The Son of Finance of the Great Age

  Chapter 806 Attacking Ireland (2)

  As the director of a large consortium, it goes without saying that Ou Zhihua has a close relationship with the top officials of the British government. After the German female chancellor ordered the investigation of vulture funds among high-level officials in various countries, the British government also issued a similar order to the country's large financial groups, and HSBC is one of them.

  Because of reasons such as British taxation and capital funds, HSBC has been trying to persuade the top management in the UK, so knowing that this matter may violate professional ethics, it has fully cooperated. It's just that Ou Zhihua's hard work was stared at by the other party, which made him quite embarrassed and helpless.

   During this delicate conversation, Tianyu Fund was lucky enough to escape.

What Ou Zhihua and the mysterious senior government official didn't know was that in the next few days, Zhong Shi borrowed a lot of Irish national debt through several large European banks, making Tianyu Fund's accumulated position within a week reached as much as 6 billion euros.

At first glance, this figure is not a lot, but we must know that the public debt of the Irish government accounts for about 80% of GDP, while Ireland’s GDP is about 250 billion US dollars, and the bond position accumulated by Tianyu Fund reaches 0.5% of the total public debt of Ireland. This number is quite astonishing.

And Zhong Shi’s associates also moved quickly, borrowing Irish national debt through their own channels, making the position held by the entire team quickly reach 2.5%. This figure can already affect the trend of Irish national debt in the market to a certain extent. .

  The most important thing is that while borrowing national debt, they also intervened in the Irish banking bond market, borrowing a total of more than 15 billion US dollars in bonds.

  Because the Irish government has injected capital into the Irish banking industry several times before, the holders of these bonds are not afraid of the default of these bonds. After paying a slightly higher price than the market, they successfully borrowed what they wanted.

  Coupled with these actions, actions to absorb Irish sovereign bonds and banking debt CDS are also quietly underway. At the same time, the actions of clearing the long positions of the euro and selling the euro are also proceeding in an orderly manner.

  Finally, a month later, on November 1, the short-selling action against Ireland finally began.

  First of all, various companies began to quietly sell Irish national debt in the market. Ten-year Irish government bonds are currently yielding around 6.5%, which is high, but not in the context of high yields across the eurozone, as German ten-year yields It also reached a staggering 6.2%.

  However, as soon as institutions such as Tianyu Fund made a move, they directly sold Ireland's national debt in large quantities in the market. Because it is impossible for an institution to cause a sensational effect, according to the prior agreement, Bridgewater Fund, Tianyu Fund, Paulson Fund and Pacific Investment Management Company shot together to sell Irish national bonds in the market.

  The first few institutions are nothing more than that, after all, they are not regular customers in the bond market. But the "debt king" Bill Gross immediately made the market look at him with admiration.

   "Pimco is selling Irish government bonds!"

   "Gross is not optimistic about Ireland anymore!"

   “My God, what the **** is going on in Ireland?”

  …

   Similar rumors immediately circulated in the bond market, with traders asking around to find out what Pimco knew.

  Generally speaking, every action of Pacific Investment Management Corporation is kept secret, because the tree attracts wind. But this time, Gross didn't mean to hide at all, and directly exposed his intentions to the market, which immediately made the market smell bad.

  After searching around, traders finally confirmed two news. The first one is the decline in GDP growth announced by the Irish government at the end of September, and the second is the news that the Irish government will continue to assist the country’s banking system in early October.

   Although these two news are in the past, traders quickly understood that the amount that the Irish government needs to bail out the banking system this time may be so large that even PIMCO is no longer optimistic about the Irish government.

  With the rapid spread of this conclusion, the market's confidence in Ireland began to shake, and the yield of the 10-year Irish government bond also began to rise.

  6.6%, 6.7%, 6.8%, 6.9%, in just a few hours, the yield of the Irish ten-year government bond climbed by 30 basis points.

  The market was a little flustered, because there was no solid fundamentals and news support. This sudden panic made the market feel very puzzled and scared.

   Just when the rate of return was approaching 7%, European consortiums began to appear. Although the amount they sold was not very large, many banks made quotations together, which to a certain extent contained the panic in the market. They scanned the goods frequently and quickly let the market realize that maybe they made a mistake.

  Professional traders are not much different from ordinary people. They have many personality defects. The biggest difference is probably the amount of funds they control. So after the European consortium took the shot, their confidence in continuing to sell was less firm.

   In a word, there is still no accurate news.

  But soon, the news that Pacific Investment Management Corporation continued to sell continued to appear in the market. This time, not only Pacific Investment Management Corporation, but even several major investment banks in the United States also joined the ranks of selling Irish government bonds.

