Chapter 1117 Thiel Fund
“Xu, Goldman Sachs also has some research on subprime mortgages.”
Blancfein noticed his vigilance, and in order to win the latter’s trust, he decided to show it first A little sincerity.
“The mortgage company owned by Goldman Sachs is the largest creditor of New Century Financial, and we have had many contacts with them.
Now we are very suspicious that New Century Financial has a multi-billion dollar Bad debts, and then prepare to conduct a financial audit of this company.”
Xu Liang nodded, "Really? Then the situation of New Century Financial is not very good."
"The situation of New Century Financial is indeed very bad.
But I am more curious about where the bad debts come from. ?”
Looking directly at Xu Liang, Blankfein continued:
“With Mr. Xu’s talent, I believe you must understand the financial dilemma in the new century and the current subprime mortgage in the United States. Very clear.
And it’s also clear what consequences they will have in the future. ”
Xu Liangliang secretly admired it.
Blankfein not only read the key information from the profit warning report issued by New Century Financial, he even smelled the risks, and now he is even more shy Communicate with yourself with a face.
The connection of these inconspicuous things is enough to help the CEO make more accurate decisions.
“It’s a pity, it’s a pity. This kind of top financial elite should belong to Hanhua. ”
Xu Liangzhong secretly felt regretful.
As a superior, what he likes most now is talents.
After organizing his language, Xu Liang smiled.
“As the world’s top financial institution, Hanhua does have a lot of analysis on the U.S. real estate market and derivatives market.
According to our estimates, as the subprime mortgage default rate soars , CDOs will become a pile of garbage.”
Blankfein nodded, "I see, you bought so many CDS credit default swaps, aren't you just waiting for that moment."
"We started investigating last year..."< br>
Xu Liang selected some of Hanhua’s findings and told Blankfein about the less important ones.
This is not because he is out of kindness, but because the old man has almost realized the risks and is ready to ask Goldman Sachs to turn around. He is just giving him a favor.
Blankfein's eyes lit up after hearing this. The discoveries Xu Liang told him made him feel refreshed and strengthened his confidence a lot.
"Xu, thank you very much. Goldman Sachs will definitely remember your help today."
Blankfein said gratefully.
Xu Liang smiled and didn't take it to heart.
No matter how much gratitude you have, it will all be attributed to ‘profit’ in the end.
It is unrealistic to expect the other party to help in vain.
But I still have to talk about the scene.
"To be honest, we are the closest partners, just exchanging information."
Blankfein agreed with a smile.
"Yes, we need to strengthen our ties in the future.
And I think subprime mortgages and their derivatives are a very large market, big enough to accommodate our two companies."
Xu Liang cursed secretly.
This old guy is really cunning and greedy. He twisted his face and wanted to get benefits from him.
"Of course. Hanhua is also happy to cooperate with Goldman Sachs."
Although reluctant, Xu Liang still wanted to bring Goldman Sachs in.
As a Wall Street giant, Goldman Sachs is big enough and well-connected, so it can share the pressure if things get big in the future.
Moreover, everyone wants to eat the meat of the subprime mortgage crisis. Instead of letting others eat it, it is better to let Goldman Sachs eat it and earn some favors.
"I have to go back to the company for a meeting, and I'll ask you out to play ball another day."
After getting what he wanted, Blankfein didn't stay any longer.
"Tomorrow I will ask someone to bring the contract and provide Hanhua with a free service."
"Okay."
Xu Liang accepted the offer of service directly without any courtesy.
This is the benefit they deserve, no need to be polite.
Although Hanhua is now also engaged in investment banking, it is mainly located in Asia.
The United States and Europe also need to rely on established investment banks such as JP Morgan, Goldman Sachs, and Merrill Lynch.
The short selling of U.S. subprime debt this time was mostly done through these investment banking platforms.
Whether it's designing consignment products, helping match up rivals, selling subprime mortgage assets and dealing with the aftermath... everything is inseparable from this group of pimps.
At the same time, because of their work, Goldman Sachs has very strong information collection capabilities, which is why they were able to detect that Hanhua was shorting subprime mortgages.
With so many channels for obtaining information at hand, Goldman Sachs is like having a pair of eyes and a pair of ears. It can always avert danger every time there is a big storm.
Of course, it is not enough to have information, but also to have enough decisiveness.
Under the subprime mortgage crisis, Merrill Lynch, Lehman, and Bear Stearns all fell.
Their ability to obtain information is no worse than that of Goldman Sachs, but they fail to grasp it.
So, in the final analysis, it still depends on the person.
If people are not good enough, no matter how good the external conditions are, it will be useless.
