My Age of Investment

Chapter 837

"Good guy, the stock price crashed immediately, falling by more than 35%."

Standing behind Xia Jingxing, Liu Hai looked at the K-line chart on the computer screen on the table, his expression was shocked at first, and then he said happily: "Jing Xing, New Century Finance has become like this, and the subprime loan market will definitely The sky has changed drastically, and our investment has been completely stabilized."

Xia Jingxing didn't speak, but the faint smile on his face was enough to explain his mood at the moment.

New Century Finance is the second largest subprime loan provider in the United States, and it can also be regarded as the source of the subprime crisis and the first domino.

When this card falls, the subprime mortgage bonds derived from subprime loans, as well as the CDO, CDS, and ABX indexes derived from subprime debt will collapse in a row, ushering in huge fluctuations in value.

"Bang bang bang~" There was a sudden knock on the door.

"Please come in!" Xia Jingxing said loudly.

Jiang Ping opened the door and walked in quickly, with joy and excitement written all over his face: "Jing Xing, great news! New Century Finance issued a profit warning, probably because the default rate of mortgage loans has soared, and the cover can't be covered at all. up!

In other words, our bet was successful, and huge profits are on the way. "

Jiang Ping is usually a quiet and calm person, but at the moment he is very exaggerated, with rich body language.

Xia Jingxing was affected by Jiang Ping's ecstasy, and couldn't help laughing: "Yes, it is indeed a great event, worthy of celebration!

This is equivalent to firing the first shot of the subprime mortgage crisis, and there will definitely be more companies releasing financial reports in the future.

Not only New Century Finance, but few other financial institutions are clean.

Behind the financial reports that are losing money, there are excessive mortgage loans, and a large number of borrowers are simply unable to repay the loans.

The most important thing is that the direction of the housing market has changed. Once the house starts to fall in price, the residual value of the house after deducting the mortgage will become a negative number.

More borrowers will begin to default maliciously, preferring to bear credit stains rather than bear the huge losses caused by the decline in housing prices.

In fact, many people cannot afford to lose hundreds of thousands of dollars on a house. "

Jiang Ping nodded. A house originally worth $500,000 suddenly dropped to $300,000, but the borrower was still burdened with a $500,000 loan. The bank took it away.

These bad debts are actually not in the hands of the poor who buy houses, so who are they? It fell into the hands of investors who bought subordinated debt and CDO debt obligations, including commercial banks, investment banks, funds and ordinary investors.

Xia Jingxing said indifferently: "The wind has just picked up now, and there should be some time before the wind and waves blow completely. Now everyone is focusing on the subprime mortgage and its derivatives market, observing and collecting information from all parties."

"yes!"

Jiang Ping and Liu Hai nodded heavily.

Both of them noticed that Xia Jingxing's face had returned to calm at this time. Even though today's good news was so important, it only made the boss happy for a few minutes, which showed that the boss's mind was very calm.

They somewhat admired Xia Jingxing's determination, if they were the top decision makers, they would have been dancing, at least they would have been happy for several days.

In fact, they are very excited at the moment. Some time ago, the fund suffered a large loss, which caused them a lot of psychological pressure.

Today's good news, like the sun shining, cleared away the dark clouds above their heads.

Nothing to worry about anymore! Just do it!

The two hurriedly said their goodbyes and left. When walking, they felt that their bodies were much lighter.

After the office door was closed, Xia Jingxing slammed his fist on the table with a "bang", and the big stone in his heart finally fell to the ground.

Around the subprime mortgage, Vision Capital invested a total of 3.4 billion U.S. dollars, most of which were his own money, which can be regarded as a heavy bet.

Now that the situation is gradually becoming clearer, he doesn't have to worry about any butterfly effect.

A few hours later, Goldman Sachs CEO Blankfein paid a surprise visit to Vision Capital.

As soon as he entered the room, the ghostly old man smiled and congratulated: "Daren, congratulations! You made another good investment."

While calling the old man to sit down, Xia Jingxing pretended to be confused and said, "Mr. Blankfein, I don't know where this joy comes from?"

Blankfein sat on the sofa with his legs crossed, picked up the coffee on the coffee table and took a sip, and then took advantage of the spare time when he raised his head to glance at Xia Jingxing from the corner of his eye. The latter looked normal and didn't notice anything.

Putting down the coffee in his hand, Blankfein said, "Daren, have you read today's financial news? HSBC and New Century Financial, the two largest subprime loan providers in the United States, have issued early warning messages."

Xia Jingxing nodded his head lightly, but did not speak. Blankfein ran to him out of nowhere today, and he was a bit puzzled about the other party's intentions.

Blankfein smiled, "You don't need to be on guard. I have no other intentions. I just happened to pass by your company and came up to talk to you."

Xia Jingxing said with a smile: "Mr. Blankfein, you don't have to beat around the bush. If you have something to say, just say it straight. As far as the relationship between our two companies is concerned, there is no need to shy away from anything."

"Haha, I'm hypocritical, okay, then I'll just say it, how big do you expect the impact of subprime loans will be?"

Blankfein looked straight at Xia Jingxing, and said, "Vision Capital, Cleary Capital, and Paulson Fund are the three largest bearish players in the subprime mortgage and its derivatives market, and these three companies are all related to you. .

