The trading here is 24 hours a day, so after watching it for a while, Yang Jing returned to his room with satisfaction, and Henry, David and Cesar also followed in.

Yang Jing poured a glass of champagne for everyone, then picked up the wine glass and smiled: "Come on, cheer for our glory!"

"Cheers to our glory!" the three of them raised their wine glasses and said in unison.

The result of this investment or speculation was very brilliant. After the three major markets were launched, the three major investment institutions under the name of Evil Dragon Fund have already made huge profits in these three markets.

In terms of international gold and international crude oil futures alone, the profits of the Dragon Fund have exceeded the market value of General Electric!

Although the global financial crisis caused by the subprime mortgage crisis has not yet reached its peak, KY Investment Fund, which is concealed by international hot money, has made more than 200 billion US dollars in shorting the US subprime mortgage and the US stock market!

Their speculative action is definitely a brilliant one.

After taking a sip of wine, Henry smiled and said, "It's a pity that the outside world is amazed at John Paulson's profits. They will never know that compared to us, John Paulson's Paulson's Paulson fund's profits are only a small part."

Cesar also smiled and said, "Don't forget, we are international hot money."

One sentence made everyone at the scene amused, and even David, who was usually serious, burst into laughter.

Not to mention the profits of the international gold and international crude oil futures markets, just this shorting of the US subprime mortgage and shorting of the US stock market has made KY Investment Fund profits exceed the US stock market crash in 1987, and this is just the beginning.

This time, the subprime mortgage crisis in the United States has begun to ignite the global financial market. A financial crisis that swept the world is bound to break out. This is the battlefield for KY Investment Fund and Pacific Capital to obtain greater profits in a later stage.

"You guys and those little guys do a good job, and we also have a John Paulson ahead to attract the attention of the outside world. We will be safer this time." Yang Jing said with a smile.

This is not something Yang Jing said randomly. It is actually an extremely dangerous thing for the United States to make money from the national crisis. During the US stock market crash, the US government caught many people who made money from the national crisis afterwards. If KY Investment Fund had not "actively" stepped forward to pay the market and repurchase a large amount of stocks, maybe Henry would have been invited in by the US government for tea at that time.

The same is true for this subprime mortgage crisis, but compared with the stock market crash twenty years ago, the financial supervision of the United States has become loose at this time, and John Paulson, who was later called the "Empty God", was in front of him, so this time KY Investment Fund was even more in the subprime mortgage crisis.

From the mid-to-late 1990s to the first decade of the new century, two "Paulsons" on Wall Street were famous. One was the former chairman and CEO of Goldman Sachs, and Henry Paulson, who served as the US Treasury Secretary in 2006. The other was John Paulson, who made a fortune in the subprime mortgage crisis because he shorted the subprime mortgage and was later praised as the "empty god".

Before the subprime mortgage crisis broke out, John Paulson was not well-known on Wall Street. Until he met his old friend Paul Pellegrini in 2004, two guys with the same stinking saw the huge bubble in the US real estate market, and then decisively shorted the subprime mortgage. In the end, he suppressed a heavy bet of $25 billion in the US real estate market to short the US subprime mortgage. After more than a year, the US $25 billion turned into $45 billion, with a direct profit of $20 billion.

John Paulson was also praised by others as the "Empty God" because of this short selling.

In fact, John Paulson's success is inseparable from Paul Pellegrini.

Paul Pellegrini was born in Italy and came to Wall Street in the 1980s. He worked as an investor in the middle of the level of Lazade Brothers and tried several venture capital investments. He also met John Paulson, who worked in Bear Stearn at that time.

In that era, the two of them could only be regarded as two little shrimps on Wall Street.

Unlike John Paulson, who had a smooth journey, Pellegrini worked as several agents after leaving the Zarad Brothers' company, but they all did not go well, and both of his marriages ended in failure.

Even before he met John Paulson again in 2004, the guy was in a state of unemployment.

However, after years of experience in the workplace, Pellegrini has developed outstanding financial analysis skills, which has created his unique investment thinking. He is no longer subject to the rules and regulations in the Wall Street financial system, no longer completely relies on credit ratings and rating agencies, but collects massive amounts of financial information and comprehensively analyzes it by himself, and uses this as the basis for investment judgment.

And when the two met again, John Paulson did not have a very comfortable life.

After four years in Bear Stearn, Paulson decided to switch from investment banking to fund management, joined Gruth Partnership Fund, and became one of his partners, officially starting his fund management career. In 1994, he saw the momentum of hedge funds and shared an office with several other small hedge funds to establish Paulson Hedge Fund, specializing in M&A arbitrage and event-driven investment.

Paulson lived a pretty good life in those years, especially at the beginning of the new century, Paulson saw the huge bubble contained in the Internet and decisively began to short the Internet, which made his Paulson fund make more than 5% of the annual profit in the first two years of the new century, and his fund size also increased to US$600 million.

The performance of Paulson Fund in the bursting of the Internet bubble has also attracted the favor of many investors. By 2005, the Paulson Fund's scale reached US$4 billion.

