Reborn Millennial Gamer

Chapter 535 Dig a hole, bury some mines (5k)

Of course it was intentional and careless!
Lu Fei knew it well, and all the spirits present also pretended to be confused with their understanding.

On Wall Street, who doesn't know that Lehman and Goldman Sachs are life and death enemies.

The instigator was Richard Fuld in front of him.

When he took over Lehman, the annual income was only US$30 billion. In just 14 years, he achieved US$193 billion by himself, and he became the third investment bank on Wall Street.

Being squeezed out is Goldman Sachs, which is now in the fourth position.

The two sides were at war in the millennium. Goldman Sachs suffered heavy losses due to the bursting of the Internet bubble. Lehman made a sneak attack without any morals.

Tit for tat, all red-eyed.

In the end Lehman stood and Goldman lay down.

The speaker of Goldman Sachs at that time was named Henry Paulson. Coincidentally, he is now the Secretary of the Treasury of the United States.

The reason why Lehman can still jump like this and sit on the top of the subprime mortgage giant is because the chairman of the Federal Reserve Greenspan is behind him. He is a fan of "The World Is Flat", insists on financial innovation, and supports CDO and CDS , even P2P.

However, this big guy retired this year.

After sorting out all these twists and turns, grievances and grievances, Lehman, who is not far from death, is naturally not included in the guest list of the Christmas banquet.

At the scene, the Goldman Sachs department invited the most.

Master Lu had long secretly chosen a side, and said haha:

"Fuld, your Lehman has a banquet, and our Trinity also has a banquet. I can't invite you, Lehman's biggest hero, away, and make your party leaderless?"

"That's why we deliberately arranged the location next to Lehman. Wait a while, and we will invite you here in person."

Carlson Bullock added cleverly.

Lu Fei glanced at it. Is this explanation perfect?
Hehe, it's perfect!
Richard Fuld stopped asking questions, "Lu, what do you think of my proposal just now? Let's do CDS business with Lehman. We will give you as much as you want."

Damn Lehman, dare to take food from a tiger!
David Solomon said with a livid face, "Hey, this is a Christmas gift specially prepared by Lu for me and Goldman Sachs."

"David, didn't you just refuse?"

There was disdain in Richard Fuld's tone.

What Goldman Sachs gave, Lehman can give.

What Goldman Sachs can't give, Lehman can still give!
"No one refuses a gift from a friend at Christmas."

David Solomon immediately put the unhappiness of Lu Fei cheating Goldman Sachs behind him, and pointed his gun at the arrogant Richard Fuld.

"Let's not stand at the door, let's all come in and have a drink."

Lu Fei smoothed things over, and under the watchful eyes of everyone, a group of them gathered in front of the French windows to seal the balcony, whispering.

"Since you are all interested, I would like to ask what is Lehman's CDS premium rate now? What is Goldman Sachs' current rate?"

John Paulson gets his eye cues.

David Solomon shook his wine glass and said bluntly that Goldman Sachs charges premiums on a quarterly basis, 3% of face value for 0.3A grades, 0.6% for A grades, 3% for 2.5B grades, and [-]% for B grades...

"How come it has increased so much in just one year?"

陆飞皱下眉头，06年全年到07年上半年，3A级才0.2%，3B级更只有2%。

Don't underestimate the 0.1% increase. The CDS of the Three Body Fund and Paulson's hedge fund totaled more than 35 billion US dollars, and the premium for a single year would be 1400 million US dollars more.

Robbing a bank is not so much!

"Market price~"

Richard Fuld explained: "CDO is rising, and CDS will naturally rise, but you can rest assured that Lehman is more diversified than Goldman Sachs. It doesn't matter if the quarterly premium rate is not appropriate. We still have the end of the month and the half-year. , I recommend you to choose the half-year, the most favorable and the most cost-effective, only 3% for the 0.25A grade, and only [-]% for the A grade..."

"Lu, we at Goldman Sachs also have a half-year."

David Solomon couldn't help feeling like he was being watched by NTR face to face. Lu Fei is Goldman Sachs' true love. How dare you snatch it from Lehman?

"Cough cough!"

John Thornton, as a bystander, calmly reminded: "David, I learned a saying in China, 'Two dogs fight for a bone, and the third dog walks away with it'. Didn't you realize that Lu was using us and Lei? Mann’s contradictions, do you want to profit from your own CDS contract? Don’t fall into his trap.”

