Vol 6 Chapter 365: Ask for advice

"The reason for submitting that report, the process of writing that report...I remember it clearly now,"

"Although I personally cannot profit from that report, writing that report is one of the most serious things I have done over the years," Feng Yiping said.

"Feng, Feng," Paulson called repeatedly, "I know, I understand..."

"You should understand," Feng Yiping stood up. "If even you, the former head of Goldman Sachs and the main maker of US economic policy, cannot understand, then,"

He shook his head, "I really don't have any hope for the further future of the American economy."

"China and the United States, at present and probably for a long time in the future, will be the two largest economies in the world, and each other's largest trading partners,"

"Under such a situation, if the American business community is short-sighted when cooperating with China, especially with Chinese government-backed companies, they may even consider deception."

He looked at Paulson, "I don't think this will have a good impact on mutual trade cooperation and mutual trust,"

"I also don't think it will benefit the interests of the United States,"

Not to mention that Wall Street focused on choosing in-depth cooperation with us in 2007. Do you feel that it is a bit bad? So hurry up and find a strong person to share the possibility.

Judging from the original investment agreement signed by CIC and Morgan Stanley, it is clear that they did not really treat domestic companies as their partners.

The picture is just our money.

"Yes, I fully understand," Paulson stood up and pulled Feng Yiping into a chair to sit down.

"I actually really appreciate your approach, we," he pointed to himself and then to Feng Yiping, "all patriots,"

"Wealth is not our ultimate goal. We all have higher pursuits... What's wrong with you Feng?" He looked at Feng Yiping.

Feng Yiping opened the distance from him at this time and looked at him very surprised.

"Nothing," Feng Yiping sat up straight.

He just, really is not used to such self-praising.

The Lun family has always been very humble.

Being interrupted by Feng Yiping in this way, Paulson also had a short-term discomfort. He sorted it out and continued, "So, when dealing with you, I am relieved. I believe in your personality and integrity, and both, whether it is Washington It’s still Wall Street, but it’s hard to find.”

Feng Yiping nodded, but he couldn't help asking, do you still have these two things on your body?

Whether you are in Washington or Wall Street, you are in a high position that ordinary people can hardly reach.

"Well let's not talk about it," Paulson smiled.

The reason why he talked about this was just thinking that Feng Yiping felt a little guilty when facing him, and he felt that the way he mentioned this incident was a joke, but he did not expect Feng Yiping to react like this. .

——Because he didn't know, in the morning, the former Minister of Finance also found Feng Yiping, and it made Feng Yiping very unhappy.

"Feng, you are right. Our problem now is not not to help but how to help."

This is why Feng Yiping is willing to discuss this issue with him, but not with Summers.

Paulson is more practical because he faces the pressure directly, while Summers is holding the attitude of watching the fire from the other side, so he will not know the importance of pursuing perfection.

Because the more perfect the plan, it won’t cause more trouble for him, who is conscious of the power of the American economy like Paulson in the future.

"Bear Stearns," Paulson was silent for a moment, "it looks very bad,"

Bear Stearns does look very bad, and its share price continues to fall today.

This is not the fact that the house leak happened in the night rain, but it can be said that the house leak happened after the night rain and the mudslide happened again.

Feng Yiping glanced at him, "Bear Stearns, it is not the most critical issue. The critical question is, will this be the beginning?"

"After Bear Stearns, will it be the turn of Lehman Brothers, Merrill Lynch, Morgan Stanley and Goldman Sachs..."

"Then the American economy is over," Paulson said. "So, Bear Stearns, we have to save."

It may not be Lehman's turn to wait for the other four, but Paulson obviously cannot take such a risk.

In the Ministry of Finance, a team has been studying the impact on the financial system after the failure of investment banks like Bear Stearns.

The results of the research are undoubtedly very pessimistic.

Because there is no such name as investment bank in China, we are not very familiar with investment bank, but if you compare it, everyone will understand it very well.

US investment banks are roughly equivalent to our domestic securities firms.

If a securities company goes bankrupt, under normal circumstances, everyone's first reaction is to find its superior.

But this is actually useless.

This is useful if a commercial bank fails. The ultimate superior of a commercial bank is the central bank, and the central bank is the ultimate lender.

Then, the government can also step in, take over the bank, let it liquidate or sell it... plus the compensation from the insurance company to compensate everyone's deposits.

But if a securities company goes bankrupt, you just go to the China Securities Regulatory Commission. What is the use?

Does it still give you money?

The supervisory department of US investment banks is also the US Securities and Exchange Commission.

Therefore, the American people who have gone bankrupt and suffered losses are equally unreasonable.

But the situation Paulson and the others are facing is that they can't ignore it.

Let’s compare the situation in China, and assume that the failure of domestic securities companies such as Hengtai and Tianfeng will have any impact.

In fact, it is not unbearable, because their comprehensive strength is average.

But if it is ranked in the top five, for example, GF, which is generally ranked fifth, goes bankrupt, can it still bear it?

Furthermore, if GF and the top four companies, Huatai, Cathay Pacific, Haitong, and the boss CITIC Securities, these top domestic securities companies all go bankrupt, what will happen?

