Zhou Xin felt speechless for a while, don't you want me to use my reputation to help pay for your mistakes? Isn't that kidding me?

Do I still want to help you stand up and say, Bernard's is fine, and trouble me to come up with a reason for you?

Not to mention that Zhou Xin has a God's perspective and knows that the Madoff hedge fund is a Ponzi scheme, even if he doesn't know, it is impossible to consume his credibility to help others at such a time.

As Baidu gets deeper and deeper into the Madoff pit, Xinxing Investment has almost sold Baidu's shares, leaving a small stake in its hands.

Because Zhou Xin was Baidu's earliest investor, coupled with Zhou Xin's prestige in Silicon Valley, Baidu still reserved a board seat for him.

Even so, it is impossible for Zhou Xin to stand up and help Baidu speak out.

Of course, the fire spread to NewPay, and Zhou Xin was heavily @, and Zhou Xin would not directly say that Madoff was a liar, because there is no evidence now.

Zhou Xin still wants to say two words: "I don't know what is going on with Madoff's hedge fund, the reason why NewPay does not cooperate with Madoff is because the interest rate given by Madoff's wealth management products is too high." ”

After Zhou Xin finished posting, he posted a long picture:

"I found that the short Weibo could not explain things clearly, and in view of the unprecedented crisis faced by hedge funds, subprime mortgages, and real estate investment trusts, I would like to share my thoughts with you.

The first is why NewPay doesn't work with Madoff. After the previous short Weibo post was sent, everyone may have a misunderstanding that Madoff's interest rate is too high, which is not normal.

I don't mean that, NewPay not only does not cooperate with Madoff, we do not cooperate with all wealth management products with interest rates above 5%, NewPay's financial product service team will conduct full background investigation and risk analysis for each wealth management product that wants to land on NewPay channels.

For the time being, we only open low-risk wealth management products, and NewPay needs to confirm that the underlying assets of each wealth management product are within a controllable range.

Madoff hedge fund is not in line with NewPay's business strategy, so we do not work with Madoff.

Now for the second question, why did Peter and I set such a business strategy for the NewPay financial channel? Will NewPay, which has always been radical in Internet financial innovation, behave so conservatively in its wealth management channels?

This question was asked to me by many board members at NewPay's internal board meeting, and I answered them like this, because NewPay's user base is too large, and we are facing users all over the United States.

These users, they lack the ability to identify the risks of wealth management products, even if they are marked with high risks, as long as the publicity is good enough, they will make blind decisions, and once there is an accident, they will pay for the accident.

Let's say a financial product issued by a well-known financial institution with a claim that the interest rate is likely to exceed 8%, like the two hedge funds that recently went bankrupt.

Users who lack the ability to identify risks will only see an 8% benefit, and will only see a high probability and will not notice the risk.

NewPay is an Internet financial institution, and at the same time, we have to take responsibility for NewPay to help you isolate risks as much as possible.

The last question, whether it is a financial crisis now, will it have as much impact as it did at the turn of the century, I think. ”

After this long Weibo post was issued, a large number of anxious investors, especially those who lost their principal due to the purchase of financial products through Internet channels in the past, gave NewPay and Zhou Xin extremely high praise.

The two bankrupt hedge funds also sold their products on Internet channels, and many investors bought them.

"It still depends on Newman, this awareness is not comparable to other business managers."

"Social responsibility is a light thing to say, many companies say that they have to assume a sense of social responsibility, but how many of them really do it?

Newman has been able to stand tall in Silicon Valley for so many years, and his ability and character are impeccable. ”

When Peter Thiel was reluctant to cooperate with Madoff, Zhou Xin set such a strategic direction with Peter before leaving Silicon Valley, and NewPay has always been strictly controlled for the products of the financial channel.

So much so that the market share of this piece is very average, whether it is revenue or profit, it is even inferior

As for WeChat Pay, WeChat Pay is only a money market fund similar to Yu Yu Bao.

WeChat payment is okay, and Tencent Zhou Xin behind it has absolute control.

NewPay is different, in order to expand, NewPay has introduced too many shareholders, and selling wealth management products is the fastest way for electronic payment companies to make money.

This has also led to NewPay's steady business strategy has been criticized, if it were not for the A/B share structure, Zhou Xin would have been hollowed out by the board of directors.

