Reborn in Hong Kong: The Tycoon Grows Up

Just when Mr. Bao was inspecting various branches and making appointments with acquaintances. The major fund companies and investment banks on Wall Street are extremely busy. At least there have been many meetings in the past two days.

If you want to say which era was the craziest for Wall Street capital, at this stage, it is definitely on the list. In order to obtain profits, it can be said that there is nothing that these speculators dare not do.

The 1980s was hailed as an era of coexistence of greed and glitz; the brutality and ruthlessness of capital, and the extravagance of Wall Street were vividly exaggerated. At this stage, the leveraged buyout wave actually has the most profound economic roots. The economic downturn and corporate profit decline, management agency problems and corporate governance issues, undervaluation of companies and the flow of hot money are some of the most critical factors of the times.

The 1950s and 1960s after World War II were called the "golden age" of American economic growth. In 1950, the GDP growth rate of the United States was 8.7% year-on-year. In the following nearly 20 years, the GDP growth rate of the United States exceeded the 6, 7, and 8 mark many times. But the good times never last. Entering the 1970s, the U.S. economy began a "turbulent journey."

During the Nixon administration, he even announced that he would stop fulfilling the obligation to convert the U.S. dollar into gold. The Bretton Woods system centered on gold collapsed, and the hegemony of the U.S. dollar was no longer guaranteed. As the stimulus to economic growth from the war gradually disappeared, the United States faced tremendous downward pressure on the economy, and a deficit began to appear on the current account.

After the Vietnam War, the United States was saddled with a huge fiscal deficit. Coupled with the outbreak of the Fourth Middle East War, the Organization of the Petroleum Exporting Countries announced an oil embargo, and oil prices skyrocketed, leading to an intensification of shrinking demand in the United States. The three pillar industries of construction, automobiles, and steel were particularly severely hit, with the unemployment rate reaching nearly 10%, and enterprises and The number of bank failures hit postwar records.

During the same period, U.S. consumer prices rose by more than 10%, and more severe inflation plunged the United States into a quagmire of stagflation. Corporate profits have fallen sharply. Driven by the economic downturn and declining corporate profits, a merger wave dominated by "hostile takeovers" has begun to emerge.

After the merger wave in the 1960s with the goal of "risk diversification", the United States produced a large number of "diversified" giant companies. For example, ITT Company, which has acquired more than 350 companies, and Litton Industrial Company, which promotes diversification strategies. In these diversified companies with dispersed ownership, management's agency problem becomes increasingly prominent.

Inefficient investment, blind expansion of the company's business territory; even squandering shareholders' profits, corporate governance issues are increasingly exposed by the media. In the case of weak internal governance, the pressure of mergers and acquisitions is regarded as a means of external corporate governance. After the 1970s, some giant companies were re-split and returned to their main businesses.

At the same time, the macro credit environment also provided the ground for the prevalence of leveraged buyouts. The stagflation of the 1970s led to continued credit expansion and extremely loose monetary policy. On the eve of President Reagan's coming to power, there were nearly five years of negative real interest rates; the U.S. federal funds rate and the inflation rate were once inverted.

Even by the late 1970s, the junk bond market was expanding rapidly, and funds were looking for opportunities everywhere. In the past two years, investors have invested US$18 billion in the junk bond market, benefiting KKR, the king of leveraged buyouts. Junk bond funds have participated in all 13 of its large acquisitions.

During the market downturn, high-yield leveraged buyouts have become the targets of hot money in the market. At this time, Wall Street will definitely ignore good projects if they find them. Bao Zixuan wants to establish a securities trading market in Fucaira. Combined with the huge size of Heiyun Group and the huge oil resources in the Middle East, it is a profitable business.

The most important thing is that everyone is not stupid. Investing in Bao Zixuan and oil is definitely much better than increasing leverage to acquire uncertain companies. Not to mention guaranteed profits but no losses, but it is indeed difficult to find a reason for failure. And the profits earned are not small. So when the news came out, the entire Wall Street was shocked.

They all want a piece of the pie, but now they can't directly negotiate with Bao Zixuan; they need to let the other party see their professionalism.