After Blankfein left, Xu Liang thought that Mai Jinchen would also come to see him.
But the old man didn't come, and he didn't even call him, which shows that the sensitivity is still a bit low.
Morgan Stanley's performance during the subprime mortgage crisis was worse than that of Goldman Sachs, and it is not without reason.
If Mai Jinheng didn't come to see him, he would naturally not send any favors. What he was after was not business.
......
The warning messages issued by HSBC and New Century Financial were like two bombs dropped into a calm lake. The housing market that had been sideways for several months finally splashed and began to fall slightly. .
The media, fearing that the world would not be in chaos, began to launch various reports and express pessimism about the housing market.
Against this backdrop, the ABX composite index of subprime home loan bond prices began to plummet.
It plummeted from 100 points a few months ago to more than 60 points. The longs suffered huge losses and the shorts made huge profits.
At this time of panic, the conference room at No. 40 Wall Street was filled with laughter and laughter.
"Xu, your investment vision is really great. It is a lifetime honor for me to cooperate with Hanhua."
Peter Thiel said to Xu Liangshu, who was sitting opposite him. Thumbs up, convinced.
Since the cooperation between the two parties began in 2005, the hedge fund department of Thiel Funds has been managed by Hanhua.
In the past two years, the other party has been shorting subprime mortgages.
Although even if the hedge fund department loses money, he is not responsible according to the original cooperation agreement, but it will also affect the reputation of Thiel Fund.
Now it’s better, U.S. real estate has fallen, and the hedge fund sector has made a profit.
According to the agreement, he will receive 5% of the total revenue of Thiel Fund's hedge fund department without any payment.
Thiel's fund now holds a total short position in subprime debt of up to US$13 billion, even if the final return is only 20%.
5% of total revenue is also a huge amount of money.
Xu Liang looked at the man in front of him with a smile. The cooperation between him and him was quite pleasant.
The situation was unclear some time ago. The hedge fund department of Thiel Funds once lost nearly one billion U.S. dollars. Peter Thiel would nag him from time to time.
Advise him to be cautious and not to end badly.
The friendship between the two parties is not very deep, and the other party can be regarded as a good friend if he can give good advice.
So Xu Liang took advantage of the subprime debt crisis and the hedge fund department of Thiel Funds took the opportunity to make a comeback and took the initiative to invite him to New York to deepen the relationship between the two parties.
“The CDO and CDS markets are not currently very volatile. Our main profits come from shorting the ABX index. Next, we need to observe more and pay attention to market trends.”
Xu Liang said with a smile .
Peter Thiel frowned and asked: "You mean there may still be turbulence in the subprime derivatives market?"
Xu Liang shrugged.
“No one can guarantee this. After all, housing prices have been strong for so many years, and some fluctuations are very possible. We have to be patient and cautious.”
Peter Thiel felt in his heart murmur.
‘You didn’t say that on purpose because you were afraid of following the trend, right? ’
He is not only an entrepreneur and venture capitalist, but also a fund manager. His first job in his career was as a financial derivatives trader.
Having basic financial literacy, and observing Xu Liang's sexy operations at close range, his views on the subprime mortgage market gradually changed. Originally, he did not think that shorting subprime mortgages was a good choice. As Xu Liang said before, the U.S. real estate market has been strong for nearly a century.
There were occasional corrections in the middle, but there was no large-scale collapse.
But watching Xu Liang spend a lot of money through Thiel Fund, I couldn't help but feel anxious.
So, with a phone call from Xu Liang, he flew from Silicon Valley to New York.
Peter Thiel said: "Xu, I also want to short subprime mortgages."
This guy is an honest person.
I am greedy, but I am greedy on the surface.
Xu Liang prefers this kind of temperament.
“Wow.”
"I need to ask for your permission first."
Peter Thiel looked at him with a sincere expression.
“Although it is a bit embarrassing, your operation makes me feel that the subprime mortgage market is ushering in a wave of decline, and I hope to get in and get a share of the pie.
But don’t worry, I will be there. If Teal Fund establishes another hedge fund department, it will never leave.”
Hanhua holds 30% of Teal Fund’s shares.
If Peter Thiel makes money through the Thiel Fund, 30% of it belongs to Hanhua.
Xu Liang looked at the man in front of him, a little confused whether he really thought so or if he had mastered the thick black science to a great extent.
But of course there is no reason to extrapolate things that make money yourself.
“This market is very big and can accommodate you and me. But if you want to short the subprime debt, you have to bear the risks involved.”
Peter Thiel smiled and said: “I have already I have thought it through carefully and I will bear all the responsibility independently for any problems.
Thank you, Xu. You are an open-minded person. ”
Xu Liang grinned.
