The Son of Finance of the Great Age

  Chapter 559 The Bear Stearns Conspiracy (3)

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   "George, is that little guy trustworthy?"

   The one who spoke was none other than Julian Robertson, who had been wrestling with Soros for several years. This former well-known figure in the hedge fund industry is now retreating behind the scenes, and his influence in the hedge fund industry is not as good as before. But if anyone dares to ignore this once powerful figure, then he will definitely suffer a big loss.

It is strange to say that after the collapse of the Tiger Fund, the relationship between Julian Robertson and George Soros turned better. Perhaps it is because there is no longer a competitive relationship between the two parties, or perhaps Soros has felt from Robertson. The rabbit died and the fox was sad. In short, the relationship between the two has improved greatly compared to before.

  The current Julian Robertson himself is no longer involved in specific fund management. When his Tiger Fund was liquidated, many of his traders and analysts set up their own funds. As a godfather, Julian Robertson naturally would not give up such an opportunity. He invested part of his net worth accumulated over the years into these funds, changing from a former manager to an investor.

  After so many years, Julian Robertson's net worth has not decreased but increased, all thanks to the "tiger cubs" he cultivated back then. Of course, even so, his net worth is still far from being compared with Soros.

  The other person online is Jim Chanos, known as the "empty god" of Wall Street. This well-known fund manager has always had only one operating strategy, which is to sell short with all his strength. In 2001, he bet on Enron at the time, and Enron went bankrupt after the scandal broke out, and Chanos became famous because of this, becoming a representative of Wall Street's short-selling forces.

  The three of them are familiar with each other, and have done similar cooperation several times, so there is no trust problem at all. But this time, Kenneth Griffin and John Paulson were added to the combination, and the two new faces made Julian Robertson worry.

"This is indeed a problem!" Soros on the other end of the phone was silent for a moment, and then said lightly, "But guys, they are the two guys with the most cash in the market right now. If you don't win over these two guys , then our plan will have to attract more people, so the risk of leaking the secret will be greatly increased. I talked to John, this guy is a very ambitious person, just like Kenneth Griffin, it is The people we're looking for. So frankly, I'm not really worried about their moral hazard."

   When it came to the cash issue, the other two remained silent. The cash problem is indeed a fatal injury to their combination. Although these people are all rich, they are among the few richest people in the world. But their assets do not exist in the form of cash. In fact, the number of days that their assets can exist in the form of cash in a year is pitifully small, because they are professional investors and know very well that holding cash is the most stupid investment method .

"They won't do that!" Jim Chanos, who had been silent all this time, suddenly said, "They are not saints, and all this does not break the law. Most importantly, they are fund managers with performance needs .”

Jim Chanos is a man of few words. Although he doesn't speak easily, everything he says is sharp and hits the nail on the head. So both Soros and Robertson attach great importance to his opinions .

  Seeing that two of the three expressed different opinions, Julian Robertson stopped continuing this topic and shifted the topic to the strategy of how to short Bear Stearns.

"Although their market value has dropped to around US$10 billion, and they suffered a huge loss in the fourth quarter of last year, after all, centipedes are dead but not stiff. We want to short them in the short term, even with the addition of two cows. I'm afraid it's still not strong enough?"

  Julian Robertson raised his own doubts after studying the situation of Bear Stearns. What the cows are talking about is naturally John Paulson and Kenneth Griffin. Because they can provide a steady stream of cash flow like cows milking, so in the financial world, institutions or individuals with sufficient cash flow are generally referred to as It is a cow.

   Indeed, although Bear Stearns' market value has been halved, their current market value is still close to tens of billions of dollars. And the most important thing is that they are the settlement providers of many exchanges, and at the same time, they manage funds of more than 100 billion internally, so they can be said to be worry-free in terms of cash.

Among other things, just talking about the hedge fund industry, there are at least 20 billion U.S. dollars in Bear Stearns' brokerage accounts. Even if the idle rate of these funds is only 10%, it is equivalent to giving Bear Stearns 2 billion U.S. dollars. cash flow.

  Shorting financial institutions and hitting their cash flow is the most ruthless move. Although Julian Robertson has been away from the capital market for a long time, his deep skills are still there. When he opened his mouth, the strategy he said was targeting the cash flow of the short-selling target, which was much better than John Paulson who didn't understand it before.

   "No, they have a lot of problems!" Jim Chanos immediately retorted, concise and concise as always, "Fatal problem!" As for what the problem was, he didn't say much.

"Julian, you have been away from the first-tier market for too long, and you can no longer keep up with the current situation." Just when Julian Robertson was still frowning and thinking hard, Soros' voice sounded again just in time, "Although Bear Stearns internally claims that their assets have been reduced by US$1.9 billion due to bond losses. But everyone knows that Bear Stearns is one of the biggest players in the entire bond market. Stanley's losses are close to tens of billions. , and Bear Stearns only lost a mere two billion US dollars, this figure is not in line with Wall Street's expectations!"

   Although Soros' statement made Julian Robertson feel a little uncomfortable, but after all, what the other party said was the truth, so he could only accept such an evaluation. But the next words quickly made Julian Robertson deep in thought, "George, you mean Bear Stearns lied about their losses? This seems unlikely, right?"

  For financial fraud, once it is exposed, the price is almost unbearable for listed companies. More than that, the relevant law firms and accounting firms, including those audited later, will face serious penalties. The most typical example is Enron, which was shorted by Chanos. When this behemoth collapsed, it also led to the closure of Andersen, one of the giants in the auditing industry. Since then, the Big Five accounting firms have become the Big Four.