I believe that Darren, you must have your own unique insights and firmly believe in your own judgment. "

Seeing the silent Xia Jingxing, Blankfein suddenly smiled, "Of course, I won't consult in vain, Goldman Sachs will reward Envision Capital.

Next, we can help you contact various CDS buyers, and you will compare prices slowly until you sell at the most ideal price, and Goldman Sachs will not charge a cent for it. "

Xia Jingxing instantly understood that the old man in front of him must have sensed danger, but he was not particularly able to make up his mind, so he thought of himself, the biggest short seller of subprime mortgages.

"Mr. Blankfein, with all due respect, our fund has suffered a lot of losses recently, and many colleagues are making fun of us. If you consult me, are you afraid of being unlucky with us?"

Blankfein smiled lightly. He had indeed heard some rumors from the upper echelon, but the internal situation of Goldman Sachs was complicated, and it was not just his words. Moreover, Goldman Sachs' self-operated department bought a lot of subordinated bonds and CDOs. Turning the bow is not an easy decision.

Xia Jingxing vaguely remembered that in his previous life, Goldman Sachs not only successfully escaped from the subprime mortgage crisis, but also made a lot of money.

What is Goldman Sachs doing at a time when other investment banks are being forced to lay off staff amid mounting losses?

This Xiu'er is giving out bonuses to all the employees wantonly.

What did Goldman Sachs do right?

One thing, end up shorting subprime mortgages.

Just when other investment banks hadn't reacted and were even buying subprime derivatives assets in large sums, Goldman Sachs shorted subprime mortgages.

He can't remember the exact time when Goldman Sachs entered the market, but it is speculated that it will be in the first half of this year, because it will be too late.

After trying to understand the twists and turns, Xia Jingxing looked at Blankfein with a smile, thinking about how to get some real benefits from this old man.

"Daren, let me first talk about our views on subprime mortgages!"

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

"The mortgage company under Goldman Sachs is the largest creditor of New Century Finance, and we have a lot of contacts with them.

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

Xia Jingxing nodded, "Really? Then the situation of New Century Finance is not very good."

Blankfein said with a smile: "Where do the bad debts come from? I believe you should be very clear.

As for what kind of consequences will it cause, and what kind of chain reaction will it produce? It should meet your predictions. "

Hearing this, Xia Jingxing immediately thought of a lot. Goldman Sachs' success in escaping from the subprime mortgage crisis may not be entirely due to the top management's passing of words. The top management's professionalism and vigilance should also account for a large factor.

Blankfein not only read the key information from the profit warning report released by New Century Finance, but also smelled the risks from it, and now he is even shy to communicate with himself.

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

Thinking of this, Xia Jingxing felt that he underestimated the bald old man in front of him, he was a character.

"Okay, then let's chat casually today?"

Seeing that Xia Jingxing agreed to share, Blankfein finally smiled with satisfaction.

It's not that without Xia Jingxing's reference, he couldn't make the final decision, it's just that he wants to walk more steadily and have a better chance of winning.

“We expect CDOs to turn into a pile of junk as subprime defaults soar.”

Blankfein nodded, "I see, you bought so many CDS credit default swaps, you are just waiting for that moment!"

"We've been investigating since last year..."

Xia Jingxing told Blankfein about some of Envision Capital's investigation findings.

It wasn't that he showed great kindness, but that the old man had almost realized the risk and was about to turn Goldman Sachs around, and he was just giving him a favor.

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

"Daren, thank you very much! Goldman Sachs will definitely remember your help today." Blankfein said with a very solemn expression.

Xia Jingxing smiled, "It's serious, we are the most intimate partners, just exchanging information."

Blankfein nodded heavily, "That's right, we need to strengthen our relationship in the future.

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

Xia Jingxing understood the old man's hint, and it was to remind him not to worry too much. Goldman Sachs joining the short-selling army would not affect Vision Capital and reduce the profit of Vision Capital.

What the old man said is also true. The bulls in the subprime mortgage market collectively lost hundreds of billions of dollars. The money will not disappear out of thin air, but will go into the pockets of various short sellers.

"Okay, let's go, I'm going back to the company for a meeting, and I'll ask you out to play sometime."

Blankfein stood up, stretched out his hand and shook Xia Jingxing vigorously, "Tomorrow I will have someone bring the contract over, and I will serve Vision Capital for free."

"good."

Xia Jingxing was not polite, and accepted the other party's gift of service very directly.

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

Speaking of it, investment banks like Goldman Sachs play an important role in financial activities. Designing consignment products, helping to match opponents, selling subprime assets to deal with the aftermath... everything is inseparable from the gang of pimps.

At the same time, because of work, Goldman Sachs has a very powerful information collection capability. For example, Goldman Sachs was the first institution to know that Envision Capital was shorting subprime mortgages.

With so many information acquisition channels in hand, Goldman Sachs seems to have a pair of eyes and a pair of ears, and it can always save the day in every storm.

After Blankfein left, Xia Jingxing thought that Mack would also come to him.

But the old man didn't come, and he didn't even call him, which shows that his sensitivity is still a bit weak.

It is not without reason that Morgan Stanley performed worse than Goldman Sachs in the subprime mortgage crisis.

If Mack didn't come to look for him, he naturally wouldn't give any favors, because what he was after was not a good deal.