Rebirth 2006, creating a super consortium

After thinking for a while, An Xin nodded to Lu Xi and Liang Fan, and said with certainty: "Yes, it's John Paulson! John Paulson!"

An indecisive look suddenly appeared on Liang Fan's face.

An Xin noticed Liang Fan's expression and asked in confusion, "What's wrong? Is there something wrong?"

Liang Fan adjusted his expression immediately after hearing this, and said hesitantly: "Mr. An, this... this John Paulson doesn't have a very good reputation on Wall Street!"

Although Anxin has heard too many stories about John Paulson, she still wants to hear how people evaluate him at this time: "Tell me, why is his reputation so bad?"

Liang Fan quickly recalled what he had seen and heard, and after organizing his words, he started talking directly: "Mr. An, John Paulson's previous experience is nothing surprising, there are a lot of such people on Wall Street.

Until last month, he re-established a hedge fund specializing in shorting the MBS (mortgage-backed securities) market, and then went to lobby old client groups, saying that after their team's research, they found that the US real estate bubble had become very serious, and that industry groups and related institutions had major concealed issues regarding subprime mortgages. There was a serious risk of subprime mortgage defaults in the market, so they were prepared to short the MBS market through a leverage mechanism!

What's more, he actually got $1.47 million in funds. Then he took the $1.47 million and went directly to Deutsche Bank. He bought all of it customized CDS (credit default swaps, which are essentially a type of bond betting insurance), a type of credit derivative, and started a counterparty trade with Deutsche Bank!

It is said that the business manager of Deutsche Bank was dumbfounded at the time. He did not expect that John Paulson would really dare to buy this thing to bet on the collapse of the US housing market.

Later, due to the business manager's frequent pessimism, John Paulson became famous and became a hot figure on Wall Street. He was nicknamed "fool" and "Kind John" by everyone.

Anyway, it's not a good thing. Mr. An, are you sure it's this person? "

"Sure!"

An Xin confirmed it first, then turned her head to look at the two and asked, "Do you think John Paulson's statement about the risks of subprime mortgages in the United States makes sense?"

Liang Fan looked a little hesitant and didn't speak immediately.

Lu Xi seemed to be thinking about something, and then he seemed to suddenly think of something. He looked at An Xin with great energy and asked, "Mr. An, is this the global financial crisis you mentioned earlier?"

An Xin did not answer this question, but continued to ask: "Let me ask you a question. Would you rather believe the data obtained from your own research, or the data provided by the top institutions in the industry?"

“The data I got from my own research!”

Lu Xi and Liang Fan immediately replied in unison.

"Yep!"

An Xin shrugged, then said with a smile: "So John Paulson also believes in the data he got from his research!"

Liang Fan understood a little, and murmured in disbelief: "Even if John Paulson's research results are true, the size of the CDO market in American real estate is several trillion US dollars. How dare those institutions play this game?"

Lu Xi shook his head and retorted, "Come on, that's Wall Street! The market size is several trillion dollars, and the issuance fees alone can make tens of billions of dollars every year. Who doesn't want to make money?"

An Xin was even more extreme, and said faintly: "Why can't the bosses behind some institutions sit down and talk it out, and then let the crisis happen and use the crisis to hunt everyone down?"

Lu Xi and Liang Fan got a chill and then looked at each other, both in shock!

An Xin did know the ins and outs of the subprime mortgage crisis, but in his previous life, he didn't really believe what was said publicly, and instead believed in conspiracy theories!

How do you summarize it on the surface?

The real estate market continued to prosper, the Federal Reserve implemented a low interest rate policy, regulators relaxed regulations, and banks lowered mortgage risk control restrictions, leading to the creation of a subprime mortgage market bubble.

But when An Xin reviewed the situation, a big question arose: Why were financial groups like Goldman Sachs, Morgan Stanley and others able to make huge profits and reap the benefits of everyone in this global financial crisis?

