My Age of Investment

Hearing that Xia Jingxing emphasized so much on his relationship with Peter Thiel and Clary Capital.

The two investment bank CEOs immediately became more enthusiastic.

"No problem, Morgan Stanley and Darren have always been very happy to cooperate with you, and the people you introduce must be the same."

With a smile, Mack took out a business card and handed it to Peter Thiel, "This is my personal business card, I will keep in touch with you in the future."

Following him, Blankfein also took out a business card and handed it to Peter Thiel, with a very friendly attitude.

With so many changes, Peter Thiel naturally felt it, and couldn't help but glance at Xia Jingxing, who was looking at him with a smile on his face.

Even though Peter Thiel still has his own pride in his heart, and he thinks that he is not weaker than others in his life, but in the face of the facts, he must admit that Darren has surpassed him and stepped into a higher level.

“We and Peter plan to set up a new fund in the near future to invest in CDO and CDS market, and we want to entrust Goldman Sachs and Morgan Stanley to help us design a new product—synthetic CDO.”

Xia Jingxing's words did not surprise the CEOs of the two major investment banks, because Xia Jingxing had already expressed this intention before.

Some time ago, Jiang Ping and Liu Hai talked with people from the two major investment banks about this matter.

And the two CEOs kept suppressing and didn't reply, they just wanted to talk about this matter with Xia Jingxing in person.

The business was actually not that big, but the business confused the two of them.

"Daren, you are interested in the CDO market, why don't you just buy some subordinated bonds?"

Blankfein pretended to be confused and looked at Xia Jingxing with a smile on his face.

Xia Jingxing began to play tricks, and a trace of disdain flashed across his face, "I'm not interested in that kind of low-yield bonds at all. If I want to play, I have to play big ones."

"haha, really?"

Blankfein smiled, "How do you want to play?"

Mack also looked at Xia Jingxing with great interest.

"We will select and recommend some of the subprime mortgage bonds to Goldman Sachs and Morgan Stanley, and sign a CDS contract with you two. We will pay you two insurance premiums every year, and you will become CDS insurance providers."

Blankfein's eyes became sharp instantly, staring straight at Xia Jingxing,

"Are you betting that the bond will default?"

"How can this be called gambling? This is called investment."

Xia Jingxing shrugged, his face was full of confidence.

Mack narrowed his eyes slightly, his gaze stayed on Xia Jingxing's face, "Dai Lun, did you see some good opportunity?"

Xia Jingxing smiled mysteriously, "It's inconvenient to reveal it, you just need to answer me if I can do it."

Mack hit a soft nail, and felt more and more suspicious about this deal.

He shook his head, "Daren, you are so confident that you have pledged all your hard-earned shares in Facebook. We Morgan Stanley dare not do this with you!"

Both CDO and CDS are traded over-the-counter. In short, you need to find someone to bet against.

The tool for gambling is the default rate of subprime loans.

Blankfein pondered for a moment, and said, "To be honest, Goldman Sachs doesn't dare to bet against you seeing Darren you are so confident.

With your own money, you can be the master of the house.

But we are different, we have to be responsible to the board of directors and shareholders.

Once I lost the bet, lost my job, and had to look for a job at my age, it would be really terrible. "

Blankfein shrugged, looking extremely helpless.

Peter Thiel glanced at Xia Jingxing, and his heart was already filled with huge waves.

CDO and CDS products are relatively small, but he has also heard of the big names and knows some basic common sense.

What is Darren doing?

Betting that housing prices will fall, leading to the default of subprime loans, the value of the corresponding subprime loan bonds will fall, and the value of CDS, that is, credit default swaps as insurance for subprime loan bonds, will rise.

But will prices fall?

As a professional financial person, he knows the term cycle and thinks that the decline is normal and not impossible at all.

And now that housing prices have been rising for so long and so much, it is very normal for them to fall back.

But what if it doesn't fall, what if it falls a few years later?

That would really be a loss.

Peter Thiel took a look at Xia Jingxing, who was as stable as a rock and seemed extremely confident.

Facing Mack's and Blankfein's suspicious gazes, Xia Jingxing said in a calm and unhurried manner, "As the two largest investment banks in the world, it would be a joke if you dare not even open their doors to do business.

The default rate of subprime loans is very low. Buying CDS usually pays premiums for nothing.

This is the same as buying accident insurance. A person has bought it for 80 years since he was born, and he has never had an insurance policy at the age of 80.

Insurance companies like this kind of customers the most. "

Mack smiled, avoiding the seriousness and said lightly: "I have never been in danger in my life, that must be a child kissed by God, and I will live a safe life."

Xia Jingxing nodded, "Probably so, we also think that most of the "children" will have no accidents in their lifetime, so buy an insurance for peace of mind.

In the event of an accident, a small premium can be exchanged for a huge amount of compensation. "

Mack understood Xia Jingxing's metaphor. Compared with the compensation, the premium of CDS is outrageously low.

This ratio is also based on the probability of things happening.

Just as insurance actuaries calculated the probability of risk to formulate insurance premiums, the financial geniuses on Wall Street also calculated the CDO default rate and the corresponding CDS price.

Attempting to make a profit by buying CDS is a typical example of making a big fortune with a small amount!

Accordingly, the probability of losing money is very high.

Mack was still a little puzzled. In his eyes, Darren was not a fool.

Anyway, in this transaction, someone must be a fool.

So this is where he feels very puzzled.

Blankfein's thoughts were similar to those of his old friends, and they all felt that Xia Jingxing's deal was suspicious.

It's just a few words: I'm doing a trick for you.

Xia Jingxing felt very tired looking at the two whose expressions kept changing.

These two people are veterans, so it's not easy to fool around.

In particular, his transaction itself is very suspicious and a bit unreasonable, which has to make people think about it.

Xia Jingxing smiled, "You want to create a good-looking performance report for the company, right?"

Being completely seen through, Liu Hai blushed for a while, "I made wedding dresses for others, thank you! Even if we don't become the biggest winners, let's be the second, third, and fourth head office.

If this is the case, it will be easier to raise funds later.

Also, too many people know that we raised $1.5 billion in external funding.

This is the most brilliant method. "

Xia Jingxing nodded, "You are right, then keep a certain amount of money in your hand!"

Seeing that the suggestion was adopted, Liu Hai was overjoyed and was about to speak.

The landline on the desk suddenly rang.

Xia Jing walked over to pick up the phone, and after listening for a while, his face became strange, with a smile that was not a smile.