"you're right."

David Solomon suddenly realized, and looked vigilantly at Richard Fuld to the left and Lu Fei to the right, you Chinese people are very bad!

When the three parties were at an impasse, among the watching crowd not far away, some people who were not too serious to watch the excitement joined together.

Those from the Goldman Sachs department will not stand idly by.

Robert Rubin, Olsman and other partisans who had already been labeled as "Goldman Sachs" flocked to David Solomon's side to strengthen their momentum.

Ivanka and Wang Wang stood on the periphery. Like them, many people were waiting to see a good show. After all, it was only a few years ago, how could the Goldman Sachs department forget their hatred.No grudge against Lehman!

I want to see blood flow into rivers, I want to see blood flow into rivers!
"Lu, Goldman Sachs is not mainly engaged in CDS. Its scale cannot satisfy your appetite. We are your best choice. Lehman is a deep participant, second only to AIG in scale. And you can rest assured that once the relevant bonds default, Lehman will bear the responsibility for insurance compensation, and will definitely be responsible to the end."

Richard Fuld is tall and tall, facing Goldman Sachs surrounded by wolves, like a bulldog, he does not lose the wind in the slightest.

"Well, what is the fee for Level 2A?"

Lu Fei rubbed his chin, looking moved.

"Level 2A?!"

Not only Richard Fuld and David Solomon, but all the Wall Street giants and elites present looked at each other like hell.

John Paulson's eyes lit up, and he immediately keenly noticed Lu Fei's genius move. Today's 3A and A grades, because of the expansion of CDS scale, the premiums continue to rise. Low, but the odds are extremely high.

Almost, 20 to 1.

In other words, if you invest a dollar, you only need a few cents in premiums for 3 months, but as long as you win the bet, you can win 20 dollars!

"What, can't you do it?"

Lu Fei looked around, showing a disappointed look.

Richard Fuld and David Solomon looked at each other, and neither dared to speak first, fearing that the opponent would offer a lower premium.

However, this zero-sum game is not limited to the enemies of Goldman Sachs and Lehman. Wall Street hunters like Merrill Lynch, Morgan Stanley, and Citigroup are here to focus on Lu Fei!

"Lu, Merrill Lynch did the 2A level!"

In the crowd, Sny O'Neill suddenly raised his voice.

All of a sudden, a stone stirred up a thousand waves.

Seeing Merrill Lynch's move, James Cain and others rushed to snatch up the triple-A swap contract of the Three Body Fund. Even Robert Rubin ignored the friendship of Goldman Sachs and worked hard to fight for Citigroup.

"land!"

David Solomon didn't dare to make an offer publicly, so he walked up to Lu Fei and whispered, "0.38%, we only want 0.38%."

"So Richard, where are you Lehmans?"

Lu Fei turned his head and cast his eyes on Richard Fuld, who was deep in thought, with a strange gleam in his eyes.

CDS is a good shorting tool.

Traditional short-selling requires you to buy the short-selling object, but CDS does not need it. It is like buying a stock for short-selling, but it rises by 50%, then you will lose 50%, but CDS will not, no matter how much the short-selling object rises , the premium is not going to change.

More importantly, CDS is not limited by quantity at all, that is to say, as long as you are willing to buy it, you can supply it in unlimited quantities. Wall Street relies on this to earn huge premiums.

But obviously the insurance premium is fixed, and it takes a huge risk to underwrite a seemingly rubbish CDO. Why are everyone scrambling for such a thankless task?

Because no one believed that subprime mortgages would collapse!

So, why not earn money from prostitution?
Therefore, Richard Fuld, who firmly believed that the subprime mortgage would not fail, opened his mouth and quoted the lowest price of 0.35%. He won the bidding without any suspense, and stepped on Goldman Sachs again.

"Widowed bitch!"

David Solomon gritted his teeth in anger, and lost to Lehman again, and he was in front of almost the entire top circle of Wall Street.

It's tolerable, it's tolerable if you're familiar with it!

Everyone in the Goldman Sachs department felt the same way, and they were so angry that they hated it together with Lu Fei. Was the promised Christmas gift for Goldman Sachs a humiliation from Lehman?

