A Wall Street Genius’s Final Investment Playbook

A tense mood filled the studio.

Because the Chinese stock market and the yuan were entirely different playing fields.

Think about it.

Are there more people investing in Chinese stocks or in the yuan?

And I’m not just talking about currency speculators. China, alongside the U.S., is one of the world’s two economic superpowers.

Its currency is held by countless sovereign wealth funds and pensions seeking portfolio diversification.

Not to mention that the yuan is widely used as a settlement currency by countries trading with China.

So what if the yuan were to suddenly plummet?

The impact would dwarf a mere stock market crash.

At that moment, the host cautiously asked,

“Mr. Ha Si-heon, are you saying you foresaw this as well? Then... did Pareto Innovations...?”

“Yes.”

I answered with a meaningful smile.

“A month ago, Pareto launched a $1 billion short position against the yuan.”

At that moment, the stock market war had officially evolved into a currency war.

Wall Street was thrown into chaos.

"He’s shorting the yuan?"

"He’s crazy, out of his mind............."

Even veteran traders who had witnessed decades of high-stakes gambling were left speechless.

Of course, the reason why Ha Si-heon entered the currency war was somewhat predictable.

"For China, controlling exchange rates is definitely harder than controlling the stock market............."

The Chinese stock market was a domestic affair.

China’s government could directly intervene and control it—whether by banning short selling, preventing capital outflows, or in the worst-case scenario, shutting down the exchange altogether.

However, the currency market was different.

The yuan wasn’t just traded within China’s borders; it was bought and sold in global markets like Hong Kong, London, and New York.

For China to block all those international transactions was practically impossible.

"Even so, a currency war?"

"Is he trying to imitate Soros or something?"

"Even Soros didn’t do anything this reckless! I mean, who would dare to mess with China?"

This situation was on an entirely different scale compared to the 1992 pound crisis.

Back then, the UK was merely a declining island nation, and the pound’s troubles were confined to a single country.

But the yuan?

China is a G2 economic powerhouse, the world’s factory, and the beating heart of the global economy.

If the yuan wobbles, the entire world economy shakes.

The U.S., Europe, Japan, Asia, emerging markets, multinational corporations—they would all suffer ripple effects.

What’s more, this would pour gasoline on the already unstable U.S.-China power rivalry.

In other words, the situation wasn’t a regional skirmish but one with potential for a global-scale economic war.

Ha Si-heon had just lit the fuse.

"You can’t even predict how something like this will end!"

"Why on earth would he......"

Once politics intervenes, economic logic becomes meaningless.

In a war where national pride is at stake, profit and loss calculations go out the window.

It was like striking a match inside a powder keg already at peak volatility.

"Does he even need a reason? He’s just a madman."

"At this point, you can’t even call this gambling............... I don’t even know what to call it anymore."

"It’s basically arson................"

However, the shock didn’t last long.

The hedge funds soon followed their instincts.

They coolly punched numbers into calculators and began their analysis.

"Just in case......"

If this had been any other hedge fund’s move, they would’ve dismissed it outright.

But Ha Si-heon was different.

He was known to possess what many called the "Black Swan Algorithm."

It was a hard-to-believe rumor.............

But his track record didn’t lie.

The Theranos exposé, the Ebola prediction, the war against Herbalife...

Every event he had triggered was an extreme, seemingly impossible case.

And in every one of those events, he had emerged victorious.

No one could dismiss such a person lightly.

Thus, hedge funds around the world began crunching numbers.

Before long, Wall Street split into two camps.

Supporters and opponents.

First, the opponents who bet on Ha Si-heon’s failure stated it plainly.

"There’s no way to beat China. China isn’t Britain."

Admittedly, there were some similarities between today’s China and the UK of the past.

Both were suffering from economic slowdowns.

China’s once-boastful double-digit growth had slowed to the 6-7% range.

And when the economy shakes, currency values typically drop.

However, both countries were artificially propping up their currencies.

But that’s where the similarities ended.

"China’s foreign reserves can’t even be compared to Britain’s."

During the pound crisis, the UK had only $30 billion in foreign reserves.

That’s why it collapsed in just one day under the $10 billion attack led by Soros and other hedge funds.

And China?

It holds the largest foreign reserves in the world.

