The dinner ended successfully. In addition to Goldman Sachs, Lehman, Merrill Lynch, Morgan Stanley, Bear Stearns, Citigroup and other Wall Street financial gangs, everyone had a share, and everyone got a Christmas gift of wrapped CDs. The earth is content.
The Three Body Fund has also received a lot of investments and investment intentions. However, Lao Qian’s family funds and funds with hidden backers are still uncertain. Although Mr. Lu’s image is very strong,
"Chinese Stock God",
The "hero of Silicon Valley" has countless auras that can blind everyone's eyes, but shorting subprime mortgages is really shocking.
Even old friends like Buffett and Bill Gates are hesitant, hoping for a reason they can't refuse.
So the next day, Lu Fei hurriedly got out of Ivanka's top-notch car and arrived at the Paulson Hedge Fund in a hurry.
After all, there are at least two moles in his fund. One Merrill Lynch and one Goldman Sachs are still useful if you keep them!
"Where's the McDonald's I ordered?" Xuan Lufei walked out of the elevator and bumped into Xu Xin, Carlson Bullock and other reliable confidants who had been waiting for a long time.
"Here it is." Xu Xin handed it over with her own hands: "For those who drink milk, I specially asked someone to prepare it. It's not suitable to drink Coke early in the morning."
"Who makes Buffett and Gates like to drink?" Lu Fei took a bite of cheeseburger: "I'm willing to sacrifice my stomach to pay for it. Are they all here?"
"They're all inside, drinking Coke." Xu Xin shook her head and laughed, and walked to the door. Then she saw John Paulson holding his breath, taking deep breaths.
"Why are you so nervous? Didn't you handle yesterday's banquet well?" Lu Fei stared into his eyes in surprise.
"Then you're standing in the way!" John Paulson said with a wry smile: "How about it still be like a banquet, where you take the lead and I cooperate?"
"No, you are the protagonist of this subprime loan. It is precisely because of your keen sense of smell and tenacity that you persuaded the Three-Body Fund to invest all your money. I am also a supporting role for you!" Lu Fei patted him on the shoulder.
"You must remember, whether it is to people or the media, you must say this." John Paulson said: "But this is for you..."
"I don't need this fame, and the future of your fund requires you to become famous. Do you understand what I mean, John?" Lu Fei waved his hand, but there was a deep meaning in it.
Once the subprime mortgage short-selling is successful, the amount of profit will be earth-shattering. If it is known that he is behind the scenes, it will do no good. Rather than being burdened by the false reputation, it is better to push John Paulson out. He is a real seedling. Red star flag jewish.
The whole United States will only turn him into a deity
"Empty God". In this way, you can also land smoothly.
"Lu, I, I really don't know what to say..." John Paulson couldn't help but be moved and gave him a hug.
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"Remember, I am just a sponsor who has been completely convinced by your charisma and amazing eloquence, and I am willing to provide you with all help including money." Lu Fei repeatedly warned: "I am the only one who can bet on you. It’s just good vision and luck given by God.”
"I understand, Lu." John Paulson nodded solemnly: "But wouldn't it be too wasteful for us to do CDS with Goldman Sachs for Lehman's bankruptcy?"
"You think Lehman won't go bankrupt?"
"But with the Federal Reserve and the Treasury Department here, they won't leave it alone, right?"
"I just bought insurance on the side. The premium is mainly the settlement fee to resolve the grievances with Goldman Sachs." Lu Fei smiled and told all the excuses he had prepared.
John Paulson didn't dig too deep. After all, the premium was paid for by the Trisolaris Fund. Following him into the conference room, he saw Buffett and Bill Gates sitting on the sofa, talking and laughing.
"Hey, Gates, Warren, morning." Lu Fei greeted,
"Do you mind if I chat while we eat?"
