Chapter 527 Introduce the king into the urn?

  The picture went back to eight months ago, when Zhong Shi majestically appeared in the American media, seeing this unusually young face, the scar that had healed in Soros' heart began to ache faintly again.

  The failure of the attack in Hong Kong 8 years ago caused heavy losses to Quantum Fund, but investment has gains and losses, which is nothing. The real reason why Soros’s reputation was discredited and the macro hedge funds never recovered was that there was a serious internal strife between the two hedge funds with the largest reputation, the largest fund management scale, and the most accurate market forecasts in the world at that time. Although right and wrong have long passed, the hedge funds that carry out macro strategies and the huge international hot money no longer trust these two hedge funds. In addition, the central banks of various countries have increased the monitoring and attention to international hot money, making shorting the currency of a country The system is getting more and more difficult. Therefore, after the financial crisis broke out in some South American countries in 1999, the hedge funds of the entire macro strategy have never reproduced the golden age of the end of the 20th century.

As one of the representatives of the era of macro strategy, Soros once said a word that could cause a huge shock in the market, and even lead to the collapse of a country's currency system. The market appeal is gone. Of course, there are also reasons for losses in the Russian government bond market and shorting the yen, but in the final analysis, the rumors released by Zhongshi are more lethal, and the entire market is full of doubts. .Robertson teamed up to refute the rumors, but it didn't help at all. Even some of his investors expressed doubts about his professional ethics at the worst time.

This kind of prestige blow is the most unbearable for Soros. Although everyone knows that it is something that everyone will do secretly, after this layer of window paper is pierced, everyone becomes sanctimonious. That side unceremoniously criticized Quantum Fund and Tiger Fund.

After the Tiger Fund collapsed due to the high-tech stock bubble, George Soros also entered a low-key period. Firstly, it was because of his unsatisfactory performance in recent years. In the past, countless young talents have become the focus of the market, and his past of earning 1 billion US dollars in a single transaction is no longer exclusive to him. New myths are born, and from time to time there are even larger numbers than this.

Although Soros has kept a low profile, he still maintains enough respect for this legendary figure among the top executives of major financial institutions, because in this industry with an extremely short life expectancy, Quantum Fund can survive for decades. There must be a lot of excellence. Not to mention anything else, just talk about Soros's personal wealth, which has grown upwards in the past few years, and you will know how powerful this old guy is.

   Once the dark side of psychology jumped out to cause trouble, Soros could no longer sit still. However, after hearing Zhong Shi's interview, he realized that he might no longer be the young man's opponent, and he had to unite with one or several super financial institutions to deal a heavy blow to the opponent. After all, up to now, he has only saved more than 10 billion U.S. dollars in net worth, and the other party was able to provide such a large amount in 1998, and it is naturally not the same now.

But it is difficult and difficult to set up opponents in the financial market. First of all, you must make the opponent interested in a certain market, and secondly, you can prescribe the right medicine after you figure out the opponent's position and operation direction. Generally speaking, it is impossible to get the top secret of the other party. The most terrible thing is that according to what Soros knows, Tianyu Fund is basically closed to outside investors, and it has been entrenched in the Hong Kong capital market for a long time, and it is not easy to appear in the U.S. capital market, so he will not be too good for a while. way.

  After several secret talks with Stanley’s top management, he received a piece of news that surprised him. Tianyu Fund was gradually withdrawing from the Hong Kong capital market. This news made him ecstatic. If such a huge amount of funds is cashed out, it is impossible to put the funds in the bank account and sleep soundly, because everyone knows that this is the most stupid way of managing money. And there are only a handful of markets that can absorb such a large scale of funds, nothing more than the US market, European market and Japanese market. Taking into account the exchange rate factor, he believes that these funds have the greatest probability of appearing in the US capital market in the form of US dollars.

Subdividing it further, the U.S. stock market, bond market, and even the credit default swap CDS market all have sufficient capacity to absorb these funds. Although the foreign exchange market is even larger, considering the risks inherent in it, Soros does not think Zhongshi will invest most of the funds in the foreign exchange market.

At this time, Stanley also had a serious internal crisis in the United States, that is, their traders bought CDOs with extremely large positions. However, due to the outbreak of the subprime mortgage crisis, the CDOs bought by Stanley were destroyed. A terrible loss.

  Why, contrary to hedge funds, do large financial institutions buy such a large number of low-grade mortgage bonds? There are a lot of articles in this.

Generally speaking, large financial institutions, especially investment banks, have three core businesses. The first is naturally the investment banking business. People who work in the industry are generally called bankers. They are well-dressed and personable, and they look like successful people wherever they go. dress up. The profit earned by these people is the commission for operating the company's listing/increasing issuance/bond issuance, etc. Different from the investment banking business, large investment banks have another profit point, that is, self-operated business, generally speaking, it is FICC (foreign exchange, bonds, commodities, etc. transactions), which are operated by traders of investment banks. Some funds conduct various target transactions in the market, earning a small price difference, and in the case of a large amount, these profits combined are quite considerable, and sometimes they are not inferior to those earned by investment banking. profit taken.

