Rebirth of the Financial Crisis Sweeping the World

  Chapter 233 233 Lehman Brothers officially went bankrupt, dig out the talents of Lehman Brothers!

  At this moment, in the Queen’s Community, Wang Guanxi has been put on the delivery outfit.

  He got up very early today.

   Woke up at 6:20.

  I am in a very good mood, I want to go for a run.

  He bought a bottle of water, and then ran along the corridor of Victoria Harbour to Causeway Bay.

  The global financial tsunami is coming soon. On September 14th, US time, that is, today, September 15th, Asian time, Lehman Brothers went bankrupt and officially detonated, starting the first wave.

  During this period, Wang Guanxi will be very busy. Not only will he operate the Hang Seng Index, he will also short many US companies, and he will also be busy with acquisitions.

  In the coming days, the Hang Seng Index will fall by 10,000 points. He will operate carefully to maximize profits.

The black shirt insurance company shorted American International Group (AIG), 5 million shares, which is worth nearly 2 billion U.S. dollars, and will make a lot of money. Then it will continue to short the major U.S. banks, because the stocks of major U.S. banks fell first. Then it skyrocketed, and then fell again, making it cool to go short.

  Moreover, the black-shirt hedge funds fought against the Hong Alliance, the Huang Consortium, and the Cheng Consortium. They shorted stocks worth 11.8 billion Hong Kong dollars, and they will also make a lot of money by then!

  Think about it and get excited.

  At this time, heavy news appeared on the news!

  Lehman Brothers declares bankruptcy!

  Wang Guanxi exclaimed: “This will become the largest investment bank bankruptcy in American history, and it will become the prelude to the global financial tsunami!”

"are you ready?"

  A sudden financial tsunami will end the largest housing price increase since the founding of the United States.

  The fall of Lehman Brothers, one of the five major investment banks, staged the tragedy of the end of American real estate financial speculation.

  At this moment, New York, USA.

  Ryan Smith, an executive manager of Lehman Brothers, came back a bit late today, smelling of cigar, and he was reluctant to get out of the car.

  Recalling everything he had experienced in the previous 63 hours, he did not know how to deal with his wife and children who had already learned about the company’s bankruptcy from the TV news.

  He admitted that he was a little weak. The moment he saw the garage safe, he had the idea of ​​drawing a gun and committing suicide. Shaking his hand and lighting the last cigarette in the cigarette case, he walked up the stairs.

  At this time, thunder broke out outside the window, and a gust of wind passed through the central hall, blowing up a few fallen leaves on the ground, and a faintly stumbling middle-aged figure appeared from the back.

  He fell into deep memories.

  2008/09/12, 10:08

  Ryan Smith has never been so panicked. When he arrived at the company at 9:30 in the morning, he was still gagging with the young and beautiful female secretary. As the company's fastest-rising executive manager, he has this high spirited qualification.

  A year ago, a subordinated debt bomb dragged American real estate and Wall Street into the abyss. Since March, after Bear Stearns was acquired by Morgan Bank, Lehman, which bet most of its investment in commercial real estate, has continued to fall.

  At that time, resignation in the financial industry was the norm. However, Renn, who was sitting in his office tremblingly waiting for the bad news of the layoffs, was unexpectedly appreciated by the nobles.

  This nobleman is Lehman managing director Mark Walsh.

  In the face of the unprecedented "subprime mortgage crisis" in the United States, Mark Walsh's approach is simple, splitting Lehman and commercial real estate-related assets into the market.

  The crisis originally did not spread to Lehman. Lehman holds very few subordinated debts, and has already sold it decisively.

  But the crazy rise in housing prices has made everyone lose their minds. Banks began to lend to customers who did not meet the loan requirements; financial institutions packaged these loans into bonds and financial products, and sold them through the five major investment banks.

  Lehman is no exception.

  Although it didn’t touch subordinated debt much, its fund held more than 30 billion US dollars in commercial real estate and residential buildings. Due to the use of financial leverage to issue short-term bonds to financial institutions during the acquisition, Lehman's stock will collapse immediately as long as someone goes short.

  In order to clear mines, Lehman formed a secret team to split and package these assets into a new company. The name of the company has been figured out, and it is called REIGLOBAL.

