"In the entire unregulated OTC market, where the big five U.S. banks account for 90% of all derivatives, it is possible for them to manipulate any one market."

"They are absolutely dominant in the futures, forwards, swaps, options and credit derivatives markets. This is a report on banking trading and derivatives activity published by the Office of the Comptroller of the Currency in the fourth quarter of 2011. In the fourth quarter of last year, there were $230.8 trillion worth of uncalculated derivatives balances across the United States, with JP Morgan, Bank of America, Citibank, Goodman Bank and HSBC accounting for 95.7% of the shares of these five super banks alone. However, 92.2% of these outstanding balances have been partially hedged. ”

In other words, there is at least $17.228 trillion in unsettled and unhedged exposure in this market. This number is equivalent to the combined market capitalization of the three major stock markets in the United States! ”

Ou Zhenchu spread his hands and said with an exaggerated expression, "It can be said that if there is a huge shock in derivatives, then a United States may be evaporated because of this." Look at what a horrible thing it is. ”

"None of the five big banks can afford to lose money because of the derivatives turmoil, so the safest thing for them is to manipulate these markets and keep them under their control at all times, so that they can minimize their risks."

"How do they manipulate these markets?"

Hearing this, Ivana basically understood a general idea, but there were still many questions lingering in her mind, and this was one of them, "There should be other buyers in the market, how can they be dominant?" ”

"It's simple. Money! ”

Ou Zhenchu smiled and said succinctly, "As long as there are enough funds, even if you bet in the wrong direction, you can manipulate the market by raising the bet until the other party can't bear the huge floating loss and liquidates the market." In this way, the trader successfully turned the tide. ”

"As JP Morgan traders, they have enough money to do this, so even if they realize that they are being sniped by the market, they can make their opponents throw in the towel by adding to their positions. I can't guarantee that this is the first thing we found out about in the market. But what I do know for sure is that only we have the ability to defeat a giant like JP Morgan, and it is basically impossible for other institutions to do so, because they can't have such a huge financial power to fight JP Morgan unless they gather more forces to enter. ”

"One force will drop ten!"

Zhong Shi, who had not spoken for a long time, finally spoke. "It's simple, but it's tried and tested. Two days ago I was with Bruno. Ixir has met, and this guy is really extreme. Although he was respectful in front of me, I could clearly see disdain and pride in his eyes. ”

"If our estimate is correct, this guy should be the operator of the IG9 contract. If you clash with him head-on, he will definitely not give up, and there is a high probability that he will use some radical tactics to scare off his opponent. In this case, the bet between us and them will get bigger and bigger. It's so big that no one can imagine. ”

"So what?"

For Zhongshi's words, Ivana clearly misunderstood. "Are you not going to snipe JP Morgan? Know that according to the agreement between us, you are obligated to help us! Also, based on your current net worth, are you still afraid of a little JP Morgan? ”

She was very dissatisfied with Zhong Shi's performance, and she didn't care about the presence of outsiders, so she said something directly.

For what Ivana said. Ou Zhenchu and Liu Mingren obviously didn't expect it, the two glanced at each other, packed up their things in unison, and prepared to leave the office. Obviously, what these people were going to discuss next was no longer suitable for them to hear.

"Haha. How could I not be afraid of a Wall Street king like JP Morgan? ”

Choked by Ivana like this, Zhong Shi didn't know what to say for a long time, and after stopping the two traders from going out, he forced a smile and replied, "Of course, the agreement between us is still valid." But can we do this, the German government contributes part of the funds, and we contribute a part of the funds, and the final benefits are shared proportionally, so that we can also diversify our risks as much as possible, what do you think? ”

"Don't even think about it!"

Ivana flatly refused without even thinking about it, "It's absolutely impossible. When the Prime Minister gave me the task, he made it clear that we could not use a penny from the treasury. You have to use your own funds to accomplish the tasks you have promised. Of course, if you can find other sources of funding, we wouldn't object. We want the end result, and we don't ask what the process is. ”

She flatly rejected Zhong Shi's offer.

Seeing that the other party rejected his proposal so happily, Zhong Shi quietly glanced at Jiang Shan, and both saw the joy in each other's eyes.

Yes, not disappointment, but joy.

For Zhong Shi, there is no need for any foreign aid to deal with JP Morgan, although the other party is a giant, but it is nothing to Tianyu Fund after all, and JP Morgan cannot completely invest all its resources in such a market. In addition, the other party is in the light, and the Tianyu Fund is in the dark, which naturally occupies a lot of advantages.

Moreover, Zhong Shi has one more nuclear weapon that has not been used, and that is his prestige. It can be said that as long as Zhongshi publicly expresses its position in the market, the responders will inevitably gather. Tianyu Fund, which gathers market forces, is definitely on par with giants like JP Morgan.

Of all the things, Zhong Shi feared the most that the German government would interfere in the matter. So he used the excuse of insufficient funds to test Ivana's attitude, and as he expected, the German government was really unwilling to shell out real money.

In this way, they naturally have no excuse to ask for the final benefits.

Poor Ivana didn't know that she had been put on a swing before she knew it, she only realized that she seemed to have neglected something, but after seeing Zhongshi's reaction. But I couldn't figure out what went wrong, so I had to give up after thinking about it for a while.

