The interbank market, which was originally a market for margin positions, has gradually developed into an extremely large market. Because the participants are not only commercial banks, but also investment banks, insurance companies, funds, foreign exchange dealers, etc. Because there are no geographical and time restrictions, it is a 24/7 market where traders from all over the world can find counterparties; Moreover, because there are many varieties and methods of trading in this market, there are bills, bonds, cash, etc., and mortgages, loans, buying and selling can also be arbitrarily selected.

Singapore.

At the headquarters of DBS Bank, although it was late at night, after receiving a 100,000 urgent news, the head of the trading department had to urgently hold a video conference to discuss the trading strategy.

As Singapore's largest commercial bank, DBS Bank has a strong state-owned identity, and Temasek Holdings is their largest shareholder. The giant has long extended its tentacles into Greater China, and is one of the first few financial institutions to set up offices and branches in mainland China. Taking advantage of the Asian financial crisis, it even swallowed up several local banks in Hong Kong and entered the Hong Kong financial market in one fell swoop.

DBS is currently the largest commercial bank in Southeast Asia and an important force in the international financial market, and is known as one of the safest banks in the world because of its particularly good risk management.

A good risk control naturally means sufficient liquidity and abundant core capital. As a result, many financial institutions and commercial banks around the world are willing to trade with DBS Bank, not only to borrow funds, but also to buy and sell bonds, international settlements and other businesses. These include financial institutions from continental Europe, the United Kingdom and North America, and Bear Stearns is one of them.

And this emergency meeting starts with an unknown trader.

Lim Kok Tong is a bond trader at DBS Bank in Singapore, where he mainly trades US real estate bonds. When the subprime mortgage bond crisis erupted last August, he was reducing a large portion of his position. As a result, DBS avoided a potential loss of S$200 million, so he was quickly promoted to head of the team he belonged to.

In the eyes of the outside world, Lin Guodong's reduction was lucky, and he reduced his position just before the crisis broke out. But Lin Guodong knew very well in his heart that this was definitely not luck, in fact, he smelled some kind of danger before the crisis broke out. In addition, a friend with Quantum Fund reminded him in time, so he made up his mind to reduce some real estate bonds.

After graduating from Princeton University, Lin Guodong did not choose to stay in the United States, but returned to Singapore, a small country. He first joined Temasek Fund as a bond analyst and soon jumped to DBS to work in bond trading, a job that was more stressful than just analytics and worked late at night most of the time, but was much better paid than analytics because he had not yet repaid the loan to study in the US.

In fact, Lam's career as a trader was not a success. It took him three years to get a salary of S$530,000 from DBS, which is much higher than the average person, but it is only in the lower middle for a bond trader. Lin Guodong is also an ambitious guy, so many times he begins to gradually deviate from the fundamentals and begins to operate according to the rumors or inside information he hears.

In the past four years in New Jersey, in addition to studying, he spent most of his time on communication, so Lin Guodong's connections in the United States are not weak. Many of those he knew had come to Wall Street, and as a result, he was often able to hear first-hand information from inside certain companies. And three years of trading. Under his deliberate flattery and flattery, he also made friends with many traders from other institutions, and these people naturally became his sources of various information.

The last time he shorted U.S. subordinated bonds was when he heard a Bear Stearns trader sue him that two of Bear Stearns' hedge funds focused on subordinated bonds had collapsed. It was because he was faster than the news that he was able to sell a large amount of U.S. subordinated bonds. Avoided that risk.

Now it's time to launch the news again, because the U.S. market has been too unstable recently, and all kinds of rumors have emerged one after another, so Lin Guodong feels that the opportunity has come again.

"Hey, Steve. Any damn news lately? ”

Lin Guodong first dialed the phone number of the Bear Stearns trader, the same trader who had last sued him about the collapse of Bear Stearns' internal hedge fund. In exchange, Lin Guodong naturally sued the other party for an internal rumor about the British bond market.

"Lin, you, I haven't heard anything useful." The trader named Steve had a low voice, and he could faintly hear other noisy and noisy voices, Lin Guodong had already begun to make up a hot trading scene in his mind, only to hear Steve continue, "But damn it, do you have any news about subprime mortgage bonds?" ”

"What?" Lin Guodong was shocked, he couldn't believe his ears, the other party was in the center of the storm whirlpool, but he actually asked a person from 108,000 miles away about the news of subprime mortgage bonds, which was really too unexpected for him, "Steve, I didn't hear it wrong, are you asking me about the CDO?" ”

Hearing the other party's reaction, Steve was not surprised, let out a long sigh of relief, and then said lightly: "Oh, since you don't know, then I didn't say anything." How's that, are there any damn bonds that need a quote today? ”

What Lin Guodong didn't know was that among some traders who came into contact with him, they generally had this understanding of him, that is, this guy was very well-informed, whether it was the American, Asian or European markets, and this guy's news was accurate.

It is precisely because of honesty and equivalent exchange that Lin Guodong has also become famous in his circle, but he didn't notice it. Since the other party had no news to disclose, he could only give up, and after politely asking for the quotations of several bonds, he hung up the phone. Without an insider, he doesn't plan to make a deal for the time being.

Immediately after that, I made a few more phone calls, and the other party didn't know the news. Anything else is already reported in the news. Lin Guodong was very disappointed, it seems that he is going to stay up late again today. He hung up the phone, intending to make a few trades in the market first, anyway, to increase the profit in the account first.

