The Son of Finance of the Great Age

  Chapter 866 The King of Wall Street (6)

  “In the entire unregulated over-the-counter market, the five largest banks in the United States account for 90% of all derivatives. In this case, it is possible for them to manipulate any market.”

Ou Zhenchu ​​continued, "In the futures, forwards, swaps, options and credit derivatives markets, they occupy an absolute dominant position. This is a report from the US Office of the Comptroller of the Currency in the fourth quarter of 2011. Derivatives Activity Report. In the fourth quarter of last year, there was a total of $230.8 trillion in uncalculated derivatives balances across the United States, of which JP Morgan, Bank of America, Citibank, Goodman Bank, and HSBC were just five The superbanks accounted for 95.7%. However, 92.2% of these outstanding balances were partially hedged.”

   "In other words, the unsettled and unhedged exposure in this market is at least 17.228 trillion US dollars. This figure is equivalent to the sum of the market capitalization of the three major U.S. stock markets!"

  Ou Zhenchu ​​spread his hands and said with an exaggerated expression, "It can be said that if there is a huge shock in the derivatives, then the entire United States may be evaporated. Look at it, what a horrible thing this is."

"Among the five large banks, none of them can bear the losses caused by the turmoil in derivatives, so for them, the safest way is to manipulate these markets and keep them under their control at all times, so that they can be able to minimize the risk.”

   "How do they manipulate these markets?"

Hearing this, Ivana basically understood the general idea, but there are still many questions lingering in her mind, this is one of them, "There should be other buyers in the market, how can they do it?" What about a single family?"

   "It's easy, money!"

Ou Zhenchu ​​chuckled, and said concisely, "As long as you have enough funds, even if you bet in the wrong direction, you can manipulate the market by raising bets until the other party can't bear the huge floating loss and liquidates and leaves the market. successfully turned the tide."

"As JP Morgan's traders, they have enough funds to carry out such operations, so even if they realize that they have been attacked by the market, they can make their opponents admit defeat by increasing their positions. I can't guarantee that, We were the first to discover this situation in the market. But what I can be sure of is that only we have the ability to defeat giants like JP Morgan, and it is basically impossible for other institutions, because they cannot have such huge financial resources Come up against JP Morgan unless more forces come in."

   "One force will drop ten meetings!"

Zhong Shi, who hadn't spoken for a long time, finally spoke at this time, "It's a very simple truth, but it has been tried and tested. I met Bruno Ixil two days ago, and this guy is indeed extreme. Although he behaved in front of me You have to be respectful, but I can clearly see disdain and pride in his eyes."

"If our estimate is correct, this guy should be the operator of the IG9 contract. Once there is a direct conflict with him, he will definitely not let it go, and there is a high possibility that he will take some aggressive tactics to scare him off Opponents. In this case, the bet between us and them will become bigger and bigger, to a level that no one can imagine."

"so what?"

Regarding Zhong Shi's words, Ivana obviously misunderstood, "Don't tell me you don't intend to attack JP Morgan? You must know that according to our agreement, you are obliged to help us! Also, according to your current Are you still afraid of a little JP Morgan?"

  She was very dissatisfied with Zhong Shi's performance, and she directly said certain things regardless of the presence of outsiders.

  Ou Zhenchu ​​and Liu Mingren obviously didn't expect what Ivana said. They looked at each other, packed up their things by coincidence, and prepared to leave the office. Obviously, what these people are going to discuss next is no longer suitable for them to hear.

   "Haha, how can I not be afraid of a Wall Street king like JP Morgan?"

After being choked up by Ivana, Zhong Shi didn't know what to say for a while, after stopping the two traders' plan to go out, he forced a smile and replied, "Of course, the agreement between us is still valid. But can it be like this, the German government contributes a part of the funds, we contribute a part of the funds, and the final income will be apportioned in proportion, so that we can spread our risks as much as possible, what do you think?"

   "Don't even think about it!"

Ivana flatly refused without thinking, "It's absolutely impossible. When the Prime Minister assigned me the task, he made it clear that we can't use a penny in the treasury. You have to use your own money." Funds to complete the tasks you promised. Of course, if you can find other sources of funds, we will not object. What we want is the final result. As for the process, we will not ask.”

  She flatly rejected Jong-seok's proposal.

  Seeing that the other party rejected his proposal so readily, Zhong Shi and Jiang Shan looked at each other calmly, and they both saw the joy in the other's eyes.

  Yes, not disappointment, but joy.

For Zhong Shi, dealing with JP Morgan does not require any foreign aid at all. Although the opponent is a giant, it is nothing to Tianyu Fund after all, and it is impossible for JP Morgan to devote all its resources to such a huge investment. a market. In addition, the other party is in the light, and Tianyu Fund is in the dark, which naturally occupies a lot of advantages.

   Moreover, Zhongshi still has a nuclear weapon that has not been used, and that is his reputation. It can be said that as long as Zhong Shi publicly expresses his position in the market, there will be a large number of responders. Tianyu Fund, which combines market forces, is definitely on par with giants like JP Morgan.

  Among the whole incident, Zhong Shi was most worried that the German government would intervene in this matter. So he used the excuse of insufficient funds to test Ivana's attitude. As he expected, the German government was really unwilling to spend real money.

   In this way, they naturally have no excuse to ask for the final income.

Poor Ivana didn't know that she had been slapped unknowingly. She only realized that she seemed to have neglected something, but after seeing Zhong Shi's reaction, she couldn't figure out what went wrong. After thinking for a while, I had to choose to give up.