  Before the rise of private wealth management, investment banks in general Wall Street were supported by these two profit points. The rise of hedge funds made investment banks realize the huge profits in this area, so private wealth management emerged as the times require, and quickly became the third fulcrum of investment bank profits. However, because it is too early, there is no way to compete with the other two departments in a short time. Therefore, generally speaking, in Wall Street culture, the sales and trading department and the investment banking department are still the key profit-making departments.

The sales and trading departments of top investment banks sometimes have terrible performance. Although there are sometimes hundreds of traders operating in the market at the same time, if the risk control mechanism is well controlled, most of the time the trading departments of investment banks are profitable. , Even in the trading days of a year, some investment banks can control the loss days to about ten days, which is quite amazing.

   But in any case, there is still a big difference between the proprietary business of investment banks and hedge funds, although at some point their trading targets are exactly the same. First of all, the traders of the investment bank use the company's own funds. Although the risk control mechanism is good, it is not a panacea after all. Buying and selling, plus the remuneration they get is a sharing mechanism, so what they are after is to maximize profits.

  Secondly, as the market maker of the ABX index, the investment bank has to buy and sell a lot of mortgage bonds every day, and at the same time match the quotations of buyers and sellers. Therefore, the amount of bonds flowing into and out of their accounts every day is extremely large, and once there is any disturbance in the market, the CDO market that only buys but does not sell may immediately suffer from lack of liquidity, and market makers with huge positions The dealers may not be able to sell the bonds, in which case they have to bear the risk of any market.

  Unfortunately, as an investment bank with a huge self-operated business and a market maker for the ABX index, Stanley America has fallen into such a crisis.

When there was no sign in the entire market, Stanley’s traders bought a large number of BBB-level and lower-level housing mortgage bonds, because the yields of these bonds are extremely high, as long as they can be paid normally or even partially paid , these bonds will recover their costs. But unfortunately, after the collapse of New Century Financial Corporation, HSBC also announced the dismissal of all employees responsible for housing mortgage loans in the United States, which suddenly ignited the panic in this market to the extreme.

The market panicked, and many traders were rushing to sell their subordinated bonds, even bonds with better ratings. Stanley, one of the largest market makers, accumulated a huge amount of house mortgages at once. Loan bonds, and their traders can only sell these bonds all over the world, including public funds and foreign banks. But at this time, others are not fools, they will only buy those mortgage bonds with better ratings, and dare not easily buy those subprime bonds with poor ratings.

Stanley, who holds a huge subprime mortgage bond, can only pinch his nose and admit it. In addition to selling these subprime bonds diligently every day, he also tries every means to conceal the news from the outside world, because once the news spreads, , their stock prices will also be affected, making their situation even more difficult.

After Stanley’s top executives failed to sell some CDOs to the Quantum Fund, Soros quickly learned of the news, and he, who wanted to take revenge on Zhongshi, naturally would not let go of this good opportunity, and conspired with Stanley’s top management After a while, the two sides quickly reached an agreement, and a conspiracy against the Tianyu Fund was launched.

  In 1998, as a top investment bank, Stanley was deeply involved in the plan to short Hong Kong. Naturally, like the Quantum Fund, they only ended up in disgrace. However, unlike the hot money, Hong Kong is an important international financial center after all, so in the whole plan, Stanley just played the role of raising the flag and drawing salary from the bottom.

   And the most important thing is that even if the top Stanley officials seriously offended all walks of life in Hong Kong at that time, they only need to fire these people and replace them with a new group of people to repair the corresponding relationship. In this regard, hedge funds are far inferior to investment banks. After all, it is impossible for Quantum Fund to fire Soros himself.

   First of all, Stanley Hong Kong came forward to expose Zhong Shi's family background, and pointed out the fact that the other party was reducing its holdings, causing turmoil in the entire Hong Kong capital market for a while. The motivation for doing this is naturally not to let this part of the funds flow back. Although they had also thought about it, this part of Zhong Shi's funds did not intend to flow back.

  After cutting off the opponent's retreat, Stanley's next step is naturally to fire this group of people at that time. In order to maintain the relevant relationship, these people can only be regarded as victims. After re-establishing a good relationship with Zhong Shi, they threw out an olive branch.

   At this time, Greenspan delivered a speech on the subprime debt market in a timely manner, which made them feel that there was a great chance of getting rid of the burden (leading the other party into the game) this time.

   Thank you very much, my book friend, uncle, for giving me a big reward for a bowl of Lantern Festival! Tomorrow is the Lantern Festival, I wish all book lovers a happy holiday in advance!

  

  

  (end of this chapter)