After Ren Pingsheng held a three-person group in New York, Ren Jiang and the other returned to Jiang Qiurong's single apartment in Manhattan.

The apartment near the central apartment is only 100 square meters in size, but the monthly rent is $5,000. Fortunately, Hanhai Bank paid for all this, otherwise Jiang Qiurong's income level would be a bit unbearable.

Although the apartment is small, its geographical location and property services are first-class, so after Jiang Qiurong settled in New York, she regarded it as a long-term destination. With her high requirements for living standards, she naturally decorated the interior very comfortably.

The apartments in this kind of apartment in the United States are all living room and one bedroom, so at this moment Ren Pingsheng is lying on Jiang Qiurong's simple bed full of modern style, looking at Jiang Qiurong who is busy in front of the Bloomberg terminal in the bedroom.

Bloomberg Terminal is a computer system that allows professionals to access "Bloomberg Professional Service". Users can access and analyze real-time financial market data and conduct financial transactions through "Bloomberg Professional Service".

"Bloomberg Professional Services" is a professional financial service developed by Bloomberg  L.P (which we often call Bloomberg). It was founded in 1981 by Michael Rubens Bloomberg. It specializes in providing customers with timely quotations, data, news, analysis and research, and transaction information in the global financial market.

Bloomberg terminals are the core products that carry Bloomberg financial data services. Whether it is securities trading institutions, commercial and investment banks, or even national financial regulatory agencies, Bloomberg terminals are extremely common. The clients it serves include analysts, traders, investment managers, etc., who obtain real-time financial market transaction data, analysis and various industry information through this product to judge the next investment and trading direction.

At present, Bloomberg is the world's largest financial data service giant, and Bloomberg terminals are also essential information tools for Wall Street investment banks. In a sense, the booming terminals are Wall Street's Microsoft, which builds the foundation for Wall Street transactions.

Jiang Qiurong is a woman who is professional and perfect, so she does not relax in obtaining and absorbing financial information at all. So in her most private bedroom, in addition to those high-end clothing and brand cosmetics with tailoring, there is also a Bloomberg machine that can check the latest information at any time.

"You're right, CDS is indeed the best short selling tool."

Jiang Qiurong stared at the information on Bloomberg, and said without looking back.

"A lot of people are already ahead. Scion  Capital bought $1 billion in CDS, Deutsche Bank bought $5 billion, FrontPoint  Partners  LLC bought $3 billion, Highside  Capital bought $2 billion, Harbinger  Capital bought $7 billion, do you know who bought the most?"

Ren Pingsheng replied without hesitation:

“Paulson Fund.”

This time, Jiang Qiurong finally turned around and asked in surprise:

"How do you know?"

Ren Pingsheng smiled without saying a word, of course he knew the deeds of John Paulson, a famous "Wall Street short seller".

In the series of crises that occurred between 2007 and 2008, Paulson Fund became the biggest winner in the subprime mortgage crisis. In 2007, Paulson Fund made $12 billion in short subprime loans using CDS, and in 2008, Paulson Fund made $8 billion by shorting banks. Paulson Fund ranked among the world's largest hedge funds in just two years, and Paulson also beat financial tycoons George Soros and James Simmons to become the "first hedge fund person".

But at this point in time, the names of Paulson Fund and Paulson are not conspicuous enough. Apart from veteran Wall Street investment banks and hedge funds, Volkswagen does not have much understanding of this "big short seller".

The reason why Ren Pingsheng was able to know so much is mainly because he had carefully read a series of research and books on the subprime mortgage crisis in his previous life, so he knew the winners in the subprime mortgage crisis well and was also very insightful about the methods of these winners.

Jiang Qiurong is already familiar with Ren Pingsheng's pretending to be mysterious. Since this man doesn't tell him, there must be his reason. Jiang Qiurong is not a woman who wants to break the casserole and asks the whole thing. She knows when to leave some secrets for men. It is not good to just ask questions blindly.

So Ren Pingsheng didn't say it, and Jiang Qiurong didn't continue to ask, but turned to the topic she was more concerned about.

"Since you've been studying subprime loans and CDS very early, why don't you buy it earlier? Isn't it a little late now?"

Ren Pingsheng smiled bitterly, and Jiang Qiurong's words touched his heart.

Since his rebirth, he has been paying attention to changes in the US market. Of course, he knows that the past two years have been the best opportunity to short the subprime loan market with CDS, but it is one thing to think about it, and it is another thing to know how to operate it.

In 2006, when Ren Pingsheng was just reborn, Scion Capital had already started buying CDS. Paulson Fund also discovered the mystery of CDS and began to raise funds from investors. However, until the end of 2006, Paulson Fund raised a total of US$2 billion and began to build positions in CDS.

