My 1999

"Xu, Goldman Sachs also has some research on subprime mortgages."

Blankfein noticed his vigilance, and in order to win the latter's trust, he decided to show a little sincerity first.

“The mortgage company owned by Goldman Sachs is the largest creditor of New Century Financial, and we have many contacts with them.

Now we are very suspicious that New Century Financial has billions of dollars in bad debts, and we are going to conduct a financial audit on this company. "

Xu Liang nodded, "Really? Then the situation of New Century Financial is not good."

“The situation in New Century Financial is really bad.

But I'm more curious about where the bad debts come from? "

Looking directly at Xu Liang, Blankfein continued:

"With Mr. Xu's talent, I believe you must have a very clear understanding of the financial predicament in the new century and the current subprime mortgages in the United States.

And it’s also clear what consequences they will have in the future. "

Xu Liang secretly admired him.

Blankfein not only read the key information from the profit warning report released by New Century Financial, he even smelled the risks, and now he is even more shy when communicating with himself.

These inconspicuous things, connected together, are enough to help the CEO make more accurate decisions.

"It's a pity, it's a pity. This kind of top financial elite should belong to Hanhua."

Xu Liangzhong secretly felt regretful.

As a superior, what he likes most now is talent.

After organizing his words, Xu Liang smiled.

“As the world’s top financial institution, Hanhua does have a lot of analysis on the U.S. real estate market and derivatives market.

By our estimates, collateralized debt obligations will become a pile of junk as subprime defaults soar. "

Blankfein nodded, "I see, you bought so many CDS credit default swaps, aren't you just waiting for that moment."

"We started investigating last year..."

Xu Liang selected some of Hanhua's investigation findings and told Blankfein some of the less important ones.

This is not because he is out of kindness, but because the old man has almost realized the risks and is ready to ask Goldman Sachs to turn around. He is just giving him a favor.

Blankfein's eyes lit up when he heard this. The discoveries Xu Liang told him made him feel refreshed and strengthened his confidence a lot.

"Xu, thank you very much. Goldman Sachs will definitely remember your help today."

Blankfein said gratefully.

Xu Liang smiled and didn't take it to heart.

No matter how much gratitude you have, it will all turn into ‘profit’ in the end.

It is unrealistic to expect the other party to help in vain.

But I still have to talk about the scene.

"To put it bluntly, we are the closest partners, just exchanging information."

Blankfein echoed with a smile.

"That's right, we need to strengthen our contact more in the future.

And I think subprime mortgages and their derivatives are a very large market, big enough to accommodate our two companies. "

Xu Liang cursed secretly.

This old guy is really cunning and greedy. He twisted his face and wanted to get benefits from him.

"Of course. Hanhua is also happy to cooperate with Goldman Sachs."

Although reluctant, Xu Liang still wanted to bring Goldman Sachs in.

As a Wall Street giant, Goldman Sachs is big enough and well-connected, so it can share the pressure if things get big in the future.

Moreover, everyone wants to eat the meat of the subprime mortgage crisis. Instead of giving it to others, it is better to let Goldman Sachs eat it and earn some favors.

"I have to go back to the company for a meeting, and I'll ask you out to play ball another day."

After getting what he wanted, Blankfein didn't stay any longer.

"Tomorrow I will ask someone to bring the contract over and provide Hanhua with a free service."

"good."

Xu Liang accepted the offer of service directly without any courtesy.

This is the benefit they deserve, no need to be polite.

Although Hanhua is now an investment bank, it is mainly located in Asia.

The United States and Europe also need to rely on established investment banks such as JP Morgan, Goldman Sachs, and Merrill Lynch.

The short selling of U.S. subprime debt this time was mostly done through these investment banking platforms.

Whether it's designing consignment products, helping match up rivals, selling subprime mortgage assets and dealing with the aftermath... everything is inseparable from this group of pimps.

At the same time, because of their work, Goldman Sachs has very strong information collection capabilities, which is why they were able to detect that Hanhua was shorting subprime mortgages.

With so many channels for obtaining information at hand, Goldman Sachs is like having a pair of eyes and a pair of ears. It can always avert danger every time there is a big storm.

Of course, it is not enough to have information, but also to have sufficient decisiveness.

Merrill Lynch, Lehman, and Bear Stearns all collapsed in the wake of the subprime mortgage crisis.

Their ability to obtain information is no worse than that of Goldman Sachs, but they fail to grasp it.

So, in the final analysis, it still depends on the person.

If people are not good enough, no matter how good the external conditions are, it will be useless.

