Chapter 646 Rescue Plan
“After the United States launched a US$700 billion rescue plan last month, the panic intensified in the London stock market and a rare plunge occurred. Among them, the stocks of the British banking system fell the worst..."< br>
After the meeting with Brown, Barron went to the DS Financial Center and heard Daisy’s summary:
“This has also expanded our income. So far, we have invested a total of Short selling on British and European stock markets includes Caesars Fund and Bucks Fund (investment funds established by Cavendish Trust and Devonshire Family Trust) have invested a total of 10 billion pounds and have made profits of more than 24 billion pounds..."
Phase For the Black Swan Fund in the United States, with an initial investment of more than 5 billion U.S. dollars, the current profit is close to 100 billion U.S. dollars. The DS Group's short selling in England and Europe only has a profit of about 2.4 times, which is indeed not high, and even a bit low. .
But there is nothing that can be done about it. After all, in the United States, the Black Swan Fund directly shorted CDO bonds and bought CDS swap insurance at the beginning, and the profits were extremely generous. In addition, the subsequent short selling of the stock market was also due to the American market. Larger scale and the ability to use higher leverage - It has to be admitted that although London is still one of the world's financial centers, it is far lower than New York in terms of the total scale of funds and the breadth of participation.
Even so, if the amount of funds of the Black Swan Fund is increased to 10 billion US dollars, the profit rate it can obtain will decrease slightly. That is, short selling of this size is more suitable for 5 billion US dollars. The reason for the amount of funds in US dollars.
On the European side, their short-selling investments are mainly aimed at the stock market. Even if the scope is the entire Europe, they need to be more cautious. The current profits can satisfy Barron's. .
“Let’s start closing short positions in the British market. As for Europe... we can retain a certain proportion of positions and make adjustments according to the situation.”
Barron has promised Brown that he will "Stabilizing the British stock market", coupled with the current decline in the British stock market, is basically in place.
The fattest fish head and body have already been eaten, so there is no need to eat the tail.
The next thing he needs to consider is that with the coming of the British government's large-scale bailout policy, he can observe the market situation, carry out bargain hunting and build positions, well, including the government public funds he is about to receive. Funds are waiting for the market to pick up.
……
Just one week after Barron’s meeting with Brown, the British government announced a series of rescue policies.
First of all, they announced that they would increase the upper limit of all personal bank deposit guarantees from 35,000 pounds to 50,000 pounds - this can only be regarded as an appetizer, mainly to stabilize some depositors of the Bank of England, which can make The chances of another bank run have decreased.
Then, the British government announced that it would buy shares in a number of banks and provide guarantees for them to ease the credit crunch.
Including, the government is likely to inject a total of more than 50 billion pounds into the eight largest banking institutions in the UK, the central bank, the Bank of England, will provide another 200 billion pounds in short-term loans, and the government will provide 250 billion pounds to guarantee medium-term debt to enhance interbank capital flows and help restore confidence in banks.
After the announcement of this policy, at the request of the banks, the British government announced in early December that it would inject 37 billion pounds into Royal Bank of Scotland, Lloyds TSB and Halifax Bank of Scotland, and transfer some of their state-owned change.
Among them, the British Treasury will exchange 20 billion pounds for 60% of the shares of Royal Bank of Scotland, and inject 17 billion pounds into the acquiring Lloyds TSB Bank and Halifax Bank of Scotland, holding the merger 40% stake in the latter bank.
At this time, Barclays Bank is still holding on, hoping to seize the time to raise 7 billion pounds to replenish its capital. If Barclays Bank accepts government bailout, the bailout provided by the British government will be Reaching 20 billion pounds, but faced with the "stringent" conditions of this subsidy, Barclays hopes to find a way to solve the liquidity problem on its own first.
