Chapter 164 Mirage
"No one could have guessed how far-reaching the impact Huawei's press conference held this spring would have on the global situation. No matter how much the media reports now exaggerate its impact, it is weaker than the real world trend that followed."

At the end of 2026, when the New York Times was summarizing the changes in the world situation over the past year, it was still thinking about the press conference two years ago.

Of course, what made Washington regret even more was that they did not kill Chen Yuanguang at MIT earlier. Chen Yuanguang had too many opportunities while studying for his doctorate in America, but they did not seize any of them.

But at that time, no one knew that an academic rising star could deal a fatal blow to America in the future.

“The federal strategy is essentially bankrupt.
Last Saturday, Huawei announced at its press conference that it had produced the No. 1 chip earlier than TSMC. After the news was announced, it caused an unprecedented tsunami on Wall Street and even in the global capital market.

Many senior practitioners in the capital market believe that the impact of this tsunami is likely to be more far-reaching than the virus that swept the world in March 2020, and it is likely to profoundly change the present and the future.

It has always been believed that America, as the world's leading technological superpower, has been abusing its power in the high-tech field and taking repressive measures to maintain its monopoly in the technology field.

You should know that although ASML is not allowed to sell the most advanced semiconductor manufacturing equipment to China, China is still one of ASML's important sources of revenue. In the first three quarters of 2023 alone, the entire Chinese market purchased 80 lithography machines from ASML.

America's various actions are venting its anxiety about the changing world. Compared with Japan, China, which has a more complete industrial chain and a broader domestic market, is obviously a more difficult competitor.

The emergence of Wright Chen has further accelerated this process. If the room-temperature superconducting technology released last year announced the shaking of American's technological leadership, then the topological semimetal released two days ago announced the complete bankruptcy of the chip alliance.

Just last year, this White House proposed the so-called "Chip 4 Alliance", which includes the world's four major semiconductor production regions: America, Japan, Korea and the United States.

What is funny is that China, which is considered to be lagging behind in the semiconductor field, has taken the lead in breaking through and surpassing the semiconductor process. Under such circumstances, it is not only the technological leadership that has been shaken, but more importantly, whether the Chip 4 Alliance is still solid?

The alliance strategy has essentially failed. This White House needs to face up to this failure and find a way, and perhaps more importantly, to contain Dr. Wright. America needs scientists like Dr. Wright to emerge before we can reverse the current decline. "

If you open an American magazine these days, you can see overwhelming news about chips. People from all walks of life have come out to interpret the impact of this event. Technology has never become so important.

The plunge in the capital market has had a direct impact on every citizen of the federation, because according to federal data, more than 50 percent of American households own stocks, a proportion far exceeding that of China.

This topic has attracted so much attention in America, let alone in China.

First, the A-share market soared. On the first working day after Huawei's press conference, the Shanghai Composite Index soared by 4%. All semiconductor-related stocks rose by at least 7 points. Noah Fund, which is famous for its semiconductor holdings, rose by 10 points.

It is quite rare for a fund to rise by ten points in one day.

The previous fund manager of the fund was named Cai. As the fund was heavily invested in semiconductors, the fund's market value fluctuated violently with the semiconductor market. In the past, the semiconductor market was not very good for a long time, so netizens nicknamed him "rice dog". It is even rarer to be scolded as a star fund manager.

Cai Gou was sent to jail for bribery after he resigned last year. This is not uncommon, as quite a few fund managers have been sent to jail.

Netizens on Xueqiu joked: "The dog still didn't make it. If he had persisted until today, the people would have given him the nickname of God of Vegetables."

Lin Qinghua went to Shenhai to find Chen Qingzhi to go fishing. Due to the downturn in the real estate industry, the Lin family's company was shrinking across the board. During this period, they encountered financial problems and asked Lin Jia to pledge her shares in Guangjia Technology to solve the problem.

Since then, Lin Qinghua has gradually retreated to the second line. It is better to lie down than to go up or down.

He would occasionally go to Shenhai to find Chen Qingzhi. Chen Qingzhi didn't have many friends, so he naturally welcomed Lin Qinghua to interact with him more often.

Lin Qinghua also had a good impression of Chen Qingzhi, who gave him the feeling of a drinking buddy from his youth, "Old Chen, when will Yuanguang return to Shenhai?