In that case, those who have not opened an account with a securities company will not be affected?

Obviously it is impossible, including those who do not know what securities are, they will inevitably be affected.

That is actually equivalent to another end of the world.

So, can the government leave it alone?

But if it’s time to control it, to be honest, I can’t control it if I want to, and no one can recover.

At the very least, you have to take action when a problem is raised.

The current general environment is that, except for a few countries-mainly China, the financial institutions of other countries are all turbulent.

Now is the time when large, global, and intertwined financial institutions become popular.

At this time, if one allows an international, large financial institution like Bear Stearns to fail, the consequences will definitely be even more disastrous. It is not an exaggeration to say that it is a catastrophe.

Therefore, to save Bear Stearns is to boost market confidence, try to avoid the rapid deterioration of the situation in the near future, and allow more time for follow-up actions.

"Are you planning to find a company to acquire it?" Feng Yiping asked.

Under the current circumstances, it is not realistic to inject capital directly into Bear Stearns, because you cannot expect all Americans to see such a systemic risk, that is, not only Bear Stearns, but the other four investment banks on Wall Street. Will also go bankrupt.

Therefore, the only feasible way is acquisition.

"That's what we planned. After all, Bear Stearns is also a very well-known company," Paulson said.

Of course, even now, Bear Stearns is still a golden sign in the minds of many people, so it is not difficult to find a buyer.

"The problem then is the pricing of those Bear Stearns securities assets," Feng Yiping said.

Among Bear Stearns' assets, securities assets, that is, subprime loans, will certainly account for a considerable part, and who is willing to buy a large amount of subprime loans at this time?

"We already have a rough solution to this problem. We pack that part of their assets as collateral and apply for a loan of the same amount from the Federal Reserve Bank of New York. This loan will be given directly to the acquiring company."

"What if there is a loss on this loan?" Feng Yiping asked.

For example, what is the value of subprime securities worth tens of billions in the future? Who can tell?

Generally speaking, it will definitely depreciate, a very severe depreciation.

"This loan will be guaranteed by the Ministry of Finance,"

That is, the loss is borne by the state.

"The Congress?" Feng Yiping asked.

Naturally, these things cannot be determined by them and the White House. If Congress does not approve them, it will be impossible to implement them.

"We will convince Congress," Paulson said loudly.

Although it sounds a little lacking in confidence, courage and will are beyond doubt.

"I believe you can do it too," Feng Yiping laughed.

This is actually very feasible, because, including the Federal Reserve and the New York Federal Reserve, the profits generated by their operations must be turned over to the US Treasury Department.

Since the Ministry of Finance has a guarantee, then when the loan suffers losses in the future, they should pay less profit accordingly.

"So, the problem is actually solved, right?"

Paulson glanced at Feng Yiping, stood up, opened the door, walked to look outside, and confessed, and then sat down, his voice became quieter, "You know, I want to talk to you Yes, not this,"

Indeed, if it was just a Bear Stearns, how could he find Feng Yiping?

"A Bear Stearns is not difficult to solve. The problem now is that I, my colleagues, and friends from the Federal Reserve are not sure..."

He glanced at the door again and approached Feng Yiping, "Feng, how large do you think the crisis will eventually be?"

No wonder he just made those actions, he was asking Feng Yiping for advice.

If Summers saw this scene, he would be shocked and speechless.

The same is the Secretary of the Treasury, but Paulson, the Secretary of the Treasury, has much more power than when he was the Secretary of the Treasury. Paulson is Bush’s chief adviser and spokesperson for all domestic and international economic issues. Simply put, it is The person who controls the overall situation of the US economy.

How can the general minister of finance have this power?

But such a person who controls the overall situation of the US economy ~www.wuxiaspot.com~ is now seeking Feng Yiping's opinion on such a critical issue...

If Summers had seen this scene, he probably wouldn't have much thoughts.

But Paulson did not make such a move without a cause.

He had naturally expected the development of the situation.

But compared to Feng Yiping’s consistent determination and self-confidence on this issue, for example, more than a year ago, Feng Yiping solemnly warned that there are systemic risks in the US financial system; and, a few days ago, He was straightforward again, saying that it is best to prepare a rescue plan from now...

Paulson determined that neither he nor the people around him could be compared with Feng Yiping in terms of accuracy and confidence in the judgment of this matter.

In addition, Feng Yiping has always made a decision, and he has never made a mistake...

So in this regard, he trusts Feng Yiping's judgment more at this time.

"Hank, I think the American economic team under your leadership should have made accurate predictions on this issue," Feng Yiping did not directly answer his question.

"There are also many well-known economists who have expressed a lot of views in this regard."

"My opinion is not necessarily more accurate than them,"

Paulson didn't know what to say? Are you forcing me to praise you or what?

"Those people may be more proficient than you in some academic fields, but in this matter, they are all inferior to you. I only trust your judgment."

"Hank, did you know that you put me under a lot of pressure,"

But the richest man Feng is still happy at this time. After all, few people have such an opportunity, don't they?

Do you want to wait for him to visit the thatched cottage?