My Age of Investment
One thousand one hundred and sixty-one, short selling ban
New York.
The entrance of the United Club Building has a white exterior wall, oval windows, and a retro architectural style.
Xia Jingxing got out of the car and glanced at the Stars and Stripes on the window sill on the second floor.
The flag was shabby and old, hanging there as loosely as a rag strip, just like New Yorkers these days, listless.
After showing his membership card, Xia Jingxing walked into the club.
Different from the bustle in the past, the club was a little quiet today.
Xia Jingxing walked through the hall and saw few people.
The waiter took Xia Jingxing to the door of a room, knocked on the door, and after getting a reply from the person inside, the waiter opened the door.
Xia Jingxing saw such a scene. The room was filled with smoke. Blankfein and Mack seemed to be flying in the clouds, puffing on cigars with sad expressions on their faces.
"Dylan, you're here!"
Blankfein stood up with a smile to greet him, and Mack followed suit and greeted Xia Jingxing.
After a brief exchange of greetings, Xia Jingxing sat down next to the two of them, took the cigar from Mai Jinheng, lit it, took a puff, exhaled a large puff of smoke, and said, "You two don't seem to be in good spirits today?"
Blankfein smiled bitterly, "Darren, except for you, no one else on Wall Street may be able to laugh right now."
Xia Jingxing spread his hands and said, "No one could have expected that Lehman would collapse."
"If the Federal Reserve Bank of New York did not provide AIG with an emergency loan of US$85 billion last night, the world's largest insurance giant would also be lying down."
Mack said with a sigh: "There are now voices in the market saying that Morgan Stanley is going to go bankrupt. A large number of hedge funds are shorting us. At the same time, they are trying their best to spread unfavorable rumors about us and suppress the stock price."
Blankfein said with a serious expression: "The same is true for Goldman Sachs. Short sellers are gathering, the stock price is falling continuously, and news trucks come to the downstairs of our company every day, trying to get first-hand news!"
Xia Jingxing felt that there was something in the words of these two old men, and they seemed to be implying that Vision Capital's short-selling behavior had become unbearable for them.
"Isn't the bailout bill already being drafted? It just needs to last a few days. The risks of Goldman Sachs and Morgan Stanley have been cleared, which is different from Lehman's situation."
Seeing Xia Jingxing pretending to be confused, Blankfein simply pointed out: "Darren, two months ago, when Fannie and Freddie had problems, the federal government issued a ban on "naked short selling."
Although the ban was lifted in August, according to the current situation, the ban may be enacted again at any time and expanded to restrict all short selling activities. "
Looking at Blankfein's serious eyes, Xia Jingxing stopped talking in circles and replied: "We have arranged to close positions one after another. You are the transaction executors, so you should know this very well."
“The liquidation effort is not enough!”
Blankfein shook his head slightly, "If the short-selling ban is enacted, institutions holding short positions will be required to disclose short-selling information.
For your business, we may attract the hatred of the entire industry and even the government! "
Xia Jingxing didn't say anything. It was really hard to shoulder the blame. Even with the size and connections of the two major investment banks, it was very stressful to shoulder the blame.
"you mean?"
Blankfein looked directly at Xia Jingxing, "You have made a lot of profits these days. Stop it and don't make that last coin."
Xia Jingxing glanced at Mack, who kept nodding, "That's right! We are in urgent need of government rescue now, and we don't dare to confront Paulson and Bernanke anymore."
Xia Jingxing pursed his lips, where is the market economy? Where is freedom? Is there any royal law?
Damn it, this old beauty can’t afford it!
But it wasn't Blankfein and Mack who were being alarmist, because in Xia Jingxing's memory, because the market fell so sharply, the federal government did issue a very strict ban on short selling.
"Close the position! But only the underlying stocks are closed, the options are not sold, and the execution time is still early."
Blankfein smiled and said, "Dylan, your choice is wise. Some money cannot be earned. It is very hot to hold."
