My Age of Investment

   Chapter 837

  "Good guy, the stock price crashed directly and fell more than 35%."

Standing behind Xia Jingxing, Liu Hai looked at the K-line chart on the computer screen on the desktop. His expression was astonished. Then he said with joy: "Jingxing, New Century Finance is like this. The subprime loan market will definitely be there next. With the big changes, our investment has completely stabilized."

  Xia Jingxing did not 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 mortgage crisis and the first domino.

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

  "Bang Bang Bang~" The door was knocked suddenly.

   "Please come in!" Xia Jingxing said loudly.

Jiang Ping opened the door and walked in quickly, with joy and excitement written on his face: "Jingxing, great news! New Century Finance issued a profit warning. It is estimated that the mortgage default rate has soared and the cover cannot be covered. NS!

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

  Jiang is usually a very calm person with few words, but at this moment he is very exaggerated and has rich body language.

  Xia Jingxing was infected by the kind of ecstasy in Jiang Ping, and couldn't help laughing: "Yes, it is indeed a happy event, worth celebrating!

  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 of losing money is the indiscretion of 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 maliciously default, and would rather bear credit taint than bear the huge losses caused by falling house prices.

  In fact, many people cannot afford a loss of hundreds of thousands of dollars in a house. "

Jiang Ping nodded, and a house valued at US$500,000 at first suddenly fell to US$300,000, but the borrower still had a loan of US$500,000. In this case, ninety-nine percent of low-income people would choose to let the house be destroyed. The bank took it away.

  These bad debts did not fall into the hands of the poor who bought the house, so who did they fall on? It fell into the hands of investors who bought subordinated debt and CDO debt mortgage bonds, including commercial banks, investment banks, funds, and ordinary investors.

  Xia Jingxing said lightly: “The wind has just started to blow, 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 to observe and collect information from all parties.”

"Yes!"

   Jiang Ping and Liu Hai nodded.

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

  They somewhat admire Xia Jingxing’s determination, and if they are the highest decision-makers, they might have been dancing and dancing, at least they will be happy for several days.

  In fact, they are very excited at the moment. The fund lost a lot some time ago, which caused a lot of psychological pressure on them.

  Today’s good news is like the sun shining all over them, except for the dark clouds above their heads.

  There is nothing to worry about anymore! It's all done!

  The two hurriedly said goodbye and left. When they walked, they felt that the whole body was lighter.

  After the office door was brought up, with a "bang", Xia Jingxing slammed his fist on the table, and the big rock in his heart finally fell.

  Focusing on subprime loans, Envision Capital has invested a total of US$3.4 billion, most of which is his own money, which is considered a heavy bet.

  Now that the situation is getting clearer, he doesn’t have to worry about the butterfly effect.

  A few hours later, Goldman Sachs CEO Bellan Kefan suddenly visited Envision Capital.

  As soon as he entered the house, the ghostly old man smiled and said, "Dalun, congratulations! I made another good investment."

  Xia Jingxing greeted the old man to take a seat, while pretending to be confused: "Mr. Bellan Kefan, I don't know where this joy comes from?"

  Beilan Kefan sat on the sofa with Erlang's legs tilted, took a sip of coffee on the coffee table, and then took a look at Xia Jingxing with the gap of his head up. The latter's face was as usual and nothing was observed.

   Putting down the coffee in his hand, Bellan Kefan said: “Dylan, have you read today’s financial news? HSBC and New Century Finance, the two largest subprime loan providers in the United States, have issued warning messages successively.”

  Xia Jingxing nodded his head lightly, without speaking, Bellan Kefan ran to him inexplicably today, a bit unable to guess the other party's intentions.

  Berlankfan smiled, "You don't need to be alert, I don't mean anything else, I just happened to pass by your company and come up to talk to you."

  Xia Jingxing smiled and said, "Mr. Bellankfan, you don’t need to be circumspect, just say it if you have something to say. As far as the relationship between our two companies is concerned, there is no need to taboo."

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

Berenkovan stared at Xia Jingxing and said: "Vision Capital, Claire Capital, and Paulson Fund are the three biggest 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 believe in your own judgment. "

   Seeing Xia Jingxing who was silent, Bellan Kefan suddenly smiled, "Of course, I will not consult for nothing, Goldman Sachs will give Vision Capital in return.

