Chapter 2686: Many Good Things

In the conference room, when Cummins stopped, Feng Yiping handed him a bottle of water and concluded, "So, among the four major banks, Wells Fargo, which was originally ranked lowest, now seems to have the least risk. ?”

"Yes," Cummins said, and drank half a bottle of water.

Feng Yiping couldn't help but shake his head.

He seems to know why Wells Fargo, which now seems to be far inferior to Citigroup, Morgan Stanley, and Bank of America, will later become the bank with the highest market capitalization in the United States.

And the reason why the ICBC of our great empire takes turns with Wells Fargo to be the world's largest bank is precisely because their interest income accounts for the majority of their total income.

For example, interest income accounted for more than 70% of Wells Fargo's total income last year, while other non-interest income accounted for less than 30%.

According to our general concept, if a bank's main income still relies on interest, then this bank can almost be characterized as a bank that does nothing and a backward bank.

Unexpectedly, such inaction and lazy administration actually allowed them to perform at their best in such a crisis.

The other three companies are not very optimistic at this time because they are relatively large in non-interest income.

In particular, Citigroup and Bank of America, which account for a relatively high proportion of non-interest income, seem to be having a very difficult time.

Compared with banks in developed countries, our four major banks happen to be such banks... we are really lucky.

With such good luck, if you still can't rise, it's really unreasonable.

However, it seems that our banks have done nothing during this crisis?

And even Bank of America, which acquired Nationwide Financial Corporation, which focuses on real estate mortgage loans, in January has not only attracted a lot of criticism from shareholders, but also caused a series of lawsuits. Later, it seems that Merrill Lynch was taken over?

Therefore, domestic banks have really wasted this good opportunity.

"What's the situation of the investment banks?" Feng Yiping asked again.

"In this regard, I think John is the most appropriate person to answer," Cummins said, pointing to John who had rushed back from New York.

John is indeed suitable to introduce this aspect. He is a talented person who has swept the five major investment banks on Wall Street.

"Okay Cummins, Feng, everyone," John, who was originally an unknown practitioner on Wall Street and is now known to well-informed people as a short-seller on Wall Street, stood in front of the screen energetically, "Since Bell Stone was After the acquisition of Morgan Stanley, and with the efforts of the Federal Reserve, the four major investment banks on Wall Street currently seem to be in good condition."

"But after comprehensive analysis, we believe that they still have big problems,"

"We all know that since July last year, they have written down losses caused by subprime mortgages several times, but in fact, related losses are not the biggest problem,"

"With their strength and the scale of their assets, if they suffer losses of that scale, although their performance will be ugly, it will not affect their survival."

Of course, this time Feng Yiping took away a total of 20 billion US dollars from the five of them, but it did not bring down any of them.

"The main problem lies in two aspects. One is the related securities and bond markets. Now, instead of a significant decrease in trading volume, there is no trading volume at all,"

"The bonds currently traded in the market are all the most traditional fixed-rate bonds, and most of the buyers are individual investors."

This is equivalent to a business having no sales.

"Another problem is liquidity."

"Because the lending of short-term funds has almost stagnated now,"

This is similar to not being able to borrow money from a bank - of course, investment banks have more financing channels than just banks.

"At the same time, many of the securities and bonds they hold are continuing to depreciate in value,"

"Considering the high leverage they have adopted in order to achieve high returns, if they cannot raise sufficient funds, then many of their funds will go bankrupt,"

Speaking of which, everyone knows what will happen if that happens.

Because Bear Stearns is an example.

The original reason why Bear Stearns was sold at a low price was the collapse of two of its funds with capital of less than US$1.6 billion.

Even without the lessons learned from Bear Stearns, it is not difficult to evaluate their situation. If a company has no sales, cannot borrow loans, and its inventory continues to depreciate, how can its life be better?

"Of course, the remaining four major investment banks have also been taking various measures recently. From the comprehensive strength assessment, we believe that if extreme situations do not occur, Goldman Sachs and JPMorgan will most likely be safer,"

Feng Yiping nodded, but he was actually saying in his heart that extreme situations would definitely occur, so they would not be safe.