At this moment, Lu Fei seemed to have expected it a long time ago, and gave Carlson Bullock a wink, and he asked innocently and innocently: "I remember that Lehman's CDS has a scale of 4600 billion US dollars. , I said that if Lehman goes bankrupt and there is no way to pay, what should we do then?"

"Lehman went bankrupt? Haha, haha!"

Richard Fuld almost burst out laughing, "You actually think that Lehman will go bankrupt, this is the funniest joke I've heard this year! Guys, someone actually doubts that Lehman will go bankrupt?"

"Haha, haha~"

In an instant, the whole room burst into laughter, and some even laughed up and down. There was a strong sense of ridicule in every laugh.

"Lu, don't you also think that Lehman will go bankrupt because they can't afford the money? No way?"

Tears welled up in Richard Fuld's smiling eyes.

"David, what do you think?"

Lu Fei didn't answer first, but instead asked David Solomon.

"Hmph, it's hard to say!"

David Solomon's words were sour, and he didn't believe that Lehman would go bankrupt from the bottom of his heart, but he never let go of his mouth.

Others are afraid of Lehman, but we Goldman Sachs don't care!

"Hehe, bankruptcy? Impossible, absolutely impossible!"

Richard Fuld sneered.

"But there is always a slight possibility. After all, CDS itself has a one-ten-thousand probability. Isn't the probability of Lehman's bankruptcy not one-ten-thousandth? Richard, what do you think?"

Lu Fei raised a smile.

Seeing this smile, Richard Fuld felt awkward in his heart, and snorted coldly: "Then what do you want?"

"Since you cut off my Christmas present to Goldman, David, how about I give Goldman another present?"

Lu Fei bluntly said that he was worried that so much compensation would make Lehman bankrupt, so he also did CDS against Lehman.

CDS, as long as there are buyers and sellers, you can make a wagering swap contract for any specified credit event. If a breach of contract does occur, the insured buyer will receive compensation from the insured seller, that is, the risk will be transferred to the insurer .

What he wanted was a guarantee from Goldman Sachs. If Lehman went bankrupt, the Three-Body Fund would be able to cash out all profits from Goldman Sachs.

It is equivalent to putting another CDS on the CDS!

The people present are all experts, and they figured out the joints at once. This is not buying insurance, it is clearly sending money to Goldman Sachs, and it is in Goldman Sachs' favorite form, 'Lehman Bankruptcy', everyone shows understanding smile.

"Lu, I don't think this CDS is necessary at all!"

Richard Fuld scowled.

"Hehe, I don't think what Lu said is unnecessary."

Before Lu Fei could open his mouth, David Solomon was the first to refuse, "Besides, this is a Christmas present for us at Goldman Sachs, and you Lehmans are too lenient."

"David is right. This is a transaction between Goldman Sachs and Lu, and Lehman has no right to interfere!"

Robert Rubin, John Thornton and other Goldman Sachs departments finally seized a chance to counterattack and quickly struck out with heavy blows.

No matter how conceited and tough Richard Fuld is, he can't beat four hands with two fists, and it is very difficult to parry him.

He showed an awkward but polite smile: "Just kidding, you just shout and kill."

"Yes, yes, today is Christmas."

Lu Fei watched enough of the excitement, showing a smirk, and finally smoothed things over, raising his glass:
"To you, cheers!"

"To you, cheers!"

All the people with evil intentions spoke in unison.

…………

After the banquet, Goldman Sachs held a small meeting alone.

David Solomon invited John Thornton to the company, formed a think tank with John Waldron and others, and sat down as a consultant to Lu Fei's CDS for "Lehman's failure to pay CDS compensation for bankruptcy".

"Do you think there will be fraud in this?"

"No, I don't think there is any problem. When Lu came to me, he made it very clear. Please represent Goldman Sachs to the banquet. You want me to be a middleman to mediate the conflicts between everyone."

John Thornton analyzed: "Goldman Sachs wants to continue its activities in China. Compared with Liu, Lu is the most suitable candidate, and his fund wants to be active in the United States, and it cannot do without Goldman Sachs. He knows this truth very well. Don't you understand?"

"What Thornton said is not unreasonable. Otherwise, Goldman Sachs would not have invited so many of our own people to the banquet, but our sworn enemy Lehman was not invited. This is a signal from Lu!"

John Waldron nodded in agreement.

