The Millennium Semiconductor Survival Guide.

Chapter 303 The cunning Madoff
Zhou Xin has always believed that Internet finance is a big killer, but if it only sells financial products directly to users through Internet channels, there is actually not much harm.

The harm of Internet finance lies in the products after its development, such as Huabei launched by Ant, whose 106 billion paid-in capital leveraged more than 2500 billion in loan disbursements, or the P2P business derived from Internet finance, which has no supervision In this case, it becomes an artifact for cutting leeks.

Moreover, Internet giants have found that it is easy and fast to make money by combining traffic with financial services, so they have focused their energy on this, which will weaken both their innovation capabilities and their investment in technology research and development.

Even for third-tier Internet companies like 360, it only took three years to launch an Internet financial business with the help of traffic, and its revenue and profits significantly exceeded the parent company.Any Internet company that can be named has begun to get involved in financial services.

First-tier Tencent and Alibaba Byte, second-tier Sina JD.com and Pinduoduo, third-tier Ctrip Didi 360, etc. have all launched financial services for the public, which are, to put it bluntly, lending.

It’s 2004 now, not 2024. No one can see the harm of Internet finance. The launch of Yu’e Bao has made institutions and companies crazy, thinking it is a great innovation.

The sale of financial products through online channels is not new. According to the quarterly magazine issued by the International Monetary Fund in the third quarter of 2002, in 3, 2001% of banks supported online transactions and launched a national bank Trading websites, at that time they combined electronic channels with the financial products of traditional banks.

In Spain and Switzerland, more customers are accustomed to electronic banking services, and more than 75% of banks provide electronic banking services.

Even at the beginning of the millennium, virtual banks appeared. These virtual banks did not have any offline branches and only handled business through the Internet. Amerikan has a total of 30 similar virtual banks.

However, their scale is very limited. The largest virtual banking service has only a few hundred thousand users. The vast majority of users use e-banking websites only for balance inquiries and transfer operations. There are very few users who purchase financial products through e-banking. Therefore, before the launch of Yu'ebao, the traditional thinking of financial institutions was that financial services were inseparable from offline, and online could only serve as a supplement.

In the past, The Banker magazine’s discussion of electronic banking focused more on transaction costs:

“E-banking existed for some time in the past in the form of ATMs and telephone transactions, but after entering the millennium, the Internet changed it. The Internet was a new channel for banking services, and both customers and banks benefited from it, regardless of the customer. Wherever you are, you can enjoy banking services conveniently and quickly.

In addition, banks can use the Internet to provide services more efficiently and greatly reduce costs.When traditional brick-and-mortar bank branches serve customers, the cost of a single transaction is about US$1. In the 90s, the cost of a single transaction by phone was about US$0.6. In the Internet era, the cost of online transactions Only $0.02 USD.

At the same time, it is worth mentioning that although electronic banks provide a wide range of services, including time deposits, investment products, automated investments, etc., the proportion of demand deposits and withdrawals exceeds 90.00%.

Traditional bank branches still have value and necessity, and complex services are still not in line with user needs at the moment."

This is an article published by "The Banker" in 2001. One month after the launch of Yu'e Bao, "The Banker"'s discussion on electronic banking completely changed:

“In the past, we believed that although banks provided a variety of online business processes, the proportion of business processes other than deposits and withdrawals did not exceed [-]%. This was because users were not receptive to Internet business processes. This view has been broken by the recent launch of Yu'E Bao by NewPay.

The Yu'ebao business launched in October gained more than 10 million users in just one month, which is more than the users of all virtual banks in the world combined. More importantly, it only took one month, and Through NewPay, users do not simply store money in virtual accounts, but purchase investment products.

This is worth pondering for all financial practitioners, why NewPay can gain the trust of users and gain so many users.According to the questionnaire survey we conducted last week, more than 500% of the 70.00 users who purchased Yu’E Bao had never purchased any financial product before.What makes these users trust NewPay so highly?
Different people have different answers. Some believe that because NewPay has a large number of users, the controller behind it is Newman. As the world's richest man, Newman will not lie to us.