  Rene Smith, who often serves commercial real estate clients, was recommended by Mark Walsh to CEO Richard Fuld, and he was promoted from an ordinary business manager to the executive manager of the investment banking department of the new company, overseeing the 110-person investment team.

At 10:08, the phone on the desk rang. After answering the phone, Renn, who was still flirting with the female secretary, quickly clouded his face.

  The call is from the big boss.

  Lehman CEO Richard Fuld, who has been lobbying the Korean-Japanese syndicate in the Far East during this period, has just left the office of Secretary of Finance Paulson.

  On the phone, the big boss told Rennes bad news that the plan to spin off the company might not be supported by the Korean-Japanese syndicate. However, he had just persuaded Treasury Secretary Paulson that he came forward that night to bring together the bigwigs of Wall Street investment banks to discuss the issue of Lehman's capital injection.

  The big boss assigned Rennes a task and asked him to quickly arrange the reception.

   "Rene, you have to know, this may be our last chance."

  2008/09/12

  At 20 o'clock in the evening, the Grand Ballroom of the Four Seasons Hotel in Lower Manhattan, New York, was brightly lit.

  CEO Richard Fuld took Renn to greet the distinguished guests at the door. Goldman Sachs, Bank of America, Morgan Stanley, UBS... the heads of major investment banks are all well-dressed, plus Treasury Secretary Paulson and Fed Chairman Bernanke, all the big figures who can influence Wall Street are absent.

  After the cocktail party started, Richard Fuld took Renne to chat with the big guys. It seemed like a chat and laugh, but in fact it was like bargaining in the free market.

  "As long as the funds are paid, everything is easy to talk about"

  "Afraid of default? The first 5 billion will be repaid by Lehman if there is a problem."

  "Do you think it is expensive? Well, let's make the price 20%"...

  Looking at the big boss like a bone-biting dog, wagging his tail in front of the heads of major investment banks, Ren couldn't help but feel sad.

  Just a year ago, the big boss was still a star at the Wall Street cocktail party. Now for a little hope, I almost kneel down.

  After getting a bunch of specious promises, Richard Fuld took Wren to the front of Treasury Secretary Paulson and Fed Chairman Bernanke.

"We only need one condition, or the federal injection of capital, or the Federal Reserve's commitment to our commercial mortgage bonds, so that we have time to deal with related assets." Richard Fuld looked at Paulson's eyes, and said Said one sentence.

  But Paulson knows that he cannot give such a promise. Taxpayers’ money cannot be used to save Wall Street investment banks. This is the “political correctness” of American politics at the moment.

   "As the plenipotentiary of the President, I will not use taxpayer money to save Lehman." As Paulson's voice fell, Richard Fuld's expression changed drastically.

  But the other party seems to have made up his mind. "Although I can't save Lehman with taxpayer money, they can." Paulson pointed to the Wall Street tycoon on the court, "No one wants to leave today. Give me an attitude."

  2008/09/13

  01: 30

  The business meeting room of Four Seasons Hotel is filled with smoke. The Wall Street investment bank leaders who came to the reception were called here by Paulson for a meeting. No one said anything. Everyone was waiting for the report issued by the asset accounting team in the next conference room.

  The reception was not over yet, the big boss instructed Rennes to lead a team to work with the Goldman Sachs and Credit Suisse joint working group designated by Treasury Secretary Paulson to calculate the value of the new company.

  Next, Renn spent the most difficult hours of his career. The accountants and lawyers of the accounting team began to review the assets one by one, and severely "tortured" Rennes. The unrelenting questions made Renne sweat.

  At 0:13 in the morning, the accounting team finished asking the last question. "Mr. Rehn, thank you for your cooperation. Please refrain from it now. We will discuss internally and issue a conclusion report."

  At 1:30 in the morning, the accounting team opened the door to the meeting room, and representatives of Goldman Sachs walked into the high-level business meeting room where Wall Street tycoons gathered, and read the report of the accounting team to everyone. "We believe that the assets of more than 30 billion US dollars are actually worth only 65% ​​of the book value, or even lower."

  Before the words fell, the bigwigs were already talking about it, and Richard Fuld closed his eyes in despair. Treasury Secretary Paulson glanced at Richard Fuld with a complicated expression, and left the conference room without saying a word.

