Bubbles and Crashes - Planet Finance Documentary

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  Bubbles and Crashes | Planet Finance Documentary - Optimized Transcription:

Ever had that jittery feeling from too much coffee or too many energy drinks? It's like your skin is tingling, and your heart's racing. Well, that's been my vibe for the past six days.

As a trader, timing is everything. Buy low, sell high — that's the game. And you can make as much in a couple of hours as someone with a master's degree.

But what happens when everyone's in on the game? Suddenly, that eight thousand Euros we started with? It's just chatter in the wind.

Numbers rule this world — a world where brains or speed can make or break you. It's all about grabbing hold of those radio waves, fiber optic cables, and riding the currents.

Welcome to Planet Finance — a place of fear, desire, where fortunes are made and lost.

Navigating Planet Finance takes me to every corner of the globe. It's a place where mood shifts with market prices. Some days, it's smooth sailing. Other days, you're swept away by the tide.

Sure, your influence as an individual seems limited here. But even in this realm, there are those who swim against the current, driven by the allure of wealth.

Enter the so-called short sellers — the vultures of finance. They thrive on others' mistakes, profiting when the market takes a nosedive.

It's a world where I've met some fascinating characters. Take John Hampton, for example — expert on tax avoidance turned short seller. He finds the psychopaths and liars intriguing, building his business on exposing them.

John's journey to his first million takes us back to the late 1990s dot-com bubble in Flanders, Belgium.

Flanders Language Valley, a hub of tech innovation. One company, Leonard and Houseby, stood out. They promised groundbreaking speech recognition technology. But fast forward 20 years, and one of the founders is left pondering in a backyard.

Their dream of global domination vanished, leaving behind bitter memories.

John smelled a rat — a hundred million dollar-sized rat. He placed his bet, and as the truth unfolded, his pockets grew heavier.

Even when you're right about a massive fraud, winning isn't always what it seems. It's a sobering lesson — finance isn't a game for the faint-hearted.

The aftermath? Shareholders left licking their wounds, still searching for justice. But in the end, the short seller walks away with pockets full.

Strange as it sounds, fraudsters often have a certain charm. They'll take your money with a smile, leaving you none the wiser.

Being right and proving it are two different things. Sometimes, the world rallies behind you. Other times, you're fighting alone against the tide.

Wirecard, the darling of Germany's fintech scene, had all the makings of a success story. But beneath the hype lurked a web of deceit.

Our short sellers dug deep, uncovering a trail of high-risk payments, gambling, and worse. And as they raced to expose the truth, the stakes only grew higher.

Why Wirecard denies everything and even strikes back—they accuse the short sellers and journalists of market manipulation. What happens next seems to come straight from a spy thriller story.

They used the former head of Libyan intelligence secret service to manage quite a large surveillance operation against who they thought were the chief critics, who were a threat to them. To work hard, I had vehicles parked outside my house. I was being followed everywhere I went; they would film me. I didn't know what their intentions were, whether it was to bundle me into the back of the car and I'd never be seen again. Obviously, my wife was traumatized with the school because we didn't know their motivations. We had to request passwords to collect our children from the school. The police, they took it so seriously that they put our home line telephone line on rapid response. So if we dialed the police 999, and even if we hung up, they'd send a police car around. Yeah, it was horrifying, and it lasted, I think, on and off for the next three years or so. And the stock just continued going up and up and up. Remember, on Planet Finance, being right doesn't always mean being proved right.

The German financial regulator, the large shareholders, even the German chancellor who lobbies for Wirecard in China, all stand by Wirecard despite the many allegations. When we first found Wirecard, I was short, sure that it was a fraud. The stock was nine euros. Several years later, the stock was 191 euros, and in that time, billions of dollars of German pension money had been used to buy the stock from fraudsters on the market. Timing is everything. To make a profit, the Wirecard share price has to go down. But now that it's going up, John has two options: pay a higher deposit to the lender of the shares or cut his losses and buy the shares back for a much higher price. On Planet Finance, this is called the short squeeze, as you are literally being squeezed dry.

And the second thing we found was what we thought was Russian mafia. And once you've found something that we think was Russian mafia, you don't look any further because the last thing I want to do as an individual is upset the Russian mafia. That's a good way of not living very long. It turns out that Wirecard wasn't Russian mafia. It was the Russian state, and they were using that access to the German banking system to launder money, to get around, say, the American sanctions on certain Russian individuals. It became apparent that in the market, very few cared. I mean, it became apparent in the more accusations that were levered against the company, somehow they still had the ability to retain the ability to deflect those, and it became sort of perceived as invincible, really.

Thank you. The government of Germany was extremely encouraging of Wirecard, and people wanted to believe because they wanted to believe, fill that need.