The Son of Finance of the Great Age

  Chapter 636 The Final Redemption (8)

   "They all know!"

   Santer, who hung up the phone, went directly to his boss, Callum McCarthy, director of the British Financial Services Authority, without a moment's pause. When he said this, Sante, who was already extremely panicked, didn't even notice that his voice had been deformed.

  64-year-old Callum McCarthy's hair is already half white, his face is full of dimples, his body is fat and swollen, and with his fierce appearance, he looks completely vicious. If it weren't for his neat face and expensive suit, he would have looked like one of those butchers in the Leeds countryside.

   It's just such a person, but he has served three full terms in the position of the Financial Services Bureau. Whether the Labor Party or the Conservative Party came to power, they all favored this "butcher", which also shows his strong ability. But in a week, he will retire completely.

   "Who? Know what? Who told them?"

   McCarthy, who was sitting firmly on the boss chair, did not change his expression at all, but a ray of light burst out from his cloudy eyes, and then disappeared. He raised his eyebrows slightly, and then asked seemingly casually.

"I don't know the specific list, but certain institutions must know about it. Among them is the Tianyu Fund." Sante took a few quick breaths, gradually calmed down his agitated heart, and began to seriously Analysis, "I don't know what's going on, and who else leaked the news. But according to the feedback from the Tianyu Fund, they may know that the Royal Bank of Scotland is in trouble, and the market turmoil on Friday is exactly what they said. for."

   "Did they know about the Halifax Bank?"

   McCarthy raised his eyebrows, did not comment on Santer's words, and asked another question.

  Halifax Bank is the largest mortgage bank in the UK. Since the outbreak of the subprime mortgage crisis, the financial situation of Halifax Bank has gone from bad to worse, and it has reached the brink of danger. But all this has not been announced to the public. Although the outside world speculates that the bank may be in danger, it is far from expected that the bank has asked the Financial Services Agency and the British Treasury for help.

  Like their counterparts in the United States, McCarthy and his colleagues are closely watching changes in financial markets. Although the subprime mortgage crisis broke out and suffered the most severe losses in the United States, in this highly integrated financial market, no country can escape this kind of systemic risk, and the British Isles are no exception.

  Because of Northern Rock Bank, Halifax Bank and other incidents, the British side is highly vigilant about the subprime mortgage crisis, even to the point of panic. They are afraid that their financial system will be in extreme turmoil and restlessness like that of the United States across the ocean.

"They didn't mention it!" Sante pondered for a long time, still not sure whether any institution knew the news, "But according to my personal judgment, they should know sooner or later. At that time, the financial institutions that do mortgage business first Hit, then maybe the investment banks, and finally the big commercial banks might get hit too."

   "If Barclays really bought Raymond Brothers..." McCarthy hesitated, and did not say the following words for a long time.

   Prior to this, he and his colleagues had repeatedly discussed various possibilities after Barclays acquired Raymond Brothers. But the premise of those possibilities doesn't include an anomaly like Friday's. In his view, the problems of RBS and Barclays can be looked at separately and independently because they are completely different in nature. But judging from market feedback, institutions, especially short-selling institutions, simply ignore this "difference", and they will swarm as long as it can be destroyed.

  If this is the case, then Barclays' acquisition of Lehman Brothers is very likely to put the entire British financial system in a dangerous situation. Royal Bank of Scotland is a lesson from the past.

   "Pick me up to Number 10 Downing Street."

   McCarthy made a decisive decision and immediately decided to report to the Prime Minister. At this time, it is necessary to let the top decision-makers know about these things and the possible harm, and then give professional advice to help the prime minister make decisions.

  In fact, McCarthy already had an idea in his mind, but the matter was so big that he couldn't make the decision by himself, so he could only let the Prime Minister make the final decision. Because both the central bank and the Ministry of Finance will follow the decision of the prime minister.

"Just received the news that Bank of America withdrew from the bidding of Lehman Brothers, and now only Barclays Bank is left." At this moment, the staff responsible for liaison with the United States walked in and told the two An unexpected news.

"understood!"

   After looking at each other for a while, McCarthy waved the staff to go out first, and then said meaningfully, "This issue should be known to the Prime Minister."

  …

   Half an hour ago, a secret conversation started between Paulson and Geithner.

  "Bank of America is going to withdraw, they won't buy Lehman Brothers." Geithner took the lead in starting the topic, "Ken Lewis has always been interested in Merrill Lynch, and I think they may instead buy Merrill Lynch."

   "Really?" Paulson gave Geithner a thoughtful look, without showing too much surprise.

  Since Ken Lewis proposed to reduce the core capital deposit, Paulson has been keenly aware that Bank of America does not really want to do this business, they just want to use this business to bargain with the Federal Reserve and the Ministry of Finance. Although so far, their purpose has not been achieved, but they have succeeded in getting the Treasury and the Federal Reserve to come forward and find liquidity guarantees for Bank of America and Barclays.

   Paulson didn't know whether Bank of America's interest in Merrill Lynch was out of its own heart or out of its own account. But at this time, he has no mind to pursue these. Geithner's guess is not wrong, Paulson now has to account for the taxpayers, is the market. As for Bank of America's temporary change of course, it is not the time to pursue it.