As of June, a staggering $3.84 trillion.

That’s more than the combined reserves of Japan, the U.S., the UK, Switzerland, Russia, and Saudi Arabia.

And Ha Si-heon’s ammunition against that massive wall?

A mere $1 billion.

Most agreed that amount wouldn’t even scratch China.

"Their stamina is unmatched, plus China has overwhelming policy flexibility."

At the time, the UK was shackled by the European Exchange Rate Mechanism (ERM) and couldn’t freely adjust its own interest rates.

China, on the other hand?

Given its political structure, it could dictate interest rates and virtually every other policy unilaterally.

However.

Those betting on Ha Si-heon’s victory pointed out something else.

"Normally, it would’ve been impossible to topple China. But right now, we’re in a state of emergency."

At this moment, China was teetering.

The stock market crisis triggered by Ha Si-heon had thrown the domestic market into turmoil.

The government’s excessive interventions only deepened investor distrust, causing foreign capital to flee in droves.

Meanwhile, the middle class—who had bet everything on the government’s rosy forecasts—was on the verge of erupting in anger.

"In this climate, they can’t just raise interest rates recklessly. And even if they do have a massive reserve pile, they can’t burn through it all."

Having policy tools doesn’t mean you can use them all freely.

Moreover.

"Of all people, their opponent is Ha Si-heon. There’s no way the retail traders will sit back..."

Ha Si-heon commanded a fanatical army of retail investors.

Their online communities were already turning into a frenzy.

—Mom: "Come eat!" Me: "One sec! I’m busy going 1-on-1 with the People’s Bank of China."

—How do you short the yuan?

→ Guide for currency speculation newbies:

Open an IB account

Tick options for 5+ years of trading experience

Enable both options/forex

Activate portfolio margin

Go full leverage short on CNH futures.

→ Risk management tips for beginners:

1. Stop losses are for cowards

2. A margin call is just a polite suggestion

3. When in doubt, double your bet

4. Keep a credit card empty just in case of margin calls.

While beginner guides were pouring out on one side, veteran voices from WSB were already rallying loudly on the other.

—I just explained 50x leverage to my therapist, and they suddenly decided to take an indefinite leave of absence.

—Dear PBOC, you may have $3 trillion, but we’ve been raised on daily margin calls.

—Let’s see who wins. (From all of us at WSB 50x leverage team)

—They say student loans should only be used for “educational purposes”... Isn’t learning currency speculation educational too?

—Life plan: Short the yuan with 50x leverage → Buy the Great Wall → Live off charging entrance fees

Honestly, they trusted and followed Ha Si-heon............ But betting on the Chinese stock market going down was a bit lacking in thrill.

The leverage was capped at just 2-3 times.

But the currency market?

The currency market is the most liquid market in finance—it’s practically a gambler’s paradise.

From forex margin to futures and options,

a wide variety of tools are available, with leverage going up to 50x or even 100x depending on the product.

Moreover, WSB retail investors have always been a YOLO crowd who thrive on extreme high-risk options.

For people like them, this was the opportunity of a lifetime.

"If tens of millions of retail traders following Ha Si-heon each invest an average of $3,000 with just 10x leverage, it could amount to a $450 billion bomb."

Of course, China, with its $3 trillion in foreign reserves, could likely withstand this level of attack.

But the point is—retail traders could still inflict some damage.

That was the argument of Ha Si-heon’s supporters.

But the opposition shook their heads.

A heated debate ensued.

"Retail traders can’t even properly use CDS or NDF. There’s no way China will lose."

"Maybe now they can. It’s hard to topple a healthy giant, but a staggering giant could fall with just a finger poke."

"China may be shaky, but is it weak enough to fall from a finger poke? You’d need at least a proper punch. Maybe if hedge funds swarmed like in the pound crisis, there’d be a slim chance....."

"That’s... a fair point."

Even those who saw China’s weaknesses had to agree here.

Retail traders alone couldn’t guarantee victory.

Institutions needed to join the fight for it to be viable.

"But just one or two won’t be enough."

"If the tipping point is crossed, it’s possible. Once the momentum builds, hedge funds will rush in."

The problem was breaking past that tipping point.

For now, Ha Si-heon stood alone at the front.

