Chapter 626 Madoff Case

Speaking of Cavendish Asset Management, in fact they spent 10 billion euros to purchase these "distressed assets" from Standard Chartered Bank - more than 50,000 homes, apartments, office buildings, etc., and it was not just a one-time move. So much money is invested in it.

First of all, Barron is very optimistic about the British real estate market and the rental market...

This can be concluded based on his previous life experience.

You know, according to data from professional research institutions, about 1 in every 5 households in England chooses to rent a house to solve their housing problem.

Therefore, the entire UK has extremely huge demand for house rentals, which is also the premise that the UK’s house rental industry has great room for development.

At present, in the huge housing rental market in the UK, private landlords have an absolute advantage in terms of share compared with private rental companies.

Currently the largest private rental company in the UK, with more than 9,000 apartments, its market share is less than 0.2%!

But Barron knows that the British house rental market will become more and more professional in the future. In addition, the impact of the Internet on the house rental industry will greatly shorten the distance between users and rental properties. Therefore, on the one hand, Cavendish Asset management companies can provide liquidity to Standard Chartered Bank by acquiring these properties. In addition, they can also use this to enter the British housing rental market.

You must know that in the future, the British banking giant Lloyds Bank will also be attracted and cannot help but join this market.

At present, Cavendish Asset Management has acquired Grainger, a company with extensive property leasing experience, for £150 million, which will manage the properties they acquired.

And they have also launched a website that provides house rental information and services for individual users, and will conduct marketing and business development through the Internet.

At the same time, Cavendish Asset Management will continue to cooperate with Standard Chartered Bank. It is not that they will continue to acquire their "distressed assets", but that they will package their property leasing business into products with fixed income, which will benefit Users make sales.

After all, the rental of real estate often provides very stable returns, so the launch of financial products is naturally welcomed by risk-averse investors.

At the same time, the Cavendish Trust Fund behind Cavendish Asset Management can also use this to recover the funds invested in these properties to make other investments.

And they can also reap the rewards of the future appreciation of these properties.

Compared with those subprime loan claims that triggered the subprime mortgage crisis, this kind of financial product that relies on renting out owned properties has much smaller risks.

…

"This case is sensational enough. I'm afraid the number of wealthy people involved will exceed people's imagination..."

"Now it seems that everything is traceable, but how many people really caught these clues at the time?"

Barron shook his head, put the newspaper in his hand on the table, and said to Amber Sheehan in front of him:

"But I believe he is a smart man. Some people have already raised their money before this..."

The newspaper that Barron placed on the table had the headline on the front page—

"Shocking $50 Billion Scam—Bernard Madoff Arrested"

Yes, on October 15, this news spread all over the world and caused a sensation.

According to reports, Madoff's arrest was reported by his son.

In early October, Madoff revealed to his son that a client was requesting to redeem $7 billion of investment from their Madoff company, which would cause the company to have a "cash flow problem."

Then on October 14, Madoff confessed to his son that Madoff's company actually had "nothing." He had previously concocted a giant pyramid-style "Ponzi scheme" that defrauded customers of more than 500 people. One hundred million U.S. dollars.

That night, Madoff's son chose to report him to the police, and then the largest fraud case in history was detonated.

Madoff can be called a big shot on Wall Street and once served as the chairman of Nasdaq - of course, he is not a big shot with weight, nor can he defraud 50 billion US dollars by "helping others invest"...

In fact, Madoff's "Ponzi scheme" has always been running well. It has been running for more than 8 years from 2001 to now.

The reason is that Madoff was a veteran in the financial industry, and he was able to strictly control the scale of this scam - the so-called "Ponzi scheme". To put it bluntly, funds added later were used to pay interest to those who joined earlier.

Therefore, in addition to using his popularity and relatively high (more than 10% annual return) interest to attract funds, the reason why he has been able to operate safely for so many years is that Madoff strictly controlled the scale of the funds he absorbed.

It must be an inverted pyramid, that is, the scale is small at first, and then gradually increases in scale. Only in this way can the entire "Ponzi scheme" continue to operate...

Therefore, Madoff can be called a "master" in this regard. If he had not been unlucky enough to encounter the subprime mortgage crisis, some investors would have suffered heavy losses in other investments and would have needed to redeem their funds with Madoff. , if Madoff's company continues to experience large redemptions, then I'm afraid his "Ponzi scheme" will still be running for some time...

According to the information Barron received, not to mention America, even in Britain, there are many wealthy people and companies that suffered losses because of Madoff's fraud.

Including HSBC Holdings and Royal Bank of Scotland, both banks lost at least more than 1.5 billion pounds in this fraud...

Of course, other places where the big victims are concentrated include those Middle Eastern tycoons - they were even proud to be able to squeeze into the investor sequence of Madoff's company, but in the end, Madoff returned the money of those real big shots first, and the rest of them could only bear the losses...

As for the so-called Madoff's son who reported him in the report, Barron can only say "6" to this. Sacrificing himself and saving his relatives is indeed a helpless choice.

But the final result may not be what Madoff wants. After all, he played too big this time. If I remember correctly, his son still ended up badly, and Madoff himself died in prison.

In fact, Barron had already paid attention to the affairs of Madoff's company earlier, but he did not choose to detonate this matter at that time - it had little to do with him.

However, the unexpected and reasonable thing is that the case broke out earlier than in Barron's previous life - it was not until December that the case broke out.

But now the progress of the subprime mortgage crisis has been greatly accelerated, so it is normal that the Madoff fraud case, which was affected by the subprime mortgage crisis and exploded due to a large number of redemptions by users, would explode in advance.

"By the way, how is the negotiation with Youcheng Group going?"

Hearing Barron's question, Amber Sheen temporarily withdrew his attention from the shocking Madoff fraud case, and said to Barron:

"We still need to continue to discuss the price. Our initial offer was rejected by them."