Chapter 142： Harvest season

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The time soon came to the end of November, when the subprime mortgage crisis intensified, and its influence far surpassed William Chen's previous life.

Because he remembered that in his previous life, the subprime mortgage crisis lasted for more than half a year, and the five major investment banks on Wall Street finally bowed their heads and admitted their losses, and then several banks were on the verge of bankruptcy.

Now the crisis has only erupted for less than two months, and investment banks including Bear Stearns, Merrill Lynch, Citigroup, and Lehman Brothers have already experienced a run on their money.

At present, the dignitaries who hold the US fiscal power, led by US Treasury Secretary Paulson and Federal Reserve Chairman Ben Bernanke, have begun to discuss how to save these institutions.

At this time, it also means that the funds invested by William Chen's meta investment company, Fund 1 and Fund 3 into subprime mortgage bonds can already be prepared for the end, because the first stage of the subprime mortgage crisis has come to an end.

Of course, this is only the first stage, and the subsequent impact may last longer.

In the company's office, John Paulson reported the current situation to William Chen:

"Now that the real estate market has fallen into collapse, the tide of supply cuts has been irresistible. This time, the tide of supply cuts is not within the scope of the previous ones that were maintained in some areas. Now more than 90% of the products in the United States have passed the secondary The houses purchased by mortgage loans have been cut off, and those institutions that accept mortgages, in order to recover the losses, are frantically recovering the mortgaged properties and continue to push them to the market for re-sale, which has also led to a plummet in house prices. It's down more than 50% from that high."

William Chen is not surprised by this situation. The New York Observer is also continuously reporting on the current state of the U.S. real estate market caused by the subprime mortgage crisis. Countless people have been driven out of their houses. In such a big city, it can be clearly seen on the street that the number of homeless people has increased several times than usual.

The impact of the crisis is also spreading to other industries. The most obvious manifestation is the surge in the unemployed. According to the data of the survey agency, the current unemployment rate in the United States has once again exceeded 10%, which means that the economy is in a long-term recession. , it is inevitable that it will come, and the most troublesome issue for the government now is how to save those banks and enterprises that are in deep crisis.

"Does this mean that our short CDO contracts and CDS bonds have ushered in the harvest season?"

At present, William Chen is most concerned about this issue, because now is the time to start some acquisitions, but first of all, there must be enough funds. Those assets that he has already taken a fancy to are waiting for him to buy the bottom.

"Yes, now the 3a-level cdo bond index is about to drop to single digits, while the 3b-level cdo bond index is already close to zero, and the vast majority of cds bonds have ushered in The redemption window, we've already started to put the finishing touches on these investments."

Speaking of which, John Paulson can't help but smile, because this investment against the subprime mortgage crisis, he personally will get 5% of the profit as a share, and at present, it is conservatively estimated that only No. 1 Fund will make a profit, It will exceed 20 billion US dollars, which means that, with this fund alone, he can personally account for more than 1 billion US dollars.

Now, it is only the first stage of the subprime mortgage crisis, and there will be more profits in the future.

"It looks like we can announce the current earnings forecast to the investors of Fund 3 and hope they will be satisfied."

"That's for sure, after all, such a high profit, under the current economic situation, I am afraid there will be very few. Even the radicals in the small funds involved in short selling can surpass us in profit margins, but they The amount of investment is too small, rarely exceeding the initial size of $50 million.”

"That's it, cash out the bond market profits as soon as possible, while these institutions are still solvent. It seems that I'm going to find someone from Goldman Sachs and talk to them about adding more investors to the fund. ."

At this time, it can be seen that the strategy of meta investment company is forward-looking at the beginning. For investment in the subprime mortgage bond market, they purposely selected more than 10 powerful large institutions, and each institution ultimately needs to The insured amount of CDs paid is less than 2 billion US dollars, and the short-selling of CDO bonds, the counterparty is their bond buyers, except for a few institutions that self-operated funds participate in as their counterparty, most of them will not cause these institutions. losses, so they don't need to worry too much about the final payout.

Now, as the first stage of the subprime mortgage crisis is drawing to a close, it's time for William Chen to extract a portion of the profits for his acquisition.

Of course, you can say that if you put these funds into continuing to short, there will be greater profits. But you have to know that everything needs to be controlled. There are many people who make money by shorting the subprime mortgage crisis. You personally earn 120 billion, or even 340 billion, as long as you have a certain background. not a problem.

But if you are too greedy, and in the final inventory, you actually got hundreds of billions of assets by shorting the American economy? Such a dazzling thing will immediately put you on the opposite side of the whole society. After all, it is your ability to make money by short-selling, but if you earn too much, do you really think that the American people have no hatred for the rich?

Besides, it is not very safe to continue to invest all of your wealth in the capital market in this way. You have really gone too far. The official wants to clean up you, know your leverage, and put some news casually, and it is not impossible for you to liquidate your position in a short period of time.

So in that case, why not take back some of the profits and put them into the acquisition? And shorting Chen William again is not without opportunities. It is risky to invest with your own money. You can use other people's money. It's like he is going to increase the capital of John Paulson's private equity fund - Fund 3. This fund Using other people's money to earn 30% of the profits, wouldn't it be beautiful.

So William Chen stopped seeing Goldman Sachs CEO Lloyd that day and wanted to discuss future cooperation with him.

"Congratulations, William, my billionaire Mr. Billionaire, for having so much wealth at your age, you made a new history."

The assets of Chen William at this time will exceed 10 billion, which is already a very certain thing for Lloyd, so as soon as the two met, he congratulated Chen William like this.

Looking at the young man in front of him, Lloyd couldn't help but feel a little envious, because he knew too well what kind of power he could have when his assets reached the level of tens of billions.

Although Lloyd now has more power than William Chen, the difference between the two is that Lloyd's power is based on his current position as CEO of Goldman Sachs. At this time, the resources he can use are far higher than William Chen's.

But once he leaves his current position, UU reading www.uukanshu. com, then the power he has at this time will be greatly weakened. Therefore, his power is time-limited, unlike Chen William, as long as he has wealth, his power will always exist, and it will become bigger and bigger as his wealth increases.

"Thank you for your compliment, Mr. Lloyd. But the same Goldman Sachs has also gained a lot this time, isn't it? I believe that after this incident, you will not only be able to consolidate your position in Goldman Sachs, but also get a lot of money. Reward, with your wise leadership, if I were on a Goldman Sachs board, there would definitely be an offer like this."

Regarding his assets at this time, William Chen had absolutely no need to hide someone of Lloyd's status, so he also complimented the other party.

Hearing these words of William Chen, it can be seen that Lloyd is also in a very good mood, with a bright smile on his face:

"Through the last cooperation, William has won the friendship of Goldman Sachs, and now we are on the same front. I wonder if you came to me today for any other cooperation? Or the things you mentioned before are now Are you going to start?"

"Yes, you guessed it right, Mr. Lloyd. That's exactly what I came here to talk about."