   It is precisely because the cost of fraud is too heavy and the impact is too bad, so Robertson can't believe that the other party dares to tamper with the financial statements.

"No! No! No!" Soros repeatedly denied, "In fact, I don't think Bear Stearns has tampered with the financial statements, but I don't think their losses in the bond market will stop here. I personally think that , I am afraid that the market will have a clearer understanding of Bear Stearns' financial situation after the first quarter report is released, and this understanding will definitely surprise everyone, so I set the timing of the official short sale at that time."

According to the original plan, they are now short-selling Bear Stearns stocks in the market, so as to slowly consume their cash flow, and wait until the first ten days of March to break out with all their strength. At that time, they will go all out and use more strategies Combined suppression of Bear Stearns, the ultimate goal is naturally to completely kill the other party. In mid-March, it was the time when Bear Stearns' financial statements for the first quarter of 2008 came out.

   "This seems a bit risky!" Julian Robertson has no objection to the choice of the timing of the outbreak. On this point, he and Soros have maintained a high degree of agreement, and both of them are masters of timing. However, he dare not agree too much with the judgment that Bear Stearns' financial situation will deteriorate, because until the last moment, no one knows what the real business situation of Bear Stearns is like, except for their own Executives, "If their financial situation is not as bad as we expected, or if they get some improvement, wouldn't we shoot ourselves in the foot by choosing to launch at that time?"

  Julian Robertson's concerns are not unreasonable. If a similar situation really occurs in Bear Stearns, then their share price is bound to rebound in the short term, and this rebound is undoubtedly quite unfavorable to those who plan to sell short.

   "This is impossible!" Jim Chanos said suddenly after being silent for a long time. His opening shocked the two people who were discussing in full swing, but they soon realized that the other party had something to say. When it comes to short selling, especially this kind of short selling of a microscopic nature, I am afraid that neither Soros nor Robertson has the same idea. The opponent is experienced.

  Seeing that the two had calmed down, Chanos still cherished his words like gold, but what he said brightened their hearts, "We made them lose money."

   "Specifically?" Soros asked thoughtfully. He seemed to grasp something, but he couldn't understand it for a while. Although he has formulated a general direction and strategy before, this strategy is not complete and specific, and the details need to be discussed with other people.

"Trading, settlement, and personnel changes!" Chanos said a few more words in a rare way, "In terms of transactions, we let him have no opponents, and in terms of settlements, we made their customers no longer trust them, and then took away funds. And personnel changes, All kinds of rumors can be generated, although the lethality of such rumors is the least, but they can attract attention in the shortest time. And attracting the attention of all parties is crucial to our follow-up plan."

   "That's awesome!"

   "Jim, you're a genius!"

   Almost at the same time, Julian Robertson and Soros understood, and they praised in unison. Although both of them are masters in building momentum, their starting point for building momentum is too high, generally speaking, they are all in the macro direction. Julian Robertson used to be a master at building momentum in stocks, but after all, he had been away from the front line for too long, and the information on hand was not complete, so he didn't realize that there were so many articles to do in it for a while.

Chanos' plan is an important supplement to Soros' strategy, that is, when Julian Robertson proposed that Bear Stearns' financial statements may make a profit or a small loss when it is released in March, they spread rumors to the market and persuaded Counterparties stopped transactions and settlements to compress Bear Stearns' possible profit channels, thereby making their financial reports less than expected, although it is still unknown whether this expectation will be realized.

  When the discussion reached this point, they basically thought of all the loopholes they could think of, and after discussing some details, they changed the topic to how to borrow Bear Stearns' stock.

"According to our research and analysis, in the past year, there has always been a force that has been shorting Bear Stearns' stock. They have been shorting Bear Stearns since they reached $170, and there is no sign of returning to their positions until now. This has ruined us. Partial liquidity!" Soros said indignantly.

  Based on the nature of U.S. stocks that can be shorted or longed, a stock is highly liquid in the market. But Bear Stearns has a total share capital (ordinary shares) of less than 200 million, which is not a small amount. However, Bear Stearns controls more than 40% of the shares and is the largest shareholder, while other institutions and individuals hold the remaining 50% of the shares. But compared to Bear Stearns itself, the number of shareholders in this part is too large, and there is no way to compete with them if it is apportioned to individuals. However, the liquidity in the market suddenly decreased by about 10%, which will definitely affect the liquidity of Bear Stearns.

   Fortunately, more than 10% of the stock finally flowed into the market. Because the time interval was a bit long, and the stock price of Bear Stearns plummeted during this period, the person who took over at the beginning may have already let go of the deal. So Soros only complained a little, and began to seriously figure out how to borrow Bear Stearns stock without being noticed by the market.

"There is such a thing? You started shorting a year ago?" Robertson was surprised. Even though he had held Japanese sell orders for more than five years, it was when he thought the market might still fall. But a year ago, Bear Stearns didn't have any decline at all. On the contrary, he said, "George, do you know who the other party is?"

   "I don't know, maybe they have already closed their positions and left the market. This profit is enough to satisfy them!" Soros frowned slightly, and after thinking about it, he answered an answer that he didn't even believe.

  He really didn't know. (The novel "The Son of Finance of the Great Era" will have more fresh content on the official WeChat platform, and there will also be a 100% lucky draw gift for everyone! Open WeChat now, click the "+" sign on the upper right to "add friends", Search the official account "qdread" and pay attention, hurry up!)

  (end of this chapter)