532 A conspiracy comparable to the nine-turn large intestine (4k)
The dinner ended successfully. In addition to Wall Street financial gangs such as Goldman Sachs, Lehman, Merrill Lynch, Morgan Stanley, Bear Stearns, Citigroup, etc., everyone had a share, and everyone got a Christmas gift wrapped in CDS.
Quite contented.
The Three Body Fund has also received a lot of investments and investment intentions.
However, the family funds of old money and funds with hidden financial backers are still on the sidelines. Although Mr. Lu’s image is very strong, he is the “Chinese stock god” and “Silicon Valley Chinese hero”. His numerous auras can blind everyone’s eyes, but he can be short-term.
Subprime mortgages are really shocking.
Even old friends like Buffett and Bill Gates are hesitating, hoping for an irresistible reason.
So the next day, Lu Fei hurriedly got out of Yin Fanka's top-notch car and arrived at Paulson Hedge Fund in a hurry.
After all, there are at least two moles in my fund.
One Merrill Lynch and one Goldman Sachs are still useful if you keep them!
“Where’s the McDonald’s I ordered?”
Lu Fei walked out of the elevator and met Xu Xin, Carlson Bullock and other reliable confidants who had been waiting for a long time.
"Here it is."
Xu Xin handed it over with her own hands: "You drink milk, I specially asked someone to prepare it. It's not suitable to drink Coke early in the morning."
"Who makes Buffett and Gates like to drink?"
Lu Fei took a bite of the cheeseburger and said, "I'm willing to sacrifice my stomach to compensate you. Are they all here?"
"They're all inside, drinking Coke."
Xu Xin shook her head and laughed, and walked to the door.
John Paulson was seen taking deep breaths.
"Why are you so nervous? Didn't you handle the banquet well yesterday?" Lu Fei stared into his eyes in surprise.
"You're standing in front of me, aren't you?"
John Paulson smiled bitterly and said: "How about it still be like a banquet, where you take the lead and I cooperate?"
"No, you are the protagonist of this subprime loan. It is precisely because of your keen sense of smell and tenacity that you persuaded the Trisolaris Fund to invest all your money, including me, who are all supporting you!"
Lu Fei patted him on the shoulder, "Remember, you must say this whether to people or the media."
John Paulson said: "But this is for you..."
"I don't need this fame, and the future of your fund requires you to become famous. Do you understand what I mean, John?"
Lu Fei waved his hand, but there was a deep meaning in it.
Once the subprime short selling succeeds this time, the profit amount will be earth-shattering. If it is known that he is behind the scenes, it will do no good. Instead of being burdened by the false reputation, it is better to push John Paulson out. He is a real seedling.
Red star flag jewish.
The entire United States will only deify him into an "empty god."
In this way, you can land smoothly.
"Lu, I, I really don't know what to say..."
John Paulson couldn't help but be moved and gave him a hug.
"Remember, I am just a sponsor who has been completely convinced by your charisma and amazing eloquence, and I am willing to provide you with all help including money."
Lu Fei repeatedly warned: "I can bet on you only because of my good vision and the luck given by God."
"I understand, Lu."
John Paulson nodded solemnly: "But wouldn't it be too wasteful for us to do CDS with Goldman Sachs for Lehman's bankruptcy?"
"You think Lehman won't go bankrupt?"
"But with the Federal Reserve and the Treasury Department here, they won't leave it alone, right?"
"I just bought insurance on the side. The premium is mainly the settlement fee to resolve the grievances with Goldman Sachs." Lu Fei smiled and told all the excuses he had prepared.
John Paulson didn't dig too deep. After all, the premiums were paid for by the Trisolaris Fund. Following him into the conference room, he saw Buffett and Bill Gates sitting on the sofa, talking and laughing.
"Hey Gates, Warren, morning."
Lu Fei said hello, "Do you mind if I chat while we eat?"
“Any sirloin burgers?”
Buffett smiled and said: "If you have any, give it to me, I won't mind."