After Blankfein left, Xu Liang thought that Mai Jincheng would also come to see him.

But the old man didn't come and didn't even call him, which showed that his sensitivity was still a little low.

Morgan Stanley's performance during the subprime mortgage crisis was worse than that of Goldman Sachs, and it is not without reason.

If Mai Jinheng didn't come to see him, he would naturally not send any favors. What he was after was not business.

…

The warning messages issued by HSBC and New Century Financial were like two bombs dropped into a calm lake. The housing market, which had been sideways for several months, finally splashed with water and began to fall slightly.

The media, fearing that the world would not be in chaos, began to launch various reports and express pessimism about the housing market.

Against this backdrop, the ABX composite index of subprime mortgage bond prices began to plummet.

It plummeted from 100 points a few months ago to more than 60 points, with bulls suffering heavy losses and bears making huge profits.

At this time of panic, there was laughter and joy in the conference room of 40 Wall Street.

"Xu, your investment vision is really amazing. It is my lifelong honor to work with Hanhua."

Peter Thiel gave a thumbs up to Xu Liang, who was sitting opposite him, and was convinced.

Since the cooperation between the two parties began in 2005, the hedge fund department of Thiel Fund has been managed by Hanhua.

In the past two years, the other party has been shorting subprime mortgages.

Although he was not responsible for the loss of the hedge fund department according to the original cooperation agreement, it would affect the reputation of Thiel Fund.

Now, the US real estate market has fallen, and the hedge fund department has made a floating profit.

According to the agreement, he can get 5% of the total revenue of the hedge fund department of Thiel Fund without any payment.

The total amount of subprime short positions held by Thiel Fund is as high as 13 billion US dollars, even if the final profit is only 20%.

5% of the total revenue is also a huge sum of money.

Xu Liang looked at the man in front of him with a smile, and he had a pleasant cooperation with him.

The situation was unclear some time ago, and the hedge fund department of Thiel Fund once lost nearly 1 billion US dollars. Peter Thiel would nag him from time to time.

Advised him to be cautious and not to end up in a bad way.

The friendship between the two parties was not very deep, and the other party could give good advice, which was also a person worth making friends with.

So Xu Liang took the opportunity of the subprime crisis and the hedge fund department of Thiel Fund to make a comeback, and took the initiative to invite him to New York to deepen the relationship between the two parties.

"The CDO and CDS markets are not volatile at present. Our main profits come from shorting the ABX index. Next, we need to observe more and pay attention to market trends."

Xu Liang smiled.

Peter Thiel frowned and asked, "Do you mean that there may be more waves in the subprime derivatives market?"

Xu Liang shrugged.

"No one can guarantee this. After all, housing prices have been strong for so many years, and some fluctuations are very likely. We have to be patient and cautious."

Peter Thiel muttered in his heart.

'Is he afraid that he will follow the trend and say this on purpose? '

He is not only an entrepreneur and venture capitalist, but also a fund manager. His first job in his career was a financial derivatives trader.

With basic financial literacy and a close observation of Xu Liang's operations, his views on the subprime market have gradually changed.

Originally, he did not think that shorting subprime loans was a good choice. As Xu Liang said before, the US real estate market has been strong for nearly a century.

There were occasional pullbacks in the middle, but there was no large-scale collapse.

But watching Xu Liang make a lot of money through the Thiel Fund, he couldn't help but feel eager to move.

So, after Xu Liang called, he flew from Silicon Valley to New York.

Peter Thiel said, "Xu, I also want to short subprime mortgages."

This guy is an honest man.

I am greedy, but I am greedy in public.

Xu Liang still likes this kind of personality.

"Okay."

"I need to ask for your consent first."

Peter Thiel looked at him sincerely.

"Although it is a bit embarrassing, your operation makes me feel that the subprime mortgage market is ushering in a wave of decline. I hope to get a share of it.

But don't worry, I will set up another hedge fund department under the Thiel Fund and will never leave."

Hanhua holds 30% of the shares of the Thiel Fund.

If Peter Thiel makes money through the Thiel Fund, 30% of it belongs to Hanhua.

Xu Liang looked at the man in front of him, and it was a little unclear whether he really thought so, or whether he had practiced the thick black school to perfection.

But there is no reason to push away the things that make a profit for yourself.

"This market is big enough for you and me. But if you want to short subprime mortgages, you have to bear the risks involved."

Peter Thiel smiled and said, "I have thought it through. If any problems arise, I will take all the responsibilities independently.

Thank you, Xu. You are an open-minded person."

Xu Liang grinned.

What an open-minded person.

