In the middle times of the Asian Financial Crisis, I arrived in Hong Kong for I had found my way.
It was just under a year since the Great Handing Over of Hong Kong to the bosom of the middle kingdom, and things were looking decidedly shaky in that little island in the South China Sea.
A few months after I arrived, the Hang Seng Index starting dropping suddenly. Nothing to do with me. It was under pressure from those fucking hedge funds (George Soros, etc...) who for some reason felt like taking immensely leveraged incremental profits by laying short trades in Hong Kong stocks.
The HKD would have to be unpegged from the USD in order to save the market, cried the Chicken Little hand-puppets of the hedge funds, the media.
This fight had started earlier, in 1997, but it was a poor effort in the Yen that triggered this more urgent one, which hit its peak velocity in August 1998.
And it was happening very quickly, like, REAL fast, and what if the ultra-laissez-faire government did nothing? Everyone knew was that the Yuan WAS going to be unpegged from the USD any day now, then for certain the HKD could not be saved...
So those HK financial authorities made a crucial decision to get some good old (and hypocritical - to them) intervention going. They pumped money into the market, buying blue chip stocks to stop it up quickly, huge amounts (by those days' and my bank account's standards) of money flying around, staggering at the time.
Then someone heard: Hey, the Russian Rouble is going to be the next to fall! Look out! (All these rumours that, rumour has it pinned, Soros and the hedge funds had started.) Once again, for the second time this week the Hong Kong market was on the verge again of going into a tail-spin unless - Soros rubs hands - the HKD was sure to be unpegged.[*]
So the financial authorities pumped even more money in! Would it work? It couldn't be sustained, could it? HK would go broke!
It was en edgy time, to say the obvious.
So meanwhile, my flat-mate Scott, a young risk analyst with one of the big multi-letter companies, was watching this on his computer screen at work and on CNBC's Squawk Box, and got so spooked that he transferred all his money into USD before what he was certain was going to happen, did happen - the HKD crashing...
All of his money. He emptied everything in his HKD accounts in order to not lose a single penny when this impending disaster hit.
I do mean ALL of it. He had no HK money at all. He had also emptied his wallet of whatever cash he had and bought USD notes.
Can you imagine what that implications of that would be?
"Hey E@L, can you lend me some money for my taxi?"
[*thinks*] No fuckin' way, banker-wanker risk-idiot. Why don't ya walk, it's free. And its not far, we're in Hong Kong, not the Aussie outback, everything is 15 minutes walk away. It's stinking hot, it's raining, humidity 1G%... walk! You sell all your money and then you bot of me because you haven't any cash for a fucking taxi! Are you a moron? Do you think I am the moron? Why the fuck would you jump out the window to get rid of your CASH? You still have buy things in Hong Kong, idiot. Even if it crashed last night, it's not like the HKD$25 in my pocket is suddenly not going to get you into town this morning. Hand, forehead, slap. Total incredulity...
"Sure Scotty. Here ya' go. Okaaaaaaaaaaay... You buyin' the beers tonight?"
(some prescient words at the end of the linked article: "...my hunch tells me that the battle is not over and that a next attack is very likely, unless U.S. government realizes the danger of hedge funds to the world economy and set some regulations to control them." Ha!)
* [sorry first draft of this had an ellipsis of the crucial word "not" - the HKD was never unpegged.]