Just as he turned on the Reuters terminal, ready to look for a few bonds that did not fluctuate much. The phone rang again. The life of a trader is that every day he is either placing an order or answering/calling to ask for the price, so Lin Guodong just glanced at the phone, and skillfully put the microphone on his shoulder with his head, looking at the computer screen intently while greeting. In front of him, there are eight screens, all kinds of non-stop flow of numbers and information for him to observe, analyze, and digest.

"Lin, a big insider. Big enough insider! A familiar voice rang out, and the words were full of anxiety and surprise.

"Really?" Lin Guodong is still indifferent, he can already hear who is speaking, it is an alumnus he knows in Princeton, who is currently doing investment analysis at Quantum Fund, called Daniel. Johnson. Regarding this person, Lin Guodong didn't like it a little in his heart, because the other party's utilitarianism was too strong. Only two or three of the ten messages released were true, so even when the other party was so excited to say that there was an inside story. Lin Guodong's reaction was still a faint look.

Daniel naturally knew what his status was in the other party's mind, and hurriedly explained: "Lin, this time the news is guaranteed to be 100% true and reliable, and you will see it soon." This is definitely a super insider, involving a giant on Wall Street, I believe you will definitely be interested. ”

"Really?" Lin Guodong was tapping the buy order, and his fingers stopped. Looking around, he took the microphone to his left hand while covering his mouth with his other hand and asked in a deep voice, "Daniel." What exactly is the news? What happened to Wall Street? ”

"It's Bear Stearns!" Without the slightest hesitation, Daniel directly named the name of this agency, "They're in big trouble, very big trouble." You should know that Bear Stearns is Wall Street's largest holder of subordinated bonds, and it is said that they have a full $50 billion position, which is more than Stanley. I just got the news that they have lost a lot of money on their internal positions, at least more than $12 billion, which is much more than the losses of their internal hedge funds. ”

"What?" Lin Guodong was completely shocked, although the news about huge losses has come and gone recently, it is the first time he has heard of such a scale and proportion of losses. Unlike the outside world, which only focuses on the amount of losses, traders often measure it from the size of their positions and the amount of losses, because they also need to take into account factors such as liquidity, risk control, etc.

A $50 billion position loses $12 billion, and if this qiē is true, then the loss amount is a staggering 24%. Generally speaking, for a giant position, the stop loss point is set relatively high, generally around 10%, and there are higher, but 24% is definitely out of the industry standard and the psychological expectations of any rational investor. So Lin Guodong only thought about it for a moment in his heart, and came to a conclusion that shocked him even more, "The liquidity of the market? ”

"Yes, there is a lack of liquidity, and it is expected that the losses of this part of the bond will continue to increase!" Daniel's tone was solemn, "So man, you'd better stop trading with them." I mean any transaction, including bonds, notes, yes, cash. At this point, any attempt to trade with them could put you in trouble with a lack of liquidity, and I don't want to see you fired. ”

After hanging up the phone, Lin Guodong's mood was very heavy. Although he had heard that Bear Stearns had fallen into a point of lack of liquidity, Bear Stearns' senior management frequently appeared on camera to refute the rumors, so that these rumors only circulated for a moment before they came to an abrupt end. And now Daniel is suing him that this qiē is all true, and that Bear Stearns' top brass is just playing a game of "the emperor's new clothes".

Suddenly, he remembered the phone call he had made with Steve, a trader at Bear Stearns, even though the other party really didn't know anything and had made the unusual move of asking him for information. Now that I think about it, maybe Steve was testing himself to see how much negative news he knew about Bear Stearns, and that news was most likely in the CDO market, which is subordinated.

Thinking of this, Lin Guodong had already believed most of what Daniel said, and when he looked at the Reuters terminal in front of him, the prospects of those U.S. real estate subordinated bonds that had just been selected through fundamental analysis had become uncertain, and the holders of these bonds were Bear Stearns, and the quotations were generally about two basis points to five basis points cheaper than the market price. Before getting any inside information about Bear Stearns, Lin Guodong was about to call the other party and suppress the price again.

As the saying goes, when the decision is constantly being disturbed, Lin Guodong only thought about it for two seconds, and then decisively knocked the cancel button, he really didn't dare to take risks with this transaction. Soon, analysis that Bear Stearns could get out of the bond at an ultra-low price was reported to DBS' management. Naturally, Lin Guodong did not copy it as it was, he submitted a full report, carefully analyzed the liquidity prospects of these bonds, and finally concluded that he should not make similar bond transactions with Bear Stearns' people.

Little did he know that his report fired the first shot at Bear Stearns' downfall.

……

"Has the news been delivered?"

Shortly after Daniel informed Mr. Lin about Bear Stearns, Mr. Soros personally called the analyst to inquire about the progress of the incident.

"It's all done, boss!" Daniel was busy reporting that there weren't many opportunities to talk to the big boss. Although it is difficult for the work of these analysts to have a direct intersection with Soros within the Quantum Fund, it is clear to everyone that Soros is not a high-ranking figure, on the contrary, he is also happy to give some sincere opinions and suggestions to low-level employees, as long as his time allows. So Daniel decided not to let go of this plan, and dared to ask, "Boss, why do you want me to send the news to DBS Bank, they are just a bank in Southeast Asia." If you had a choice, wouldn't it be better if the banks came from Europe or the United States? ”

"That's a tricky question, Daniel, and you're getting to the heart of it!" Soros smiled, didn't hide it, and replied bluntly after joking, "There are two reasons, first, they do their best job in risk control." Second, they are the banks of Asians. Do you understand? (To be continued......)