Happy Tycoon

The trader here is non-stop 24 hours a day, so after watching for a while, Yang Jing returned to his room with satisfaction. Henry, David and Cesar also followed.

Yang Jing personally poured a glass of champagne for everyone, and then he picked up the glass and smiled: "Come on, toast to our glory!"

"Cheers to our splendor!" The three said in unison, raising their glasses.

This investment or speculative result is very brilliant. After the three major markets were launched, the three major investment institutions under the name of Dragon Fund have already made huge profits in these three markets.

Only in terms of international gold and international crude oil futures, the profit of the Dragon Fund has exceeded the market value of a General Electric!

Although the global financial crisis triggered by the subprime mortgage crisis has not yet reached its climax, the KY investment fund, which uses international hot money as a cover, has made more than two profits just from shorting the US subprime mortgage and the US stock market. Hundreds of billions of dollars!

Their speculation is absolutely brilliant.

After taking a sip of wine, Henry said with a smile: "Unfortunately, the outside world is marveling at the profit of John Paulson. They never know that compared to us, the profit of John Paulson’s Paulson Fund is only Only a small part."

Cesar also smiled and said: "Don't forget, we are international hot money."

One sentence amused all the people at the scene, and even David, who was usually unsmiling, burst into laughter.

Leaving aside the profitability of the international gold and international crude oil futures markets, just this short US subprime loan and US stock market shorts made the profits of KY investment funds surpassed the US stock market crash of 1987, and this is just the beginning.

The U.S. subprime mortgage crisis has begun to detonate the global financial market, and a financial crisis sweeping the world is inevitably about to break out. This is when KY Investment Fund and Pacific Capital will obtain greater profits in a later stage. Battlefield.

"You and the little guys are doing very well, and there is a John Paulson in front of us to attract outside attention. We will be safer this time." Yang Jing said with a smile.

This is not what Yang Jing said, but it is actually an extremely dangerous thing to make a fortune in the United States. When the U.S. stock market crashed that year, the U.S. government caught a lot of people who made a lot of money after the event. If it hadn’t been for the KY investment fund to "actively" stand up to fund the market and buy back a large number of stocks, maybe Henry would have been caught at that time. The American government invited in for tea.

The same is true for the subprime mortgage crisis this time, but compared to the stock market crash 20 years ago, the financial supervision of the United States has become looser at this time, and it coincides with the later generation of John, who is called "the **** of the sky." Paulson is in the front, so this time KY investment funds are even more in a fish in water during the subprime mortgage crisis.

From the mid-to-late 1990s to the first ten years of the new century, there were two famous “Paulsons” on Wall Street. One was the former chairman and CEO of Goldman Sachs, and Henry, who served as Secretary of the Treasury of the United States in 2006. Paulson, the other is John Paulson, who made a fortune from shorting subprime mortgages during the subprime mortgage crisis, and was hailed as "the **** of the sky" by later generations.

Before the outbreak of the subprime mortgage crisis, John Paulson had no reputation on Wall Street until he met his old friend Paul Pellegrini in 2004. Two guys with the same smell saw the American housing market. That huge bubble, and then decisively short subprime mortgages, he eventually pressed a $25 billion bet in the U.S. real estate market to short U.S. subprime mortgages, and after more than a year, the $25 billion became 45 billion U.S. dollars, with a direct profit of up to 20 billion U.S. dollars.

John Paulson was also hailed as the "empty god" because of his short selling this time.

In fact, the success of John Paulson is inseparable from Paul Pellegrini.

Paul Pellegrini was born in Italy and came to Wall Street in the 1980s. He worked as a mid-level investor in Lazard Brothers and tried several venture capital investments. He also met John Paulson at Bear Stearns at that time.

In that era, two people can only be regarded as two little shrimps on Wall Street.

Unlike John Paulson, who had a smooth journey, Pellegrini worked for several brokers after leaving Zarad Brothers, but they all did not go well, and his two marriages were also successful. Ended with failure.

Even before he met John Paulson again in 2004, this guy was in a state of unemployment.

However, after years of experience in the workplace, Pellegrini has developed outstanding financial analysis skills, which has created his unique investment thinking. The rating agency is to collect a large amount of financial information and analyze it comprehensively, and use this as the basis for investment judgment.

When the two met again, John Paulson's life was not very comfortable.

After four years of tenure in Bear Stearns, Paulson decided to switch from an investment bank to fund management, joined the Gruss Partners Fund, became one of the partners, and officially started his fund management career. In 1994, he spotted the momentum of hedge funds, rented an office with several other small hedge funds, and founded Paulson Hedge Fund, which specializes in M&A arbitrage and event-driven investment.

In those years, Paulson’s small life was pretty okay, especially at the beginning of the new century. Paulson saw the huge bubble hidden in the Internet and decisively began to short the Internet, which made his Paulson Fund in In the first two years of the new century, his annual profit exceeded 5%, and his fund size increased to 600 million US dollars.

The Paulson Fund’s performance in the bursting of the Internet bubble has also attracted the favor of many investors. By 2005, the Paulson Fund’s scale reached US$4 billion.