"However, but have you ever thought that if you buy so many CDS, if the corresponding CDO depreciates, Sanso is very likely to get $40 billion from Lehman."

David Solomon looked serious: "If the compensation is paid, it means that real estate and subprime mortgages will collapse..."

"But will subprime mortgages collapse?"

John Thornton asked: "All of us know that subprime mortgages are rock solid and never going to crash."

"Right."

David Solomon immediately corrected, "No, that's not certain, that's not certain, the interest rate has been raised six times in a row this year, and the interest rate has reached 6%, and the floating mortgage rate will rise to more than 5.5%. rise."

John Waldron didn't take it seriously, "Didn't Rubin disclose this news? The interest rate increase is just to cool down the real estate industry, but overall, the entire real estate industry is still operating steadily. It must be stable."

"But I'm still not at ease."

David Solomon knew that it had nothing to do with subprime mortgages, but only with Lu Fei. This bastard would be so stupid. Stud bet on CDS and turned against the entire American financial system. Isn't this courting death?
"What else is there to worry about?"

John Thornton was puzzled.

"When we do CDS, in addition to earning premiums, we also hedge our own CDOs. Lu's fund has a gross CDO, but none!" David Solomon touched his Mediterranean bald head, "He sold CDO’s money is all invested in CDS, this kind of operation, I really doubt whether he will play finance? Is it still Lu who is fighting us against soybeans, oil, and gold?”

"This, I have the most right to speak."

John Thornton said with a smile: "I have lived and worked in Huaxia for so many years. According to my observation, the Huaxia people have a character flaw, that is, they want to save face. In Lu Xun's words, 'face is the spiritual program of Huaxia people'..."

"Who is Lu Xun?"

David Solomon and John Waldron looked at each other.

"A great writer in China is equivalent to Hemingway."

John Thornton continued, "He said that Chinese people just want to save face and suffer, and the more successful people are, the sooner they succeed, the more they want face, and the less they can accept failure."

John Waldron slapped his thigh: "That's right, isn't that the kind of person Liu is! Being knocked down by Lu time and time again is just to lose face, and he wants to take revenge time and time again, but Lianxiang fails time and time again. Repeated defeats, repeated defeats and repeated battles."

"All right……"

Most of David Solomon's doubts disappeared, but he still had concerns. What if the subprime mortgage collapsed like Lu Fei's bet, after all, God was always standing behind this oriental man.

Unexpectedly, America was not protected even once!
"So what if it crashes?"

John Waldron doesn't care, not to mention Freddie Mac and Fannie Mae, and the last line of defense of the Federal Reserve. Even if something goes wrong, the stock of subprime mortgages is only 1.5 trillion dollars, even if 30% of the subprime Grade bonds are rotten, but only more than 5000 billion.

This amount is just a drop in the ocean for the United States, which has a GDP of 13 billion and a debt market size of 25 trillion.

In the entire federal deposit insurance system, the scale of this loss is only 3.6% of the total assets of financial institutions.

It is completely within the tolerance of the United States!
"Waldron is right. It really collapsed, and it was Lehman who paid for it. You don't think Lehman can't afford it?"

John Thornton didn't take it too seriously, "Even if Lehman couldn't afford it and really went bankrupt, wouldn't the Federal Reserve just let it go bankrupt and not save it? So, enjoy Lu's CDS premiums with peace of mind, just as a It's our settlement."

"Pfft!"

John Waldron couldn't help laughing: "Thornton, what you say is just adding insult to injury. I estimate that Lu's investment in the CDS project has already lost two to three hundred million yuan. If he continues to insist, he may lose one billion yuan, but it is in vain. Let us earn tens of millions of insurance premiums every year, and also drive up the stock price of Goldman Sachs, and today we eat his banquet and drink his Romanee-Conti, isn’t it a beast?”

"Just treat him as atonement for his previous sins, burn himself, and illuminate us, ahaha, hahaha~"

David Solomon finally made up his mind to make this deal.

The three-body bet won, and Lehman paid.

If you lose the three-body bet, you earn premiums.

Anyway, whether it is a loss or a win, Goldman Sachs will not lose money inside or outside!

There is no reason not to do it!Only a fool would not do it!

　Thanks to Fushen Doudou for the 400 starting coins.

　　
　
(End of this chapter)