"As for Merrill Lynch and Lehman Brothers, we feel that the risks faced by Lehman Brothers should be greater,"

"Why?" Feng Yiping asked.

"Because currently, except for Lehman Brothers, the other three investment banks are actively liquidating assets to raise funds,"

John knew what Feng Yiping wanted to hear.

Goldman Sachs and Morgan Stanley, according to Feng Yiping's advice, have offered many of the company shares they hold for John and the others to choose from to offset the unpaid portion of the CDS contract.

We are currently stuck in this regard.

Feng Yiping took a fancy to the shares of ICBC held by Goldman Sachs and the shares of CICC International held by Morgan Stanley.

It goes without saying how hard it is to get ICBC shares. CICC International, which is relatively unknown, is actually even more amazing because it is the first investment bank in our country similar to the investment banks on Wall Street.

Let’s not talk about other businesses, just talk about its achievements in issuing stocks. Let’s put it this way. It will definitely participate in all companies with Chinese characters in their names and some large state-owned enterprises listed overseas.

Goldman Sachs holds more than 5.5% of ICBC shares, and JPMorgan holds more than 34% of CICC International shares.

One is a hen that can lay golden eggs, and the other is an excellent vehicle for participating in investment in mainland China and Chinese investment in the world. Goldman Sachs and JPMorgan are now reluctant to give up.

And the more reluctant they are, the more Feng Yiping doesn’t want to give up.

“We expect that as the situation becomes more and more severe, they should agree to sell some core high-quality assets,”

John said to let Feng Yiping rest assured that Goldman Sachs and JPMorgan will definitely give in in the future.

Feng Yiping nodded at him. Since he had such confidence, then this job was just right for him to complete.

Well, it's a beautiful scene to think about becoming a shareholder of ICBC and CICC after Goldman Sachs and JPMorgan give in!

"It should be because of the previous high losses that Merrill Lynch is also very active in this regard and has made great moves. John Thain is currently planning to deal with their total CDO of US$30.6 billion at a super low discount price,"

"They are even actively contacting Bloomberg to discuss the sale of high-quality assets such as their 20% Bloomberg shares,"

Well, this is what Feng Yiping is concerned about.

Although the overall negotiation is led by Bloomberg, Bloomberg has agreed that Feng Yiping's company will acquire half of the 20%.

On the one hand, it can completely offset the outstanding balance of Merrill Lynch's remaining CDS contracts, and on the other hand, he can also become the second largest shareholder of Bloomberg.

"According to the information we have, the negotiation is now coming to an end and the transaction should be completed this month,"

It seems that Bloomberg will call to ask for money soon.

But this is still good news. It is not easy to get the protective Bloomberg to agree.

"But Lehman is very passive in this regard. Perhaps because CEO Fuld was originally an Air Force pilot, he has a stubborn personality and seems to have not yet realized that the focus should be on saving his life. Therefore, his main work now is not to sell assets to cash out, but is still thinking about how to make money..."

"But we all know that not everyone has the same means as Feng," John said with a smile.

Everyone in the conference room also smiled knowingly.

In this year's fantasy, there are really few people who can make such a big profit except Feng Yiping.

"So we expect that if the situation continues to deteriorate to a certain extent, Lehman Brothers will definitely be very dangerous,"

"Fortunately, this seems to have nothing to do with us," John said with some pride.

Because the CDS purchased from Lehman has been offset by the discount of the loan lent to Blackstone.

Thinking of this, John felt that the young boss sitting there was very unfathomable, because he had arranged to purchase the least CDS contracts from Lehman, as if he had anticipated this at the time.

"Next, I would like to introduce other situations on Wall Street to you..."

"Wait," Feng Yiping interrupted him, "Wu Qian, let the acquisition team come to sit in on the next meeting,"

The next meeting was related to the acquisition he valued.