Rebirth of the Financial Crisis Sweeping the World

  Chapter 152 152 Trillion Big Mac shot! Floating profit of 50 million Hong Kong dollars!

  The next day, Saturday, July 12.

  Wang Guanxi was eating fried noodles at noon.

  The latest political news is here.

  Bloomberg News: AIG Group has a huge loss!

  American International Group (AmericanInternationalGroup), referred to as AIG.

  AIG is a world-renowned insurance group company, as well as the world’s largest insurance group and a diversified investment group. It has assets of 1105.3 billion US dollars!

  Assets are over US$1 trillion, what is this concept!

  7.75 trillion Hong Kong dollars!

  How scary.

  Like the US$2 trillion Fidelity Investment Group (FMRLLC), it’s also a Big Mac!

  AIG Group has two very famous insurance companies, AIU Insurance and AIA!

  The history of the AIG Group can be traced back to 1919, when the Dutch-American Sidder established an insurance agency company, AIG Insurance, in Lushi, China, to provide customers with fire insurance, marine insurance and other protection.

  Two years later, Shide established AIA Life Insurance Company, becoming the first foreign company to provide life insurance products and services to China Xia People. This is the person who created China Xia Insurance.

  In just a few years, Shide has expanded its business to many regions in China and even Southeast Asia.

  However, due to the outbreak of the war, Shi De moved the company's headquarters from Lu City to the United States, and then withdrew from the insurance business in the Mainland. Only in 1992 did he reopen the insurance business in Lu City.

  Now AIG is already a giant company. Its subordinate AIA Insurance and AIA are the two most profitable giant insurance companies.

  Customers in the mainland are not unfamiliar. Many employees of state-owned enterprises and private enterprises have bought insurance from this insurance company.

  But this year is the year of disaster for AIG Group. The entire subprime mortgage crisis almost destroyed it. The financial tsunami that broke out in September 2008 made AIG sink into a quagmire. In the fourth quarter of 2008, it lost $61.7 billion!

  Accepted bailout, but in order to repay the US government’s 180 billion U.S. dollars in debt, it sold a large amount of assets. In the future, AIA was also sold. This AIA will have a market value of trillions of Hong Kong dollars in the future!

  It’s July, and there have been bad news for AIG Group.

  Among AIG’s $38 billion reduction project, $20 billion came from credit default swap contracts. The $18 billion comes from mortgage loans and asset-backed securities, including subprime mortgages.

  "AIG Group finally survived by selling its assets to pay off its debts, while another super investment bank, Lehman Brothers, closed down, with a total debt of US$613 billion, which became the tipping point of the financial tsunami."

  "The financial tsunami is not far away!"

  Wang Guanxi then turned on the computer and checked the public balance sheet of the listed company AIG.

The June 2008 quarterly report shows that there are 10498 billion U.S. dollars, but it should be noted that many of these assets are subprime mortgage debts or bad debts of subprime mortgage derivatives, so the numbers are only numbers and will not be known until the financial tsunami comes out. How much is lost!

  Wang Guanxi intends to short American International Group (AIG) stocks, but his own funds will short the Hang Seng Index, so he has to use Cathay Pacific auto insurance funds to short.

  However, the funds for Catalan Auto Insurance are also limited, and there is not much money to mobilize.

  Don’t look at Cathay’s auto insurance asset size of 550 million, but the insurance company has regulations and cannot use all the funds!

  The use of funds of insurance companies is limited to the following formula:

  1 Bank deposit;

  2 Trading bonds, stocks, securities investment fund shares and other securities;

  3 Investment in real estate;

  4 Other forms of fund use specified by the government.

   To give a simple example, the mainland insurance company stipulates that the capital for investing in stocks and securities is limited to less than 30%.

  Hong Kong is a bit different.

  It is necessary to prepare a solvency reserve, which refers to a specified amount by which the asset value of an insurance company must exceed its liability. As far as general insurance business is concerned, the solvency reserve is the insurance company’s premium income in the previous financial year or the higher amount of its liabilities. The solvency reserve is calculated at one-fifth of the amount within HK$200 million. , And the portion of less than 200 million Hong Kong dollars will need to be calculated at one-tenth. The minimum amount of solvency reserve is 10 million Hong Kong dollars.

  To be more specific, Cathay Auto Insurance has a liability of 500 million Hong Kong dollars to insurance customers. Therefore, Cathay Auto Insurance needs to prepare a minimum solvency reserve of 50 million Hong Kong dollars to compensate for insured accidents that occur at any time.