  2008/09/13

  13: 17

  After leaving the Four Seasons Hotel, Renn was muddled along the way, and his heart was full of fear for the future.

  At this time, the phone rang. The big boss called: "Rene, we can save it. Go back to the company soon, and Bank of America is willing to use part of the loan and equity to purchase."

  Rain instantly felt that God was still standing by his side.

  Back to the company, he led a working group to Bank of America non-stop to start negotiations on mergers and acquisitions.

  When we arrived at Bank of America, it was still dark, and the head of the investment department of Bank of America was waiting at the elevator entrance. Seeing that this guy called the "financial meat grinder" in the industry was in charge of this merger and acquisition, Rehn felt a little lack of confidence.

  What he didn't expect was that, although it was a slap in the face, the negotiation went smoothly. At one o'clock in the afternoon, after intense negotiations, the legal teams of both sides drafted the final acquisition agreement.

  At 13:17, the other party received a call and came back to express regret and terminate the merger negotiation.

  Ryan felt baffled and asked why? The other party just gave a wry smile, "You know, Goldman Sachs and Morgan don't want us to merge, the pressure is too great. And Merrill Lynch offered the board of directors a condition that could not be refused, we can only choose Merrill Lynch."

  After listening to the other party's words, Ren lost all his strength and sat paralyzed in the conference room, unwilling to move a finger.

  2008/09/13

  18:00

  Ryan didn’t know how he got back to the office. When CEO Richard Fuld saw Renn, he was surprised by his pale face, and he personally poured Renn a cup of coffee.

   "We have another choice," he said while looking at Rennes, "Accepting the offer from Barclays Bank of the United Kingdom for almost $10 billion to acquire our North American business."

   "No, this is equivalent to selling our most cash-flowing department." Rain burst into tears instantly. Richard Fuld was extremely calm at this time. "The cash will give the company a buffer for half a year. Now we can only bet that the value of the commercial real estate we hold will appreciate within half a year, as long as it appreciates, there is a way."

  Richard Fuld's words are not for Rennes, but for himself.

At exactly 18 o'clock, he picked up the phone, found a number and dialed it. "I agree with your purchase opinion." The other party was silent for a while, and said in a low tone: "I personally and the board of directors are inclined to this plan, but in the afternoon we filed a transaction application with the British Banking Regulatory Authority. Unfortunately, I applied five minutes ago. It was rejected."

   "Why?" Richard Fuld's voice became stronger, "Aren't you ready to buy?"

  "We are very sorry. After the subprime mortgage crisis, the banking supervisory department thought that the risk of investing in Lehman was too high. I am very sorry."

  2008/09/14

  09: 12

  Ryan sat in the office until dawn. When the rising sun came in through the floor-to-ceiling windows, he felt the boundless malice of the world.

   With a bang, the office door was knocked open by the secretary. "Mr. Lane, look at the news, my goodness."

  Next, the voice of despair spread in the office like an infectious disease.

  At 9:12 in the morning, the International Swap and Derivatives Association (ISDA) announced that it would allow investors to offset the credit derivatives associated with Lehman to avoid being involved in the huge vortex caused by Lehman's bankruptcy in the future.

  At the same time in the CEO's office, Richard Fuld picked up the phone and told the secretary: "It's time. Let the board of directors meet."

Just a few minutes ago, he received a call from Federal Reserve Chairman Bernanke: “Richard, don’t blame me. The Fed’s invisible bailout agreement for financial institutions has already stimulated moral hazard. Therefore, we unanimously decided to choose an influence. Reckless institutions that were enough to deter the market took the initiative to abandon all potential promises to it and let it go bankrupt completely, so as to warn all market participants not to have any illusions. In fact, Lehman was just chosen at the wrong time."

  It was this call that completely defeated Richard Fuld.

  2008/09/15

  01: 00

  After nearly 6 hours of discussion, the board of directors of Lehman Brothers reached an agreement on the conditions of the company’s bankruptcy set by the Federal Reserve.

  At 1 a.m. on September 15, Richard Fuld walked out of the Lehman Headquarters building, and in the face of the media that came, read the board resolution: Lehman Brothers Investment Co., Ltd. applied to the federal government for Bankruptcy Protection Act No. 11.