Some people also think that putting money in a virtual account is still a deposit. It is better to put it in Yu'e Bao, where the daily income can be clearly seen.Others believe that because doing business involves high turnover of cash flow, putting money in Yu'ebao can not only enjoy certain benefits, but is also very flexible. NewPay, which can complete all operations through mobile phones, is better than any other bank. Businesses need to be more flexible.

NewPay’s ambitions go far beyond this. After launching Yu’e Bao, they launched a one-year U.S. dollar time deposit with an annual interest rate of 4.1%. According to our understanding, the underlying logic of this product is Wells Fargo’s one-year U.S. dollar term deposit. Time deposit, and if the user directly chooses Wells Fargo Bank to make a one-year U.S. dollar time deposit, the interest rate is 4.3%.

In other words, NewPay can earn 20 BP from the sale of this product. If Wells Fargo's sales costs are included, NewPay's income will be even higher.In just one week, the amount of time deposit business through NewPay has exceeded 1 million yuan. NewPay has not announced the specific number of customers.Why users would rather choose NewPay with lower interest rates than traditional banks is a reason worthy of consideration by all banks.

When the traditional banking industry’s understanding of Internet business was still building websites, NewPay, which is already a giant, has announced its arrival to the banking industry through Yu’e Bao.”

For Peter Thiel, term deposits are just the beginning, and NewPay has a series of combinations waiting to be launched.

It is not just financial institutions and media that are eyeing NewPay. A large number of investors are also eyeing NewPay. The most noteworthy among them is Madoff, Bernard Madoff. The Ponzi scheme he designed in 08 Investors lost almost US$650 billion, which is an astronomical figure.

There are many well-known financial institutions that have been caught in the scam, such as UBS, Austrian Bank, HSBC, Nomura Holdings, etc.

In 2004, even Madoff's son didn't know that he was running a Ponzi scheme. As the chairman of Nasdaq, the investment products he launched had even higher ratings in the industry than U.S. bonds. Before 08, No one suspected that he was a liar.

But there are still a few people who know the truth. One is his brother Peter, Peter Madoff, and the other is Picower. Picower is Madoff's long-term partner and obtained $72 billion in his Ponzi scheme. income.

After NewPay launched Yu’e Bao, which was a huge success, Madoff approached his brother to discuss: “Can we also engage in Internet finance?
Using the Internet to raise funds? "

As a person with vested interests, Peter naturally knew that the scam would be exposed sooner or later. Just as Lincoln said: "You can deceive some of the people all of the time, and you can deceive all of the people some of the time, but you cannot deceive all of the people." time to deceive everyone."

Both Madoff and his brother Peter knew this very well. They all held the same idea and maintained this scam long enough until they died. After their death, they would not care about the flood.But after thinking about Madoff’s idea, Peter said: “One of the important means we used to attract customers was Madoff’s high threshold, which required an investment of more than US$100 million and the invitation of insiders. This strategy may be inconsistent with The guidelines for the sale of Internet products are inconsistent.

According to my understanding of the products sold by NewPay, their main focus is a low threshold, which can be purchased with only $1. "

Madoff had been anxious recently because he knew he was about to face a large payout.

As a top liar, he knows the most about scams. The so-called Bio-Omega Group, which specializes in hedge funds, they say is a hedge fund, but it is actually a Ponzi scheme. Moreover, Madoff read a message from a Jewish gathering he organized. Bio-O Group is fast. No, their scam is almost unstoppable.

Of course, the BEIO Group's scam was far inferior to that of Madoff, with the largest scale being only US$45 billion.

The Bio Group's gameplay is very similar to that of Madoff. The bankruptcy of Bio-O's scam will cause investors who purchased Madoff's funds to make large redemptions. Once a run occurs, Madoff's scam will also be exposed.

Therefore, Madoff needs more liquidity and more cash to support possible runs in the future.