The first is the Goldman Sachs investment bank. After all, Bao Zixuan was the first to find them; Bruce Bowles is reporting the relevant situation to the directors.

At this time, the president of Goldman Sachs was very high-spirited. After all, the other party took the initiative to find them, giving Goldman Sachs an advantage.

Bruce Bowles: "On the day Microsoft went public, Mr. Bao Zixuan came to me. He hoped to cooperate with the Goldman Sachs investment bank to establish the Fucaira stock trading market. As for the relationship between Bao Zixuan and Fucaira, here is also No need for me to stress.”

"The other party is very sincere and their attitude is very clear. If Goldman Sachs Investment Bank wants to participate, they will definitely give us a seat. At the same time, although Bao Zixuan did not directly reject Morgan Stanley, judging from the tone, the other party should not choose the same The Morgan family cooperates. This is our opportunity, which is at least much better than investing in junk bonds."

Goldman Sachs must not remain indifferent to Bao Zixuan's goodwill. If that's true, then with that kid's character, he probably won't even have a chance to cooperate in the future. Old Morgan is cooperating less and less with Heiyun Group because he is too stubborn.

Even U.S. National Steel Corporation is about to be kicked off Black Cloud Automotive’s supplier list. You must know that this is the world's largest automobile group, and they would rather import steel from abroad than buy it locally. The price-performance ratio of U.S. National Steel's products is absolutely not bad. It can be said that this guy just wants to compete.

As for Apple and Microsoft, that's because they never participate in any management. Even if it's a listing, I just come here to take care of some errands. It can't be regarded as cooperation with Heiyun Group companies; Bao Zixuan is not the controlling shareholder of these two companies.

At this time, a director said: "President Bowers, how much profit can Goldman Sachs make if it helps Heiyun Group build a stock trading market in Fucaira?"

Hearing this, Bruce Bowles felt disgusted. It was because of this director that Goldman Sachs entered the world of junk bond underwriting. This will not only damage the company's reputation, but more importantly, it will cause serious hidden dangers in the future.

But these people, for the sake of short-term interests, are completely indifferent. There is no cooperation yet, and to be precise, no details have been agreed upon; it is just a preliminary concept, and Goldman Sachs needs to come up with a plan. He even asked how much profit could be made. How could one answer?

But now that we are on the board of directors, we must not act like a child.

Bruce Bowles said very seriously: "I can't answer you yet, after all, this matter is still under planning. As for how much profit can be earned, it depends on Goldman Sachs' attitude and dedication."

"Bao Zixuan has made it clear that he is not very professional about the stock trading market; therefore, he hopes that Goldman Sachs can come up with an overall plan. In other words, the Fucaira stock trading market is planned by Goldman Sachs. This is a test of skill. How can Maximize profits while satisfying customers.”

"So I will lead the team, personally investigate, and then come up with a final plan."

"Dear directors, there is currently no professional stock trading market in the Middle East, but there are many large oil companies in the Middle East. They lack technology and capital, but they have huge oil and natural gas resources in their hands."

"As long as you raise funds in the stock market, it is easy to develop. If Goldman Sachs invests junk bond funds in oil and natural gas companies, not only will the assets become benign, but the future returns will be immeasurable."

All the directors were interested when they heard that Goldman Sachs could participate in the construction of a national stock trading market. This is not just a matter of profit; popularity and influence are even more difficult to measure in terms of money.

If the Fucaira project is successful, then other countries that want to build stock trading markets will definitely choose Goldman Sachs first. This is invisible advertising, more useful than any publicity.

And you can exchange junk bonds for oil and gas company stocks. Any fool knows how to choose. This is a great opportunity that you cannot find even with a lantern; you must not miss it.

Chris Goldman, the company's largest shareholder, said very resolutely: "Junk bonds cannot last long, so we should get out of here as soon as possible. Since Bao Zixuan took the initiative to find President Bowers, then you should work hard and be a customer Satisfied with the plan.”

Chris Goldman, as the representative of the Goldman family; his words are still very weighty and can be regarded as the final word on this matter. In other words, the entire company must unconditionally cooperate with the Fucaira Stock Exchange Project.

As for the other directors, they definitely don’t dare to say anything more, as that would cause discomfort for themselves.