Vol 6 Chapter 528: Good things

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

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

Feng Yiping couldn't help shaking his head.

He can be regarded as knowing why Wells Fargo, which seems to be far inferior to Citigroup, Motorola, and Bank of America, will later become the most valuable bank in the United States.

And why did the ICBC in China take turns sitting on the throne of the world's largest bank with Wells Fargo? The reason is precisely because their interest income accounts for the bulk of the total income.

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

According to our general concept, if a bank's main income relies on interest, it can almost be characterized as an inactive bank and a backward bank.

Unexpectedly, such inaction and such lazy politics would make them perform their best in such a crisis.

The other three companies have relatively large non-interest income, so their performance at this time is not very optimistic.

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

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

With such good luck, it would be really unreasonable if it still cannot rise.

However, it seems that our bank did nothing in this crisis?

And even in January, the acquisition of the US National Financial Corporation, which is mainly engaged in real estate mortgage loans, has not only attracted a lot of criticism from shareholders, but also incurred a series of lawsuits against Bank of America. Later, it seems that Merrill Lynch was still collected?

Therefore, the domestic banks really missed this good opportunity.

"What about the investment banks?" Feng Yiping asked again.

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

John is indeed suitable to introduce the situation in this regard, this is a man who has swept the 5 major investment banks on Wall Street.

"Good Cummins, Feng, everyone," John was standing in front of the screen vigorously from an unknown practitioner on Wall Street, who is now known by well-informed people to short Wall Street. After the Moroccan acquisition, thanks to the efforts of the Federal Reserve, the four major investment banks on Wall Street now seem to be in good condition."

"But after a comprehensive analysis, we believe that their problems are still big."

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

"With their strength and the scale of their assets, bearing losses of that scale will make their performance unsightly, but it will not affect their survival,"

Naturally, it is said that Feng Yiping this time was equivalent to taking away 20 billion U.S. dollars from the hands of five of them, but it did not bring down one family.

"The main problem lies in two aspects. One is the related securities and bond markets. Now it is not that the turnover has dropped significantly, but that there is no turnover at all."

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

This is equivalent to a company not selling.

"The other problem is liquidity,"

"Because of the short-term fund borrowing, it is now almost stagnant,"

This is similar to not being able to borrow money from banks-of course, investment banks don’t just use banks for financing.

"At the same time, many securities and bonds they hold are still depreciating,"

"Considering the high leverage they have been using for high returns before, if they cannot raise sufficient funds, then many of their funds will go bankrupt."

Speaking of this, everyone understands how the follow-up will develop if that happens.

Because Bear Stearns is an example.

The reason Bear Stearns was sold at a low price was because two of its funds with capitals of less than $1.6 billion failed.

Even if there is no lesson learned from Bear Stearns, it is not difficult to evaluate their situation. If a company has neither sales nor borrowed loans, and its inventory is constantly depreciating, how can its life be better?

"Of course, the remaining four major investment banks have recently taken various measures. From the comprehensive strength assessment, we believe that if there is no extreme situation, Goldman Sachs and Xiaomo are more likely to be safer."

Feng Yiping nodded, actually saying in his heart that extreme situations would definitely happen.

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

"Why?" Feng Yiping asked.

"Because at present, except for Lehman Brothers, the other three investment banks are actively realizing assets to raise funds,"

John knew what Feng Yiping wanted to hear.

Goldman Sachs and Xiaomo, in accordance with Feng Yiping's opinion, have given out a lot of shares in the company they hold for John and the others to choose to offset the unpaid part of the CDS contract.

It is precisely this aspect that is currently stuck.

Feng Yiping took a fancy to the shares of ICBC held by Goldman Sachs and the shares of CICC held by Xiaomo respectively.

It goes without saying how rare the shares of ICBC are, but the relatively infamous CICC International is actually even better, because it is actually the first investment bank in our country like a Wall Street investment bank.

Not to mention other businesses, just talk about its achievements in issuing stocks. Let's put it this way, he will definitely participate in the overseas listing of companies with the Chinese prefix and some large state-owned enterprises.

Goldman Sachs holds more than 5.5% of ICBC and Xiaomo holds more than 34% of CICC International.

One is a hen who can lay golden eggs, and the other is an excellent vehicle for participating in investment in mainland China and Chinese investment in the world. Both of these are a bit reluctant now.

And the more reluctant they were, the less Feng Yiping didn't want to give up.

"We expect that as the situation gets worse, they should all agree to sell some core high-quality assets,"

This is what John said to let Feng Yiping rest assured that Goldman Sachs and Xiaomo will definitely let go in the future.

Feng Yiping nodded at him. Since he has such confidence, then this job is just left to him.

Well, think about the scene of Goldman Sachs and Xiaomo becoming shareholders of ICBC and CICC after they let go. It's beautiful!

"It should be because of the previous high losses, Merrill Lynch is also very active in this regard, and the actions are also very large. John Thain is currently planning to deal with their holdings of CDOs with a total amount of 30.6 billion US dollars at an ultra-low discount price. ,"

"They are even actively approaching Bloomberg to discuss the sale of high-quality assets like their 20% stake in Bloomberg."

Well, this is Feng Yiping's concern again.

Although the overall negotiation is led by Bloomberg, Bloomberg has agreed that Feng Yiping's company ~www.wuxiaspot.com~ will receive half of the 20%.

On the one hand, he can fully offset Merrill Lynch’s remaining CDS contract debt, on the other hand, he can also become Bloomberg’s second largest shareholder.

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

"The transaction price is expected to be around US$4.5 billion,"

It seems Bloomberg will call for money soon.

But this is still good news.

"Lehman is the most negative in this regard, perhaps because CEO Fuld was originally an Air Force pilot. He has a stubborn personality. It seems that he hasn't realized that the focus should be life-saving, so his main job is not on I am still thinking about how to make money when selling assets to cash out..."

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

Everyone in the meeting room laughed heartily.

In this year's illusion, there are still very few people who can make such a big deal except Feng Yiping.

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

"Fortunately, this doesn't seem to have anything to do with us," John said triumphantly.

Because of the CDS purchased at Lehman, they have already used the discount of the loan lent to Blackstone to offset it.

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

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

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

Because the next meeting is related to the acquisition he values.