He was like a god to retail investors, but not to hedge funds.

He hadn’t yet earned enough credibility for them to blindly follow.

But then— unexpected news arrived.

<Soros enters $1 billion yuan short... Is a second currency war about to begin?>

Traders’ eyes widened.

"Soros? That Soros?"

The key figure in the pound crisis.

The hero of the first currency war had personally announced his entry.

Of course, Soros wasn’t following Ha Si-heon.

He explained his own reasons for joining the fight.

—China’s debt is unsustainable. A hard landing is inevitable...

But regardless of his reasons, the fact that the legendary investor was now on Ha Si-heon’s side was huge.

And that wasn’t the end of it.

Before the shock could wear off, more bombshell headlines exploded.

<Bridgewater takes $1.5 billion yuan short position... Fully joins the currency war>

<Paul Tudor Jones: “China’s economic hard landing inevitable,” enters $2 billion short>

Traders couldn’t believe their eyes.

All the names being mentioned were among Wall Street’s top 1% legends.

Wall Street’s fiercest predators were now all going in for the kill.

***

—Risks are rising in China’s banking sector. Reckless credit transactions and a surge in bad loans...

This was a warning from Paul Tudor Jones, the legendary macro fund manager who correctly predicted Black Monday in 1987.

—China is now fighting two wars simultaneously: one against the financial markets, and another against economic slowdown. These two wars cannot coexist...

Ray Dalio, who predicted Japan’s “Lost Decade,” also raised his voice.

—China’s real estate bubble and debt are already out of control. Local government debt is a ticking time bomb...

This was the pronouncement of David Tepper, who foresaw the 2008 subprime crisis.

Each of these masters highlighted different issues, but their conclusions converged into one.

The yuan will fall.

And every time such headlines appeared..................

Beep beep beep~!

A whistle blew in the Pareto office.

Each time Gonzales climbed on his desk and blew the whistle, the office erupted in cheers.

"We walk the path of the great short sellers!"

"We walk the path of the great short sellers!"

Somehow, all the traders and analysts had created this bizarre chant and were shouting it together.

‘I guess they’re ready to die happy now................’

Just a few days ago, these same employees were trembling in fear of assassination. ɴᴇᴡ ɴᴏᴠᴇʟ ᴄʜᴀᴘᴛᴇʀs ᴀʀᴇ ᴘᴜʙʟɪsʜᴇᴅ ᴏɴ N()velFire.net

Now, they had turned into berserkers.

"We walk the path of the great short sellers! Follow us!!!!"

"Uoooooooh!"

‘They’ve all lost their minds.’

Well, anyone sane wouldn’t still be here.

Those with any sense had already left during the Herbalife fiasco.

Anyway.

"Behind us stand Soros! Paul Tudor Jones! Dalio! Tepper!"

"Trust in Pareto and follow us!!!!"

The employees were ecstatic as if they’d achieved a great feat, seeing these Wall Street legends join the shorting cause.

And honestly, who could blame them?

These weren’t just investors; they were icons who had shaped modern finance.

It was like declaring war and having Napoleon and Alexander the Great gather under my banner.

But I knew the truth.

I knew why these big players had really joined.

'Actually, they’ve been eyeing this for a while—I just made the first move.'

They were already watching China’s currency and capital outflows closely.

Under normal circumstances, they wouldn’t have acted until next year.

But with the capital flight I triggered and increasing market volatility, they moved up their timeline.

So, these legendary investors weren’t following me.

But it seemed my people couldn’t see that clearly.

"There’s no such thing as impossible at Pareto! That’s just an excuse for cowards!"

"We fear nothing! We believe everything is possible!"

Amid this overheated atmosphere, only COO Crane kept his cool.

"Will China really allow the yuan to fall?"

China maintains a fixed exchange rate system.

Every morning, the government sets the rate and allows only a 2% fluctuation range.

For the short to succeed, China would need to deliberately devalue the yuan significantly.

"China has long maintained a stable exchange rate to promote the yuan as an international currency. A sudden policy shift would destroy global trust and cause severe damage. Politically and economically, they have nothing to gain. That’s why they’ll likely defend it to the bitter end......"

This was the prevailing market view.

That China would fight to the death to defend the yuan.