  In addition to selling Irish government bonds this time, Irish banking bonds also appeared in the ranks of selling, which is considered to be a confirmation of Gross' speculation that he is not optimistic about the Irish banking market.

   Bears once again overwhelmed bulls, and the wave of selling continued.

   "Ireland may need international assistance!"

   "The European debt crisis may break out again!"

   "Portugal is next!"

  …

   Various unfounded rumors began to circulate in the market. Although these rumors have not been verified, they are already iron-clad facts in the minds of traders. Driven by these rumors, the Irish ten-year bond yield finally broke through 7% before the close, closing at 7.01% , becoming one of the most changed sovereign bonds among the market bonds on the day.

   "How's the transaction going?"

  After the market closed, Zhong Shi asked Jiang Shan, "Where is the CDS of the Allied Irish Bank?"

  On the one hand, sell Ireland's sovereign debt and its bank bonds, and on the other hand, buy their CDS. This strategy is basically in the same direction.

   "Sold a third."

Jiang Shan wiped the sweat from his forehead, gasped for breath, calmed down after a while, and replied respectfully, "The CDS spread of the 10-year treasury bond is approaching 500 basis points. Tomorrow, we just need to work harder to break through 500 basis points, right?" impossible."

  The concept of the so-called CDS spread is the CDS price of Irish 10-year government bonds. The 500 basis points mentioned by Jiangshan is 5%. Assuming that Tianyu Fund has 10 million euros of Irish 10-year government bonds in hand, the cost of protecting these bonds from default is 500,000 euros, which is the CDS price of the underlying 10 million euros of Irish government bonds.

  The rise or fall of this number represents the market's sentiment on whether the target will default.

   "Nice job!"

  Zhong Shi patted Jiang Shan on the shoulder, "According to the established strategy, the yield of Irish 10-year government bonds has been maintained at above 7%, so that the market atmosphere will become more and more serious."

   "But according to the extent of today's sell-off, we only have three days at most, and we will run out of ammunition by then!"

Jiang Shan was a little worried. In his opinion, today's efforts were too aggressive, which reduced the chips in hand a lot. Under such circumstances, if there is no major news released within a few days, Tianyu Fund's sniper plan will soon come to an end. .

   "Are you in a hurry?"

  Zhong Shi shook his head, smiled and said to Jiang Shan, "Who do you think is in a hurry under the current situation?"

   "Not us... No!"

Jiang Shan blurted out, but when he saw Zhong Shi's expression that seemed to be a half-smile, an answer suddenly popped up in his mind, "It's the Irish government. If they still want to make up for the losses in the banking industry by issuing bonds, then they must We have to weigh it carefully, issue bonds under such circumstances, whether they will be able to repay these debts in the future."

   "Maybe they won't even be able to pay the interest if their economic growth is still that sluggish."

  He said excitedly, "In this way, they must have something to do!"

   "So what do you think they're going to do?"

   Zhong Shi is quite satisfied with Jiang Shan's awareness, but so far it is not the end of the conversation, he continues to guide the other party to think.

   “Make a statement to reassure the market, maybe clear something up!”

  Jiangshan said without hesitation, "Maybe it can calm the market to a certain extent, but after all, distant waters cannot save near fires. After all, the deterioration of fundamentals cannot be calmed down with a few words. Is that the case, Zhong Sheng?"

   "You're right!"

Zhong Shi nodded appreciatively, "No matter what statement the Irish government makes, the market will only interpret it as they can't sit still with the current situation. In this case, the speculation about the Irish government will only further harm them. So whatever they do, it's wrong."

   "Then what should they do?"

  Jiang Shan thought about it for a moment, and his face gradually became serious. What Zhong Shi said was very reasonable, so he had no possibility of refuting it. There is indeed a high probability that the facts are what Zhong Shi said.

   "It depends on how much money they have in the treasury!"

Zhong Shi heaved a long sigh and said in a dejected tone, "From the very beginning, they have given aid to the banking industry indiscriminately for the sake of egalitarianism, and it is estimated that they have emptied all their wealth. In this case, no matter what they do, they have already It is impossible to restore the confidence of the market. I am afraid that they will only have to accept the aid!"

   "Our opportunity is coming soon!"

   he added at last.

   Thanks to book friends Bookworm 18622, cpower, Brother Huan, and Z Jia for voting for the monthly ticket! Thanks to the book friends who passed by KLMY and Nie 13 for their rewards! I feel very mentally exhausted recently, and I don’t even know what to say when I want to ask for votes. I hope everyone will support me because the author’s code words are not easy. If there are no votes, I really can’t even maintain the status quo...

  (end of this chapter)