"These bastards are so arrogant and arrogant, they don't know what fear is after Bear Stearns, it's speechless!"

Just when Zhong Shi was "singing and dancing" in Germany, a group of people on the other side of the ocean were paying attention to the market movements day and night, including the one who spoke.

His name is David. Einhorn is the head of the hedge fund Greenlight Capital. and Jim. Chanos, like him, is also a well-known bearish representative on Wall Street. But with Jim. Chanos's difference is that the handsomely handsome hedge fund manager, who is less than forty years old, is unusually high-profile, and even his famous book, the experience of shorting United Capital, has been written into a book, which once topped the best-selling list.

Greenlight Capital is a hedge fund founded by Einhorn in '96 with less than $1 million at the beginning, which was a typical small hedge fund at the time. But no one expected that in this industry with a huge speed of innovation, Greenlight Capital did not drown in the monstrous waves of the capital market, but turned from a small sampan to a giant aircraft carrier, becoming one of the giants of the hedge fund industry.

For 12 consecutive years, there has not been a single year of loss, and the average annual return rate has reached 22%. Einhorn has successfully transformed what started as a small fund with less than $1 million into a super hedge fund with $5 billion in funds under management. Although it is not comparable to the super large hedge funds on Wall Street, since the scale of funds under management reached $3.5 billion, Einhorn announced that it would close to the outside world and no longer accept entrusted funds.

In other words, this is Einhorn's deliberate control of the scale of fund management, not that Greenlight Capital cannot compare with those funds that can easily exceed tens of billions of dollars. This reflects Davy on a certain course. Einhorn was so confident in his investment prowess that he couldn't even afford the management fee of scaling up his money.

At the beginning of the year, Greenlight Capital was also involved in shorting Bear Stearns. But unlike Soros and others, he didn't have a lot of chips to bet on Bells, so it didn't attract too many people's attention. At that time, Bear Stearns, in order to save the predicament at that time, once wanted to invite Jim. Chanos went on TV to preach that Bear Stearns had no problem. But Jim was heavily bet on. Chanos ruthlessly denied it. Later, Bear Stearns wanted to find Davy. Time was running out in Einhorn.

In his later memoirs about the financial crisis, Alan . . . Schwartz once said: If Bear Stearns finds Einhorn first, and the other party does not short Bear Stearns, maybe Bear Stearns may still be able to come back to life. Time can't be turned back, but it can still be seen from this that David. Einhorn's influence in the market.

And now, the enraged Davy. Einhorn roared as he said this, apparently targeting another company. This company is the Kaminari Brothers.

Kaminari Brothers, founded in 1850, is an investment bank with a history of 156 years. As one of the most famous investment banks in the industry, they have the world's top research team, top financial advisors, top bond and equity underwriting teams, and are the out-and-out financial giants on Wall Street, ranking fourth among the top five investment banks.

After the collapse of Bear Stearns. There is a perception in the market that the next financial institution that may finish the game is the Kaminari Brothers. After all, among the five giants, Kaminari Bros. is only a little stronger than Bear Stearns, and compared with the other three, it is far from comparable in terms of assets under management and profitability.

Most importantly, during the subprime mortgage crisis, Kamison Brothers had written off $16 billion in bad debts, turning their financial statements into a loss throughout 2007. And it's even worse. In the first quarter of '08, investors still don't see any hope of turning a profit.

Known on Wall Street as the "Immortal Birds," the Kaminmen Brothers survived the American Civil War, two world wars, the Great Depression, the 9/11 terrorist attacks, and a takeover. And in the first quarter, although the Kaminari brothers' statements were extremely ugly. But they managed to raise $4 billion from the market, allowing them to take a breather.

In 2007, like a handful of other savvy fund managers, David . Einhorn saw an opportunity in the market a few months ago. But unlike others, he and his analysts started with the companies involved in the subprime mortgage crisis, analyzing whether their stocks were overvalued or undervalued. Eventually, he and his team settled on a large list of 25 companies, and the Kaminari brothers were among them.

And at the beginning of the year, Davy. Einhorn was thoroughly enraged when he attended a conference call on the Karemmen Brothers to release their first-quarter earnings report. On the phone, Kaminarimon's executive, the financial officer Christophe. Mera went so far as to say that they didn't have much planning for the second quarter, and now that it's May, the arrogance of the Kaminari Bros. executives can be seen.

Now, when I look at the first quarter report of the Kaminmon brothers, David . Einhorn identified an even more important problem.

"They're crazy, and that's okay?"

David. Einhorn pointed to a string of numbers on the financial statements and said to the subordinates sitting around him.

"What's the situation?" Following the position of his finger, analysts quickly found this figure, the yield of spot bonds, $78.348 million and other words. However, the analysts looked over and over for a long time, and still couldn't find anything wrong, and they turned their puzzled eyes to Einhorn.

