The Son of Finance of the Great Age

  Chapter 747 Greece's downgrade (3)

   At the same time, Moody's and Fitch also issued statements one after another, claiming to lower the credit rating of Greek sovereign bonds.

   Moody's lowered the long-term senior unsecured bond rating of Greek sovereign bonds from Aa1 to Baa1, only one step away from being reduced to junk status. At the same time, Moody's declared that it would not rule out including Greek bonds in the re-evaluation list that may be further downgraded.

Fitch lowered Greece's sovereign credit rating from A- to BBB-, just one step away from the junk level, and the rating outlook is "negative", which means that, like Moody's, the possibility of further downgrades cannot be ruled out .

  Regarding the reasons, the statements of the two sides reached a surprising agreement. That is, the Greek government is facing a huge fiscal deficit, coupled with unimaginable public debt, and these debts have been accumulating, and there is no possibility of any reduction in sight.

  The three major rating agencies jointly issued a statement to lower the rating of Greece's national debt, which immediately caused a sensation in the global market!

   The foreign exchange market was the first to react to the rating agencies, and the exchange rate of the euro against the U.S. dollar experienced huge intraday fluctuations.

  Since Lehman Brothers declared bankruptcy, the euro, which had been weakening against the U.S. dollar, began to rise strongly, and even reached a peak of 1 euro to 1.44 U.S. dollars at the end of 2008. However, the euro fell again after the U.S. Senate and House of Representatives reached a massive rescue plan.

  With the ferment of the financial crisis and Europe's active attitude in rescuing large financial institutions, the exchange rate of the euro against the US dollar has re-entered an upward channel after falling for a period of time. And this rise lasted for nearly a year, from 1 euro to 1.2456 US dollars at the lowest point to 1 euro to 1.5144 US dollars, an increase of 21.58%. But this increase, starting from the joint downgrade of Greece's three major rating agencies, reached its peak on this day.

   On December 4, the euro exchange rate plummeted, falling from 1.506 at the opening to 1.4857 at the close, with a drop of as much as 1.35% throughout the day.

In the trading days of the following month, the euro still couldn't stop the momentum of the plunge. Among them, it fell below 1% again on December 27, reaching a decline of 1.29%. By December 22, the euro zone announced that Considering the implementation of aid to Greece, in just 13 trading days, the euro against the U.S. dollar fell by an astonishing 5.36%, forming a wave of not small market.

  The major reason for the plunge of the euro is not that Greece's rating has been lowered, but rather the market's speculation about how major countries in the euro zone will react after Greece's rating has been lowered. It is generally believed that the major euro zone countries will help Greece. However, the market cannot reach a consensus on the amount of aid and the terms of aid.

It was this difference in expectations that caused the euro to continue to fall until December 22, when the finance ministers of the euro zone sat together and began to seriously discuss the plan to aid Greece. The panic was effectively alleviated.

   A similar situation occurs with the British pound. Because it is highly related to the trade degree of the euro zone, the British pound is also shorted to a certain extent.

  The slow negotiation mechanism finally played a role, but it was too late for the rapidly changing capital market.

   The second reaction to Greece's rating is the bond market. Because the downgraded ones are sovereign bonds, the price of Greek government bonds plummeted in the market, and the yield suddenly rose from 11% to about 15%, and in just 12 months, the yield continued to soar. The day of December 22nd reached the highest point, which is a staggering 20%.

  This figure means that the Greek government wants to raise funds from the market. The 100-euro face value national debt can only be sold for 83 euros without calculating the coupon interest, and the price difference of 17 euros in the middle evaporates in vain.

   This is the power of rating agencies!

   At the same time, French government bonds and German government bonds have seen a certain increase in yields. Because capital is more willing to invest in products with higher credit ratings at this time. Among them, the yield of German government bonds even once exceeded the benchmark interest rate in the euro zone, reflecting investors' optimism towards the German economy.

  Of course, the impact is not limited to these two things. Markets such as interest rate futures, stock markets, and stock index futures in various countries in the euro zone all fell to varying degrees. Compared with the above two fields, their influence appears to be relatively limited.

"cheers!"

  In the villa on Long Island, a group of people were cheering and celebrating with champagne.

  This is Paulson's home, located in the rich area of ​​Long Island, New York, this 20-acre mansion cost Paulson a full $3.4 million. Among them, 16 acres is a nature reserve. The entire villa covers an area of ​​nearly 10,000 square meters and has 5 bedrooms and 4 bathrooms. The rooms are all made of cherry wood and granite, which is low-key, calm, luxurious and quiet, with excellent privacy.

   This is not the top mansion in the rich area of ​​Long Island, and of course, for Paulson, it is impossible for him to live here. He is currently looking for a new residence, and this can only be regarded as his temporary place to stay.

  Five or six people sat around in front of the fireplace, the raging fire made their bodies warm, without any feeling of cold at all. The coffee table in front of them was filled with all kinds of dishes, desserts and drinks, and the group enjoyed the joyful Christmas dinner while chatting and laughing happily.

   "I made $300 million in pounds!"

Ackman stretched out three fingers and boasted proudly, "Before the rating agencies launched, I had established enough short positions in the pound and long positions in the U.S. dollar, and I used three times the leverage. Well, the exchange rate of the British pound against the U.S. dollar fell by a full 4%. With the back and forth and leverage, I made more than 20% of the profit. Tsk tsk, this kind of performance is not inferior to my performance in the first half of last year. "

  He couldn't stop shaking his head while talking, and finally drank the champagne in the glass, and then sat down on the sofa.

