Blackstone Code-Chapter 614: Jump
Short selling—a common financial practice.
Stockbrokers in Eminence often use a simple analogy like betting on small or big to explain long and short positions to clients who know nothing about finance. This straightforward explanation helps clients understand what they’re dealing with.
More specifically, let’s say a financial asset is priced at 100 units. At that point, A borrows one unit from B and sells it to someone else, pocketing 100.
Later, when the price drops to 50, A buys it back for 50 and returns it to B.
In this transaction, A profits 50 from the price drop. That’s how short selling works.
If the asset’s price goes up instead, A loses the same amount it rises by.
Of course, that’s just the basics. In reality, there are other factors that affect the final profit or loss. But overall, that’s the general idea of short selling.
Lynch wanted to lend money to Mr. Herbes. Herbes would use the money to buy another currency. When the Valier plummeted, he would buy it back at a dirt-cheap price and return it to Lynch. The difference left in his pocket would be his profit.
But would Lynch really be that generous?
That was the question. A big one.
Mr. Herbes didn’t think Lynch was a good man—and for good reason. He had just said he was doing this to take revenge for a harmless joke from two years ago.
So could what Lynch just said be true?
Was he really doing this out of principle? Or was it another trap?
Mr. Herbes was feeling deeply conflicted. He could hardly focus. The looming bankruptcy made him feel like he was about to piss himself. Legs tightly closed, he asked, “How much?”
He was asking how much Valier Lynch could lend him. If Lynch had enough liquid Valier on hand, he might be able to recover some of his losses.
He quickly thought it over, like the last deal they did. He hadn’t found any issues with it, but now there was no time for deeper deliberation. He had to act fast.
If the Valier collapsed completely, he’d lose his last chance.
Lynch saw the desperation on Mr. Herbes’s face and smiled brightly. “Give me a moment…” He motioned for Herbes to sit down and went into the next room to make a call.
Though the door wasn’t fully shut, Herbes could faintly hear Lynch’s voice—it sounded like he was making inquiries.
That thought brought new doubts. Was this another trap Lynch had laid for him?
On the other end, Lynch was on the phone with Lime. “Do we or our clients still have any Valier in cash?”
“We’ve cleared out our own holdings, but the clients still have plenty…” Lime let out a short laugh. “At least fifteen to twenty billion’s worth is still with them.”
“I already followed your instructions and warned all clients about the risks with the Valier—told them not to hold it. But you know how it is—the Valier kept climbing and recently had a decent spike, so they insisted on jumping in with their managed accounts. So…”
Lime didn’t finish his sentence. He just laughed. Lynch knew exactly what he meant.
People, when faced with things they don’t understand, tend to fall into two categories.
The first are those with lower levels of education, status, wealth, or power—generally in the lower to middle tiers of society. They lack strong independent thinking and haven’t achieved much success. These people are easily swayed by those more professional than them—not because they’re gullible, but because they truly lack confidence in things they don’t understand. They have to rely on expert advice. That’s why Eminence’s brokers are often used as cautionary tales in legal shows and publications.
The second category consists of successful people—even if they’re not particularly well-educated.
They have status, wealth, or power—in other words, they’re winners. Winners trust their own judgment and are less likely to be persuaded by others. When their judgment clashes with Lime’s warnings, they don’t trust him. They trust their own instincts, their track record, and the intuition that brought them success.
As a result, Lime’s poorer clients—though still at least middle-class—stayed out of Valier. The wealthy ones, however, jumped in.
Roughly 20% of Lynch’s Valier was bought up by these people. The rest was swallowed by other players—because it was physical cash.
Not long ago, these same people were singing Lime’s praises for making them money from good news. But then the bad news came flooding in, and the Valier nosedived. Many of them took huge losses.
Lime wasn’t the least bit regretful. In fact, he felt a little gleeful. Watching those who ignored him suffer gave him a sense of satisfaction. He was in high spirits as he talked with Lynch.
“You did great—better than I expected…”
Lynch had thought some of his Valier—maybe 3 to 4 billion—would be left unsold. Selling off 10 billion in a short time wasn’t easy, given market capacity.
He was ready to recall some from clients at a discount to round off a clean number to lend Mr. Herbes.
But he didn’t expect Lime to have handled it so well—it was all gone. Of course, this was also because international speculators had gone wild over the Valier.
With the market red-hot, everyone was going crazy. At this point, even if Lynch had several hundred billion more, the market would’ve gobbled it up.
After praising Lime, Lynch hung up, paused briefly, then dialed Mr. Truman’s office.
“Ran into trouble?” Truman’s signature laugh came through the moment the line connected.
International calls still required manual switching at the time, so Truman had already been informed who was calling. If Lynch was calling now, there could only be one reason—he was in trouble.
Trouble big enough for Lynch to call for help—that intrigued Mr. Truman. He wanted to know who could possibly give Lynch a hard time.
Lynch chuckled. “Yes, a bit of trouble. I need authorization to move 10 billion Valier. After thinking it over, the only one who can come up with that kind of money is the federal government.”
That request caught Truman off guard. “What happened to your own 10 billion?” 𝑓𝑟𝑒𝘦𝓌𝑒𝑏𝑛𝑜𝘷𝑒𝘭.𝒸𝘰𝑚
“I sold it—almost at the peak.”
Even someone like Truman, not deeply versed in finance, understood what that meant. Lynch had easily made tens of millions in profit on that trade.
It reminded Truman of all the times he’d tried to get Lynch to join him—and Lynch refused. Maybe Lynch really was better suited for this stuff. Over the years, no one had made money as effortlessly as Lynch.
After a momentary pause, Truman felt a touch of envy—then curiosity. “And what do you need that money for now?”
“You know, I’ve got a friend—Mr. Herbes. He wants to borrow some money—10 billion Valier.”
“I figured, the federal funds are just sitting there. Might as well use them.”
“Three months. Return no less than 4.5% of the principal in federal sols. That’s…” Lynch did a quick exchange-rate calculation. “Over three million in profit. Not bad for a single deal.”
Mr. Truman’s curiosity clearly lay elsewhere. “So how much will you make?”
“About the same amount.”
“Will this money leave the Federation?”
“Of course not.”
“When will the paperwork be done?”
“Very soon.”
Lynch came out of the room smiling and sat back down on the sofa. “I’ve arranged it for you. Ten billion Valier in cash. The repayment comes with a 9.5% return, settled in Federal Sol. If that works for you, you can have your people start the paperwork now.”
Seeing Lynch casually pull out a ten billion again, Mr. Herbes had the urge to ask—The ten billion you’re talking about—isn’t that my ten billion?
But he didn’t say it. He didn’t dare offend Lynch—not when this was his last chance.
If he used this money to settle his debts and move the rest quickly, he’d still come out ahead.
He didn’t plan to notify anyone else—he intended to keep the short-selling profits for himself. That way, he’d even make money.
Heaven and hell were just a breath apart. Right now, he didn’t care about anyone else’s fate—only his own.
Forget 9.5%. He’d take 15% and still be happy!
“No problem at all, Mr. Lynch. So, how do we proceed?” He was eager now, with a smile returning to his face.
Lynch wrote down a number and handed it to him. “This is the loan department head at the Gold Exchange Bank headquarters. You’ll need to provide collateral. You know I’m not just handing you a ten billion Valier for nothing. Once they’re satisfied, the money’s yours.”
After watching Mr. Herbes leave, Lynch dialed the number he’d given him. “Hello… yes, someone will be coming to see you in the next couple of days…”