  Of course, the 50 million Hong Kong dollars is only a theoretical amount. In actual conditions, Cathay Pacific Auto Insurance needs to prepare more solvency reserves to deal with insurance accidents that occur at any time, as well as the supervision of the Securities Regulatory Commission.

  Just prepare the solvency reserve of 200 million Hong Kong dollars, and do the rest!

  "Insurance companies have the most sufficient cash. Before the global financial tsunami, I had to acquire a few more insurance companies, and I would have more funds available at that time."

  "It is absolutely cool to mobilize 2 billion funds to short AIG Group’s stocks."

“I remember that AIG’s stock price went from more than US$400 per share to shit. It fell below US$30 per share, and then it continued to fall in the following days. It fell below US$6 per share. This loss of market value was extremely miserable. Financial empire collapses at any time"

  Although Wang Guanxi’s cash is only 200 million now, he has already stared at this huge AIG, saying that everything will take two pieces of meat from it.

The AIG Group is like a scarred elephant, vultures in the sky, carnivores on the ground, and blood-sucking insects hovering around it. Not far away there are tigers, wolves, hunting dogs, and leopards staring at it. Once it’s gone, everyone Will pounce on it and bite.

  AIG’s losses are just beginning. When the global financial tsunami came, a behemoth like it had the worst asset shrinkage and the worst loss.

In order to save its life, it will sell its securities assets frantically, and sell stocks, bonds, houses, various canteen assets, and financial assets in a short period of time. It is conceivable that the stocks that it sells will How terrible the fall, how panic the market will be!

  And it’s not just that it’s crazy selling assets, there are many, many such financial institutions around the world.

  "AIG Group's AIA Insurance, AIA's main business is in Asia. I don't know how much Hong Kong assets it holds. It will be unimaginable when it will sell off."

  ··

  At this moment, AIA, a subsidiary of American International Group, Asia Headquarters, has just experienced an extraordinary high-level meeting.

  The meeting discussed the sale of certain Asian assets to ease the financial pressure on the parent company, American International Group (AIG).

  AIA and AIU are both members of the AIG Group and the two most profitable insurance companies.

  This time the parent company has given instructions that it needs to collect some capital turnover, which is about 10 billion Hong Kong dollars, of which 5 billion Hong Kong dollars have been issued by AIA.

  CFO of AIA: johnbarrieharrison

  John Barry Harrison, referred to as Harrison.

  He came to the office.

   Several assistants followed.

  Opened the trend chart of each stock and glanced over it.

  Recently, Sinopec, CNOOC, and PetroChina are all falling, while AIA holds a lot of stocks but sold them.

   Then Harrison commanded: "Next Monday, we will start selling some shares of Sinopec, CNOOC, PetroChina, and China Construction Bank, and cash out 5 billion Hong Kong dollars in cash."

   "Yes, Mr. Harrison"

  At this time, the assistant suggested: "Mr. Harrison, the shares of China Resources Beer Group have risen a lot recently. Do we sell its shares so that we may be able to cash in more cash."

  "Let’s take a look" Harrison opened the stock of China Resources Beer. Recently, the stock of China Resources Beer is very strong, and the stock price is at a high position. He is very happy.

   Then he ordered: "Then cash out all the stocks of China Resources Beer, Sinopec, and CNOOC, CNPC, and China Construction Bank."

  "Yes, Mr. Harrison" the assistant nodded respectfully.

  And Harrison thought for a while and notified the chief financial officer of AIU Insurance Company.

  ··

  The next day, July 13, AIU Insurance, Chief Financial Officer, Garthjones.

  Garth Jones.

  As soon as he returned to Hong Kong from Lushi, he came to the company and held an extraordinary meeting.

  Let your subordinates sell the stocks of China Resources Gas, ICBC, HSBC, and Standard Chartered Bank, and cash out 5 billion Hong Kong dollars, alleviating the financial pressure of the parent company AIG Group.

   Soon Monday, the stock market opened.

  AIA, AIU Insurance Company, began to cash out stocks.

  Morning.

  China Resources Beer, China Resources Gas stocks fell sharply, and ICBC, HSBC, Standard Chartered Bank, and Sinopec also fell a lot.

  Wang Guanxi is happy.

  Today, the shares of China Resources Beer fell by 5 yuan, from 25.00 yuan per share to 20.00 yuan per share.

  50 million Hong Kong dollars floating in his account.

  (End of this chapter)