After the collapse of Lehman Brothers, Su Nuan and Ji Mo celebrated. Their previous decision to short the company was proven to be the right one at this moment.
After Lehman Brothers went bankrupt, Su Nuan and Ji Mo made tens of billions of dollars in profits. Su Nuan watched the funds in the account increase, and she was so happy that she woke up laughing in her dreams every day.
The original $50 billion investment was recovered long ago, and nearly $100 billion was subsequently earned back.
After the collapse of Lehman Brothers, Su Nuan and his team did not stop, but instead began to besiege the second-ranked Morgan Stanley, the first-ranked Goldman Sachs, and AIG.
As early as September 12, AIG's stock price fell 31% in a single day. On the day of Lehman's collapse, within just one hour of opening, AIG's stock price fell 50%, to a mere $6.65.
Why did AIG collapse so quickly? Although AIG stopped underwriting CDS in 1990, the 125 CDS contracts it underwrote early on resulted in losses of $11.5 billion, double the profits of AIG's financial division from 1988 to 1990. The bulk of these losses came not from the CDS of the three short sellers, but from Goldman Sachs.
As early as when Lehman Brothers was negotiating the acquisition, AIG had already asked Henry Paulson for help. If it did not receive any help, AIG would run out of funds within a week.
Goldman Sachs didn't give AIG that much time. On September 15, AIG's rating was downgraded, triggering Goldman Sachs's hidden clause. He took decisive action and demanded that AIG provide additional collateral.
The downgrade caused AIG's assets to depreciate. Previously, compensation of $10 billion might require 100 assets, but now it may require 150 assets.
If AIG couldn't pay, it would trigger further short-selling attacks, a ratings downgrade, and continued asset devaluation, widening the hole in Goldman Sachs' payments, creating a vicious cycle. As Goldman pressed on, AIG's liquidity quickly bottomed out.
When the financial market is about to collapse, the largest investment bank in country A starts hunting for the largest insurance company in country A. Goldman Sachs will make a profit of 50 million US dollars.
Su Nuan and his team also made a profit of $100 billion from it.
Even though AIG had exhausted almost all of its assets, it still could not satisfy Goldman Sachs' appetite.
If AIG fails to provide sufficient collateral by September 16, it will default. The short sellers will not let AIG go, and its fate will be the same as Lehman Brothers.
As the largest insurance company in Country A, AIG owns the pension insurance and teachers' retirement funds of millions of Country A residents. If AIG collapses, it will directly shake the foundation of Country A.
It was at this moment that Ji Mo witnessed the terrifying side of Su Nuan. Because of the diplomatic containment launched by Country A against China, Su Nuan began to take action against Country A's financial market.
Starting from real estate lending, to shorting major companies in Country A, and now to bringing down AIG, the foundation of Country A has been shaken.
Every step was carefully planned, and the scary thing was that she had anticipated every step long ago.
It was as if he had opened his third eye, and everything was under her control. In the past two years, Ji Mo followed Su Nuan's instructions step by step, from confusion at the beginning, to belief, to admiration, and now to astonishment.
However, having come this far, he would not give up. Moreover, he had made a lot of money following Su Nuan in the past two years. Although he was now a citizen of Country A, he still had Chinese blood flowing in his bones.
While Ji Mo was still encouraging himself, Su Nuan made another decision that surprised him.
"Sell all the CDS we hold on AIG, quickly."
"Okay, Miss Su."
Now Ji Mo has learned to obey decisions, because Su Nuan's decisions have never been wrong.
Ji Mo sold all the CDS he held as quickly as possible, and Henry Paulson was dumbfounded at this time. He never dreamed that his former company Goldman Sachs would give him such a big gift.
With only hours left before AIG publicly defaulted, Henry went to Capitol Hill to advocate for a rescue for AIG.
At 9 p.m., the A government nationalized AIG, holding 79.9% of AIG's shares and providing $85 billion in loans to support AIG.
After Su Nuan heard the news, she breathed a sigh of relief. Fortunately, she remembered in time that in her previous life, Country A also announced the acquisition of AIG when AIG was about to make an announcement, turning the privatized enterprise into a nationalized one.
Su Nuan got through it safely, but Goldman Sachs was dumbfounded. The nationalization of AIG was a huge loss for them.
After learning that AIG had been nationalized, the short sellers poured all their bullets into Morgan Stanley and Goldman Sachs. And Su Nuan and his team were the most powerful among this group of short sellers.
The CDS prices of these two institutions were instantly doubled. The short sellers were no different from the real estate speculators a few years ago. They didn't care about the impact of the collapse of the financial system, they only cared about how much money they could make.
Su Nuan had long known that in order to save the capital market, the Securities and Exchange Commission would issue a short-term order in the near future to ban short selling of 799 stocks.
So, before, when other short sellers were getting excited, Su Nuan once again made a puzzling decision - to clear the inventory.
No matter how much Ji Mo prepared himself mentally, he was still shocked when he learned of Su Nuan's decision. However, no matter how confused he was, he still did it.
Ji Mo's actions made many short sellers sneer at him. Many people actively bought the CDS he released while mocking him for being timid.
After Ji Mo liquidated his positions, on September 18, the Securities and Exchange Commission issued an order banning short selling of 799 stocks. When the short selling ban came out, the short sellers were completely dumbfounded.
This ban is declaring to the world that the liberal economics believed by some politicians and economists in Country A is a lie, and it will only plunge Country A's economy into the abyss when an avalanche occurs.
As soon as the ban was issued, Su Nuan knew that it was time for them to exit. As the winner behind the scenes who planned and leveraged the financial crisis in Country A, Su Nuan had successfully retired.
This financial war lasted for nearly three years. Su Nuan made a profit of up to 270 billion US dollars, China also made a profit of 100 billion US dollars, and Ji Mo made almost the same.
When Su Nuan got the final data report, she looked at the strings of numbers and couldn't stop smiling.
While they were cheering and celebrating, the economic crisis in Country A had not ended.
In California's Central Valley, housing prices plummeted by 50%, consumption fell by 30%, and car sales plummeted from 16 million in 1988 to just 9 million in 1990.
On November 7, 1991, General Motors announced that without a government bailout, it would not survive until the summer of 1992. In the winter of 1991, 800,000 Americans lost their jobs every month. On December 1, 1991, the National Bureau of Economic Research announced that the American economy was now in recession.
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