Although the size of the fund has increased by nearly seven times, Paulson still finds it uncomfortable. Why? It's simple, because Paulson feels a bit goalless.

This is the terrible point of hedge funds, because he is in charge of hedge funds with a scale of 4 billion US dollars, but he does not know the direction of investment. A long time will inevitably lead to investor dissatisfaction.

At this time, the U.S. economy was booming, especially the real estate market, which was extremely hot. But, on the contrary, Paulson was not interested in the U.S. real estate market. Mortgage loans, financial derivatives, and real estate are all confounded by him. He mostly stays out of the real estate boom, so does he have any goals?

Therefore, when he met Pellegrini, Paulson's life was not comfortable.

But at this time, he met Pellegrini, and his old friend pointed him a direction.

Although Pellegrini is in a professional state, his sense of smell has always been very sensitive. In particular, the boom in the US real estate market in the past two years has given him an unusual taste.

So Pellegrini began to study the American real estate market. Through decades of research on interest rates, he found that they had no effect on the housing market. This means that despite all the whitewashing of bullish people, the Fed's cut in interest rates is not the reason for the recent surge in housing prices. But after reading academic, government documents and data, Pellegrini felt very frustrated: he could not quantify the extent to which housing prices were overvalued, and he did not know when the bubble began. He couldn't even prove that the price increase this time was different from the past.

In order to get new conclusions, Pellegrini added a "trend curve" to the housing market data, which clearly shows the extent of the recent price increase in the housing market. This time, Pellegrini took a step back and began to pay attention to a longer historical period. He found the property data for each year after 1975.

Then suddenly, the answer came out: from 1975 to 2000, after taking into account the inflation factor, the annual growth of house prices in the United States was only 1.4%. However, during the six years from 2000 to 2005, U.S. housing prices have soared by more than 7% every year!

In other words, American housing prices need to shrink by 40% to match historical trends!

This kind of rise in house prices has never been seen before, and Pellegrini also found that every time house prices fell in history, they would fall below the trend line. NS.

When Pellegrini told Paulson the results of his analysis, Paulson, who was born silly and bold, immediately realized that this was a golden opportunity.

At the beginning of 2006, it was generally believed that housing prices would never fall across the United States; mortgage experts kept advocating that the housing market and mortgage market would continue to flourish; good news frequently appeared in major media. Most of the big names on Wall Street hold the same argument. Credit rating agencies have also issued AAA ratings for Wall Street financial products.

"Experts are blinded by the prosperity of the real estate market." After receiving Pellegrini's analysis, John Paulson decisively abandoned the rating agency's scoring. He personally led his 45-person team and tracked thousands of people. Tens of thousands of housing mortgages, analyze the specific conditions of personal loans that can be obtained one by one.

As it gradually deepened, Paulson became more and more convinced that investors had greatly underestimated the risks in the mortgage market, and it became increasingly difficult for creditors to recover their loans.

Before the subprime mortgage crisis broke out, the relationship between CDO and CDS in the US real estate market was like this. The higher the risk of a CDO, the higher the value of the CDS guaranteed. But during the real estate boom, most people believed that CDO was not too risky, so the price of CDS was very low.

So Paulson decisively invested 150 million US dollars in July 2006 to establish the first short CDO fund, and began to build a large number of positions.

At the same time, he shorted dangerous CDOs while acquiring cheap CDSs.

Paulson's team began to look for low-quality CDOs in the market, that is, high-risk CDOs. His goal is not the healthiest and most mature at all, but the kind of proof that no one can recover. Then, they buy the CDS insurance contract for these CDO shares.

"Man, do you want the CDO of New Century Finance?"

"Nonsense, so rubbish, no, of course I want such a top-quality CDO, I want as much as I want!"

"What about scammer loans and interest-only loans?"

"Fak, do you still need to talk about it? Bring it to Lao Tzu, as much as you want!"

"Dude, do you want the CDO of mortgage loans in the overheated housing market in California and Nevada?"

"Yeah, do you have a lot? I want it all"

In this way, Paulson was searching for high-risk CDOs and cheap CDS in a hot real estate market. His actions even caused a lot of ridicule on Wall Street.

Especially in the following months ~www.readwn.com~ the US real estate market is still prosperous, and there is no sign of sluggishness. Therefore, Paulson's fund has been losing money continuously-he has been continuously losing money. More than one billion dollars was invested.

Investors hurriedly asked him several times whether he should stop the loss. He flatly refused: "No, I have to raise."

Paulson did what he said, and he even set up a second short CDO fund once again, and continued to increase investment.

Paulson's approach caused a lot of ridicule and ridicule at the time, but he still insisted on doing it.

But his desperate approach did not disappoint him, even if he lost more than one billion US dollars from July 2006 to the end of 2006, he still did not flinch.

In the end, his persistence brought him huge wealth!

The subprime mortgage crisis finally broke out, and Paulson, who had prepared a large number of short positions in advance, finally got the huge return he deserved in this subprime mortgage crisis-20 billion U.S. dollars!