539 Subprime mortgage shooting, the most beautiful fireworks (5k)
February 9th, the gloomy sky was covered with flying snow. Anhui
In the Lehman Building, Richard Fuld slapped his hand heavily on the table and cursed: "What the hell is Goldman Sachs doing! We are only one shot away from hitting a home run for Lu, why suddenly?"
Stop shorting Penguin!"
"David said that the crude oil market has recently entered an inflection point of low oil prices, and Goldman Sachs needs to move money to cover its positions."
James Caan chuckled and said: "I even sold a lot of A-level and above CDOs to insurance companies, pension funds, and even exported to funds and banks in Europe. It was said that they were 95% off."
"95% off?!"
Richard Fuld couldn't help laughing.
Back then, I personally pulled Goldman Sachs from its third position on Wall Street. I didn’t expect that after a few years, it would actually lead to this situation.
If Henry Paulson knew, he would be angry to death!
"I bought 330,000 Class 2A mortgages, does Lehman have an appetite for some?" James Caan laughed.
"Buy! I'll have someone contact Goldman Sachs now!"
Richard Fuld hung up the phone and immediately asked his secretary.
Lehman eats whatever Goldman Sachs sells.
Don't take advantage of me, bastard!
For two hours, there was constant good news.
Not only did they tearfully swallow 500,000 in collateral from Goldman Sachs at a 9.4% discount, but Penguin’s stock price still fell by 1.21%, even with the blessings of Buffett and Lu Fei’s stock gods.
In front of Wall Street giants, even stock gods have to kneel down!
According to this downward trend, sooner or later the warning line for stock pledges will be hit, or even the liquidation line. Banks such as Deutsche Bank and Credit Suisse have been eager to "extort" more mortgages.
Knife after knife, cut out Lu Fei's flesh!
Richard Fuld was elated. The only thing that made him unhappy was that today the ABX index seemed to be stuck with glue, motionless and remained at 105 points, neither going up nor down.
Not even the decimal point was moved.
There was something vaguely elusive and strange about it.
"What's going on?"
Richard Fuld was anxious and asked people to buy five long positions, just like pebbles to test the water.
Unexpectedly, instead of rising, the ABX index suddenly went down, falling by 1 point in the blink of an eye.
"Why did it fall? How could it have fallen?"
Richard Fuld's heart skipped a beat, and he immediately checked the prices of MBS (real estate mortgage-backed bonds), CDO and other derivatives. They were all falling more or less, and there were even signs of a plunge.
Looking back at the ABX index, it dropped another 0.7 points.
"Impossible, absolutely impossible!"
He couldn't calm down anymore. He stood up, picked up the phone, and told his secretary to call the research department immediately, "Find out immediately for me, which link is the problem, or is there some bad news that just came out? Go check it out right away, right away!
"Anhui
"Understood, Richard."
The secretary answered on the phone.
"Don't panic, maybe it's just a technical adjustment."
Richard Fuld stared blankly at the computer screen, as if the water had been turned on, and the ABX index that he had worked so hard to raise plummeted. His heart was pounding wildly, as if it had reached his throat.
"Richard, watch TV!"
The secretary pushed open the door and said, "Watch Fox News!"
Seeing his flustered look, Richard Fuld hurriedly turned on the TV. As soon as the channel was locked on Fox, he saw the female host of the business news, who reported in detail: Anhui
“Today, New Century Corporation, the second largest subprime mortgage company in the country, issued an announcement announcing that it had underestimated the severity of losses suffered from home loan defaults and arrears in the first three quarters of 2006, resulting in a pre-emptive loss for the fourth quarter.
It is estimated that it will almost eat up the profits for the whole year of 2006, and a profit warning for the fourth quarter has been officially issued...
As of reporting time, New Century's share price has plummeted 4.6%, and some Wall Street analysts have lowered their stock ratings."
"Richard, is it possible that the subprime mortgage market really collapsed?"
The secretary spoke hesitantly and with a vibrato.
"Impossible, absolutely impossible!"
Richard Fuld stared angrily and directly denied Sanlian, "Don't panic, New Century Company may just be operating improperly."
As soon as he finished speaking, the whole office fell into silence.