   Ackerman was already drunk, so drunk that he didn't even have the strength to stand up.

   "Why don't you just short the euro?"

Another emerging fund manager, Griffin, asked inexplicably, but he didn't hear the answer for a long time. He turned his head in wonder, only to find that Ackerman had fallen asleep at some point, and smiled wryly. Shaking his head anxiously, he turned to the others and said, "I shorted the euro, longed the US dollar, and shorted Greek government bonds at the same time. However, due to time constraints, I didn't sell too much, so the profit was a little more than him. So far So far, the floating profit on the book has reached 500 million U.S. dollars."

  He told his earnings without any hesitation, apparently with the intention of throwing a certificate of fame.

  Among the people present, he and Ackman had the smallest funds. In other words, if the other players decided not to play with them, they would have no tricks at all. So they had the intention of surrendering, and wanted to use this to show that they were of one mind.

  This truth, Ackerman knows, Griffin knows, and everyone else knows it.

   "You guys have a lot of guts!"

When everyone's eyes turned to Jim Chanos, he took a sip of vodka lightly, and then said lightly, "Based on being cautious about the prospects of the whole matter, I only invested 100 million US dollars in the exchange rate market. The natural income is incomparable to yours. So far, my book has only a floating profit of about 10 million U.S. dollars."

   As a veteran short seller, Jim Chanos did not go all out, which surprised others. But after thinking about it, no one knew what the situation would turn out before, so his cautious behavior was understandable.

   "My turn?"

Among the remaining people were Paulson, Delio, and Zhongshi. Paulson looked around and realized that he was the weakest among the three. The other two didn't have any intention of speaking, so they stood up immediately. , "I was short Greek bonds, long German bonds, short British pounds, euros, long dollars and yen, and the current proceeds are close to $1 billion."

   he said proudly.

  Indeed, compared with others, he has made great strides, covered a wide range, and invested the most money so far. So by far, his income is also the highest.

  Of course, all of this is also related to his blind belief in Zhongshi.

   "Wow, that's impressive!"

Delio clapped his hands twice to express his appreciation to Paulson, then spread his hands and listed his positions one by one, "Short positions in euros, short positions in sterling, long positions in U.S. dollars, short positions in Greek government bonds, long positions in Greek interest rate futures . So far, I have made about $1.2 billion, but these are just floating profits on the paper."

  According to the current market fluctuations, coupled with the targets and yields of his investment, everyone quickly estimated the approximate amount of Delio's investment, at least more than 5 billion US dollars.

  When he thought of the inconspicuous Delio next to him, who was so resolute in pursuing Zhong Shi, Paulson's drunkenness suddenly sobered up, and a sense of crisis rose in his heart for no reason.

"Now it is your turn!"

  After Delio finished speaking, there was no slight expression fluctuation on his face, and he patted Zhong Shi on the shoulder, "Mr. Zhong, don't you want to show the report card?"

   "Show it off?"

  Zhong Shi put down his wine glass and chuckled, "Gentlemen, I have to say that your actions are meaningless."

   Just when everyone was suffocating, Zhong Shi went on to say, "Since you have all said it, then it is natural for me not to say it. How about this, I am involved in all the targets you can imagine!"

"what?"

   As soon as the words came out, all four people were shocked.

   Even Ackerman, who had been squinting halfway, opened his eyes, sat up straight involuntarily, and looked at Zhongshi in disbelief.

   "You... what did you say?"

  Because he was so surprised, Paulson couldn't even speak fluently and stuttered.

   This is not just a question of short-selling strength, but whether you believe that the whole plan can be carried out smoothly and implemented. At least for now, several other people are more or less reserved. This is not the reason for not being optimistic, but for the whole plan, they still have concerns and are cautious by nature.

  But as soon as Zhong Shi's words came out, they realized that at least Zhong Shi had unreserved trust in this matter.

  “Long the dollar, short the euro and the British pound, short Greek government bonds, long interest rate futures, short the stock market, long the stock markets of France and Germany, long their national debt, I have been involved in all of these.”

Zhong Shi counted with his fingers, "So far, the profits of these targets have exceeded 2 billion US dollars. Of course, I have not calculated the changes in the exchange rate and the changes in profits. Of course, because of the intervention of the Eurozone, these profits may be in the future. But I can at least be sure that the income of at least 500 million US dollars is guaranteed. That part is the profit from my previous sale of Greek bonds, and I believe this part of the profit will continue to expand in the future.”

   "..."

   What he answered was a gasp.

   Everyone felt very boring for a while, and they boasted for a long time, daring to show love in front of Zhong Shi, it was all a child's play. But after thinking about it, they were all relieved. After all, although Zhong Shi was the youngest among them, he was the one with the richest assets and the most courage.

  There is no doubt about this.

   "What should we do next?"

   After a long while of silence, Paulson asked leisurely. Among these people, he was the one who suffered the most, because now he is the most popular and praised by the media. During the long-term praise, he seems to have lost himself. But in front of Zhong Shi, he returned to the cruel reality again.

   "Next, we will target the gold market!"

   Picked up a piece of pizza, Zhong Shi chewed slowly, and replied seemingly casually, "Yes, you heard it right, it's the gold market!"

   Thanks to Xiaoqi's Civilization Miracle, cpower, Crazy, Spring Comes, Flowers Bloom Early, etc., for your monthly votes! Thanks to the electromagnetist for continuing to reward! In addition, I would also like to express my gratitude to the book friends who voted for the monthly tickets in the past two days that were not mentioned. Thank you for your strong support for this book last year. This year, the author will continue to work harder~

  (end of this chapter)