Chapter 596: A sharp turn for the worse

BFT (British Fortune Times) Fund finally reached a final agreement with the eight oil companies in May on the oil order, and received the first installment of liquidated damages...

As early as mid-April, international oil prices rose again to $110 per barrel after a slight decline, and in May, oil prices rose directly to $120 per barrel.

At this point, those oil companies no longer had illusions. After negotiating with BFT Fund, they will be exempted from the liquidated damages required for the funds corresponding to the previously delivered crude oil spot, and only need to pay the liquidated damages for the undelivered crude oil price.

Of course, BFT Fund did not lose money in this way, because they had already made a lot of profits by reselling the previous crude oil spot to United Energy Group and partners including Reliance Group, PetroChina, and Sinopec.

Therefore, BFT Fund finally reaped more than $10 billion in profits with a $30 billion oil order margin.

In addition to the $22.5 billion invested in gold spot and futures, and the more than $28.5 billion recovered after profit, the BFT Fund will have more than $68.5 billion in funds in the future.

Because the liquidated damages of these oil companies need to be paid in two installments, the first installment of liquidated damages will be paid in May, and the remaining balance will be received two months later.

But even so, there are more than $60 billion in funds in the BFT Fund's account.

Next, we have to wait for the subprime mortgage crisis to break out completely.

Interestingly, as early as July 2006, Professor Rubini of New York University put forward a controversial view at the time - he predicted that the US economy was facing the possibility of a recession, and in the future "catastrophic" recession, it would be divided into 12 stages.

They are:

Step 1 is the worst real estate recession in the history of the American economy;

Step 2 is that the losses of subprime mortgage loans will further expand, far exceeding the estimated 250 billion to 300 billion US dollars;

Step 3 is huge losses in unsecured consumer credit, including credit cards, car loans, education loans, etc.;

Step 4 is the credit downgrade of professional credit insurers, and the AAA rating on which they rely will not be guaranteed;

Step 5 is the collapse of the commercial real estate market;

Step 6 is the bankruptcy of large regional or national banks;

Step 7 is that the balance sheets of financial institutions will see hundreds of billions of dollars in book losses;

Step 8 is a wave of corporate loan repayment failures;

Step 9 is the collapse of the shadow financial system;

Step 10 is a further decline in the stock market;

Step 11 is the draining of liquidity in the financial market;

Step 12 is the beginning of a vicious cycle...

It can be said that there will always be people who understand, but in times of prosperity, such voices will be drowned out.

In Barron's previous life, when he was studying the subprime mortgage crisis, he saw this prediction that initially seemed very "radical", but in the end it was shown that this prediction was completely consistent with the occurrence of the subprime mortgage crisis.

At present, the subprime mortgage crisis has progressed to the fifth step, and the commercial real estate market is about to collapse - Barron knows that the "two houses" in the United States will soon be unable to hold on, and then their government will inevitably need to take over them...

When the process reaches the sixth step, large banks begin to go bankrupt, and that is when the BFT fund can start to enter the market.

However, what Barron did not expect was that this process was so fast.

In early June, Barron temporarily left China and arrived in the United States on the Devonshire.

At this time, the subprime mortgage crisis once again showed a violent fluctuation.

In the past week, the stock prices of the "two houses" Fannie Mae and Freddie Mac have fallen by nearly 50%!

If the current lowest stock price level of the two companies is estimated, their stock prices have fallen by more than 90% from the highest value in a year!

As you can imagine, the stock prices of these two companies fell rapidly. Well, the Black Swan Fund also made a lot of money by shorting the stock prices of the two housing companies.

But this time, Barron came to California.

Fannie Mae and Freddie Mac are facing the situation of being taken over by the government, and in California, IndyMac Bank is also facing bankruptcy.

In the past 11 days, the bank has been withdrawn more than 1.3 billion US dollars by its customers in panic.

Because IndyMac Bank also operates mortgage business, and accounts for a large proportion of its revenue, it has been greatly affected by the subprime mortgage crisis.

It is said that if IndyMac Bank declares bankruptcy, the Federal Deposit Insurance Corporation (FDIC) may take over.

The reason why Barron came here is to see if there is a possibility of taking over this bank. Of course, this also depends on whether he can get the right conditions.

As of March 31 this year, IndyMac Bank's total assets were 32 billion US dollars and its deposits were 19 billion US dollars.

However, due to the panic caused by the subprime mortgage crisis, IndyMac Bank may declare bankruptcy at any time.

This kind of panic also happened to Northern Rock Bank. Last month, a senator wrote to bank regulators, hoping that they would take measures to prevent IndyMac Bank from going bankrupt.

After the news came out, the market panicked, and IndyMac Bank's customers rushed to bank branches to withdraw money, resulting in a run, which caused IndyMac Bank to lose $1.3 billion in deposits in 11 days.

"Yes, IndyMac Bank may declare bankruptcy at any time. If someone calls me now and tells me that they have gone bankrupt, I will not be surprised at all."

After the plane landed in Los Angeles, Barron met with California Governor Schwarzenegger who was waiting here. He said to Barron with a serious face:

"Barron, my friend, will you help this bank?"

"This is exactly why I came here from China, but you have to know that I am a businessman, so although I will not be stingy about paying money, I will not do things without returns. At least I need a bank that can recover in the future."

"According to the investigation conclusions and what I have According to the news, IndyMac Bank is not that bad, at least not hopeless. If a large amount of funds are injected, it can still be saved..."

"Isn't there still the FDIC?"

Hearing Barron's words, Schwarzenegger couldn't laugh:

"If we wait until the FDIC takes over, then IndyMac Bank may not be able to revive..."

"Because too many banks will repeat the same mistakes?"

"Yes, I'm afraid this is not alarmist."

It is estimated that if the FDIC takes over IndyMac Bank, the cost will be between 4 billion and 8 billion US dollars, which may set a historical record for the cost of acquiring a bank.

And once IndyMac Bank goes bankrupt, it will become the second largest bankrupt bank in American history so far, second only to the scale of the Continental Illinois National Bank of America that went bankrupt in 1984.

"So now, I need to negotiate with the board of directors of IndyMac Bank and the heads of relevant institutions to see if it is worth taking action. "