If I refuse you, you will not short?

It's just a matter of following the flow.

But then again, he really wants Peter Thiel to invest in subprime mortgages on a large scale, the bigger the better, just to cover up Hanhua's actions.

The title of "Subprime Mortgage Short God", whoever wants it can take it, anyway, he doesn't want it.

"By the way, Xu. I decided to cancel the fund management fee we agreed on before, as a reward for you."

Hanhua had previously drafted a cooperation agreement with Peter Thiel.

Hanhua uses the Thiel Fund hedge fund signboard and is responsible for its own profits and losses.

No fees are required in the middle, but if the hedge fund department makes a profit, 5% of the total income must be distributed to the Thiel Fund.

Now Thiel Fund has made a lot of money by shorting subprime mortgages.

This guy just said he didn't want it, it seems he was too generous.

Xu Liang became alert.

There is no such thing as a free lunch.

"I hope Thiel Fund and Hanhua can reach a cooperation. We can keep in touch with each other and work together on subprime mortgage investment."

Xu Liang came to his senses instantly.

'So you are waiting for me here? '

The good impression of Peter Thiel that he had accumulated in his heart quickly collapsed.

This guy is obviously a big-eared thief with a thick face and a black heart.

No matter how much you earn from 5%, it is not as much as you earn from doing it yourself.

How can you guarantee that you can make money by doing it yourself?

Of course, you have to hug someone's thigh.

Xu Liang is the thickest thigh.

Thoughts turned in his mind.

"No problem, I agree."

"Really?"

"Of course."

Peter Thiel, who was originally nervous, suddenly became excited.

"Xu, if Thiel Fund makes money, I will definitely give you a considerable consulting fee, this number..."

Thiel showed five fingers.

Xu Liang shook his head and chuckled, "You have waived the management fee, so forget about this consulting fee.

Thiel Fund and Hanhua are the closest partners, and there will be many opportunities for cooperation in the future."

Peter Thiel smiled, "Okay, if you need any help in the future, don't hesitate to contact me at any time."

"Don't worry, I won't be polite." Xu Liang smiled.

Having achieved his goal, Peter Thiel did not stay any longer, but stood up and said goodbye. He was in a hurry to go back to deal with the establishment of a new fund.

After Peter Thiel left, Li Jinling walked in.

"Mr. Xu, the people have been sent away."

Xu Liang responded.

"Send a fax to Hanhua and ask them to sort out the subprime loan information collected within the company and send it to the Thiel Fund."

"Mr. Xu, we spent a lot of money to collect this information. Is it appropriate to give it to the Thiel Fund?"

Looking at her, Xu Liang smiled.

"Are you worried about creating a competitor for Hanhua?"

Li Jinling nodded.

"Actually, it's not necessary. The time when subprime loans really make money is always before the crisis breaks out.

Now that New Century Finance has collapsed, many financial institutions have come to their senses.

You can make money by entering the market and short selling at this time, but you can't make several times of excess profits.

For us now, it's muddying the waters.

This will make it easier to put the money in the bag.

So whether it's Goldman Sachs or Thiel Fund, it's good for us to get involved. The more they make in the subprime mortgage crisis, the easier it is for us to put the fruits of victory in the bag.

Especially, we still hold 30% of the shares of Thiel Fund, and we can also share part of their profits."

To sum it up in one sentence.

There is too much fat meat for his family to eat, so he doesn't mind sharing it, letting people close to Hanhua have a bite, and earning some favors by the way.

"Mr. Xu, you are still very thoughtful."

Xu Liang smiled: "When you send an email later, remember to tell Hanhua to prepare more detailed information and the text should be encouraging.

We should try to get Peter Til to invest more money and leverage more.

The more he earns, the better it is for us."

"Yes."

"By the way, how is Paulson?"

In the past two years, Hanhua has invested in all the funds in the world that shorted US subprime bonds.

Paulson Fund is the focus.

"He is raising his second hedge fund. I heard that the total amount is as high as 5 billion US dollars. It seems that he is going to do a big thing."

Xu Liang: "Paulson is a ruthless person. His confidence and enthusiasm in investing in subprime mortgages are no less than ours."

Li Jinling nodded.

"Send an email to Hanhua and invest as much as possible in Paulson Fund." Xu Liang said.

No one knows better than him how serious the impact of subprime mortgages on the United States and the world is.

When he thought of the scene of millions of people being homeless, his scalp was numb.

No one can bear the anger of so many people, so it is better to keep a low profile.

Set up a few more targets to attract fire, and they will hide in the dark and count money, feeling happy.