"Is there any sirloin burger?" Buffett said with a smile: "If so, give it to me, I don't mind." Bill Gates reminded: "Hey, Warren, you have been diagnosed with prostate cancer. The doctor asked you to Either exercise or quit Coke and burgers, don’t take your life for granted.”
"No, it's impossible not to drink Coke, even in this life, so I choose damn exercise." Buffett took the burger and opened the package happily.
"Me too, I can't live without Coke!" Lu Fei put the milk in front of Bill Gates.
"How about Gates, do you drink this, or coffee?"
"Of course I drink Coke too!" Bill Gates rolled his eyes: "By the way, Lu, how long do you want to stay in the United States this time? Why don't you stay a little longer? Apple's press conference will be held in January. I heard that Steve Jobs and Like you, we will be on hand to announce the new Apple smartphone."
"Of course, I plan to celebrate the New Year in the United States this year." After Lu Fei said polite words to them, he introduced John Paulson and boasted: "Everything today was done by this short-selling genius, John Paulson. Paulson, maybe when you mention "Paulson" on Wall Street, you will only think of Henry Paulson, but I can guarantee that if nothing happens, he will soon be famous on Wall Street, and even in the United States. When "Paulson" is mentioned again, Sometimes, John Paulson is only mentioned." John Paulson was even thicker-skinned and could not help but blush.
"Stand straighter." Lu Fei cast a look and asked to start your performance. John Paulson breathed out and picked up a foam box on the table. A tall building made of building blocks immediately appeared in everyone's sight, with labels layer by layer - 3a, 2a, a, 3b, 2b, b……
"This is our entire subprime bond infrastructure. Among them, B-class bonds are the foundation of the entire subprime mortgage and have the highest interest rates. Obviously, you will definitely earn the most by buying them, but they are high-risk and may even default and collapse." Pulling away one of the building blocks in Level B, the entire tall building shook slightly.
"But I don't know when people with no income or stable jobs will be able to apply for 3B-rated bonds. In the end, because they can't repay the loan, they will all become a pile of garbage. Where is the trash can?"
"Do you have any basis or evidence?" Buffett saw the building blocks drawing a parabola in mid-air and falling accurately into the trash can.
John Paulson and Lu Fei looked at each other and played the investigation video they had shown him before. Rushu Jiazhen said: "According to our investigation, the subprime mortgage company has serious violations. In order to pass the loan review, it will help low-income people." People with even no stable income pretend to be high-income lawyers and doctors. Among them, the proportion of loans with incomplete or even no supporting documents is 52.1%. Now they even waive the loan review. More than 6% of the new subprime loans There is no documentary proof in Chengdu. You only need to register your name with an agency to apply for a loan. Even those who already have a subprime loan will buy a second, third, or fourth home with nothing..."
"That is to say, these B-class bonds have all fallen to zero." Xuan Lufei wiped his mouth with a tissue.
"Even if it's A-level or above, it's the same. It's all a bunch of beautifully packaged garbage."
"No way?" Bill Gates frowned as he listened to the whole process of packaging forgery: "A bunch of junk subprime mortgages can be packaged and turned into AAA financial derivatives that are not inferior to national bonds. Don't you think this Are there any weird problems with the logic inside?"
"Isn't it difficult to say this? As long as the rating agencies are dragged into the water, this operation can be completed." Lu Fei crossed his arms: "In fact, according to John's investigation, Moody's, S&P and Fitch are all doing this."
"Why?" Buffett put down the tempting burger.蟟
"Because if the ratings of subprime mortgage bonds are not raised, business will go to rating agencies that are willing to give high ratings, even triple-A ratings. In order not to lose customers and revenue, they have to join forces and help their customers deceive them. Customer." Lu Fei picked up the page-turning pen and flipped through the ppt on the TV, which clearly showed the proportion of subordinated bonds at each level.
"Three-body has also done CDOs. We have never done this, but we have seen it. It can be said that 65% of the 3A level CDOs on the market look safe and risk-free. In fact, it is estimated that at least 90% of them are really smelly. Inaudible garbage.” It was a shocking and startling stream of information to digest.