Bill Gates reminded: "Hey, Warren, you have been diagnosed with prostate cancer. The doctor told you to either exercise or give up Coca-Cola burgers. Don't take your life for granted."
"No, it's impossible not to drink Coke. It's impossible not to drink Coke in this life, so I choose damn exercise."
Buffett took the burger and unpacked it excitedly.
"Me too, I can't live without Coke!"
Lu Fei put the milk in front of Bill Gates, "Why don't you drink this, Gates, or coffee?"
"Of course I drink Coke too!"
Bill Gates rolled his eyes: "By the way, Lu, how long are you going to stay in the United States this time? Why don't you stay a little longer? Apple's press conference will be held in January. I heard that Steve Jobs, like you, will announce a new brand on the spot.
of Apple smartphones.”
"Of course, I plan to spend the New Year in the United States this year."
After Lu Fei said polite words to them, he introduced John Paulson and boasted: "Everything today was done by this short-selling genius. John Paulson may be mentioned on Wall Street as 'Paul'."
Paulson', only Henry Paulson comes to mind, but I can guarantee that if nothing happens, he will soon be famous on Wall Street and even in the United States. When 'Paulson' is mentioned again, only John Paulson will be mentioned.
"
John Paulson is thicker-skinned and can't help but blush.
"Stand straighter."
Lu Fei cast a look, please start your performance.
John Paulson breathed out and picked up a foam box on the table. A tall building made of building blocks immediately appeared in everyone's sight, with labels layered layer by layer——
3A,2A,A,3B,2B,B……
"This is our entire subprime bond infrastructure. Among them, B-class bonds are the foundation of the entire subprime mortgage and have the highest interest rates. Obviously, you will definitely earn the most by buying them, but they are high-risk and may even default and collapse."
As he spoke, he took away one of the B-class bricks, and the whole tall building shook slightly, "But I don't know when, people with no income or stable jobs can apply for 3B-class bonds. In the end, because they can't repay the loan, they all become
It’s a pile of garbage, where is the trash can?”
"Do you have any basis or evidence?"
Buffett saw the building blocks draw a parabola in mid-air and fall accurately into the trash can.
John Paulson and Lu Fei looked at each other, played the investigation video that they had shown him before, and then said:
"According to our investigation, subprime mortgage companies have serious violations. In order to pass the loan review, they will help people with low income or even no stable income pretend to be high-income lawyers and doctors.
Among them, the proportion of loans with incomplete supporting documents or even no supporting documents is 1%. Now, even the loan review is simply waived.
More than 60 percent of the newly added subprime loans in Chengdu have no documentary evidence. You only need to go to an intermediary to sign up to apply for a loan. Even those who have already been saddled with a subprime mortgage will buy a second house with nothing, and then buy a third house with nothing.
Set, fourth set..."
"In other words, these B-rated bonds have all fallen to zero."
Lu Fei wiped his mouth with a tissue, "Even those above Grade A are the same. They are all a pile of beautifully packaged garbage."
"No way?"
Bill Gates listened to the whole process of packaging forgery and frowned: "A bunch of junk subprime mortgages, after being packaged, can turn into AAA financial derivatives that are not inferior to national bonds. Don't you think there is some very complicated logic in this?"
Weird question?"
"Isn't it difficult to say this? As long as the rating agencies are dragged into the water, this operation can be completed."
Lu Fei crossed his arms: "In fact, according to John's investigation, Moody's, S&P and Fitch are all doing this."
"Why?"
Buffett puts down the tempting burger.
“Because if the ratings of subprime mortgage bonds are not raised, businesses will go to rating agencies that are willing to give high ratings, even triple-A ratings. In order not to lose customers and revenue, they have to join forces and help their customers deceive them.
client."
Lu Fei picked up the page-turning pen and flipped through the PPT on the TV. It clearly showed the proportion of subordinated bonds at each level.
