Rebirth of England.

Chapter 596 A sudden turn of events
The oil major of the BFT (British Fortune Times) Fund finally reached a final agreement with the eight oil companies in May, and received the first phase of liquidated damages...

As early as mid-April, international oil prices rose again to US$4 per barrel after falling slightly. By May, oil prices rose directly to US$110 per barrel.

At this point, those oil companies no longer have any illusions. After negotiating with the BFT Fund, they will be exempted from the liquidated damages required for the funds corresponding to the crude oil spot delivered previously, and will only need to pay liquidated damages for the undelivered crude oil consideration. .

Of course, the BFT fund will not lose money in this way, because they have already made a lot of profits by reselling their previous crude oil spot to United Energy Group and partners including Reliance Group, PetroChina, and Sinopec.

Therefore, in the end, the BFT Fund made a profit of more than 300 billion US dollars with a large oil order margin of 100 billion US dollars.

Coupled with the US$225 billion invested in gold spot and futures, and the more than US$285 billion recovered after profits, the BFT Fund will have more than US$685 billion in funds.

Because the liquidated damages of these oil companies need to be paid in two installments, the first installment of liquidated damages will be paid in May, and the remaining balance will be paid two months later.

But even so, there are currently more than 600 billion US dollars in the BFT fund's account.

Next, we have to wait for the subprime mortgage crisis to completely break out.

Interestingly, as early as July 2006, Professor Rubini of New York University put forward a controversial point of view at the time - he predicted that the U.S. economy would face the possibility of recession and a "catastrophic" recession in the future. , will be divided into 7 stages.

They are -

Step 1 is the most severe real estate recession in the history of the American economy;

Step 2 is that subprime mortgage loan losses will expand further, far exceeding the estimate of $2500 billion to $3000 billion;

The third step is huge losses in unsecured consumer credit, including credit cards, car loans, education loans, etc.;

The fourth step is the credit downgrade of the professional credit insurance company, and the AAA rating it relies on for its operation will not be insured;
Step 5 is the collapse of the commercial real estate market;

Step 6 is the failure of large regional or national banks;
Step 7 is hundreds of billions of dollars in paper losses on financial institutions’ balance sheets;
Step 8 is the wave of corporate loan repayment failures;

Step 9 is the collapse of the shadow financial system;

Step 10 is for the stock market to fall further;
Step 11 is to drain financial markets of liquidity;
Step 12 is when the vicious cycle begins…

It can be said that there will always be people who understand, but in times of prosperity, such voices will be drowned.

In Barron's previous life, when he was studying the subprime mortgage crisis, he had seen this prediction that initially seemed very "radical", but it turned out that this prediction was completely consistent with the occurrence of the subprime mortgage crisis.

At present, the subprime mortgage crisis has progressed to the fifth step, and the commercial real estate market is about to collapse. Barron knows that America's "two mortgages" will soon be unable to hold on, and their government will inevitably need to take over them...

When the waiting process reaches step 6, large banks begin to go bankrupt, which is when BFT funds can start to enter the market.

But what Barron didn't expect was that the process would proceed so quickly.

In early June, Barron temporarily left China, took the Devon Hill, and arrived in the United States.

At this time, the subprime mortgage crisis once again showed violent fluctuations.

In the past week, the share prices of Fannie Mae and Freddie Mac have fallen by nearly 50%!

If we estimate the current lowest stock prices of the two companies, their stock prices have fallen by more than 90% from their highest levels in a year! As you can imagine, the stock prices of the two companies fell rapidly, and the Black Swan Fund also made a huge profit by shorting the stock prices of the two housing companies.

But this time, Barron came to California.

Fannie Mae and Freddie Mac faced government takeover, and in California, IndyMac faced bankruptcy.

The bank has seen panic withdrawals of more than $11 billion from its customers in the past 13 days.

Because IndyMac also operates a mortgage business and accounts for a large proportion of its revenue, it has also been greatly affected by the subprime mortgage crisis.

It is said that if IndyMac declares bankruptcy, the Federal Deposit Insurance Corporation (FDIC) may take over.

The reason why Barron came here was to see if there was a possibility of taking over the bank. Of course, this also depends on whether he can get the right conditions.

As of March 3 this year, IndyMac Bank had total assets of US$31 billion and deposits of US$320 billion.

However, due to the panic caused by the subprime mortgage crisis, IndyMac Bank may declare bankruptcy at any time.

Speaking of which, this kind of panic has also happened to Northron Rock Bank - last month, a senator wrote to the banking regulator, asking them to take measures to prevent the collapse of IndyMac Bank.

After the news came out, there was panic in the market. IndyMac Bank's customers went to bank branches to withdraw funds, which caused a run. IndyMac Bank reduced its deposits by US$11 billion in 13 days.

"Yes, IndyMac could declare bankruptcy at any time, and I wouldn't be surprised if someone called me now to tell me that they have failed."

After the plane landed in Los Angeles, Barron met California Governor Schwarzenegger who was waiting here. He said to Barron with a serious face:
"Barron, my friend, will you bail out this bank?"

"This is exactly why I came here from China, but you have to know that I am a businessman, so although I will not be stingy with paying money, I will not do anything without return. At least I need to get a company that can A bank that will recover in the future.”

"According to the investigation conclusion and the information I received, IndyMac Bank is actually not that bad, at least not to the point of being hopeless. If there is a large amount of capital injection, it can still be saved..."

“Isn’t there still the FDIC?”

After hearing Barron's words, Schwarzenegger couldn't laugh:

"If the FDIC takes over, IndyMac may not be able to revive..."

“Because too many banks will make the same mistake?”

"Yes, I'm afraid that's not alarmist."

It is estimated that if the Federal Deposit Insurance Corporation takes over IndyMac, it will cost between $40 billion and $80 billion, which may set a record for the cost of acquiring a bank.

Once IndyMac Bank fails, it will become the second largest bank failure in American history so far, second only to the bankruptcy of Continental Illinois National Bank in 1984.

"Now, I need to negotiate with the board of directors of IndyMac Bank and the heads of relevant institutions to see if it is worth taking action."

(End of this chapter)