The Son of Finance of the Great Age

  Chapter 630 Final Redemption (3)

Bob Dimon was very happy. He took a negotiating team of dozens of people from Heathrow Airport to New York early in the morning. This was just the vanguard of the negotiating team. The entire team may reach hundreds of people.

  The reason why the Federal Reserve made a "request" was naturally that Barclays did not want to give the market the impression of taking advantage of the fire, but in fact they did.

  On September 7, three days before Raymond's press conference, Paulson announced that the government would take over Freddie Mac and Fannie Mae. The rumors that had been going on since July were finally confirmed. This is a big event that has caused a stir in the entire market, because this is the first time that the US government has directly rescued the market, using the method of trusteeship (injecting national credit) to support a certain joint-stock enterprise.

  The market is arguing about this, and public opinion has also formed two camps with sharply opposing views. Whether it is necessary to save the market has become the focus of the debate, and Paulson has been under tremendous pressure.

  But for Dick Foud, this is an obvious signal, that is, "too big to fail"! The government had to bail out because it was worried that the failure of a large financial institution would cause huge shocks in the market. If this is the case, it is impossible for the government to let Leimen brothers go.

   So during this time he frequently called Geithner, Bernanke and even Paulson, hoping to hear good news from them. Sure enough, Barclays Bank from the United Kingdom also joined the ranks of bidding for Lehman Brothers.

   But deep down, Dick Foud is still willing to do business with Bank of America, because he knows that his contacts are limited to Wall Street. If Bank of America acquires Raymond Brothers, maybe he will be a partner. But if the British bought it, he didn't have any expectations for his future.

   Unsure of the situation, he even called Ken Lewis to congratulate him, making Ken Lewis dumbfounded.

  …

   "Our people have arrived in New York, and we will contact the Leimen Brothers immediately to review their materials."

At the buzzing Kennedy Airport, Bob Dimon couldn’t wait to call Henry Paulson as soon as he got off the plane, “But Mr. Minister, it is said that Bank of America also participated in the bid for Rayman Brothers, which is Is it true that we at Barclays were not the only bidder?"

"Yes!" Paulson said directly on the phone, "Bank of America is also interested in the assets of Lehman Brothers, so it also participated in the bidding for Lehman Brothers. Bob, I believe you have already heard about this matter from the newspapers. Got it. What, what's the problem?"

For the current situation of Raymond Brothers, Paulson, Bernanke and others are the most clear. Ken Lewis and Bob Dimon contacted him directly, and did not contact the chairman of Raymond Brothers, Dick Rich. Germany, this has to be said to be a strange thing. Paulson knew very well that they were all betting that the government would come to the rescue of Raymond Brothers.

  But Paulson is also very aware of the pressure he has been under during this period. The speaker of Congress has made it clear that they will not approve any proposal to save Wall Street. That is to say, if the investment banks on Wall Street get into trouble, the government can only watch from the sidelines, and will never take custody again like the "two rooms".

Speaking of the grievances between Barclays Bank and Bank of America, it goes without saying that in the acquisition of ABN AMRO, Barclays believes that Bank of America played a disgraceful role in this acquisition and is a troublemaker. . So after hearing that Bank of America also intervened in the bidding of Lehman Brothers, Bob Dimon felt that the other party might be playing a role in driving up the price.

   "Is Bank of America really planning to acquire the assets of Lehman Brothers?" Dimon thought about it carefully, and asked in a calm tone as much as possible, "Or do they plan to have other purposes?"

Although the question was very cryptic, it still aroused Paulson's displeasure. He said unhappily, "Mr. Think, Mr. Dimon, should you expedite the process, and don’t blame me for not reminding you if Raymond Brothers ends up in Bank of America’s hands.”

  Bob Dimon naturally heard Paulson's displeasure. He changed his mind and thought again and again, but still couldn't tell whether Bank of America was a trustee or really interested in Raymond Brothers. But now it is clear that he is unlikely to get more information from Paulson, so he decisively changed the subject:

"Dear Mr. Minister, because we had some business friction with Bank of America before, we don't want to lose to him this time. We are determined to win this time. But now there is a problem. Although we are very interested in Raymond Brothers, If the price of Leimen Brothers exceeds the range we can bear, we would like to conduct transactions through another model. In short, we really want to acquire Leimen Brothers.”

"What model?" Paulson was very interested in Dimon's statement, but he did not let down his vigilance. There are too many people who want to use the Fed and the Treasury. I will do my best to help you.”

  Paulson didn’t say anything to death. At this time, being able to broker a deal with the Raymond Brothers was one less worry for him, and it wouldn’t cause too much shock to the market. This was the effect he was after.

   "Bear Stearns, we want to trade the Bear Stearns way!"

  Bob Dimon was not polite at all, without any hesitation, he directly made the request.

What must be explained here is that although Bear Stearns was eventually acquired by the government at a price of $10 per share (in fact, it was an equity swap), the fact is that the Federal Reserve injected liquidity into Bear Stearns to fund the investment. Prevent Bear Stearns from going bankrupt. This event is also the first time since 1929 that the Federal Reserve has provided emergency funds to non-commercial banking institutions.