   Even after the fact, it will be difficult to investigate, if the other party really bought Merrill Lynch.

"So now Barclays is the only buyer left?" Paulson tapped his index finger on the mahogany table and asked slowly, "How is the negotiation between Bob Dimon and Raymond Brothers? Dick Is Fude willing to accept the conditions offered by the other party?"

  Lehman's management was particularly angry because Paulson and Geithner excluded Dick Foud, McDart, and others from the rescue team. But besides the anger, there was deep sorrow, and the Leimen people including Dick Foud felt a sense of powerlessness.

   At this time, Bob Dimon led his negotiating team to appear, and discussed various matters of the acquisition with the people of Raymond Brothers. On the one hand, under the instruction of Paulson, he took the initiative to contact the Raymond Brothers. On the other hand, it is natural to take the opportunity to lower the purchase price.

"At this point, it is no longer something he can resist." Geithner said with confidence, "If he doesn't want Raymond Brothers to go bankrupt, he can only accept the other party's conditions. Fortunately, Dimon decided to let him buy After that, he continued to serve as the chairman of Leimen Brothers, so there will be no big problems in this regard.”

   "There is no big problem?" Paulson keenly sensed that there was something in Geithner's words, he couldn't help but frowned, and asked in displeasure, "So, there are still big problems?"

"Yes, there is a big problem with Leimen Brothers' financial statements, and the need for liquidity guarantees is far greater than imagined!" Geithner's eyelids twitched quickly, and then he gave a wry smile, spreading his hands, quite Wei said helplessly, "Bank of America estimated it was 40 billion U.S. dollars, but now it needs at least 50 billion U.S. dollars or more. Those CEOs seem unwilling to pay."

   "Really? These damned guys, let's see what they think!" Paulson snorted coldly, his face instantly collapsed. At this time, if anyone dares to take a chance, he doesn't mind teaching the other party a lesson.

  The conference room on the 5th floor was full of CEOs. They basically stayed here for the past two days, waiting for the analysts upstairs to report various data. As the review of Lehman's balance sheet deepened, most of them became more and more ugly.

The asset shrinkage on the balance sheet of Lehman Brothers was far more alarming than expected. After the initial analysis of assets, liabilities, derivatives, accounts receivable, accounts payable, repurchases and long-term liabilities, analysts We found that the quality of the assets held by Leimen was extremely poor, but the figures shown in the financial statements were not the case.

  Taking commercial real estate and related assets as an example, Lehman Brothers estimated that this part of assets has 40 billion U.S. dollars in its financial statements, but after a rough estimate, analysts were surprised to find that this part of assets is only 24 billion U.S. dollars. If a further review is carried out, I am afraid that there is not even 20 billion US dollars, and it is not even half of the estimate of the Leimen Brothers.

  Similar situations not only occur in commercial real estate, but also in various assets such as mortgage loans, long-term and short-term notes. The amount of assets of Leimen Brothers continued to shrink, while the amount of liabilities remained unchanged. After offsetting each other, the funds needed for the acquisition naturally increased.

  This also means that the CEOs here will have to spend more funds, and naturally they will not have a good face.

   "Gentlemen, it's time for us to make a choice!"

Jamie Dimon stood up and first appealed, "Since we are required to contribute, we can't just play the role of giving money without asking for anything in return. Gentlemen, our money did not fall from the sky. Since we are required to If you don’t invest, then you must give us an appropriate return.”

"right!"

   "Jamie, well done! We need something in return too!"

   "Paulson and Geithner should know we can't do this for nothing."

   For a while, the meeting room was excited, and the CEOs shouted loudly regardless of their demeanor.

  As the real situation of Leimen Brothers was stripped away step by step, the required capital share was gradually increased, and resentment gradually accumulated in the hearts of the CEOs. Originally dissatisfied with funding their opponents, they took this opportunity to yell out their anger, since Paulson himself was not around anyway.

   "Gentlemen, since this is the case, why don't we discuss a plan to turn our fundraising into investment, at least we can get good returns in the future." Jamie Dimon hit the iron while it was hot.

"This is impossible!" Michael Klein of Barclays stood up and said firmly, "Gentlemen, according to our previous acquisition plan, Barclays will acquire the new Leimen Brothers after the reorganization. And everyone here , the liquidity guarantee paid will support the assets spun off from Lehman Brothers, which is the new asset management company.”

"what?"

   Like five thunderclaps, except for the Barclays bankers, everyone else was shocked by this statement. Before that, they were required to put a liquidity guarantee on the transaction, which was equivalent to borrowing money, and it was no big deal.

But under the current circumstances, Barclays will acquire the highest-quality assets of Lehman Brothers, and those assets with poor qualifications will be divested to newly established companies. The liquidity provided by the CEOs here will support the operation of these assets .

   Still borrowing money, but the lender is different. This is the biggest problem. They were not worried about Barclays' solvency, but they had no confidence in the new company after the split.

   Thanks to book friend James Wuwukong for voting for the monthly ticket! I hope everyone will continue to support this book, thank you very much~!

  (end of this chapter)