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Chapter 500 Sold to Goldman Sachs

I had dinner in the hotel, drank a cup of coffee, and then went to the luxury business suite in Gaoyang to talk about work.

In the United States, the ban on smoking is very strict. Smoking is not allowed in most public places, especially in high-end hotels.

Because Gao Yang wanted to smoke, Chen Lan reserved a smoking room for him. Gao Yang came to the United States in January, and the same arrangement was made.

Gao Yang lived in a suite with a living room of more than 20 square meters. Chen Lan, Wu Fei and Qin Xianglin wanted to discuss the Titan Fund with Gao Yang.

Lin Yunjiao and Yang Ming were serving tea at the side, and the tea was Pu'er tea and Tieguanyin brought from China.

Seeing that Lin Yunjiao's movements of making tea were a bit jerky, Yang Ming asked softly, "Sister Yunjiao, didn't you know how to make tea before?"

Lin Yun's delicate face flushed slightly: "I only started learning it when I went to work in the president's office. There is no tea set here, so it feels inconvenient."

Yang Ming smiled slightly: "Then let me help you. I have been studying with a tea art master for more than three months, and I just became a teacher a few days ago..."

On the sofa, Gao Yang took out the cigarette case and handed one to Qin Xianglin and Wu Fei.

After lighting a cigarette, Gao Yang noticed that Chen Lan glanced at Lin Yunjiao and Yang Ming who were preparing tea, Gao Yang smiled and said, "Sister-in-law, they are all employees of the company, so there is no need to avoid anything."

Chen Lan made a small gesture, took out a notebook, and prepared to report on work formally.

Beside, Lin Yunjiao and Yang Ming were slightly happy when they heard Gao Yang's words just now, knowing that this was a big deal, but Gao Yang said that they don't need to avoid it.

Chen Lan unfolded the notebook and began to report:
"Since Standard & Poor's announced the downgrade of subprime bond ratings on July 7, there have been these major events:

On July 7, the hedge fund under Bear Stearns announced that it had suffered huge losses and was on the verge of liquidation;

On August 8, Macquarie also announced that its two high-yield funds faced a 1% loss;
On August 8, in an interview with the media, Bear Stearns believed that the U.S. credit market was in the worst state in the past 3 years. Affected by this, European and American stock markets fell sharply this Friday;

In addition, just today, Bear Stearns President Spector just announced his resignation...

From the current point of view, among the top five investment banks in the United States, Bear Stearns is in trouble and may suffer the most.

Fortunately, when we shorted the subprime mortgage swap contract in early February, Professor Qin believed that Bear Stearns' subprime mortgage business was aggressive and suggested avoiding it.

Since Standard & Poor's lowered the subprime bond rating on July 7, BB and BBB grades have been most affected, and prices have plummeted.

AA and AAA grades are relatively stable, mainly because the disclosed subprime mortgage default rate is just over 6%.

I asked Huang Yi to arrange manpower, and conducted another week of on-the-spot investigation. On August 8, I got the analysis results.

According to our survey, the current subprime mortgage default rate must have exceeded 10%. Our survey conclusion is that the default rate is around 12%, which is frighteningly high, and subprime mortgages are bound to collapse.

On August 8, I contacted several investment banks and made quotations for our short-selling subprime mortgage swap contract. Based on the comprehensive quotations, if we sell now, we should be able to make a profit of about 3 billion US dollars.

After deducting the 33% capital gains tax, the net investment income is exactly 11 times.

Now, swaps are a hot commodity on Wall Street..."

Chen Lan was very excited today. Neither she nor Wu Fei expected that in just half a year, they would be able to reap 11 times the absolute income, and the couple would become billionaires in no time.

In the next semester, Wu Fei will be able to officially resign from Columbia University. From then on, his family will settle in San Francisco. Simply investing with Gao Yang will be enough to live a prosperous life. Wu Fei will not have to work as hard as he is now.

After listening to Chen Lan's introduction, Gao Yang smiled slightly:
"Sister-in-law, brother, this time I invited Professor Qin to come over to help.

I have already communicated with Professor Qin, we are shorting the credit default of subprime loans this time, and the profit is huge. The best way is to package and sell all the shorting shares to a powerful and well-established investment bank.

After our discussion, we decided to communicate with Goldman Sachs, and Goldman Sachs is also capable of taking these shares.

For us, this is the safest and safest way to trade. "

Chen Lan worried: "Gao Yang, Goldman Sachs is indeed the investment bank with the most background and strength on Wall Street, but after all it involves billions of dollars, what if Goldman Sachs is unwilling to accept so much?"

Gao Yang smiled and said: "Sister-in-law, I think we can rest assured that Goldman Sachs must be very interested, and I think the quotation of 40 billion US dollars is too low.

We shorted the AA shares with a face value of 160 billion US dollars and a leverage of 200 times. The value of these shares alone is much higher than 40 billion US dollars.

We have a total of 185 billion U.S. dollars in face value swap shares, even with a 4% discount, that is more than 70 billion U.S. dollars. "

Qin Xianglin was surprised and said: "Gao Yang, if you want to sell more than 70 billion US dollars, it is impossible for Goldman Sachs to accept it."

Gao Yang said: "Professor Qin, I'm just making an example, you can negotiate the price.

According to the current situation of the evolution of the subprime mortgage crisis, I think that our minimum psychological expectation for the overall package transfer should not be less than 50 billion US dollars.

If Goldman Sachs is willing to take over the order with US$50 billion, in a few months, when the subprime mortgage bonds completely collapse, Goldman Sachs will at least have room to double its profit.

50 billion US dollars, we have transferred an absolute lot of benefits. "

Qin Xianglin thought about it: "Okay, I will talk to Goldman Sachs tomorrow."

Chen Lan said, "Shall we go together?"

Gao Yang said: "Sister-in-law, we don't need to go, you just prepare the materials for Professor Qin."

Qin Xianglin said: "Tomorrow, I will test it with Goldman Sachs. If the negotiation is successful, you will come forward."

Later, Gao Yang personally sent Qin Xianglin back to the room: "Professor Qin, please leave this matter to you. The business has been negotiated. Your research project at Jiaotong University, or the School of Economics at Jiaotong University, in the name of 51 Group, can sponsor many less than 5 million dollars."

Qin Xianglin smiled slightly: "Gao Yang, you don't need to spend so much money. Jiaotong University plans to open a senior financial school to train high-end financial talents, and it is ready to apply.

The government of Shanghai will definitely support this matter. You can sponsor the construction of this high-level academy without too much money. 1 million is enough.

When the time comes, I will introduce you to the school leaders, and you can talk about it yourself. "

Gao Yang said: "Professor Qin, what China's financial sector lacks is high-end talents, and 51 Group is obliged to do so.

In the future, 51 Group will also consider setting up an education fund to support the construction of basic disciplines in colleges and universities, support and reward college students with excellent character and learning, and set up corresponding grants and scholarships.

In addition, in terms of primary and secondary education, we will also carry out national funding to help those children from difficult families, especially those with excellent character and learning, complete their secondary school studies. "

Qin Xianglin was startled, and nodded: "Gao Yang, you have a heart, I hope there will be more entrepreneurs like you in Huaxia..."

(End of this chapter)