Although Lu Fei and John Paulson spoke clearly and rationally, they remained silent.
"If it's true as you say, what is the current default rate?" Buffett narrowed his eyes into a straight line.
"It has exceeded 4.5%, and when it reaches about 8%, the entire building is likely to..." John Paulson pushed lightly, and with a crash, the entire building block collapsed instantly, leaving chicken feathers everywhere.
"Why haven't so many people discovered it?" Bill Gates couldn't help but trembled.
"Some people can't see it because the categories involved are too complicated. Bubbles are derived from bubbles. The entire subprime mortgage is hidden at the bottom. Even Wall Street elites can't tell the truth from the false. What's more, Not to mention investors who are even less knowledgeable. Some of them see it but don’t believe it. People always believe what they see in front of them, or they are just betting like us." Lu Fei smiled and said: "But it’s just a bet. The loan will not collapse.”
"How big is the entire bubble?" Buffett felt his mouth go dry and his tongue went dry, and he took a big sip of Coke.蟟
"It seems that the amount of subprime mortgages is only 1.5 trillion, but in fact the derivatives market surrounding subprime mortgages exceeds 450 trillion, and CDS accounts for 72 trillion...P2P also accounts for about 1.3 trillion." Lu Fei couldn't understand it. Thinking about it, I thought that the mine I planted in "The World is Flat" was only worth 500 billion US dollars, but I didn't expect that Wall Street would be so crazy.
You must know that in the past seven years, China only had 2 trillion RMB! In just 3 years, it is already
As expected, the total amount of funds in the "4 trillion stimulus plan" needs to be played by the United States. This thunder will only explode if it doesn't explode.
Once it explodes, it will shock the heavens, shake the earth, and make ghosts and gods cry! After a long question and answer, Buffett showed a hint of shrewdness in his silly smile: "That's why, Lu, you did that at yesterday's Christmas party. Haha, what you gave was not a Christmas gift, but a landmine. But you gave it accidentally." Lehman, or did you intend to give it to Goldman Sachs on purpose?"
"I am the one who advocated for Lehman..." John Paulson said ahead of Lu Fei: "Lehman invested a lot of energy in the CDO market and completely ignored the risks brought by subprime mortgages. CDS alone has 430 billion US dollars. Not to mention the scale of CDOs, they even create synthetic CDOs, and package the CDS sold to us, along with P2P and unsold CDOs, into new CDOs.”
"So you are not optimistic about Lehman and want to short Lehman." Buffett guessed the root knot at once.
"Not only Lehman, but also Merrill Lynch and Bear Stearns." Lu Fei looked directly at them.
"Originally, I planned to have this project exclusively, but I can't eat such a big burger, so I am willing to open it to you, my best friends, but the limit cannot be less than 30 million US dollars."
"Warren, what do you think?" Bill Gates was moved, but he still humbly asked for advice and had to let Buffett make the decision.
Lu Fei said quietly: "Even if you guess wrong, you will only lose part of the premium, but if you hit the target..." As if Satan was whispering, Buffett's cloudy eyes burst into light, and then he said kindly: "Lu, Gates Tell me, you've always wanted to join my Berkshire Hathaway?"
"Yes, but to be honest, the circulation in the secondary market is too small and the price is expensive. Warren, can you give me a friendly price?" Lu Fei winked and smiled playfully.
"If it's true as you said, Lu, I welcome you to serve as an independent director of Berkshire Hathaway." Buffett smiled without answering and raised his Coke.
"Cheers!" When Bill Gates saw Lu Fei raising his glass, he also hurriedly clinked his glass. Soon, the three agreed to take the lead of Trisolaris Fund and form a joint family office with the Bill Gates Family Fund and the Buffett Family Fund to start a big cooperation.
From this moment on, the three families were connected online. In the future, with each investment, it is destined to form a community of interests that are inextricably linked.