It’s an open six.
You won’t go short if I refuse?
It’s just pushing the boat along.
But having said that, he really wanted Peter Thiel to invest in subprime mortgages on a large scale. The bigger the better, just to cover Hanhua's actions.
Whoever wants the title of "The God of Subprime Mortgage" can take it. He doesn't want it anyway.
"By the way, Xu. I decided to cancel the fund management fee we set before, as a reward for you."
Hanhua had previously formulated a cooperation agreement with Peter Thiel protocol.
Hanhua uses the brand name of Thiel Funds hedge fund and is responsible for its own profits and losses.
There is no need to pay any fees, but if the hedge fund department makes a profit, 5% of the total income must be allocated to Thiel Fund.
Now Thiel Fund has made a lot of money shorting subprime debt.
This guy doesn’t want it even if he says he doesn’t want it. He seems to be too arrogant.
Xu Liangliang became wary.
There is no free pie in the sky.
"I hope Thiel Fund and Hanhua can reach cooperation. We can exchange information and make progress together in subprime mortgage investment."
Xu Liang thought about it for a moment.
‘So you are waiting for me here? ’
The good impression of Peter Thiel that had accumulated in my heart quickly collapsed.
This guy is obviously a big-eared thief with a thick face and a dark heart.
No matter how much you earn at 5%, it won't be as much as earning in person.
How to ensure that you can make money in person?
Of course it’s a thigh hug.
Xu Liang is the thickest thigh.
My mind is full of thoughts.
"No problem, I agree."
"Really?"
"Of course."
Peter Thiel, who was originally worried, suddenly became excited.
"Xu, if Thiel Fund makes money, I will definitely give you a large consulting fee. This amount..."
Thiel pointed out five fingers.
Xu Liang shook his head and chuckled, "You have already waived the management fee, so forget about the consulting fee.
Thiel Fund and Hanhua are the closest partners, and we will cooperate in the future There are still many opportunities."
Peter Thiel smiled, "Well, if you need help in the future, please don't hesitate to contact me at any time."
" Don't worry, I won't be polite." Xu Liang smiled.
Having achieved his goal, Peter Thiel did not stay any longer, stood up and left, eager to go back and deal with the establishment of a new fund.
After Peter Thiel left, Li Jinling walked in.
"Mr. Xu, I'm sending you off."
Xu Liang responded.
“Send a fax to Hanhua and ask them to sort out the subprime loan information collected within the company and send it to Thiel Fund.”
"Mr. Xu, we spent a lot of money to collect this information. Is it appropriate to give it to the Thiel Fund?"
Glancing at her, Xu Liang smiled.
“Worried about creating a competitor for Hanhua?”
Li Jinling nodded.
“In fact, it is not necessary. The time when subprime loans really make money is always before the crisis breaks out.
Now that New Century Finance has exploded, many financial institutions have come to their senses.
At this time, you can make money by entering the short market, but you will not be able to earn several times the excess profit.
Now the water is muddy for us.
This will make it easier to put your money in your pocket.
So whether it is Goldman Sachs or Thiel Fund, it is a good thing for us that they participate. The more they make from the subprime mortgage crisis, the easier it will be for us to take home the fruits of our harvest.
In particular, we also hold 30% of the equity of Thiel Fund, and we can share part of the profits when they make money. ”
To sum it up, it’s just one sentence.
There’s too much fat for his family to eat, so he doesn’t mind sharing it so that people close to Hanhua can take a bite and earn some favors by the way.< br>
“Mr. Xu, you have thought carefully. "
Xu Liang smiled: "When you send the email later, remember to tell Hanhua to prepare more detailed information and the words should be inspiring.
Let Peter Till invest as much money and leverage as much as possible.
The more he makes, the better it is for us. "
"Yes. "
"By the way, what's going on with Paulson? ”
In the past two years, Hanhua has invested in all the funds in the world that are shorting U.S. subprime debt.
The Paulson Institute is even more important.
"He is raising his second hedge fund. I heard that the total amount is as high as 5 billion US dollars. It seems that he is going to do something big."
Xu Liang: "Paulson is a ruthless person. His confidence and enthusiasm for investing in subprime mortgages are no less than ours."
Li Jinling nodded.
"Send an email to Hanhua and invest in as many Paulson funds as possible." Xu Liangdao.
No one knows better than him how serious the impact of subprime debt has been on the United States and the world.
When he thought about millions of people being homeless, he felt a little numb.
No one can bear the anger of so many people, so it is better to keep a low profile.
A few trees and a few targets went out to attract fire, while they hid in the dark and counted money, enjoying themselves.
(End of this chapter)