Although the fund size has increased by nearly seven times, Paulson still feels uncomfortable. Why? It’s very simple, because Paulson feels a little lacking in goals.

This is the terrible thing about hedge funds, because it is in charge of hedge funds with a scale of US$4 billion, but does not know the direction of investment. Over time, it will inevitably cause dissatisfaction among investors.

At this time, the US economy was in full swing, especially the real estate market, which was even more booming. But Paulson was not interested in the US real estate market. He did not go through the mix of mortgage loans, financial derivatives and real estate. He was mostly out of the real estate boom, so what are his goals?

So, Paulson was not comfortable when he met Pellegrini.

But at this time, he met Pellegrini, and his old friend pointed him in a direction.

Although Pellegrini is in a career state, his sense of smell has always been very sensitive. Especially the popularity of the US real estate market in the past two years has made him smell an unusual smell.

So, Pellegrini began to study the U.S. real estate market. Through decades of interest rates, he found that they had no impact on the housing market. This means that despite the bullish people, the Federal Reserve's cuts in interest rates are not the reason for the sharp rise in housing prices recently. But after reading academic, government literature and data, Pellegrini felt very frustrated: he could not quantify the degree of value of housing prices, nor did he know when the bubble began. He could not even prove that this price increase was different from the past.

To get a new conclusion, Pellegrini added a "trend curve" to the housing market data, clearly showing the recent price increase in the housing market. This time, Pellegrini took a step back and began to pay attention to a longer historical period. He found the annual real estate data after 1975...

Then suddenly, the answer came to light: from 1975 to 2000, after considering inflation, the annual growth of housing prices in the United States was only 1.4%. However, during the six years from 2000 to 2005, housing prices in the United States soared at an annual rate of more than 7%!

In other words, U.S. housing prices need to shrink by 40% to match the historical trend!

This level of rise in housing prices is unprecedented, and Pellegrini also found that every time housing prices fell in history, it would fall below the trend line. That is to say, if housing prices really fall now, it would really plummet.

When Pellegrini told Paulson about the results of his analysis, Paulson, who was born stupid and bold, immediately realized that this was a once-in-a-lifetime opportunity.

At the beginning of 2006, it was generally believed that housing prices would never fall across the United States; mortgage experts kept advocating that the real estate market and housing mortgage market would continue to flourish; good news frequently appeared in major media. Most of the big names on Wall Street also held the same argument. Credit rating agencies also gave Wall Street financial products AAA ratings.

"The experts were blinded by the prosperity of the real estate market." After obtaining the analysis results of Pellegrini, John Paulson decisively abandoned the rating agency's scoring. He personally led his team of 45 people to track thousands of mortgages in houses, and analyzed the specific situation of the personal loans he could obtain one by one.

As he gradually deepened, Paulson became increasingly convinced that investors had greatly underestimated the risks of the mortgage market, and it became increasingly difficult for creditors to recover their loans.

Before the subprime mortgage crisis broke out, the relationship between CDO and CDS in the US real estate market was like this. The higher the risk of CDO, the higher the value of CDS guaranteed for it. However, during the booming period of the property, most people believed that CDOs did not have much risk, so the price of CDS was very low.

So Paulson decisively invested US$150 million in July 2006 to establish the first fund to short the CDO and began to build a large number of positions.

At the same time, he shorted the dangerous CDO while purchasing cheap CDS.

Paulson's team began to search for low-quality CDOs in the market, that is, CDOs with high risk. His goal was not the healthiest and most mature ones, but the kind of certificates that no one could do to make a comeback. Then, they purchased CDS insurance contracts with these CDO shares.

"Man, do you want the CDO of New Century Finance?"

"Nonsense, so trash... Oh no, of course I want such a top-notch CDO, I want as much as I want!"

“What about scam loans and interest-only loans?”

"Fake, is this more important? Take it for me and you will need as much as you want!"

"Brother, do you want the CDO of mortgage loans in the overheated real estate market in California and Nevada?"

"Yeah, are there many places? I want them all..."

In this way, Paulson was plundering high-risk CDOs and cheap CDSs in the hot real estate market, and his actions even caused a lot of ridicule on Wall Street.

Especially in the following months, the US real estate market was still booming and there was no sign of sluggishness. Therefore, Paulson's fund was constantly losing money - he had been investing more than one billion dollars in a row.

An investor hurriedly asked him several times if he should stop the loss. He flatly refused: "No, I still have to raise the bet."

Paulson said that he would do it, and he even once again staked to build a second fund to short the CDO and continued to increase investment.

Paulson's approach caused a lot of ridicule and ridicule at that time, but he still insisted on doing so, which was quite a bit like everyone was drunk and I was awakened, even though I was thousands of people.

But his desperate behavior did not disappoint him. Even though he lost more than one billion US dollars from July 2006 to the end of 2006, he still did not back down.

In the end, his persistence brought him huge wealth!
Chapter completed!