  From that moment on, Lehman surpassed the scale of the bankruptcy of Dechon Securities in 1990 and became the largest investment bank bankruptcy in the history of the United States.

  To the Fed’s surprise, the collapse of Lehman Brothers was not the end of the subprime mortgage crisis, but the beginning of a larger global financial tsunami.

After   , as Bank of America, Morgan Sachs, and Goldman Sachs abandoned their investment banking businesses and applied to become savings banks under the management of the Federal Reserve, the five major investment banks on Wall Street became history.

  From the perspective of composition, Lehman’s assets are very reasonable, and most of them are commercial real estate mortgage bonds. Benefiting from the longest-lasting real estate bull market since the founding of the United States, Lehman's profits over the past few years have ranked among the top three of the five major investment banks.

  However, the success of the real estate, the failure of the real estate.

  On the one hand, it is crazy to eat, long-term holding of high-quality real estate projects such as apartments and office buildings; on the other hand, in order to reduce financing costs, a large number of short-term loans and one-year bond portfolio financial leverage are used to complete the acquisition. With such operations as Lehman, in the event of a financial crisis, there is only the choice of death.

  There is no property market that will rise forever. This is the case with the collapse of the Japanese property market, and the same is true for the U.S. subprime mortgage crisis. If the property market and finance fluctuate together, no one can escape.

  Real estate speculation can only be a bubble.

At this time, Ren Smith’s phone rang. It was an old friend’s phone. The person in charge of the Hong Kong Lehman Brothers branch was the chairman of the Hong Kong Lehman Brothers branch. His name was Pastor Bran. special!

After the Hong Kong Lehman Brothers branch was sold, Pastor Brandt went to a Hong Kong insurance company, which seemed to be called Black Shirt Insurance Company, and served as an executive director in it. He didn’t know how to call him suddenly. Up.

  Thinking about it, Ren Smith still got on the phone.

  After a few words of greeting.

Pastor Brandt said: "Smith, you are a rare talent. Now that Lehman Brothers is bankrupt, come to Hong Kong. This place can grant you a higher position. This will be your new stage. My big boss is a very, very powerful person"

  He is the chairman of the Hong Kong branch of Lehman Brothers, and now watching Lehman Brothers go bankrupt, he is not happy in his heart.

   Then he briefly said something, which stunned Ren Smith.

Pastor Brandt said: "Smith, come to Hong Kong, I can recommend you to become the executive director of the Black Shirt Investment Bank. The Black Shirt Investment Bank also has a partnership system, which is similar to Lehman Brothers. We need talents. I hope you can come here in Hong Kong. Then we can work together. I am at the Heishan Insurance Company under the Heishan Group, and you are at the Heishan Investment Bank under the Heishan Group."

  Ryan Smith thought for a while and said, "Well, I just went to Hong Kong to relax. I am too tired recently. See if I can do the job you mentioned."

  Pasto Brandt smiled and said: "Smith, you can also introduce talents from your department to Hong Kong. We need a lot of talents."

At present, the Heishan Hedge Fund, Heishan Insurance Company, and Heishan Investment Bank under the Heishan Group are in a period of rapid expansion and require a large number of talents. Although Lehman Brothers went bankrupt, it does not represent Lehman Brothers. Employees are rubbish, on the contrary these employees are very good.

  Now that Lehman Brothers has closed down, he hopes to find some talents.

Thinking of this, he continued: "The treatment here will not be much worse than that of Lehman Brothers. As long as you do well, the bonus is very high. At the Black Shirt Investment Bank, the securities department, investment management department, and investment bank will be paid out every year. 40% of the net profits of the three departments will be used as a bonus for the partners."

  Ryan Smith nodded and said: "OK, let me ask them."

Since Pastor Brandt, the former chairman of the Hong Kong branch of Lehman Brothers, has also joined a financial group in Hong Kong, perhaps they can also try. Now Wall Street is laying off staff and finding a good job, it is not so. Easy.

  After finishing the call, Ren Smith got up and returned home.

   and Pastor Brandt is reporting to Wang Guanxi’s work,

  (End of this chapter)