I would like to have a good chat with him about this breakthrough in semiconductor technology. We all have come from that era and we know very well that only when the country is strong can everyone's life be better.

I always feel that the country is like a ship and we are all passengers on it. If the ship capsizes, no one will have a good ending.

Even if there is a lifeboat to jump off and escape, it will be hit by other ships. The Damao is the best example. "

After the 22-year war began, the fate of the Russian tycoons in Europe and the United States left a deep impression on the Chinese tycoons. Abramovich was forced to sell Chelsea and the money from the cryptocurrency exchange was confiscated, which made them feel sad.

For China's wealthy, it is easy to run away. As long as you are determined to give up half of your wealth, you can still run away.

But as it stands now, even if they go to a so-called neutral country, they cannot remain neutral.

Because of this, most wealthy people choose to leave the country in name only but not in reality. That is to say, they have foreign nationality, an extra layer of skin on their body, but their industries and themselves are still in the country.

Chen Qingzhi's attention was focused on the water in front of him. Without even raising his head, he said, "Yuan Guang is now a thorn in the side of the American army. He should just stay in Mianyang.

I have told him, and China has also told him not to run around, and that it is safest to stay in Mianyang."

Lin Qinghua then reacted, “You are right, the hinterland of Mianyang must be much safer than Shenhai.

Not to mention that the American embassy in Shudu has been withdrawn, and their influence there has become even weaker.”

In 20 years, due to some indescribable reasons, America's only consulate in the southwest region was withdrawn, and their influence in the southwest region was greatly reduced.

“Sometimes you just can’t help yourself. Yuan Guang doesn’t have any flaws. His only flaw is that he’s so powerful that he can poke a hole in the sky.

These past few days have been quite eye-opening. The global capital markets are all falling, and only the A-share market has shown a unique trend.

The U.S. stock market is America’s most dazzling signboard and also its biggest weakness. Once the U.S. stock market collapses, it means that their global ruling system will almost be over.

Yuanguang has been giving the Americans hard time one after another." Lin Qinghua said with emotion.

Chen Qingzhi was very calm: "Whether it is the U.S. stock market or other capital markets, various media will create an illusion for users, trying to tell the public that the stock market is a voting machine. Why do U.S. stocks keep rising? Because America has a future.

Why does the A-share market keep falling? Because China's economic environment is not good. This view is right and wrong. That is, the A-share market has never been able to reflect China's economic situation.

More importantly, in the long run, the capital market is not a voting machine, but a weighing machine. Returns are the most important, which is also the most critical point in Buffett’s investment philosophy.

Previously, the number of high-quality companies in the US stock market was greater than the number of high-quality companies in the A-share market, and the number of junk companies in the US stock market was greater than the number of junk companies in the A-share market.

Now with the breakthrough in chip technology, the high-quality companies in the A-share market may be greater than the high-quality companies in the US stock market, and the A-share market naturally faces a repricing.

The only thing that makes me a little regretful is that northbound funds did not sell, and there was no large outflow of northbound funds, but a large inflow. If they also sold, they would not be able to enjoy the dividends of China's technological breakthroughs, and the pricing power of northbound funds would be falsified overnight. "

After Chen Qingzhi finished speaking, Lin Qinghua was shocked. He didn't expect that this brother, whom he thought only knew how to eat, drink and have fun, actually had such a deep understanding of the stock market and could even talk about the U.S. stock market.

"Brother, I didn't expect you to know so much about the stock market?"

Lin Qinghua had often asked Lin Jia for information about Chen Qingzhi, and he knew very well that this guy loved to enjoy himself the most, besides fishing and playing cards, so his opinion just now was not something that a playboy could understand.

Although taxi drivers from all over the world are experts when it comes to talking about international politics, it still takes a lot of skill to be able to use Buffett's investment philosophy so cleverly and apply it appropriately at this moment.

In Lin Qinghua's opinion, with this ability, it is more than enough for him to be a stock analyst on the financial channel.

After all, what commentators need most is the ability to quote classics and the history of the capital market, and to be able to easily link the present to a similar point in the past. As for whether it is a case of trying to find a sword in the past or not, that is not important. You are just a commentator and you don't need to do any actual work.

“I have played the A-share market for many years and paid at least several million yuan for it. Later, I bought index funds of U.S. stocks and realized how easy it is to make money.

