profit for several consecutive years, or even decades, or one that merely maintains only a small profit, what is it if it is not garbage?

If it is just this is just, after all, there are a series of columns of technology in, may be used one day. The valuation of these enterprises is still high, hundreds of times the price-earnings ratio, in addition to the bubble or bubble.

In fact, this no loss is all the result of the royal consortium’s intentional manipulation. The use of other vests, so that these enterprises can be able to be able to earn income in the side business.

It is really too big a hole, there is no way to close the books, or the R & D team ability is really garbage, only to be abandoned and let it go bankrupt.

This month a patent, in a few months another technological breakthrough. The good news is endless, constantly stimulating market confidence. More and more enterprises are financed, and the market value is also expanding.

If not for the outbreak of the stock market crash, this game of catching drums and passing flowers could have gone on forever. Until one day there is a technological breakthrough, and then it’s another story.

Unfortunately, there are no ifs in reality, and now that the bubble has burst, this kind of business with no performance to back it up has naturally fallen to the ground.

The “waist cut” and then “waist cut”, that only belongs to five percent of the successful treatment. The technology sector as a whole fell, that are eighty percent up, some stocks fell even up to ninety-nine point nine percent.

If the market value of the calculation of wealth, after the outbreak of the stock market crash, Franz’s paper wealth evaporated at least eight billion guilders, more than the world’s countries a year’s financial income added up to the sum of all more.

The bubble blown out by himself, naturally he has to swallow the bitter fruit by himself. Of course, this is only on the surface. If you look deeper you will find that from the outbreak of the continental war, the major shareholders of these enterprises have begun to reduce their holdings.

The major shareholders are still major shareholders, and only a small portion of those shares have been reduced. However, it is this small portion that could now buy the entire company.

Franz, who had profited a lot, was not happy at the moment. Once upon a time it was woolgathering, taking other people’s money for scientific research, burning up naturally does not hurt.

Now the situation is different, the market can not be financed, these bullish high-tech enterprises have been on the verge of bankruptcy, looking to smash in their own hands.

There are only two ways in front of Franz: either to save these enterprises with their own funds; or to break their wrists and get rid of these gold swallowing beasts.

There is no doubt that neither of these options is a good choice. “Funding” is easy to say, but doing it is an absolute tear.

You know that this is not a two, but thousands of enterprises need money, around the Franz family is rich can not afford to lose money so.

“Stronger break” in the short term there is really no loss, but the previous efforts have all been lost. And, after this lesson, in the future, want to make up stories woolgathering, are not so easy.

There is no way, the crash came too fast, as a major shareholder simply can not run out. What’s more tragic is that in this stock market crash, Franz missed his own family’s industry when he was shorting because his conscience was not clear.

A momentary slip of the tongue created a thousand years of hatred. Franz, who missed out on many hundreds of millions of dollars, now suddenly realized that he was a poor man.

After hesitating again and again, Franz said helplessly: “Palace Minister, find someone to carefully screen once again, and bankruptcy and reorganize all the enterprises that have serious losses and have not produced any results.

The remaining enterprises should also compress their expenses, cut down on research funding, and develop lucrative side businesses as much as possible.

The royal consortium will secretly give these enterprises some help when it can. As a matter of principle, priority will be given to our domestic enterprises, while overseas enterprises should be abandoned.

In addition to sending people from the secondary market, one after another to buy domestic high-quality enterprise’s stock. It’s not far from the bottom, and it’s time for a rebound further down the road.”

Squeezed out of the bubble of the stock market, is a chicken feather. Compared to the valuation before the outbreak of the stock market crash, which was tens or hundreds of times, this valuation of a few times now looks obviously much smoother.

Having braced himself and cut out a portion of the companies with serious deficits, Franz’s heart is dripping with blood, and he desperately needs to plunge into a portion of high-quality assets to replenish them.

Palace Prime Minister Mirabelon persuaded, “Your Majesty, now that we have reached the end of the economic crisis, a large-scale bankruptcy and liquidation, our losses will be very large.

Why don’t we let these companies transform, and if necessary the consortium can help them produce results to boost their stock price, and look for an opportunity to throw it to the receiver in the back.”

In fact, this is the reason why consortia like to play with finance. Engaging in industry on their own has slow returns not to mention the fact that they lose a lot of money when the key is in an economic crisis.

In contrast, playing with finance is much easier. “Economic crisis” does not only have “danger”, but also “opportunity”.

For ordinary people and enterprises, it is a disastrous crisis, but for the financial consortium is a big opportunity.

When the crisis breaks out, you can play shorting; after the crisis breaks out, you can bottom out; after the crisis is over, you can turn around and sell the bottomed out enterprises, and wait for the next round of crisis to continue to play.

In the capitalist world, an economic crisis every ten years or so is not only the self-regulation of the market, but also the guys behind the scenes who see the fruit is ripe and want to harvest.

Otherwise, the economic crisis is such a big thing, before the outbreak of the signs are so obvious, how could people not notice it?

Franz shook his head: ”I think you misunderstood, this economic crisis will not end so easily. Right now, although it’s nearing the bottom, it’s still a long way from ending.

The most optimistic estimate is that the Empire will not be able to get out of the Great Depression until next year. As for other countries, it depends on their own situation. The preliminary estimate is that it will take at least two years to completely get rid of the crisis.

It will take even longer until the market regains confidence and finds new takers. If we don’t close down these companies with heavy losses, our losses will be even greater if we hang on for dear life.”

Unlike in the past, this economic crisis has been artificially delayed. According to the normal economic development pulse of the capitalist world, there were signs of an economic crisis as early as three years ago, only the initial location was in France.

If not for the outbreak of the Continental War, the first to explode would have been the French. Perhaps realizing the severity of the crisis, it was the French who chose to go to war before the bubble burst.

While the war diverted the crisis, it also brewed a new one. If the continental war had just ended and the crisis had been allowed to erupt, then it would have lasted a year and a half and probably gotten over it.

Unfortunately, in order to their respective interests, the British and Austrian governments have taken action to delay the outbreak of the crisis, the bull market was artificially prolonged for more than a year, the stock market once again doubled, the bubble was blown to an incomparable point.

The bigger the bubble bursts the more damage it brings, the Vienna stock market directly evaporated three quarters of the other financial markets are similar, bringing the killing power is far from the previous several economic crises can be compared.

Hearing this bad news, Mirabelon face changed greatly. Lasted more than two years of the Great Depression, the destructive force is simply comparable to the Revolution of 1848.

If the Holy Roman Empire is not able to take the lead to come out and promote the recovery of the world economy, it is possible that the European continent will have to recreate the 1848 Revolution again.

In a sense, the European world now has more of a basis for a revolution than it did in 1848.

The wave of unemployment affecting various countries, the deteriorating economic situation, the complex international conflicts, and the hatred among European countries are all hotbeds of revolutionary ideas.

The French, who were not willing to be defeated, Spain, who was trapped in the Philippine War, Portugal, where the monarchists and republicans were about to fight for their brains, and Italy, which had just gained its independence and had not yet stabilized its situation, all had the basis for the outbreak of a revolution.

The Holy Roman Empire, as the new leader, seemed to be powerful, but in fact, it had reached a crossroads. Once the continent of Europe broke out in a wave of revolution, the Vienna government’s trouble will be big to go.

In particular, there is also a in the dark eye, want to make things Britain; and seemingly restrained the sharp, but ambitious tsarist government.

In this context, if the royal consortium does not quickly bear the pain to cut the flesh, it is possible that even the opportunity to cut the flesh is gone.

……

(End of chapter)