"So what do we do next?"

Zhong Shi had a gloomy face, pretending to be very dissatisfied with Ivana, but he looked helpless, and said to Liu Mingren and Ou Zhenchu with a little anger, "If we want to snipe them." What should I do? How much money is needed? What is the projected benefit? ”

Seeing Zhong Shi's uncertain face, Ou Zhenchu and Liu Mingren couldn't help but be a little flustered, and hurriedly calculated on the paper, and then Liu Mingren replied: "JP Morgan uses the strategy of flattening the selling curve to arbitrage the price difference between the forward and recent IG9 contracts, then we will do the opposite, buy the five-year IG9 five-year contract, sell the IG9 ten-year contract, and directly counter with them." ”

"When the exposure has accumulated to a certain level, we will announce the news. Let the whole market come and snipe JP Morgan. At that time, whether the whole market buys a single CDS or adopts the same strategy as us, will eventually force JP Morgan to abandon their current strategy and eventually achieve their goal of defeating them. ”

"According to our calculations, if JP Morgan is to be forced to back down on this exposure, at least $50 billion worth of IG9 contracts are needed. As a result, when the news is announced, JP Morgan will have to cut its exposure to admit defeat. We expect to make billions of dollars in profits. ”

This is a figure calculated by the two in a hurry, and it is basically impossible to guarantee its accuracy. And there are many constraints, so they don't dare to say an accurate number.

"This number ......"

Zhong Shi pondered for a moment, and finally said slowly, "It seems a little small, not enough for us to increase the intensity of our attack on JP Morgan." Well, I'm going to give you $80 billion to $100 billion. Is there a problem in building up a rivalry with JP Morgan as much as possible and trying to maximize profits at the last minute? ”

"No problem!"

Bell Stone gave $80 billion to $100 billion, but this is only the total value of the contract, and in fact only a small fraction of the cash needed to open these positions. According to the current market price, it is only about 4 billion to 5 billion US dollars. However, for this part of the fund, risk control is very important. Ou Zhenchu and Liu Mingren quickly discussed, and finally patted their chests and reassured.

For a trader of their level, being able to trade with so much cash will not easily refuse even if they feel that they are not capable, because this is undoubtedly the best opportunity to make a name for themselves.

"Also, JP Morgan is going to sell us about $15 billion in CDS, what do you think should be done?"

After the two agreed, Zhong Shi continued to ask, "Originally, this was a trick I used to test them, but now it seems that there is still some room for this fake deal. ”

"It would be nice to switch to a five-year contract with IG9!"

Ou Zhenchu said without thinking, "Since they are shorting the five-year contract of IG9, then we can buy it." Of course, after this deal is over, we will buy the IG9 five-year contract from the market and sell the IG9 10-year contract, so as not to let them know about our actions too early. I think for JP Morgan, they'd be more than happy to see us make such a move. ”

"Are there any other influencing factors?"

Zhong Shi nodded, but asked uneasily, "In addition to everything we discussed, what other factors could affect JP Morgan and give them a chance to turn defeat into victory?" ”

"No more!"

Liu Mingren said confidently, "According to our judgment, if there is really a strong opponent, JP Morgan is basically in a situation where he will not win. Any good or bad news that happens in the international macroeconomy will hasten their demise. ”

"Why do you say that?"

Ivana asked curiously, "Didn't you say that the news is both good and bad?" Why is it that for JP Morgan, good news or bad news will hasten their demise? ”

"Because their positions are against the normal volatility of the market!"

This time, Ou Zhenchu explained, "To put it simply, if there is good news in the market, then at most JP Morgan will maintain its existing position, but it will not be able to invest endless money into it, so it will eventually be consumed alive." If there is bad news in the market, such as the recurrence of the European debt crisis or the poor economic data in the United States, it will inevitably lead to turmoil in the bond market, followed by a general increase in the price of CDS. As a result, the spread between the five-year IG9 and the 10-year IG9 will widen further. According to their current strategy, this behavior is undoubtedly a loss, and if you add to this the huge position we have set up with them, the amount of their loss will become astronomical. ”

"So it's only a matter of time before they are defeated!" Ou Zhenchu finally said with confidence.

"You knew that beforehand, didn't you?"

Ivana suddenly understood at this time, and screamed at Zhong Shi, "What you said just now that the German government funded is a test of the current situation, right?" God, you are so cunning! ”

She finally understood, but it was too late. (To be continued.) )

PS: Thank you book friends for the Demon Dragon War Ghost, Happy Bugs, and All Cats for voting for the monthly ticket! Recommended for two days and no improvement, far less than last month, and the overall has fallen, it is inevitable that there is a feeling that the prosperity has passed, maybe the situation last month will become the best memory. Although the book is almost finished, for now, it will be written for a while, not in a day or two or a week or two weeks and it will be over immediately. Now I feel that it is very difficult to conceive, and I often feel mentally exhausted, but of course I will continue to work hard, but the request for more updates is indeed a bit difficult for the author, and I can only say that I do my best, which I hope you can understand that it is not easy to write a book. It's not too late to finish writing today, so I said a few more words, and finally I hope that everyone will continue to vote more, and don't forget to vote more~