Outside the frosty window, snowflakes are falling~
Along with the biting cold wind, the bustling subprime mortgage industry felt the chill for the first time. On the day New Century Company made the announcement, its stock price fell by more than 35% at the close of trading.
The ABX index even fell by a full 5 points.
It is equivalent to the more than 20 days of efforts by bulls such as Lehman and Merrill Lynch to be in vain. John Paulson's fund relied on holding CDS and short positions worth nearly 40 billion US dollars. In just one day, the floating profit on the book directly reached
Extremely terrifying——
$2 billion!
More than 72.5% of the funds here come directly from Lu Fei or are raised by him, not to mention that the Three Body Fund also holds CDS and short positions worth US$20 billion.
The two men's one-day result was 2 billion more than when Soros shorted the pound, exactly twice as much.
The "God of Short Selling" has changed hands ever since!
John Paulson and Mr. Lu, who had been ridiculed for almost two years, turned around overnight and became famous throughout Wall Street.
Citigroup, Merrill Lynch, UBS and various funds were slapped in the face. They used to shout about how tough the short-selling penguins were, but now they are so humble: I admit that my voice was a bit loud just now.
One by one, Lu and Fei's phone calls were off the hook!
Meanwhile, the Goldman Sachs conference room was in chaos.
"Quick, let someone notify New Century Company immediately and tell them that the money they have taken from us must be paid back in advance. It must be paid back to me immediately, right away, now!"
“How many CDOs have been sold now?”
"..."
The senior executives sitting around the round table shouted loudly, some yelled at the top of their lungs, some cursed on their mobile phones, and some were so anxious that they were sweating. In the tense atmosphere, everyone was anxious and manic.
David Solomon seemed to be aloof from the incident, standing alone in front of the floor-to-ceiling window, quietly looking at the heavy snow in the sky.
Suddenly, John Warrendell's voice came from behind:
"Do you think this is a coincidence? Or..."
"Do you think there is such a coincidence?"
"Perhaps New Century Company was just too aggressive in the fourth quarter and made some operational mistakes?"
"Does it matter? We are not the only ones urging New Century Company to repay the money. Even ordinary medium-sized banks cannot bear such a run. What's more, New Century Company, if I remember correctly, has a debt of more than 170
Hundreds of millions, right?”
"17.3 billion."
John Warrendell couldn't help but have a headache. New Century Company was destined to go bankrupt. Once the first domino fell, subprime mortgages would...
"Lost, lost."
David and Solomon were unwilling and reluctant.
After repeatedly studying George's business intelligence, he still chose to believe Lu Fei despite being dubious, because he always felt that God was protecting him, so he defied all opinions and ordered the forced liquidation of all long positions.
Moreover, all traders were fully armed and tried every means to package a large number of CDOs and swindle them to unsuspecting investors.
They even sell these junk bonds to retired people, civil servants and other market idiots who know nothing.
It looked as if Goldman Sachs had escaped death and won.
But in fact, we lost solidly, lost our reputation, lost our reputation, especially lost to Lu Fei.
"Fake, watching this bastard make money is more uncomfortable than us losing money. The profit is nearly 3 billion US dollars, 3 billion!"
John Warrendell was jealous and resentful, "Why does God always prefer this Chinese? Is he the illegitimate son of God?"
"I don't know, John, I don't know..."
David Solomon's eyes were full of loneliness. Looking around, New York City was vast and covered with snow.
He clenched his fists tightly and smashed the glass hard: "We won, but we also lost. We completely lost to Lu!"
"But at least we can survive."
John Warrendell urged: "We must meet immediately and find any way to secretly clear out this damn pile of junk bonds."
"How many have been processed now?" David Solomon asked.
"Already a third of it has been thrown away."
"Where's the position?"
"We are now a net short position, just like Lu and Paulson's funds, they are the main short sellers."
"What about CDS?"
"I have bought US$2.2 billion in CDS from AIG. Once these CDS depreciate, I will probably receive about US$12 billion in compensation. AIG doesn't know anything yet and foolishly jumped into our carefully designed trap."
John Warrendell smiled like he was surviving the disaster, "David, I think there is still a chance to learn from Lu and John in shorting subprime mortgages, but the biggest problem now is..."
"How exactly do their investment portfolios match up?"
David Solomon looked sideways.
