Chapter 1748 Great Deal
The complete outbreak of the subprime mortgage crisis was triggered by the collapse of the second largest subprime mortgage company in the United States, the "New Century Financial Corporation".
The complete outbreak of the financial crisis was triggered by the collapse of Lehman Brothers, one of the five largest investment banks in the United States, and the acquisition of Merrill Lynch.
After that, the European sovereign debt crisis was triggered by the Greek debt default.
Of course, the other two are of no real use now. What Xiao Qi can use most in time is the second financial crisis, the collapse of Lehman Brothers, and the acquisition of Merrill Lynch by Bank of America.
Xiao Qi didn't like all the investment banks and fund companies, even his old friend Citibank, he should do it right away, and walked away with 1 billion US dollars in Citibank in one breath, showing no mercy at all.
Because Xiao Qi understands that these investment banks and banks are giant crocodiles who cannibalize people. If you talk to them, they will not talk to you. The best way to get along is to cooperate with vigilance.
But Xiao Qi doesn't dare to eat any money.
The last time Tong Wencong asked Xiao Qi if he wanted to buy Greek CDS, which is credit default swap insurance, which can also be called a credit default swap insurance product, Xiao Qi rejected it cleanly and asked Tong Wencong not to participate in it. .
You deal with financial institutions and bet against them. It is an honor to win them. It is something that makes others feel very powerful and cool. Winning money is safer and more transparent than winning in a casino.
But using financial means to harm a country, no matter how unworthy the country is, is still a very dangerous thing, not to mention that these European countries have gradually become a main body, and they have always advanced and retreated together.
Therefore, Xiao Qi will not be such a greedy idiot, he will only make money when he should make money.
For example. Lehman Brothers, which went bankrupt 5 months later, and Merrill Lynch, which was acquired by Bank of America, also have cds bond default swap products in several investment banks. Xiao Qi only needs to go to the financial derivatives market to buy these products. As soon as Mann Brothers collapsed and Merrill Lynch was acquired, these bond default swap products had to be paid out. The more you buy, the more you lose.
Let us give a simple example to illustrate, that is, Lehman Brothers issued 10 billion US dollars of bonds to the market, and then it found Merrill Lynch, paid a certain price, and asked Merrill Lynch to issue 10 billion US dollars of bonds An insurance that bears the risk that this $10 billion bond may exist. The name of this insurance is credit default insurance.
For example, Goldman Sachs bought this insurance. If the $10 billion bond does not default and cannot be delivered, then Goldman Sachs needs to pay premiums at regular intervals.
If Lehman Brothers collapsed. Naturally, there is no way to deliver the 10 billion US dollars of bonds. At this time, Merrill Lynch must compensate Goldman Sachs for its losses. This amount of compensation is not as simple as the little premium paid by Goldman Sachs. doubled.
Under normal circumstances, banks and investment banks such as Lehman, Goldman Sachs, Merrill Lynch, etc., all control each other's bond default swap insurance products, that is, they endorse each other, and they do not want to rely on this to make money. money.
so far. It is only on the bright side that commercial banks report to the Federal Reserve for credit default swap products. Its scale exceeds 62 trillion U.S. dollars. If you count the private sector, it is at least 100 trillion U.S. dollars. This shows how huge this market is, and how worried Americans are about financial derivatives. deep.
Because of such a large scale of credit default swap products, Americans are selling these products to the world all the time.
For example, Mochiyev, who just took office as the president of Citibank Asia Headquarters. So I called Xiao Qi and asked him if he had any thoughts on buying these insurances.
Xiao Qi immediately refused, expressing that he was not interested.
But Mochiyev has just taken up the post of president of the Asian head office, and he is eager to make some achievements so as to consolidate his position. So I have always been reluctant to call Xiao Qi, emphasizing the benefits of buying these bond default swap insurance products.
"Qi Shao, we are friends, please believe me. We estimate that by the end of this year, these investment banks will definitely have a big crisis. Although the US government will not let them fall by then, bond defaults are certain. Just relying on these insurances, I can guarantee that you can get at least 5 times to 10 times the return!"
Mochiyev said vowedly, but he didn't know that Xiao Qi was secretly laughing.
What does it mean to get a pillow when you want to sleep?
Isn't it Mochiyev?
Originally, Xiao Qi wanted to make a fortune in this aspect, but he didn't expect that he would automatically send it to his door.
Someone asked Xiao Qi to buy it, and Xiao Qi bought it on his own initiative, the meaning is completely different.