Of course, with the implementation of this round of rescue plans, the British government also requires Halifax Bank of Scotland to raise 12 billion pounds, Royal Bank of Scotland to raise 20 billion pounds, Lloyds TSB to raise 5 billion pounds, and Barclays needs to raise 12 billion pounds. £8 billion to remediate bad debt - recapitalized banks must restore their mortgage and small business lending to 2007 levels.
As one of the policies of this round of rescue plan, the Bank of England announced that it will start to cut interest rates. This will be the third interest rate cut by the Bank of England in the past two months. It is also the third interest rate cut by the Bank of England since February this year. The sixth interest rate cut has reduced the base interest rate from 5.5% to 2%!
This also means that Britain will begin to implement quantitative easing monetary policy. "Looking at the economic crises that have occurred around the world in the past 120 years, each economic crisis usually has an economic decline that lasts for 2 to 3 years and a loss of 5% to 10% of GDP growth. In this economic crisis, although the current GDP growth has It has entered the bottom, but it will take some time for the economy to truly recover..."
What Barron has in hand at this time is his think tank's forecast of the current subprime mortgage crisis and subsequent economic forecasts. An analysis article done.
Although he knew the detailed process of the subprime mortgage crisis in the original time and space, after all, in this world, the process of the subprime mortgage crisis was affected by him, and it was obviously accelerating.
Therefore, he also needs to use more data and analysis to determine subsequent actions.
“From the rescue plan launched by the government this time, it can be seen that the degree of confirmation has increased as originally thought...”
It has become the UK’s market value except HSBC Holdings Davis, the CEO of the largest listed bank, Standard Chartered-Merrill Lynch, is naturally very concerned about the government’s bailout plan. Even though Standard Chartered-Merrill Lynch does not need any bailout from the government, from the point of view of the government increasing liquidity in the financial industry Look, it is also very beneficial for their subsidiary Standard Chartered Bank.
“This is also the result of the joint efforts of many parties, and the Prime Minister has also realized that if he does not try his best to maintain the confidence of the market, then even if it is worse, the performance of England will be more outstanding. This This is not good news for him and the entire Labor Party. After all, the Labor Party has clearly lost in the local council elections in May this year.”
Barron's words were recognized by Davis:
"It is true. Not only the people, but also the bankers are complaining about the government's slow action..."
He took off the He took out the glasses cloth from the inner pocket of his suit, wiped it carefully, and said to Barron:
"Your Highness, the one who is most anxious now is probably Buck. After yesterday's meeting, Mr. Diamond came to talk to me about the financing of Barclays Bank..."
Robert Diamond is the president of Barclays Bank, and yesterday, he Together with Davis and some of the UK's major bank managers, he participated in a meeting initiated by the government regarding this bank rescue and ensuring bank liquidity.
After that meeting, Robert Diamond took the opportunity to talk to Davis about their financing plan.
Due to government requirements, Barclays Bank needs to come up with up to 8 billion pounds of funds as soon as possible to solve their bad debt problem. Otherwise, following the Royal Bank of Scotland and Lloyds TSB Bank, Barclays Bank It also needs to receive government assistance and partially nationalize it.
Of course they don’t want to end up with such a result - because the bailout is not in vain. In order to show the public that the government bailout is not to pay for the bankers’ mistakes, those banks that received the bailout need to Accept tough conditions.
For example, as a condition of receiving government rescue funds, the presidents and chairs of the Board of Directors of Royal Bank of Scotland and Halifax Bank of Scotland will be forced to resign. Executives of the rescued banks will not receive cash bonuses this year. The bonus will be determined in stocks based on the company's performance...
If there is no other way, then Robert Diamond naturally does not want to end up in the same end, so in order to save themselves, they are preparing to obtain some urgently needed financing through financing funds.
Not only Davis of Standard Chartered-Merrill Lynch, I believe that at this time, Barclays is also contacting other potential capital injection targets to help them obtain funds to avoid being "bailed out."
"Really? What kind of plan did they propose?"
(End of this chapter)