"That's right, John's line has been busy. How about we start from Lu's side again and let George find a way to get the investment portfolio of the Trisolaris Fund?" John Warrendell suggested.
"No, George's value is too great."
David Solomon was reluctant to put the undercover agent in danger, "After Christmas, why don't we get back together with Lu Zhong and ask him directly how he operates."
John Warrendell nodded and changed the subject:
"What about the CDS between us and Lu? If all claims are settled, we will have to pay at least US$15.5 billion in compensation, not including the Paulson Fund's swap contract..."
"how do you want to do it?"
"Can we inform Lu that Goldman Sachs' system was attacked by hackers, malfunctioned, and some CDS and other important files were lost? Not all of it, but half of it?"
"Do you think you can refuse? Don't forget that these contracts involve Buffett, Bill Gates, Walton..." An
David Solomon said with fierce eyes: "With so many families, can Goldman Sachs offend them?"
"Fake, Lu has long been on guard against us defaulting on our debt!"
John Warrendell scolded: "I think this Chinese is more Jewish than me, a Jew."
"Well, let's sell the CDS we insure to AIG. In this way, the CDS that need to be compensated by Goldman Sachs will be compensated by AIG." David Solomon laughed.
"What a great idea. CDS can hedge insurance and earn premiums. Those idiots at AIG will definitely agree."
John Warrendell snapped his fingers: "But, all of them? I think we can keep some high-quality ones, such as the settlement fee Lu gave us. After all, Lehman cannot go bankrupt."
"Just do it." An
David Solomon showed a wry smile.
When will I ever be able to beat Lu Fei!
…………
Nine days later, it’s New Year’s Eve.
Just these days, the ABX index fell directly from 105 to 75, making huge profits from shorting subprime mortgage projects!
Lu Fei and John Paulson had a profit of 18 billion on their books!
Not rmb, but US, Daole.隖
Mr. Lu once again fought to become a god, and he was suddenly promoted from the "Chinese Stock God" to the "God of Investment".
Buffett? Just an American.
The voices that had been clamoring in newspapers, TV stations, and on the Internet to question Lu Fei's lack of optimism about subprime mortgages came to an abrupt end, and fans in the fandom who were steadfast in their support sounded the clarion call to fight back.
Facebook, Line, YouTube, Twitter...
Wherever he went, not a blade of grass grew.
Especially Richard Fuld, who rides on the face of the flying dragon, the comment section of Facebook has been completely washed away. He was so unruly and unruly before. Please restore it to the same state.
However, Richard Fuld has not logged in to his account for a long time.
New Century Corporation disrupted the entire subprime mortgage market and completely disrupted the short-selling plan of Lehman and other Wall Street giants.
Penguin lost the pressure, and the stock price quickly rebounded, even with another myth of the "Mainland Stock God", and even trended higher than before the short selling.
"Hey, Lu, I want to talk to you about the price of your three-body body, and make sure the price is reasonable."
Listening to John Warrendell's voice on the phone, Lu Fei interrupted without hesitation: "You can definitely price my CDS accurately. Doing so now will be beneficial to Goldman Sachs."
"Lu, I don't know what you want me to say?"
"Do you have to make it clear? Is Goldman Sachs also shorting?"
"No..." An
John Warrendell was so frightened. How did he know that Goldman Sachs had turned from long to short? Could it be that George had been discovered?
"Do you have to pretend to be stupid? Do you want me to announce to the public that Goldman Sachs is coaxing others to buy CDOs while backhand shorting, and it is probably a net short position? Do you want to say it? The media is now bombarding my phone calls one by one, and they are all asking me for an appointment.
Talk about subprime mortgages.”
Lu Fei's threatening tone was full of murderous intent.
Damn, at this time, you are still trying to trick me into closing my position!
"No, no, no, Lu, hehe, you are Goldman Sachs' best friend. We will definitely give you a very satisfactory price for your CDS, but can you reveal a little bit about the short-selling combination between you and John? Please!
"
John Warrendell softened his tone: "For the sake of David and I begging you so hard these days."
"Wait a minute, I'm worried about Penguin's stock price now. It's still 4.9 US dollars short of returning to the price before shorting." An
Lu Fei secretly said: "I heard that Goldman Sachs also participated in Lehman's short selling of Penguin. Is this true?"
"No, absolutely not! We are friends!"
