Chapter 196: Winning Is Not Over

Faced with the ever-expanding balloon, everyone was ecstatic.

Wei Dongsheng is an exception.

After the incident, Wei Dongsheng Zhuge Liang focused on the details of the devil, and heard the footsteps of the global economic crisis getting closer.

Following the bankruptcy of New Century Financial Corporation, the mortgage crisis spread silently, and two hedge funds under Bear Stearns that invested in subprime mortgages suffered heavy losses. At this point, Bear Stearns, one of the five largest investment banks in the United States, was officially involved in the subprime mortgage crisis. Faced with the huge losses caused by investing in subprime mortgages, Bear Stearns only issued a tepid statement, declaring that it has no problems with capital or liquidity. Perhaps, Bear Stearns regards this setback as a common crisis that it has survived many times in its nearly 100-year history, with very limited attention.

In July 2007, the crisis spread further, and the American Home Mortgage Investment Corporation (American_Home_Mortgage_Investment) also declared bankruptcy. Seeing that the crisis could no longer be concealed, Standard & Poor's and Moody's issued a crisis warning on mortgage-backed bonds. Only then did the subprime mortgage crisis officially enter the public eye.

In August 2007, the central banks of Europe, the United States and other countries began to rescue the market. The Federal Reserve continued to inject capital into the financial system, each time it was a large sum of billions and tens of billions of dollars; countries all over the world also paid attention to it. From August 11 to 13, just 48 Within hours, the central banks of various countries invested 326.2 billion US dollars to rescue the market. The large-scale bailout of hundreds of billions of dollars and hundreds of billions of euros by central banks around the world effectively eased the impact of the subprime mortgage crisis. On October 5, 2007, both the Dow Jones and Standard & Poor's Indexes broke new records in history, and it seemed that everyone had crossed the quagmire of subprime mortgage crisis.

However, these rescue policies all address the symptoms but not the root cause.

The paper-pasted windows of the Federal Reserve are in fact similar to those in China. The latter sits on an administrative monopoly, regards stockholders as mentally retarded fools, and recklessly changes the rules; the former sits on a capital monopoly, relying on its large size and abundant funds, and it is unreasonable to collide with the market. Therefore, the end result of both is the same bad. The China Securities Regulatory Commission seemed to alleviate the "530" crash, but it was actually indulging hot money to blow bigger balloons and gathering new crash potential; the Fed seemed to alleviate the subprime mortgage crisis, but it was actually indulging a group of investment banks, hedge funds, and finance. Insurance and others transfer their losses to more customers, indirectly triggering a global economic crisis.

At this moment, they all thought they were right, and they thought everything was under control.

Since they think they are right, let's continue to bet!

Compared with the 2008 global economic crisis, the turmoil in 2007 is just an appetizer.

The political ecology of China has undergone a small change in five years and a major change in ten years. 2007 is a new five-year node. The Labor Party held its 17th Congress from October 15 to October 21 to elect a new cabinet elder. There are 25 faces in this China’s top political club. Some people will stay in the cabinet. The fourth generation will stay in the cabinet. Gong Qixing will also stay in the cabinet, but Gong Qixing is still an ordinary elder. Someone will enter, the future five generations of head princes and future cabinet chiefs. They are also added to the cabinet.

Behind the changes in personnel is the change of power, which will surely form a new political map. For example, Buhou was kicked to the Ministry of Commerce by a certain faction in the past, but now He Zong Lian Heng was elected to the cabinet by chance and immediately received a new life. As long as there is no major change, Bu Hou must have left the place like his previous life and continued to bet for a major change in the next ten years after five years.

In the Chinese system, political power comes first, and many people are waiting for the conclusion of the new cabinet election.

Wei Dongsheng is no exception.

Five years ago, in 2002, Wei Dongsheng waited for the 16th Congress of the Workers’ Party to conclude before he rushed to Yanjing with the money earned from plug-ins and private servers. Five years later, 2007 was the same. After the final results came out, Wei Dongsheng could make cheap arrangements. , Adjust the plan for the next five years. The butterfly effect brought by Wei Dongsheng has not yet affected China's top clubs. Faces familiar from previous lives have all appeared in the cabinet on time. The political climate change in the next three to four years may be the same as in previous lives.

The cabinet election ended, and Wei Dongsheng immediately dialed Gong Qiuqiu's phone: "How is your place?"

Gong Qiuqiu's mood is very high: "Very good, the Rose Fund has suddenly emerged as the biggest short seller on Wall Street. The mortgage crisis is far beyond my imagination. All hedge funds in the vacant loan market are now the stars of Wall Street. If they rank as the best in 2007. On the list of profitable fund managers, Rose Fund ranks first; John Paulson, who is also in the vacancy loan market, ranks second, and George_Soros is still sought after. Regardless of the specific income of our own investments, if I were John Paul A fund manager like Sen, as a fund manager of the Rose Fund, guess what my income can be?"

Wei Dongsheng cooperated with Gong Qiuqiu's interaction: "One billion dollars?"