   "So what do we do next?"

With a gloomy face, Zhong Shi pretended to be very dissatisfied with Ivana, but with a helpless look, he said to Liu Mingren and Ou Zhenchu ​​with a little anger, "If we want to attack them, what should we do? How much money? How much is the expected income?"

Seeing Zhong Shi's unhesitating expression, Ou Zhenchu ​​and Liu Mingren couldn't help feeling a little flustered. After quickly calculating on paper, Liu Mingren replied: "JP Morgan uses the strategy of flattening the selling curve to obtain long-term benefits. If there is a price difference between the IG9 contract and the recent IG9 contract, then we will do the opposite, buy the five-year IG9 five-year contract, sell the IG9 ten-year contract, and directly compete with them.”

"When the exposure has accumulated to a certain extent, we will announce the news again, so that the entire market will attack JP Morgan. At that time, whether the entire market buys a single CDS or adopts the same strategy as us, it will eventually force JP Morgan gave up their current strategy and finally defeated them."

"According to our calculations, if JP Morgan has to back down on this exposure, it needs at least an IG9 contract worth more than US$50 billion. In this way, when the news is announced, JP Morgan has to reduce its exposure Throw in the towel, and we expect billions of dollars in profits could be made."

   This is a number calculated by the two hastily. It is basically impossible to guarantee its accuracy, and there are many restrictive factors, so they dare not say an accurate number.

"this number…"

Zhong Shi pondered for a moment, and finally said slowly, "It seems a little small, not enough for us to intensify our efforts to attack JP Morgan. Well, let me give you a quota worth 80 billion to 100 billion US dollars, and build up as much as possible Is there any problem with JP Morgan's opponent, striving to maximize profits at the last moment?"

"no problem!"

Zhongshi gave a quota of US$80 billion to US$100 billion, but this is only the total value of the contract. In fact, only a small part of the cash is needed to establish these positions. According to the current market price, it is only 4 billion to 5 billion. billions of dollars or so. However, for this part of the funds, risk control is very important. Ou Zhenchu ​​and Liu Mingren had a quick discussion, and finally patted their chests to assure them.

  For traders of their level, even if they feel that their ability is insufficient, they will not easily refuse a transaction that can get so much cash, because this is undoubtedly the best opportunity to build their reputation.

   "Also, JP Morgan intends to sell us CDS for about US$15 billion. What do you think should be done?"

  After the two agreed, Zhong Shi continued to ask, "Originally this was a tactic I used to test them, but now it seems that there is still room for this false transaction to be exploited."

   "It would be nice to switch to IG9's five-year contract!"

Ou Zhenchu ​​said without hesitation, "Since they are shorting the five-year contract of IG9, then we will buy it. Of course, after this transaction is over, we will buy the five-year contract of IG9 from the market and sell the ten-year contract of IG9 , not to go through their channels, so as not to let them know about our targeted actions prematurely. I think for JP Morgan, they are very happy to see us make such a move.”

   "Are there other influencing factors?"

  Zhong Shi nodded, but then asked anxiously, "In addition to everything we discussed, what other factors can affect JP Morgan and give them a chance to turn defeat into victory?"

"there is none left!"

Liu Mingren said confidently, "According to our judgment, if there is really a strong opponent, JP Morgan is basically in a situation where it is safe to lose. Any good or bad things that happen to the international macro economy now Good news will hasten their demise."

"Why do you say that?"

  Ivana asked strangely, "Isn't it said that there are good news and bad news? Why, for JP Morgan, good news or bad news will speed up their demise?"

   "Because their positions violate the normal fluctuations of the market!"

This time, Ou Zhenchu ​​explained, "To put it simply, if there is good news in the market, at most JP Morgan will maintain its current position, but it is impossible for it to invest in endless funds, so in the end it will be left alive. Once there is bad news in the market, such as repeated European debt crisis or poor economic data in the United States, it will inevitably lead to turmoil in the bond market, followed by a general rise in CDS prices. In this way, the price difference between the five-year IG9 and the ten-year IG9 will further widen. According to their current strategy, this behavior is undoubtedly a loss. If we add the huge position we have erected with them, they will lose money The quota will become an astronomical figure."

   "So defeating them is only a matter of time!" Ou Zhenchu ​​finally said confidently.

   "You knew this beforehand, didn't you?"

  Ivana suddenly understood at this time, and screamed at Zhongshi, "Just now you said that the German government's funding is a test of the current situation, right? God, you are so cunning!"

  She finally understood, but it was too late.

   Thanks to book friends Molong Zhangui, Happy Bug, and Quan Quanmao for voting monthly! The recommendation has not improved for two days, far less than last month, and the overall decline has fallen. It is inevitable that there is a feeling that the prosperity has passed away. Maybe the situation of last month will become the best memory. Although it is close to the end of the book, as far as it is concerned, it will be written for a while, and it will not be finished immediately in a day or two or a week or two. Now I feel that it is very difficult to conceive, and I often feel mentally exhausted, but of course I will continue to work hard, but everyone hopes that the request for more updates is indeed a bit difficult for the author. I can only say that I did my best. I hope everyone can understand and write. The book is not easy. It’s rare to finish writing today before it’s too late, so I just said a few more words. In the end, I still have the cheek to hope that everyone will continue to vote for more, and don’t forget to vote more for recommendation~

  (end of this chapter)