  The wishful thinking of Barclays Bank is that if the Fed can inject liquidity into Barclays Bank as it did with the government, then they will go all out to acquire Raymond Brothers. Because of the endorsement of the Federal Reserve and the Ministry of Finance, Barclays' liquidity will never be questioned by the market, which is very beneficial to them.

It’s just that Barclays’ wishful thinking was wrongly timed. If the US government took custody of the “F&F”, this strategy might still work. However, there are unprecedented voices questioning Paulson’s rescue of the market. Putting pressure on both Paulson and Bernanke has decided not to make a move, this strategy has become a mirror image.

   "No, it's not possible!"

Paulson flatly vetoed it, but at the next moment, he might realize that his tone was too harsh, so he softened his tone and said, "Mr. Dimon, it is impossible to obtain liquidity through this method now. But we will help Find a way to help you find some foreign aid."

  Although he was not very satisfied, Bob Dimon knew that this was the only way to go. As long as liquidity is available, it doesn't matter where it comes from.

  …

   Paulson hung up the phone and immediately dialed Geithner's phone. Bernanke is now in Louisiana, handling matters at the Federal Reserve branch there.

"Timothy, we have encountered a problem." Paulson spoke quickly, with a hint of helplessness in his tone, "Barclays asked the Fed to provide liquidity, but I have already rejected it. Counting Bank of America, It really annoys me that the two only buyers in the market have been making requests one after another."

"They asked for liquidity?" Geithner was silent for a long while, feeling a headache. At present, the media is still clung to the issue of "Two Freddie's". It is impossible for Erson and Bernanke to inject liquidity into Leimen Brothers, let alone the current situation, "So, Henry, what are you going to do?"

"I plan to form a consortium alliance, and each family will contribute a part of their liquidity, and the funds to rescue Leimen Brothers will be spent from this." Paulson thought and thought, and only came up with such a plan, "Only in this way , in order to obtain liquidity. It’s just that this plan requires the consent of all parties, and I think this will be a bit troublesome.”

"This..." Geithner hesitated for a while, "will we scare investors away? You know, so far, the only two institutions are counting on the will from the government and the Federal Reserve. If they know If the government may not make a move, they will. If the bidding is not satisfactory, then eventually Raymond Brothers..."

"No, we can't save the market again!" Paulson said emphatically. "They must know that if they can't save themselves, the market will be in a mess. Wall Street needs to save itself, not wait for the government to help. We can't afford the political risk in that, and I don't want to be called 'Mr. Bailout'."

Knowing he couldn't change Paulson's opinion, Geithner said, "Okay, I'm going to call those guys on Wall Street and see what they have to say. I'm going to call them a special meeting in New York on Friday, Discuss specific details and plans."

  …

  In the evening, as Paulson expected, he received a call from Ken Lewis. The Bank of America CEO has been so well informed.

"We have carefully reviewed the situation of Raymond Brothers. Without the support of the government, it would be very difficult for us to proceed with this transaction." Lewis said bitterly, "We can't do it, their assets have shrunk too much, and it is difficult to negotiate with Raymond. People from Men Brothers reached an agreement on the price. If we insist on the acquisition, this will put Bank of America at a huge risk."

  Paulson was very clear about the purpose of the other party's call, but at this time he had already decided not to use government funds, so he was unmoved at all. He just considered the latest situation and gave Ken Lewis another explanation.

   "If you have any problems with assets and we can help, don't bother to tell me now, and I will find a solution for you." Finally Paulson said.

   "What?" Ken Lewis was very surprised, and he didn't know if it was true or not. "Henry, I remember you said that government funds will not be involved in this transaction. Now, what is going on now?"

"It won't be government funds!" Paulson said indifferently, "We plan to form a consortium and provide it to institutions that acquire Lehman Brothers. If Bank of America intends to acquire Lehman Brothers, this fund is our support for you .”

   "There will be such a good thing?" Ken Lewis wanted to laugh, but he didn't dare to laugh out loud, because it was a great disrespect to Paulson, "Henry, this plan is not what we want."

  In fact, similar plans are not without precedent, such as the plan to save Long-Term Capital Management in 1998. But Ken Lewis could tell at a glance that the current situation is still different from the original one. It was originally intended to absorb the position of Long-Term Capital Management to avoid impacting other consortiums, but now this is to save an investment bank with the purpose of acquiring it. So for the bidder Bank of America, this is a deal that enriches itself. And other consortiums will never watch Bank of America use their own funds to do such self-interested things. Although the will of the Ministry of Finance and the Federal Reserve is not easy to violate, they will definitely put forward some harsh conditions.

   But in the same way, Ken Lewis will not say anything dead, "But Henry, if this plan is feasible, we will still bid for Leimen Brothers."

   Thanks to book friends Nanquan 99, Xiaoqi Civilization Miracle, Zhou Shao, rest assured that you voted for the monthly ticket! Sorry for being late again, I hope everyone will forgive me, for the sake of the author's hard work in such a hot day, I hope everyone understands the difficulty of the author and can support this book a lot, the author is very grateful~

  (end of this chapter)