The Son of Finance of the Great Age

  Chapter 574 Drain from the bottom (2)

  When Alan Schwartz dragged his exhausted body back to his office, he was so tired that he only had the strength to breathe. At this time, his heart was full of infinite regrets. Why did he obsessively accept James Kane's request and take the position of Bear Stearns CEO?

  During the day, he appeared on CNBC's program and explained to the market clearly and unambiguously in the live broadcast that Bear Stearns currently has good liquidity and there is no so-called crisis in the market. At the same time, he also hinted that the rumors currently prevailing in the market are only cooperating with the action of shorting Bear Stearns' stock. In the last week, the short sellers have crazily attacked Bear Stearns' stock, and these rumors are just one of their tricks.

  In CNBC's live broadcast, Alan Schwartz even made harsh words, and will hold these rumor makers legally accountable and make them pay the corresponding price for their actions.

Perhaps it was affected by Alan Schwartz's public "rumor refutation", or it may be because the short sellers began to take profits and leave the market. In short, shortly after Schwartz's speech, Bear Stearns, which has been sluggish recently, showed a sharp increase. Not a small increase, when the market finally closed, it rose by 5.78%, and the stock price reached a high of $30.

   This is not a shot in the arm, because the stock of Bear Stearns was suppressed to below $30 due to bad news before, and the downgrade of Bear Stearns’ rating by the rating agency eventually caused the stock price of Bear Stearns to plummet. And the more the stock price falls, the greater the damage to investors' confidence, and the more difficult it is to raise funds.

After a little relief, Alan Schwartz sat up straight from the sofa chair, picked up the phone and wanted to call those investors, and when he was about to persuade them to hand over the funds to Bear Stearns again, his arm There was a pause, then he shook his head with a wry smile, and put the microphone down again.

  Before that, calls about divestment from Bear Stearns came to his landline one after another, and Alan Schwartz tried his best to persuade him, but the effect was not obvious. From the last board meeting to the present, more than US$40 billion has been lost from Bear Stearns' account. In other words, the amount of funds that Bear Stearns can use at present is only about US$20 billion.

  From hundreds of billions of dollars half a month ago to 20 billion dollars today, in just two weeks, Bear Stearns has lost more than 80% of its cash flow, which is extremely astonishing.

  Most of the money left today comes from hedge funds. It's not that Alan Schwartz has never received calls from hedge funds to withdraw their funds. In fact, dozens of hedge funds have withdrawn funds from them, and the hedge funds that remain on their client list are those few Famous hedge funds: Quantum Fund, Castle Fund, Paulson Fund...

Of course, it is not that these funds have not requested redemption of funds, but under the joint lobbying of several Bear Stearns directors, including Alan Schwartz, and the promise of fee reductions, these funds Only then gave up the idea of ​​redeeming funds.

Alan Schwartz regards these funds as very important, and even regards them as the largest capital for Bear Stearns to attract new capital inflows, because these hedge funds are all from the most famous funds in the market, and their managers are not from the market Either an excellent manager with a high reputation in the world, or a supernova who has risen like a comet in the past two years. And as long as their funds are still in their own accounts, Alan Schwartz can proudly introduce to the outside world: Even Quantum Fund and Paulson Fund are using our research reports and using the leverage we provide!

   It’s just that Alan Schwartz never imagined that the reason why Bear Stearns is in its current situation today is precisely because of the “efforts” of the hedge funds he counts on. And a few minutes later, these people tore off the mask of hypocrisy, added the last straw to Bear Stearns' already weak body, and directly knocked down this giant who was strong on the outside but strong on the inside.

  But now Alan Schwartz doesn't know anything about it, his thoughts are still completely immersed in the memories of what he did that day, and he has no time to care about him. Carefully recalling every sentence he said on TV, he wondered if there were any mistakes or omissions in his speech that might have caused misunderstandings. After watching the TV recording several times over and over again, Alan Schwartz finally nodded with satisfaction, confirming that his performance was normal, and even a little bit supernormal in some places, which made him very satisfied.

   It's just that his complacency didn't last long, and the **** phone buzzed, which made him frown. He picked up the microphone with a slight displeasure, and asked angrily: "This is Alan Schwartz, Bear Stearns, who are you?"

  Generally speaking, all business calls will be screened by the secretary outside the door, and then connected to his room, which can save him a lot of harassment. But this time it was his private phone that rang, and only those with close relationships could dial it directly. As the top leader of Bear Stearns, his private phone would naturally not be disclosed to too many people. However, Alan Schwartz didn't notice this detail at this time, and his tone was a little reckless when he opened his mouth. Just when he realized that his attitude was a bit inappropriate and was about to apologize, he heard the other party say something stupid. Brain words:

   "Sorry, Alan."

   "What?" Alan Schwartz was a little confused, and after subconsciously asking a question, he was shocked to find that the other party had hung up the phone, leaving only the beeping sound of electricity.

  Thought and thought with the microphone, Schwartz was still not sure who the other party was, because the other party said too little, and the "sorry" was even more inexplicable. Alan Schwartz shook his head helplessly and put down the microphone. He decided not to call back the other party for the time being, but to wait for half an hour before calling back to see if the other party would calm down by then.

It's just that his microphone had just been reset, and another phone rang immediately, and a panicked voice sounded after the connection, "The big thing is bad, Alan, just a minute ago, the Paulson Fund withdrew All the funds in their accounts are as much as 4.5 billion U.S. dollars."