At least in terms of covering people's eyes and ears, there is a lot of room for calmness.
So, after "reconsideration", Xiao Qi finally agreed to try to buy some bond default swap insurance products.
Of course Xiao Qi would not be that stupid. He only bought the bond default swaps of Lehman Brothers. some special abilities.
Therefore, among Mochiyev's recommendations, the teenager chose to buy the remaining four major investment banks, Lehman Brothers, Merrill Lynch, Goldman Sachs and Morgan Stanley.
In the first few days of April, he used his own funds in Citibank to purchase the credit defaults of Lehman Brothers worth 4 billion US dollars, Merrill Lynch 2.5 billion US dollars, and Goldman Sachs and Morgan Stanley 1.5 billion US dollars each. For swap products, the time has almost reached the end of January 2009.
For this reason, from April to January next year, Xiao Qi paid more than 160 million U.S. dollars in monthly premiums, and the total premiums exceeded 1.6 billion U.S. dollars.
However, according to the previous history of Lehman Brothers’ filing for bankruptcy protection on September 14, and Bank of America’s acquisition of Merrill Lynch Securities on September 15 for close to 50 billion US dollars, Xiao Qi’s credit default swap insurance for Lehman Brothers alone It can earn a conservative profit of more than 8.5 billion U.S. dollars, and Merrill Lynch has at least about 4 billion U.S. dollars.
Compared with the profit that must have exceeded 12 billion US dollars, the expenditure of only 1.6 billion US dollars is simply a drop in the bucket.
Although making a lot of money this time, it did not exceed the bottom line of the Americans.
Goldman Sachs, Morgan Stanley and even Citibank must earn more than Xiao Qi.
In addition, Mochiyev's diligent promotion is well documented, so Xiao Qi doesn't have to worry about the consequences. The only possibility is that outsiders think Xiao Qi's vision is good, and he hit the treasure again.
Compared with this transaction, which will take several months to show its power, Xiao Qi has received a lot of doubts and ridicules in recent days.
The reason is very simple. Silver Lake Capital has been so excited that it bought 80% of the shares of Foursquare from Xiao Qi, the chairman of Xiannv Company, at the cost of a total valuation of 2.5 billion US dollars. Became the largest shareholder of the most popular geographical location sharing and geographical review software in North America.
Foursquare's user growth rate and valuation speed in the previous life far surpassed many companies, and it is the same in this life. Foursquare already has more than 50 million registered users and 18 million active users. From its establishment to now, it is just In half a year or so, I have to say that everyone has great expectations for it.
Originally, I thought that Xiao Qi would continue to invest, and then go public in the IPO to collect money, but I didn't expect Xiao Qi to sell this golden hen before it was fully mature.
Therefore, many European and American commentators who could not understand Xiao Qi immediately began to satirize and ridicule Xiao Qi as much as possible on TV, newspapers and magazines.
"Hehe, the genius boy has some fantastic ideas, but his eyes can't keep up with his clever head!"
"If I were Xiao Qi, I would definitely make it worth 10 billion U.S. dollars, and then choose to sell it slowly. Perhaps the cautiousness of the Chinese people makes Xiao Qi feel safe!"
"It's a pity that Xiao Qi gave up the star electronic network company that may be the second Facebook. The acquisition of 2 billion US dollars, Silver Lake Capital has made a lot of money! I don't know if Xiao Qi will regret it and cry today. Woolen cloth?"
"As far as I know, Xiao Qi was disliked by the founding team of Foursquare, so they strongly asked Xiao Qi to sell the stock. How could Chinese people understand the thinking of Americans? Xiao Qi's previous success was just a fluke! The sale of Foursquare is the beginning of Fairy Company's decline!"
"..."
Looking at these remarks, Xiao Qi's only movement was to shrug his shoulders, as if they were farting.
Not to mention that they don't know what Xiao Qi is thinking, just saying that this is hated by the founding team of Foursquare is talking nonsense with open eyes.
After Xiao Qi received 1.82 billion US dollars excluding taxes, he directly sent a bonus of 120 million to the founding team of Foursquare. People don't know how grateful they are to Xiao Qi.
Silicon Valley is a place that cannot hide its secrets.
Once others know how generous and forthright Xiao Qi is, then Xiao Qi must call them to do something if he wants to do something in the future!
This is also the reason why Hoffman asked Xiao Qi to give bonuses to the founding team of Foursquare!
I have to say that for being able to come up with such a coup, Hoffman deserves to be the cunning king of connections in Silicon Valley! (To be continued..)