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

  Xia Jingxing understood in an instant. 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. Bellankfan, with all due respect, our fund has been in a lot of losses recently, and many colleagues are laughing at us. If you consult me, are you afraid to follow us with bad luck?"

Bellankefan smiled lightly. He did hear some rumors from the upper echelons, but the internal situation of Goldman Sachs was complicated, and it was not what he said. Moreover, Goldman Sachs' self-operated department bought a lot of subordinated bonds and debt-backed bonds. Turning the bow is not an easy decision.

  Xia Jingxing 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 when other investment banks are forced to lay off staff due to heavy losses?

  This show is giving out bonuses to all employees.

  What did Goldman Sachs do right?

  One thing, go short subprime mortgages.

  Just when other investment banks hadn't reacted, or even bought subprime derivatives assets in large sums, Goldman Sachs short-selling subprime mortgages.

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

After trying to understand the corners, Xia Jingxing looked at Bellan Kefan with a smile, thinking about how to get some real benefits from the old man.

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

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

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

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

  Xia Jingxing nodded, "Really? Then the financial situation in the new century is not so good."

  Berlankfan smiled and said, "Where does the bad debt come from? I believe you should be very clear.

  As for the consequences, and what kind of chain reaction? Should meet your prediction. "

  Hearing this, Xia Jingxing instantly thought of a lot. Goldman Sachs' ability to escape the subprime mortgage crisis was not necessarily due to the high-level communication. The professionalism and vigilance of the high-level should also account for a big factor.

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

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

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

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

   Seeing Xia Jingxing agreed to share, Beran Kefan finally smiled with satisfaction.

  It’s not that without Xia Jingxing’s advice, he will not be able to make the final decision, but he wants to go more steadily and have one more chance of winning.

   "We expect that as the subprime mortgage default rate soars, debt-collateralized bonds will become a pile of rubbish."

  Berankfan nodded, "I can see that you have bought so many CDS credit default swaps, aren't you just waiting for that moment!"

  "We have been investigating since last year..."

  Xia Jingxing told Bellan Kefan to the original findings of some investigations conducted by Envision Capital.

  It's not that he showed kindness, but that the old man has almost realized the risk and is ready to make Goldman Sachs turn around. He just sends a favor.

  Berlankfan’s eyes lit up. The findings Xia Jingxing told him made him feel refreshed and strengthened his confidence a lot.

   "Darren, thank you very much! Goldman Sachs will definitely remember your help today." Bellan Kefan said solemnly.

  Xia Jingxing smiled, "It's serious, we are the closest partners, we only exchange information."

  Berlankvan nodded his head, "Yes, we need to strengthen our ties in the future.

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

  Xia Jingxing understood the old man’s suggestion to remind him not to worry too much. Goldman Sachs’ joining the short-selling army will not affect Envision Capital and reduce the profitability of Envision Capital.

  The old man is also telling the truth. The longs in the sub-prime market have lost hundreds of billions of dollars together. This money will not disappear out of thin air, but into various short pockets.

   "Okay, let's go, I'm going back to the company for a meeting, and I will invite you out to play golf the next day."

  Belankfan stood up, stretched out his hand and shook Xia Jingxing firmly, "Tomorrow I will have someone bring the contract over and help Envision Capital provide one service for free."

"it is good."

  Xia Jingxing has no courtesy, so he directly accepted the service gift from the other party.

  This is the benefit they deserve, so you don’t need to be polite.

  Speaking of it, the role of investment banks like Goldman Sachs in financial activities is really important, designing consignment products, helping to match rivals, selling subprime mortgage assets...everything is inseparable from these pimps.

  At the same time, because of work, Goldman Sachs has a very strong information gathering ability. For example, Goldman Sachs was the first institution to know that Envision Capital shorted subprime mortgages.

  With so many information acquisition channels in hand, Goldman Sachs is like a pair of eyes and a pair of ears. Every time a big wind and a big wave can be a breeze.

After Bellan Kefan left, Xia Jingxing thought that Mai Jinheng would also come to him.

  But the old man didn't come, and didn't even call him, indicating that his sensitivity is still a little worse.

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

  Mai Jinheng did not come to him, he would naturally not send any favors, because it was not a good deal to catch up with him.

  (End of this chapter)