"Three-body has also done CDOs. We have never done this, but we have seen it. It can be said that 65% of the AAA-level CDOs on the market seem safe and risk-free. In fact, it is estimated that at least 90% of them are stinky.
Unsmellable garbage.”
It's a horrifying and shocking amount of information to digest.
Although Lu Fei and John Paulson spoke clearly and rationally, they remained silent.
"If it's true as you say, what is the current default rate?" Buffett narrowed his eyes into a straight line.
"It has exceeded 5%. When it reaches about 8%, the entire building is likely to..."
John Paulson gave a gentle push, and with a crash, the entire building collapsed instantly, leaving chicken feathers everywhere.
"Why haven't so many people discovered it?"
Bill Gates couldn't help but trembled.
"Some people can't see it, because the categories involved are too complicated, bubbles are derived from bubbles, and the entire subprime mortgage is hidden at the bottom. Even the elites on Wall Street can't tell the truth from the false. What's more,
Not to mention investors who are even less knowledgeable. Some of them see it but don’t believe it. People always believe what they see in front of them, or they are just gambling like us."
Lu Fei smiled and said: "But I am betting that the subprime mortgage will not collapse."
“How big is the entire bubble?”
Buffett felt his mouth was dry and his tongue was dry, so he took a big sip of Coke.
"It seems that the amount of subprime mortgages is only 5 trillion yuan, but in fact the derivatives market surrounding subprime mortgages exceeds 450 trillion yuan, and CDS accounts for 72 trillion yuan...P2P also accounts for about 3 trillion yuan."
Lu Fei would never have thought that the mine he planted in "The World is Flat" was only worth US$500 billion, but he didn't expect Wall Street to be so crazy.
You must know that in the past seven years, China only had 2 trillion RMB!
In just three years, the total amount of funds for the "4 trillion stimulus plan" has already been reached. As expected, the United States has to be able to play.
This mine will only explode if it doesn't explode.
Once it explodes, it will shock the heavens, shake the earth, and make ghosts and gods cry!
After a long question and answer, Buffett showed a hint of shrewdness in his silly smile: "That's why you did that at yesterday's Christmas party. Haha, what you gave was not a Christmas gift, but a landmine. But you gave it accidentally."
Lehman, or was it intended to be given to Goldman Sachs on purpose?”
“I was the one who advocated for Lehman.
"
John Paulson said ahead of Lu Fei: "Lehman invested a lot of energy in the CDO market and completely ignored the risks brought by subprime mortgages. CDS alone has 430 billion U.S. dollars, not to mention the scale of CDO, and even created synthetic
CDO, package the CDS sold to us, together with P2P and unsold CDO, into a new CDO."
"So you are not optimistic about Lehman and want to short Lehman."
Buffett guessed the root knot at once.
"Not only Lehman, but also Merrill Lynch and Bear Stearns." Lu Fei looked directly at them, "Originally I planned to have this project exclusively, but I can't eat such a big burger, so I am willing to offer it to you guys
My best friend is open, but the limit cannot be less than $30 million."
"Warren, what do you think?"
Bill Gates was moved, but he still humbly asked for advice and had to let Buffett make the decision.
Lu Fei said quietly: "Even if you guess wrong, you will only lose part of the premium, but if you hit the target..."
As if Satan was whispering, Buffett's cloudy eyes burst into light, and then he said kindly: "Lu, Gates told me, have you always wanted to join my Berkshire Hathaway?"
"Yes, but to be honest, the circulation in the secondary market is too small and the price is expensive. Warren, can you give me a friendly price?"
Lu Fei blinked and smiled playfully.
"If it is true as you said, Lu, I would welcome you to serve as an independent director of Berkshire Hathaway."
Buffett smiled without answering and raised his Coke.
"cheers!"
When Bill Gates saw Lu Fei raising his glass, he also hurriedly clinked his glass.
Soon, the three of them agreed to take the lead of Trisolaris Fund and form a multi-family office with the Bill Gates Family Fund and the Buffett Family Fund to start a big cooperation.
From this moment on, the three families were connected online.