Later, I studied the U.S. stock market in detail. This kind of passive investment is so stable. Even after such a severe decline in the past 20 years, it quickly recovered. I began to doubt: are U.S. stocks really so invincible?
Obviously not. In my opinion, the U.S. stock market is an artificially created price distortion cycle, and they are caught in a collective liquidity illusion.

It’s a fascinating phenomenon that permeates the financial markets and creates a deceptive sense of security for investors and traders.

It’s like a mirage in the desert, a dazzling oasis that evaporates in an instant when you take a closer look.”

Lin Qinghua was shocked. He had heard a similar statement from an economics professor at Zhejiang University when he was having dinner with him.

Lin Qinghua knew that at this moment he only needed to be a good supporting actor: "Brother, what do you mean?"

Chen Qingzhi said: “Let’s talk about the price distortion cycle first.

U.S. stocks are increasingly biased towards leading companies, such as Apple, Amazon, Microsoft, Nvidia, etc. For example, the S&P 500 is an index weighted by large stocks. The more money investors invest in indexing, the faster the stock prices of leading companies will rise than other stocks in the market, and they will occupy an increasingly larger share in the S&P 500 index, thus forming a cycle that truly distorts prices.

About 10 stocks are holding up the other 490 stocks from collapsing.

Honestly, this gimmick is about to run out of steam. The impact of China’s chip breakthrough is likely to burst this bubble completely.”

Chen Qingzhi went on to say: “The liquidity illusion is even more interesting.

Everyone knows that the Federal Reserve plays a key role in shaping liquidity conditions. When they engage in quantitative easing, they inject a large amount of money into the financial system. This flood of liquidity can convince investors that the market is sound and stable.

After the financial crisis in 08, the Fed's quantitative easing program injected a large amount of liquidity into the market. Investors saw it as a safety net, but it masked potential risks.

Because the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept reveals market liquidity. Narrow spreads indicate ample liquidity, while wide spreads indicate scarcity.

A thinly traded stock with a wide bid-ask spread can cause panic and puncture the illusion of liquidity if a sudden surge in sell orders occurs.

Quantitative trading firms thrive on the illusion of liquidity. Their algorithms exploit tiny price discrepancies, assuming that liquidity is always available. However, during market declines, there is a high chance that liquidity can suddenly disappear, leading to a flash crash.

This week's stock market crash and the 20-year crash have their own traces, but the flash crash of the Dow Jones Index in May 2010 caused the Dow Jones Industrial Average to plummet nearly 5 points in a few minutes. Quantitative trading accelerated the chaos.

Therefore, in fact, this is a mirage created by the joint efforts of America, the Federal Reserve, and their global public opinion system.

If you study it in depth, you will find the truth hidden behind the illusions.

The Federal Reserve injected a large amount of money into the market, providing ample liquidity. Interest rates were low and money flowed freely. Investors were intoxicated by the sea of ​​cash, thinking they could always find a buyer or seller.

Yet this illusion is built on shaky foundations. The supply of liquidity is not infinite. It depends on the confidence, trust, and delicate dance of market participants. When panic strikes, liquidity can evaporate faster than rain.

If the financial crisis in 08 revealed the fragility of this illusion, it was just a twisted ankle in a dance. Then today, the plunge in US stocks is a loss of confidence among global investors. The dance can be restarted, but can confidence be restored?

At the end, Chen Qingzhi's expression suddenly became ferocious and then calmed down again: "I have been looking forward to this day for a long time.

What makes me even happier is that the illusion of liquidity was torn apart by my son himself.”

As a person born in the 1970s, I have too many unpleasant memories when I was weak in the past. These memories have been piling up in my mind. Time can make them forgotten, but when the memory is triggered, the desire to see the collapse of the American imperialist system becomes stronger than ever.

The man born in the 1940s in the White House glared at Jeffrey and said, "Go to war! It's time for the Federation to take action. We need a victory to tell the world that our throne is unbreakable!"

Jeffrey is helpless. As the director of the White House, he is very clear about the current financial situation. If the US continues to fight, it will really go bankrupt. Will anyone really pay for the US debt if it continues to fight?
It would be fine if we win, but what if we can't win? This thought flashed through his mind: "Boss, should we ask the think tanks for another round of opinions?"

"I said war! Take action, sir." The other party's tone was more firm than ever before.

(End of this chapter)