David asked curiously: "Boss, what do you think old Paulson will do?"
"What will you do? It's easy! One is to be acquired, and the other is to go bankrupt directly! If you don't do this, it will not be enough to establish your authority and calm the public anger." Yang Jing said expressionlessly.
"Boss, who do you think Paulson will target? Goldman Sachs? Citigroup? Bank of America or Morgan Stanley?" David asked curiously.
Yang Jing shook his head and said, "Goldman Sachs is unlikely to do that. After all, Paulson Sr. came from Goldman Sachs. Although Goldman Sachs made a huge contribution to the subprime mortgage crisis, I don't think Paulson Sr. will take action against Goldman Sachs."
After a pause, Yang Jing continued, "As for Citigroup and Morgan Stanley, even if Paulson wanted to take action against them, he doesn't have the courage. Whether it's Citigroup or Morgan Stanley, Paulson can't touch them. He doesn't have the energy to do that."
Yang Jing was not making this up. No matter if it was Citigroup or Morgan, let alone Paulson, even if George W. Bush and George H. Bush were stacked together, they wouldn't dare to move! Do you really think the top ten financial groups in the United States are a joke? Especially the old financial groups with deep roots like Morgan and Citigroup, let alone a small Treasury Secretary like you, even the President of the United States can be easily replaced by them!
Anyone who dares to take action against Citigroup and Morgan Stanley would be like a mouse accompanying a cat!
Henry nodded and said, "Boss, what you said makes sense. Boss, then Paulson can only take action against those investors who have no foundation?"
"That's right! I think Merrill Lynch and Lehman Brothers could be Paulson's targets."
Cesar asked in confusion: "Boss, isn't New Century Financial enough to satisfy old Paulson? After all, it is the second largest subprime mortgage company in the United States."
Yang Jing shook his head and said, "New Century Financial is not a big enough company. Paulson will definitely take over an investment bank that is big enough."
After hearing this, several people were silent.
"This has actually been demonstrated in Bear Stearns." Yang Jing continued to explain while looking at his silent subordinates. "Bear Stearns itself is the fifth largest investment bank in the United States. However, in March this year, this investment bank with a scale of over US$100 billion was acquired by the US government for US$236 million. This may have been the result of Paulson's efforts to establish his authority!"
Henry and the others were horrified.
Although the New Century Financial Corporation, which went bankrupt last year, was not small in size, it was still far behind Bear Stearns. However, Bear Stearns, a $100 billion investment bank, was acquired by the United States at $2 per share, a total of $236 million. This was something that was unimaginable in the past. You know, one month before Bear Stearns was acquired, its share price was still more than $90 per share!
But such a weird thing happened, and the Treasury Department did not care about it. If they say there was no instruction from Paulson Sr., who the hell would believe it?
Henry nodded and said, "Boss, what you said makes sense. Now we still have Merrill Lynch and Lehman Brothers. It just depends on which of these two investment banks is faster. But I am more optimistic about Merrill Lynch. As for Lehman Brothers..." Henry shook his head and said nothing more.
Cesar nodded and said, "Merrill Lynch and Bank of America are competing fiercely now. I think Merrill Lynch is likely to sell itself to Bank of America and avoid the tragic fate of Bear Stearns. As for Lehman Brothers, I'm afraid there really is no one to take over."
Cesar's guess was actually very accurate. Others didn't know these things, but Yang Jing, who traveled back from the future, knew very well what happened at this critical juncture.
When the subprime mortgage crisis reached its climax, Merrill Lynch took decisive and proactive action. Even if it sold itself at a low price, it at least saved the Merrill Lynch brand.
If nothing unexpected happens, Merrill Lynch will reach an agreement with Bank of America in a month and sell itself to Bank of America at a price of one-third of Merrill Lynch's market value a year ago, that is, US$44 billion.
However, Lehman Brothers, the world's number one investment bank at the time, eventually went bankrupt because no one took over.
Between Merrill Lynch and Lehman Brothers, it was Merrill Lynch that had the last laugh, while Lehman Brothers, which had a century-old history, eventually ended up in bankruptcy.
Lehman Brothers was indeed the most unlucky investment bank used by Paulson Sr. to establish his authority.
Although Merrill Lynch has not yet been acquired by Bank of America and Lehman Brothers has not gone bankrupt, Yang Jing knows all this.
PS: I would like to thank “book friend” 100 for the reward.
Continue read on readnovelmtl.com