There is no other way. Internet finance has given Madoff hope. Before, he had looked down on Internet channels.

Madoff stood up and stared at the map on the wall in his office. He turned his back to Peter and said, "Peter, it's not for me to do this. We need to find Internet channels that are willing to help sell Madoff's financial products.

Then the channel party helped promote it, and in public terms this became a benefit that the Internet channel helped their customers obtain, allowing them to purchase Madoff's financial products at zero threshold, which originally required US$100 million and insider recommendations.

Do you understand, our proactive behavior turned into passive behavior, and became what we helped their customers win through the vigorous efforts of Internet channels.

The interest rate of Yu'e Bao is less than 12%, Madoff's interest rate is at least 20% every year, and the income Wells Fargo gives NewPay is only 40 bp, and it will not exceed 200 bp at most. We can give NewPay at least [-] bp, or even more. "

Peter thought that his brother was worthy of being an older brother, but he was still not as experienced as him. "NewPay can easily sell financial products with interest rates of 5000% to so many users. If NewPay helps us sell Madoff's products on behalf of us, NewPay has [-] million users around the world." With its size, you can’t just help us sell it for billions.

NewPay helped promote Madoff's past glorious achievements, focusing on the threshold of Madoff's financial products, and giving users the concept of this rare benefit. "

Madoff nodded: "Yes, in order to highlight the specialness of Madoff's financial products, we can also set thresholds. For example, other financial products can be purchased at any time, but Madoff's financial products have a fixed sales period. After the sales period, If it is no longer available, we usually distribute dividends in February, and the sales period is in January.

Proceeds from sales can be used to pay dividends, while also giving users a sense that Madoff's products are reliable and offer ultra-high interest rates.

In the first year, NewPay said, maybe there is only this one opportunity, and then in the second year, it said that it would only sell during this period every year, and the sales period would be fixed in the future.

With the electronic payment market growing at more than 20% per year and NewPay's monopoly in the electronic payment field, Madoff's capital growth rate can fully cover the amount of dividends. "

Peter applauded Madoff's genius idea and expressed his admiration: "I will contact NewPay immediately. I know their executives."

Madoff asked: "Then there is another question, that is, should we only cooperate with NewPay, or should we find more channels to cooperate?"

Peter said: "According to the high standards we set for Madoff before, it would be better to only cooperate with NewPay. After all, NewPay is the best electronic payment company and should now be called an Internet financial company."

Madoff nodded: "Newman and I know each other, and I will also say hello to Newman at the same time."

In the bureau formed by Bill Gates, Zhou Xin met Madoff several times. On the surface, Zhou Xin was very polite to Madoff and even called him the godfather of the investment industry. But every time the godfather brought up whether he should buy Madoff When asked about financial products, Zhou Xin would smile and decline: saying that he was not short of money and that he preferred investing by himself rather than giving money to others to invest.

Madoff didn't doubt him, because Zhou Xin's record really proved that he had a far superior sense of smell in the Internet field, and it was normal for him to invest on his own.

Madoff sometimes thought, if he had a new sense of smell, would he still need to play a Ponzi scheme?
Madoff and Peter split up. Madoff went to contact Zhou Xin, and Peter went to contact NewPay executives.

After Zhou Xin received Madoff's cross-border call, he was wondering what tricks the old fox wanted to play. After hearing Madoff's so-called powerful alliance plan, he sneered in his heart.

Madoff’s statement is roughly: “NewPay is expanding rapidly in the Internet financial field, but it lacks a product that is hot enough. The interest rate of Yu’ebao is too low and not exaggerated enough. Madoff can provide financial products with an annualized interest rate of 10%, and The interest rate on Madoff’s products is at least 12%, and the extra interest rate is NewPay’s commission.”

　I had insomnia last night and coughed violently. I don’t know why I cough violently at night and feel like I want to cough my lungs out, but I don’t cough during the day.

　　
　
(End of this chapter)