Mack added: "I heard that the state of New York is planning to investigate suspected illegal short selling, and we can't do that.
Of course, what we are talking about here is illegal short selling, which refers to those behaviors that release false news and disrupt the market.
Vision Capital is our major client, and all trading operations are executed by us and Goldman Sachs. Everything is compliant and legal. You can rest assured about this, Darren. "
Blankfein also smiled and nodded, "Yes, Darren, we are close partners. If you cooperate with our work, we will naturally cooperate with you."
Xia Jingxing shrugged, "I hope so!"
Seeing Xia Jingxing's expression of displeasure, Blankfein and Mack didn't say anything. After all, holding an additional short order would mean a large amount of profit.
It is not an easy decision to give up such a large amount of profits now.
Of course, Xia Jingxing was reluctant to give up this profit, but compared with his life and principal, he had no choice but to give up a small profit.
Vision Capital established a short position of up to US$14 billion in underlying stocks with the help of TRS total return swap instruments provided by two investment banks.
With the demise of a large number of financial institutions such as Bear Stearns, Freddie Mac, Fannie Mae, and Lehman, short positions have been reduced somewhat.
In the past two days, some short positions have been closed one after another. The short positions currently held are less than 10 billion US dollars, about 8 billion US dollars.
An average decline of 10% in financial stocks in the portfolio would be a profit of $800 million.
Looking at the miserable decline of the US stock market, it is estimated that there are still several US$800 million left.
However, these profits can only be given up temporarily, and you must learn to make trade-offs.
Compared with short selling, which can only earn 100% of the profit at most, the returns from stock indexes, options and other derivatives are higher.
Just keep the big profits, and stop shorting the underlying stocks.
Xia Jingxing thought in his heart.
Blankfein felt a little sorry for Xia Jingxing, a major client, and wanted to repair the relationship, so he said, "Darren, didn't you ask me to contact Lehman's bankruptcy disposal team?
We've been contacted! "
Xia Jingxing pretended to lighten up a bit, "Really? What did they say?"
Blankfein said with a smile: "Not bad, now everyone wants to solve this mess as soon as possible, and there are great discounts on asset prices.
Darren, you know what? Those British guys at Barclays are so insidious!
They failed to save Lehman a few days ago, but as soon as it declared bankruptcy, they jumped out again. It took only two days to negotiate a transaction plan, investing US$1.75 billion to acquire the New York headquarters and two data centers of Lehman Brothers. and certain other assets.
As for Lehman's Asia-Pacific business, not only we are eyeing it, but the Japanese at Nomura Securities are also eyeing it.
But don't worry, with Goldman Sachs taking action, the Japanese will just wait to go back home in despair. "
A smile appeared on Xia Jingxing's face, "Really? I entrusted this matter to Goldman Sachs because I believe you can solve it neatly."
"That's natural. You can just sit and drink coffee at 40 Wall Street and wait for the final signature."
Blankfein looked confident, and he made Xia Jingxing happy in just a few words.
This scene fell into Mai Jinchen's eyes, making him unable to sit still. The old man said with a smile on his face: "Darren, AIG's current situation is slightly better than Lehman. After all, it is not bankrupt, it is just taken over by the federal government." That's all, so it's relatively difficult to talk about it.
But don’t worry, we at Morgan Stanley will definitely win their insurance business in Asia for Vision Capital. "
Blankfein glanced at Mack, and the two looked at each other for a moment, but neither said a word.
Xia Jingxing was very good at balancing. Just now, the CEOs of the two investment banks had reached an agreement on "persuading Vision Capital to liquidate their positions," but now they were fighting over their work as "M\u0026A transaction consultants."
To be honest, a big customer like Xia Jingxing, who has a lot of business and is generous with his money, is always a hot commodity, so the customer relationship needs to be maintained well.
Although the two knew that it was impossible to monopolize the business, they couldn't help but want to give it a try. At least they could beat their old rivals and get a bigger share of the cake.
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