   The person who spoke was Eddie Marcus, the director of the trading department. Since the large-scale withdrawal of funds, his main task is to monitor the changes in the cash account, and at the same time, he is responsible for convincing those customers who are trying to withdraw funds. And once a large amount of divestment occurs, he must notify Alan Schwartz and the board of directors in a timely manner.

   "What?" Alan Schwartz turned pale after hearing this, and quickly asked, "Eddie, didn't you persuade me? God, what is going on?"

"Of course I persuaded, but the Paulson Institute directly refused, and did not listen to any explanation or guarantee from me." Eddie Marcus was struggling at this time, but he still had to be patient. Explained, "And their people said that they have already greeted you."

"Did you say hello?" Alan Schwartz was taken aback for a moment, and the next moment he realized that the nonsensical call just now was from John Paulson, and the other party just said a word, Just hang up the phone, is this considered a greeting? For a moment, Alan Schwartz's hands and feet were cold, and he didn't know what to do.

After five full minutes of sluggishness, Alan Schwartz woke up from his absent-minded state. At this time, he really wanted to make a call and ask John Paulson what was going on, but he thought about it carefully. After thinking about it, he gave up this move dejectedly, because he knew very well that even if the other party was willing to tell him the real reason, he might not be able to obtain the right to use the funds in a short time.

   Even more unfortunately, depressing news soon came one after another, and several famous funds such as Tiger Global Fund, Commodity Fund, and Castle Fund also called to withdraw their funds. In the anxious voice of Eddie Marcus, Alan Schwartz knew that the current cash in Bear Stearns' account was flowing out like water, and so far there were only 5.3 billion US dollars left, of which 5 billion US dollars were In the account belonging to the Quantum Fund, $300 million is Bear Stearns' own cash flow.

Hedge funds transferred so much funds at once, which caught Alan Schwartz by surprise. Amidst all the frustration, he also had a doubt in his heart, why they would withdraw funds so concentratedly at this time, among which Is there some misunderstanding?

   His doubts didn't last long, and Soros' call came to his phone, "Hey, Alan, my buddy, are you okay now?"

"I'm doing fine. How about you?"

Alan Schwartz, who was almost numb after hearing the bad news, had no time to greet him at this time, so he just replied mechanically, and then jumped up immediately as if his **** was being burned, and asked in a trembling voice. He said, "George, are you also here to transfer the funds in the account?"

  If Soros transfers the funds at this time, then Bear Stearns' cash account will almost be emptied, and it can declare bankruptcy now.

   When asking this sentence, Alan Schwartz kept praying to God, hoping that the other party did not have this purpose.

It's just a pity that Soros not only came to withdraw all the cash (portfolio), but also told him the brutal truth, "Yes, Alan, I'm very sorry. I don't want my funds to go bankrupt The clearing house is frozen, so I have to withdraw the funds I put in Bear Stearns immediately. After all, I am also responsible for my investors. In addition, I noticed your speech today, and it is your speech today that makes me firm Without confidence, there is indeed a big problem inside Bear Stearns!"

"What? What?" Alan Schwartz shook his head. At this moment, he thought he had an auditory hallucination, but after Soros repeated what he said, he realized that he hadn't heard it wrong, " I'm not lying, George, there is no liquidity crunch within Bear Stearns."

"That happened a few hours ago!" Soros chuckled, did not deny it, and said something that shocked Schwartz, "It's just that it's different now, and you probably don't have much cash to pay for it." Do you support the transaction tomorrow or the day after tomorrow? Even if there is, what about the next week or month?"

   "Admit defeat, Allen!" Finally Soros said meaningfully.

  At this time, Alan Schwartz was in such a state of confusion that he didn't have time to think about what Soros said. The other party's plan to withdraw funds had already made him flustered. You must know that Bear Stearns' sales and trading department occupies more than half of their business. Now without the support of cash, they can't provide leverage as usual, and they can't make settlements, and they can't even maintain the operation of self-operated business. I can't do anything. Once such news is leaked, Bear Stearns' stock will immediately become worthless, and the entire company can only declare bankruptcy.

  At the thought of bankruptcy, Alan Schwartz's brain buzzed and immediately exploded. He never imagined that Bear Stearns was on the verge of bankruptcy after only a few hours. But at this moment, he took a few deep breaths and gradually regained his composure. The worst situation has been considered, and there is nothing to be afraid of. And once reason returned to his brain, he realized what Soros just said.

"George, how do you know so much?" Alan Schwartz asked in puzzlement, but he soon understood what was going on, "It turns out that you are operating behind the scenes, even in the stock market. You are also doing short selling, right?"

"Let's think about what to do. Now that we know these things are meaningless!" Soros neither denied nor affirmed, but just put down such a sentence and hung up the phone, leaving Schwartz alone trembling.

After thinking for a long time, Alan Schwartz's head was getting bigger, but he still couldn't think of a good solution. Finally, he gritted his teeth suddenly and called Bernanke. Now only the chairman of the Federal Reserve can save Bear Stearns up.

   Thank you book friends, it wasn’t me who voted for the monthly ticket last night! Thanks to whoever said he is not crazy for rewarding this book! I'm sorry that I made a mistake in the title yesterday in a hurry, and wrote today's in advance, I apologize here...

  (end of this chapter)