"By the way, Lu, why did you give Goldman Sachs such a strange CDS? Is there any secret hidden in it?" Bill Gates was very curious.
"China has a plan, called the method of provoking generals. I will turn to Goldman Sachs. Lehman may not ignore it. Does Richard have a history of attacking Goldman Sachs partners? Maybe now, Lehman is going to go against me. I will go short. Richard You have to do more virtue." Xuan Lufei had a mysterious smile on his face.
Of course he won't say that there is a trick hidden in this plan. In the previous life, it was precisely because of Goldman Sachs' retaliation that it deliberately blocked any way for Lehman to survive, which led to Lehman's bankruptcy.
Now, Goldman Sachs is the CDS underwriter for Lehman's bankruptcy. If Goldman Sachs doesn't rescue him, Lehman will have to pay compensation to Mr. Lu, and Goldman Sachs will have to shoulder billions of dollars.
If Goldman Sachs chooses to take Lehman's hand, wouldn't it be even more embarrassing than losing billions of dollars? If you kill someone, you'll be heartbroken!
In other words, if Goldman Sachs doesn’t save it, it will lose money! Goldman Sachs saved me and fell into my trap! In short, regardless of whether he can be saved or not, Goldman Sachs will definitely eat the nine-turn large intestine cooked by Mr. Lu with the added defense.
Buffett and Bill Gates don't understand this approach and just invest money. With their endorsement, a bunch of old money families who were still waiting on the sidelines finally couldn't sit still.
Even if we know that shorting subprime mortgages is a fantasy, the two investment gods Lu Fei and Buffett have joined forces. It is difficult for people not to have confidence in the Trisolaris Fund. What if it is true?
Confidence and image are the most important indicators of investment! As a result, a lot of green dollars flowed into the joint fund jointly created by the three companies. In just one week, a total of 1.05 billion US dollars was raised.
Coupled with China's domestic US$500 million, John Paulson decisively divided it in half and established two brand-new short-selling funds. They bought all products that could be shorted, such as subprime mortgage bonds, ABX index, CDO, synthetic CDO, etc. To short CDS, you only need to wait until the moment when real estate turns from prosperity to decline.
While Lu Fei was very busy and the Gulfstream G450 was flying around the United States, Merrill Lynch was not idle either.
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"In the proposed CDS contract, we found that Lu had set a hidden clause. If Merrill Lynch's rating is downgraded, a certain amount of collateral must be paid to the Trisolaris Fund." Michael Bloom submitted the document.
"What kind of collateral?" Sean O'Neill frowned.
"It's nothing more than the superhero IP that Marvel mortgaged to us. Lu is really a full-fledged Marvel super fan." Michael Bloom showed a sneer.
"Is this clause only available to Merrill Lynch, or is it shared by Bear Stearns and Lehman?" Sean O'Neill asked.
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"Both." Michael Bloom said.
"What's the attitude of those companies?" Sean O'Neill was expressionless, specifically asking Lehman's Richard Fuld, did he agree or disagree?
"Shall I call to find out?" Michael Bloom rolled his eyes. Signonil remained silent, just pushed the landline phone in front of him, and watched quietly as he dialed a number.
"Beep, beep..." As soon as the call was connected, Michael Bloom asked two questions, but the third sentence got stuck in his throat, his eyes widened, and he looked stunned.
"What's wrong? You didn't ask, or you still refuse to say anything?" Sionnier looked solemn.
"No, Richard answered the phone in person." Michael Bloom's eyes were dull: "He asked me to ask you, do you want to team up with Lehman and Bear Stearns to make a short bet with Lu Lai? abx index, make a huge profit from him?"
"Haha, it seems that Lu's decision to ask Goldman Sachs to deal with CDS for the bankruptcy of Lehman has angered this Wall Street bulldog." Sean O'Neill laughed and said: "The mad dog is going to bite!"