The most outrageous thing is that Goldman Sachs even claimed that "this is a perfect storm!"

Of course, these financial groups also had something to say, and they all explained that this was because their risk control teams were excellent and had discovered the crisis in advance.

Nonsense, why are you financial groups always able to detect crises in advance?

Wherever there is a crisis, you will be there harvesting!

Oh, no, it should be that wherever you are, there is a crisis!

These consortiums are like gods of war in the global capital market, invincible and unstoppable!

Eh? That's still not right. Big A may be the only nightmare of these financial groups. Once they enter the market, they still have to admit defeat and leave!

Lu Xi was the first to adjust his mood and said hesitantly, "Boss, you are being a little extreme, aren't you?"

An Xin did not refute. Her idea was indeed a bit too conspiratorial and extreme.

After thinking about it, An Xin immediately began to arrange future investment plans: "Liang Fan, after the $90 billion in funds from Yuanfang Private Equity are in place, take out $20 billion of your own funds directly to find John Paulson and ask him to open a new hedge fund to manage this part of our funds!"

Liang Fan asked hesitantly, "Boss An, why don't we do it ourselves?"

An Xin shook her head and explained, "Of course we will be involved, but we can't do all the $90 billion ourselves. If that's the case, the CDS comes with leverage, and $90 billion is leveraged 10 times, that's $900 billion. Which opponent can afford to lose it?

Besides, the goal of doing so is too obvious. We are afraid that when the market collapses, CDS’s opponents would rather go bankrupt than pay the money!

So entrusting 20 billion US dollars is just to buy insurance. After all, John Paulson and his hedge funds belong to American capital, and they operate in multiple ways, so those counterparties are more or less a little cautious!

Of course, since $20 billion of funds are to be entrusted, relevant confidentiality measures must be taken. The client should find a foreign employee to be responsible for the entrustment. The channels for the entrusted funds should be more roundabout, and Paulson should sign the relevant confidentiality documents to ensure that nothing goes wrong! "

Liang Fan nodded as if he had suddenly realized something and said, "No problem, I will take care of the relevant matters. What about the remaining 70 billion US dollars?"

"As for the remaining $70 billion, we will set up 10 relevant trading teams to operate it, enter the US market through the offshore model, and then start to sweep up the CDs issued by major banks on the market in large quantities. We will sweep up as many as we can!

The remaining funds will use 10x leverage to short sell US stock indexes through options and futures channels starting from October, including the S&P 10, Dow Jones Industrial Average, and Nasdaq 500! "

"But if we only raid the CDs sold by the big banks, we'd probably only make a few billion dollars!"

An Xin rolled her eyes and said, "Brother, a CDS with a margin of more than 10 or 20 billion US dollars, after adding leverage, it will be 10 or 20 billion US dollars. If all can be executed and paid out, what else can you do to make 10 or 20 billion US dollars?

Besides, isn’t there also the profit from shorting the US stock index? That’s the big deal!”

Liang Fan nodded awkwardly and said, "Boss An, I understand. I will strictly follow all your arrangements!"

Lu Xi was not to be outdone: "Mr. An, what should we do at Star Capital?"

An Xin did not answer immediately. After thinking for a while, he slowly said, "Let's allocate the $69.575 billion first. Faraway Private Equity will keep $10 billion, Faraway Finance will keep $9.575 million, and the remaining $50 billion will all be left to Star Capital.

Star Capital's $50 billion is directly using 10 times leverage to buy gold futures. This will be a long-term trading order, so you need to be patient! "

Upon hearing this, Lu Xi immediately assured: "Mr. An, no problem, I have enough patience!"

"That's good!"

An Xin nodded with satisfaction, and then began to think about whether there was anything missing. After thinking for a while and finding that there was nothing missing, he clapped his hands and said to the two people: "OK, these are the arrangements for now. You can go back and make relevant preparations. Once all the funds are in place, start the relevant operations immediately!"

"Okay, Mr. An!"

"Got it, Mr. An!"

...