John Warrendell played the emotional card and vowed to increase Penguin's share price. Goldman Sachs was obligated to do so. I'll take care of it!
"That's so embarrassing. Just 3% is enough."
Lu Fei suppressed his laughter. When the Penguin stock was sold off, almost all of it was bought by his Three-Body Fund. He bought low and sold high, rounding up, which was equivalent to another huge profit for the Wall Street giant.
As expected of Hawk-chan who supports the transportation team captain!
"First I went to Xianyang to be the king, and then I went to Xianyang..." Anhui
Just as he was shaking his head and humming the tune, Xu Xin rushed in: "These people on Wall Street are so shameless. Bank of America called and said they had a power outage, and Deutsche Bank said the server crashed. In short, every one of us doing CDS,
No one wants to admit it."
"It's not that they don't want to admit it, they just want to redeem CDS from us at a low price, or even buy other companies' CDS."
Lu Fei grabbed a banana from the fruit plate.
"A Fei, you are right."
Xu Xin smiled coldly, "They are just daydreaming. They can never buy a CDS from us."
"No, sell it to them."
"What! Why, Ah Fei?"
"Sister Xin, have you ever thought about these issues?"
Lu Fei solemnly said: "Who will compensate these CDS? Are the compensation really ready?"
"Of course it's the insurance companies, banks and investment banks."
Xu Xin frowned, confused.
"This is the truth, but everyone who buys CDS ignores one question: Can CDS really be redeemed?"
Lu Fei said with a straight face: "Take Lehman as an example. The scale of CDS is 440 billion U.S. dollars. If you have to repay trillions of U.S. dollars, do you think Lehman can afford it? It will go bankrupt 200% of the time."
In fact, it was not CDOs that knocked down the last domino of subprime mortgages, but CDSs, which completely blocked all escape routes.
"yes!"
Xu Xin suddenly realized that once Lehman went bankrupt, even if it was acquired and reorganized and still owned these CDS, it would definitely depreciate greatly.
"So what we have to do is wait for the big banks on Wall Street and the big investment banks to buy CDS for hedging because of panic, so we sell them all and cash them out, and all we get is cash."
Lu Fei made a "Safety" gesture.
"And we can also do a favor to Wall Street and even the world's financial institutions by selling CDS."
Xu Xin took a breath and said, "A Fei, you are so stupid, my God, didn't you really travel from the future?"
Lu Fei smiled and did not answer, and said half-jokingly: "Sister Xin, your husband still works at Bearsden, right? I think he can find a new job now. If he wants to start a business, he will do it for your sake. I am very happy."
I’m happy to invest in an angel round.”
"I'll ask him during the New Year's Eve dinner."
Xu Xin said: "By the way, Soros also called and wanted to invite you to his home to ask you how to short CDS in person."
"Let him find John. I'm not free. Now Buffett has to make an appointment in advance to see me."
Lu Fei raised his proud chin, "Besides, I'm not going anywhere today, and no one can delay me from going home to eat dumplings."
"Haha, we don't eat dumplings in the south."
Xu Xin said with a smile: "But there is also a New Year's Eve dinner, but I always feel that it is missing a little bit of the New Year flavor. There is obviously a family and a Spring Festival Gala. Hey, don't you think it's strange?"
"It's not surprising at all, this is a lot of fireworks!" An
"I said, yes! It's just that there are no fireworks. It's a pity, places like New York are strictly prohibited."
"What's so difficult about this? Fireworks are allowed in the Empire State Building. Sister Xin, please call and ask how much it costs to set off a cannon." Lu Fei patted his chest, "I paid for this, just to celebrate this time."
Shorting subprime mortgages will make us rich."
"Sure, but let's keep a low profile." Xu Xin said.
"Then let's use John's name and let him become famous again." Lu Fei waved his hand and looked ahead.
This fireworks is just the beginning.
The splendid climax had to come during the subprime mortgage crisis.
At night, landmarks like the Empire State Building suddenly light up with blue and gold lights, instantly attracting the attention of passers-by.
Immediately afterwards, clouds of fireworks exploded from all directions.
One flower, two flowers, three flowers, exploded, scattered, and soon the dark night sky was as bright as day, but it was a pity that it was a little hasty——
Otherwise, the entire Chinese dragon would volley over America!