"Don't you see?" David. Einhorn shook his head helplessly, "This part of the gain is problematic, it is actually a loss. Because theoretically, they can buy back their own bonds, and according to the previous position, this part is the income. ”

"If you look closely, this is just the yield of BBB-rated bonds in the first three months, and there are other credit grade bond yields. Oh my God, these numbers add up to at least over $500 million in gains, and damn it, these aren't gains, they're real losses. ”

David. Einhorn was shocked, even though this method of concealment often occurs. But never before had such a huge amount of accounts appeared, and he trembled with so much excitement that he realized that he had discovered a serious problem.

"If this calculation is followed, then the day they face bankruptcy shows up on the financial statements that it is precisely the day of the highest profit!" Analysts reacted with the same shock.

"Quiet. I need to ask each other! ”

At a time when many analysts were engaged in a heated discussion, David. Einhorn waved his hand to stop the commotion, and then dialed the new CFO of the Kaminari brothers, Erin. Karen's phone.

In order to better grasp the numbers, many companies provide internal high-level communication services to large investors. In other words, people like institutional investors and billionaires can contact the heads of relevant departments as long as they want to inquire about certain numbers that are not illegal.

"Irene, I'm David. Greenlight Capital. Einhorn first reported to his home, and then without a word of greeting, he went straight to the point, "Regarding the financial statements for the first quarter, I have a few questions I would like to ask you, which is about bond yields. ”

"Debt proceeds?" Erin. Cullen's reaction was alert, and he immediately asked rhetorically, "What's wrong with the debt yield?" Isn't it clearly written in the financial statements? ”

For this David. Einhorn. Erin. Cullen has been in for a lot of headaches, and the Wall Street fund manager has called several times to inquire about the Kaminmen Brothers' internal finances. Although every time it was Erin. Karen prevaricated, but every question asked by the other party was not something she could handle, and in this case she could only procrastinate.

Erin. Cullen has only been in office for less than three months, and he doesn't even know much about the current complicated financial situation within the Kaminari brothers. Einhorn's problem. However, as the Einhorn problem deepened, she also began to realize that the actual financial situation of the Kaminhamon brothers was not satisfactory. But she definitely didn't expect it. The truth is that the situation is already quite bad.

What she knows now is that Greenlight Capital may be shorting the Reminmen Brothers, and she doesn't want to sue the other party for too much information for the sake of her own salary and bonus dividends. Of course, there is some information that she herself is not very clear.

"Of course. I saw the report. "David. Einhorn was naturally not perfunctory by her remarks, "I wonder how the profits from these transactions are generated?" Or in other words, are these income-generating bond counterparties just yourselves? ”

"What?" Erin. Karen couldn't help but scream, "David, are you crazy?" Are you questioning whether our numbers are fake? If that's the case, you are welcome to file a lawsuit at any time! ”

However, her tone quickly softened, "I'm not in charge of these things, you should ask the trading department about the transaction." You wouldn't be so simple as to believe the rumors that Pacific Investment Management and we have stopped trading. ”

Recently, there have been many rumors surrounding the Kaminari Brothers, starting with the world's largest bond fund, the Pacific Investment Management Corporation, severing a deal with the Kaminmen Brothers, and then rumors that hedge funds have begun to withdraw funds from the Kaminmen Brothers on a large scale. It's almost the same trick as shorting Bear Stearns, but so far, the Kaminari brothers are still standing.

"Of course not, I won't believe these unfounded rumors." David. Einhorn already knew that he couldn't ask anything from this impermanent woman, at least in terms of bond yields, so he changed the subject and asked about another thing he had asked earlier, "Erin, when exactly are you going to do it about asset appraisal and re-registration?" ”

It must be noted that whether it is a bank or an investment bank, when it holds an asset, especially an asset suitable for long-term holding, it is very cumbersome to carry out a mark-to-market system. Because the position is too large, and because the market price fluctuates every day, this mark-to-market system in many cases only increases the workload in vain. So much so that later the consortium greatly simplified these transactions, only calculating the price at the time of buying and the price at the time of selling. If there is a positive return between the two, it is profitable; If a negative gain is generated, it is a loss.

However, after 2007, the United States promulgated new accounting standards, and listed companies need to re-register or assess the value of their assets within a certain period of time. This time can be daily, weekly, quarterly, or even yearly, depending on the time held. Unlike the original valuation method, the current asset valuation must be dynamic and mostly jù.

"When I organize the staff, I will carry out a daily mark-to-market system for all the current assets. Yes, that is, every trading day, there will be a dedicated person to evaluate the price of these assets. If necessary, these numbers are reflected in the balance sheet. "Erin. Cullen couldn't help but complain, "We'll do it according to accounting standards." Yes, I swear in God's name. ”

……

"She's lying!"

Dave who hung up the phone. Einhorn said to the long-awaited traders. (To be continued......)

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