These funds that use CDS to short subprime loans are large and small, but the smallest one is also worth more than US$1 billion. At that time, Ren Pingsheng was working hard to open the Meikong River route, and only earned his first ten million in his life through Indian generic drugs. He couldn't even get the ticket to Wall Street. Why should he short the subprime loan?

Even in 2007, Ren Pingsheng raised his net worth and capital to the billions, but there was still a big gap between the size of Wall Street hedge funds, not to mention that most of his assets were in China. Under the domestic foreign exchange control system, it would take a very time-consuming and laborious task to transfer funds to the United States. At that time, there was not enough capital to participate in this century-old short selling.

But now it’s different. Ren Pingsheng has cashed out more than $1.3 billion in cash through financing and listing of Wanyou Games. In addition, he made a net profit of $20 million in selling Apple stocks this year. King’s Landing Capital LLC, a physical company registered in the United States, has $1.4 billion in capital, which has reached the basic threshold of Wall Street hedge funds.

On the other hand, through the listing of Wanyou Games, Ren Pingsheng made friends with Wall Street investment banks such as Goldman Sachs, Morgan Stanley, and established stable credit from them, which also provided him with a way to participate in financial derivatives trading.

The last and most important one, Ren Pingsheng's entry at this time just happened to avoid the short squeeze between Wall Street giants.

The so-called short squeeze refers to the behavior of groups in the securities market with strong manipulation capabilities, which use large funds to absorb and concentrate the circulating securities in the market, or raise the current price through large-scale purchases, which causes short sellers in the market to make up for their losses as long as they buy and hedge at the same time, which ultimately leads to a sharp rise in the stock price. For short sellers, short squeeze is the most terrible situation. Short sellers facing short squeezes will definitely lose their money unless the short seller puts a way out and the short seller will definitely lose everything and die.

An object with a very high momentum needs to undergo very fierce resistance to change the original trend, and it takes longer to turn it. It took up to a year from the time of betting on CDS in 2006 to the outbreak of the crisis. During this period, the default rate of mortgage loans has increased significantly, and housing prices have begun to turn around, but short sellers still cannot make money because the entire system is still making the final struggle.

Wall Street has never been a paper tiger. Giants such as Goldman Sachs, Merrill Lynch, Lehman, Bear Stearns, and other giants who have made heavy bets on CDOs will not surrender. Wall Street has been firmly bound by MBS and CDOs. Investment banks, insurance companies, hedge funds and rating agencies have become combinations of interests. Under the background music of "house prices will always rise", they will use their influence and financial advantages to resist stubbornly. This resistance is so strong that many people participating in short selling begin to doubt themselves, "Am I wrong? Does the market know something we don't know?"

When all the people make heavy bets on CDS, what is left is waiting and suffering. These sufferings are caused by the always strong price of the CDO, and are also caused by the increasing pressure on financing costs. This small group of people is by no means waiting for the masts and oars to be destroyed every day. The opponents they face are essentially extremely powerful machines such as the government, banks, the Federal Reserve, and the rating agencies. They will never know what actions they can do.

As for Scion Capital, which was the first to short subprime loans, before the bubble burst, it continued to reduce its valuable CDS positions under the pressure of the market and customers. In the end, Scion Capital, which started the earliest, only achieved a total return of 489.34%.

In this process, Paulson Fund, which had the strongest financial strength and the most patient, laughed to the end. They survived the most difficult stage. When the subprime loan bubble burst, they also won the most reward, including more than 20 billion US dollars.

After listening to Ren Pingsheng's analysis, Jiang Qiurong looked at the man with admiration.

This man not only has advanced market vision and strong ability to act, but also has a thoughtful heart. His plan to short subprime loans is no worse than the most experienced hedge fund managers on Wall Street.

However, Jiang Qiurong was also a little worried. After all, Ren Pingsheng's opponent this time was not an ordinary person, but the entire Wall Street. According to Bloomberg statistics, 13,675 hedge funds and thousands of other types of investment institutions have obtained permission to invest in CDS, but even in the current situation where the risks of subprime loans have been exposed, only 100 institutions have entered CDS, most of which are to hedge the real estate in their hands.

Only a very small number of people, greater than 10 and less than 20, directly empty the collapse of the real estate market. If Ren Pingsheng wants to join this small group, he has to face a hundred times larger opponent. Even though he has fully estimated the possible risks and reduced the risks to the lowest point, the market is unpredictable after all, and no one dares to assert the future direction.

Is Ren Pingsheng’s bet worth it?
Chapter completed!