Gong Qiuqiu: "You underestimated the percentage of fund managers."

Wei Dongsheng raised his estimate: "2.5 billion US dollars?"

Gong Qiuqiu: "More."

Wei Dongsheng continued to raise the data: "3 billion US dollars?"

Gong Qiuqiu smiled and said, "It's almost there."

Wei Dongsheng was surprised: "Already made so much money?"

Gong Qiuqiu said: "Actually not many. Although the performance of the two funds managed by John Paulson is not as good as that of the Rose Fund, but with its volume of more than 20 billion US dollars, he has made at least 3 billion US dollars. Rose Fund As a young fund, it has been neglected by the capital market in the early stage. If it weren’t, Rose Fund’s fund manager’s profit would be even more terrifying. After all, Rose Fund dared to spend more than one billion US dollars in July 2006 to short US mortgages. The ruthless role of the market."

Gong Qiuqiu went on to explain: "Hedge funds are expensive games that are not weaker than war. Contracts can cost hundreds of millions of dollars. As long as you bet in the right direction, money will continue to flow into your pockets. A hedge fund owned by Bear Stearns The fund is actually in our hands. Bear Stearns is still delaying the payment. If Bear Stearns’s huge sum of money can be paid in, the actual income of the Rose Fund this year will be $1.5 billion."

Wei Dongsheng: "Is there any hope for this contract?"

Gong Qiuqiu: "Bear Stearns’ financial situation is very bad. The contract fulfillment negotiations last week, do you know how Bear Stearns threatened us? The person in charge of Bear Stearns threatened us that if the Rose Fund refuses to make a discount, wait for Bell After Stearns went bankrupt, the US$1.5 billion contract we held would be worthless. I never imagined that Bear Stearns, which has a history of nearly a hundred years, would one day be so desperate to speak of the threat of bankruptcy. The five largest investment banks in the United States One of Bear Stearns was so miserable that he threatened me with bankruptcy! Bear Stearns’ financial situation is probably worse than I thought."

If the performance is successful, the contract is worth 1.5 billion U.S. dollars; if the performance fails, the contract is worthless.

Facing the threat of Bear Stearns, Gong Qiuqiu calmly expressed his disappointment with Bear Stearns, which proved the strength of the Rose Fund in this financial war.

Wei Dongsheng listened patiently to Gong Qiuqiu's short story: "Does Bear Stearns hope to fulfill the contract?"

Gong Qiuqiu: "In the negotiations last week, Bear Stearns put forward a proposal. Bear Stearns hopes that I will come forward to match the in-depth cooperation between CITIC Securities and Bear Stearns: CITIC Securities will raise 1.5 billion U.S. dollars from Bear Stearns and carry out 1 billion U.S. dollars. To put it simply, CITIC Securities will lend the money to Bear Stearns, and Bear Stearns will return the borrowed money to us.”

Gong Qiuqiu previously worked at CITIC, and because of the influence of the Gong family, he has a strong network in the Chinese financial system.

In other words, if Gong Qiuqiu hadn't helped him in time in the past, Wei Dongsheng would have no way to create a third-party payment platform Xinbao before the launch of "The Spring and Autumn of the Ten Kingdoms". If the cooperation between Bear Stearns and CITIC Securities is beneficial to each other, Gong Qiuqiu can definitely play a role.

This kind of operation sounds troublesome to Wei Dongsheng.

Shorting the US mortgage market is far more difficult than Wei Dongsheng imagined.

Short selling at the multi-billion dollar level will never be as simple as buying and selling stocks.

First of all, if you want to go short, you need to find players who are willing to bet against you. If everyone is short, whose money are you going to make? Some people go long, or some people don't believe in going down, they are willing to bet against you, and they have enough funds to bet against you, so that you can get profits by betting against.

Winning the gambling is not over yet, you have to ensure that the party who loses the gambling obediently fulfills the contract and ceding the really cheap silver to you.

The party who loses the bet will generally not breach the contract with brutality. Every transaction of a hedge fund has a guarantor, and the price of a loser’s default is not only to offend the Rose Fund, but also to offend the guarantor and the hidden rules of the market. Therefore, every time the Rose Fund makes money, it will pay various forms of guarantee fees to Wall Street bigwigs. This money is necessary, otherwise Bear Stearns said to tear it up and tear it up, how can you help him? With multiple guarantees, since Bear Stearns loses the bet, they have to fulfill the contract, or else Bear Stearns has broken the whole international market.

Moreover, Gong Qiuqiu is definitely not a **** of ordinary people.

Gong Qiuqiu is not only Gong Qixing's niece, but also has a strong network in the Chinese financial system. Bear Stearns has a very high default cost.

However, Bear Stearns was able to legally breach the contract.

For example, bankruptcy.

Once Bear Stearns declared bankruptcy, the $1.5 billion contract between Bear Stearns and the Rose Fund became a bad debt, which became a pile of waste paper like Bear Stearns threatened.

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