Rebirth of England.

Chapter 626 Madoff Case

Speaking of Cavendish Asset Management, in fact, they put out 100 billion euros to purchase the "non-performing assets" of Standard Chartered Bank - more than 5 houses, apartments and office buildings, etc., and it was not just a one-time investment of so much money.

First of all, Barron is very optimistic about the future of the real estate market and the housing rental market in the UK...

This can be concluded based on his experience in his previous life.

You should know that according to data from professional research institutions, in Britain, about one in five households chooses to rent a house to solve their housing problem.

Therefore, there is a huge demand for house rental in the whole of Britain, which is also the premise for the huge development space of the house rental industry in Britain.

At present, in the huge housing rental market in the UK, private landlords have an absolute advantage in terms of market share compared to private rental companies.

Currently the largest private rental company in the UK, it owns more than 9000 apartments, but its market share is less than 0.2%!

But Barron knows that the housing rental market in the UK will become more and more professional in the future. In addition, the impact of the Internet on the housing rental industry will greatly shorten the distance between users and rental properties. Therefore, on the one hand, Cavendish Asset Management can provide liquidity for Standard Chartered Bank by acquiring these properties. On the other hand, they can also use this to enter the housing rental market in the UK.

You know, in the future, the British banking giant Lloyds Bank will also be attracted and will not be able to resist joining this market.

Cavendish Asset Management has acquired Grainger, a company with extensive property leasing experience, for £1.5 million and will have it manage the properties they have acquired.

They have also launched a website that provides housing rental information and services to individual users, and will conduct marketing and business through the Internet.

At the same time, Cavendish Asset Management will continue to cooperate with Standard Chartered Bank. It will not continue to acquire their "bad assets", but they will package their real estate leasing business into fixed-income products and sell them to users.

After all, renting out real estate often generates very stable returns, so launching financial products based on this is naturally popular among risk-averse investors.

At the same time, the Cavendish Trust Fund behind Cavendish Asset Management Company can also use this to recover the funds invested in these properties and make other investments.

And they will also be able to reap the rewards of future appreciation of these properties.

Compared with the subprime loan debts that triggered the subprime mortgage crisis, this type of financial product that relies on renting out owned properties has much less risk.

……

"This case is sensational enough. I'm afraid the number of wealthy people involved is beyond people's imagination..."

"Now it seems that everything has a traceable path, but how many people actually caught these clues at the time?"

Barron shook his head, put the newspaper in his hand on the table, and said to Amber Sheen in front of him:
"But I believe he is a smart man. Before this, some people have already withdrawn their money..."

The newspaper that Barron placed on the table had the headline on the front page:

"Bernard Madoff Arrested in $500 Billion Fraud"

Yes, on October 10, this news spread all over the world and caused a sensation. According to reports, Madoff's arrest was reported by his son.

In early October, Madoff revealed to his son that some clients had requested to redeem $10 billion in investments from their Madoff company, which would cause the company to have "cash flow problems."

Then on October 10, Madoff confessed to his son that the Madoff Company had actually "nothing" and that he had previously concocted a giant pyramid-style "Ponzi scheme" that defrauded customers of more than $14 billion.

That night, Madoff's son chose to report him to the police, and then the largest fraud case in history was detonated.

Madoff can be considered a big shot on Wall Street, having once served as the chairman of NASDAQ. Of course, he is not a big shot with much weight, and it is impossible for him to defraud $500 billion by "helping others invest"...

In fact, Madoff's "Ponzi scheme" has been running well, and it has been running for more than 2001 years from 8 to now.

The reason is that Madoff was a veteran in the financial industry and he was able to strictly control the scale of the scam - the so-called "Ponzi scheme", to put it bluntly, was to use the funds that joined later to pay interest to those who joined earlier.

Therefore, in addition to using his own fame and relatively high interest rates (over 10% annual rate of return) to attract funds, the reason why Madoff was able to operate safely for so many years was that he strictly controlled the scale of the funds he absorbed.

It must be an inverted pyramid, that is, the scale is small at the beginning, and then gradually increases, so that the entire "Ponzi scheme" can continue to operate...

So Madoff can be called a "master" in this regard. If he had not been unlucky enough to encounter the subprime mortgage crisis, and some investors had suffered heavy losses in other investments and needed to redeem their funds from Madoff, causing Madoff's company to experience continuous large-scale redemptions, then I'm afraid his "Ponzi scheme" would still be running for a while...

According to the information Barron received, not only in America, but even in Britain, there were many wealthy people and companies who suffered losses because of Madoff's fraud.

Including HSBC Holdings and Royal Bank of Scotland, both banks lost more than 15 billion pounds in this fraud case...

Of course, other victims also included the wealthy people in the Middle East. They were even proud to be among the investors of Madoff's company. But in the end, Madoff returned the money of the real big shots first, and the rest could only bear the losses.

As for the report that Madoff's son reported him, Barron can only say "6". Sacrificing himself to save his relatives was indeed a helpless choice.

But the final result might not be what Madoff wanted. After all, he played too big this time. If I remember correctly, his son still had a bad ending, and Madoff himself died in prison.

In fact, Barron had already paid attention to the affairs of Madoff Company earlier, but he did not choose to detonate this matter at that time - it had little to do with him.

What was both unexpected and reasonable was that this case broke out earlier than in Barron's previous life - the case did not break out until December.

But now the progress of the subprime mortgage crisis has been greatly accelerated. It is normal that the Madoff fraud case, which was affected by the subprime mortgage crisis and collapsed due to large-scale redemptions by users, will collapse ahead of schedule.

"By the way, how is the negotiation going with Youcheng Group?"

Hearing Barron's question, Amber Sheehan temporarily turned his attention away from the shocking Madoff fraud case and said to Barron:
"We still need to discuss the price. Our initial offer was rejected by them."

(End of this chapter)