In the future, with each investment, it is destined to form a community of interests that are inextricably linked.
"By the way, Lu, why did you give Goldman Sachs such a strange CDS? Is there any secret hidden in it?"
Bill Gates was very curious.
"China has a plan, called the method of provoking generals. I will turn to Goldman Sachs. Lehman may not ignore it. Richard has a history of attacking Goldman Sachs' partners. Maybe now, Lehman is going to go against me. I will go short. Richard
We must do more in virtue.”
Lu Fei had a mysterious smile on his face.
Of course he won't say that there is a trick hidden in this plan.
In the previous life, it was precisely because of Goldman Sachs' retaliation that it deliberately blocked any way for Lehman to survive, which led to Lehman's bankruptcy.
Now, the CDS underwriter of Lehman's bankruptcy is Goldman Sachs. If Goldman Sachs does not save the company, Lehman will have to pay compensation to Mr. Lu, and Goldman Sachs will have to shoulder billions of dollars.
If Goldman Sachs chooses to take Lehman's hand, wouldn't it be even more embarrassing than losing billions of dollars? If you kill someone, you'll be heartbroken!
In other words, if Goldman Sachs doesn’t save it, it will lose money!
Goldman Sachs saved me and fell into my trap!
In short, regardless of whether it can be saved or not, Goldman Sachs will definitely eat the nine-turn large intestine cooked by Mr. Lu with the added defense.
Buffett and Bill Gates don't understand this, they just spend money. With their endorsement, a bunch of old money families who were still waiting on the sidelines finally couldn't sit still.
Even if we know that shorting subprime mortgages is a fantasy, the two investment gods Lu Fei and Buffett have joined forces to make it difficult for people not to have confidence in the Trisolaris Fund. What if it is true?
Confidence and image are the most important indicators of investment!
As a result, a lot of green dollars flowed into the joint fund jointly created by the three companies, and in just one week, a total of US$500 million was raised.
Coupled with the US$500 million from China, John Paulson decisively divided it in half and established two brand-new short-selling funds. They bought all products that could be shorted, such as subprime mortgage bonds, ABX index, CDO, synthetic CDO, etc.
To short CDS, you only need to wait until the moment when real estate turns from prosperity to decline.
While Lu Fei was extremely busy and the Gulfstream G450 was flying around the United States, Merrill Lynch was not idle either.
"In the proposed CDS contract, we found that Lu set a hidden clause. If Merrill Lynch's rating is downgraded, a certain amount of collateral must be paid to the Trisolaris Fund."
Michael Bloom handed over the document.
"What collateral?"
Sionil frowned.
"It's nothing more than the superhero IP mortgaged by Marvel to us. Lu is really a super fan of Marvel."
Michael Bloom gave a sarcastic smile.
"Is this clause only available to Merrill Lynch, or is it available to Bear Stearns and Lehman?" Sean O'Neill asked.
"Both." Michael Bloom said.
"What's the attitude of those families?"
With a deadpan expression on his face, Sean O'Neill specifically asked Lehman's Richard Fuld whether he agreed or disagreed.
"Shall I make a phone call to find out?"
Michael Bloom's eyes rolled.
Snow O'Neill remained silent, just pushed the landline phone in front of him and watched quietly as he dialed a number.
"Dudu, Dudu..."
As soon as the call was connected, Michael Bloom only asked two questions, but the third sentence got stuck in his throat, his eyes widened, and he looked stunned.
"What's wrong? You didn't ask, or you still refuse to tell?"
Sean O'Neill looked solemn.
"No, Richard answered the phone himself."
Michael Bloom's eyes were dull: "He asked me to ask you, do you want to team up with Lehman and Bear Stearns to make a bet with Lu Lai, short the ABX index, and make a huge profit from him?"
"Haha, it seems that Lu asked Goldman Sachs to do CDS for the bankruptcy of Lehman, which angered this Wall Street bulldog."
Snow O'Neill laughed and said: "The mad dog is going to bite!"