As for why the 5% line is set, it is because if there is no limit, even if Peter has the same opinion as him, the risk management department may do things privately.

The reason why Baidu is deeply bound to Madoff is directly related to George Reyes's private acceptance of Madoff's benefits.

The line set by NewPay determines that financial institutions have no incentive to buy NewPay's risk management and control department.

The 5% line also means that the underlying assets of financial institutions are strictly controlled.

After Zhou Xin's public response, the Weibo quickly spread in the global public opinion circles, and everyone had different interpretations.

Professionals and the general public are paying attention to Zhou Xin's last sentence, which he believes is coming, and it will be worse than the bursting of the Nasdaq bubble in 2000.

People in the industry dare not say that Zhou Xin does not understand finance.

At the turn of the century, emerging investments anticipated the purchase of a large number of S&P 500 industrial index constituents, which was later exposed in the industry, and Wall Street thought it was a stroke of genius.

As the scale of emerging investments grew, the investment institution, which mainly manages Zhouxin's wealth, began to sell stocks in large quantities in 2006 in favor of gold and long-term Treasuries, making Wall Street financial institutions realize that Zhou Xin not only thinks so, but also does it.

To be honest, everyone knows that the crisis is coming, but no one can predict how serious the crisis will be and what the situation will be.

The act of buying gold in large quantities proves that Zhou Xin's prediction will be very unoptimistic.

Investors who have purchased high-yield wealth management products dominated by Madoff have begun to care about what the underlying assets of the wealth management products they have purchased are.

Is there a subprime mortgage product that has been experiencing frequent thunderstorms recently?

"As an industry insider, I represented Goldman Sachs on the board of directors of NewPay before I left Goldman Sachs, and I can give you an internal estimate that we had at the time.

Ten billion, NewPay loses 10 billion dollars a year because of the rejection of financial institutions that give high commissions. John Sain said on Weibo.

He was previously the president of Goldman Sachs and now jumped to Merrill Lynch as CEO, and he has been criticizing NewPay for its conservatism in wealth management products.

His speech further proved Zhou Xin's pattern and ethics.

Zhou's comments further led to a plunge in the stock market, with both Ameriken and Huaguo posting their biggest one-day declines since the turn of the millennium.

Zhou Xin's Weibo is like blowing the clarion call for the capital market to plummet, and the cold air of the stock market is further transmitted to other capital markets, and the stock market crash has further caused investors to be more suspicious of hedge funds.

Investors from Americon and around the globe are surrounding the headquarters of Madoff's hedge fund and Baidu, demanding that Madoff disclose the underlying assets and disclose the details of the funds.

The profit model of hedge funds lies in the model, where you go long and short at the same time to guarantee returns. To put it simply, you can't be completely half short and half long, there will still be bias, you go short more than long, and then the market plummets, then you will have a very considerable gain.

To give a very simple example, there is a type of fund that guesses the rise and fall of the stock index the next day, if the stock index rises, the return of fund A is 7%, and the stock index falls, and the return of fund A is 2%, which is a very simple hedge fund case.

Madoff can stay above 12% for a long time, which requires him to grasp the ups and downs of the stock market most of the time.

What's more, the scale of assets under his management is as high as 600 billion US dollars, and in the case of a stock market crash, he wants to earn an annualized return of 12%, only short, and short is to have a counterparty, that is to say, he makes so much money, which means that the company with which he is a counterparty has to lose 72 billion US dollars.

There are only so many companies that are qualified to compete with Madoff hedge funds, and there are many financial practitioners and professional institutions who buy Madoff's wealth management products.

The original financial institutions, Golden Gate Asset Management, Santander Bank of Spain, HSBC Group, BNP Paribas, Nomura Securities, etc., so after the stock market crashed, everyone began to inquire whether Madoff was short.

As a result, no one knew which financial institution Madoff had shorted with, not on the surface, nor on the private side.

"Newman, you shouldn't have come out and say this." Henry expressed his displeasure to Zhou Xin through a cross-border phone call.

Henry is Henry Paulson, who has run from Goldman Sachs to the Nash government as Treasury Secretary, only came the year before last, and after more than a year of work, he encountered an unprecedented hole.

Zhou Xin said: "Henry, you know me, I am a good person, I want to tell people a little truth, even if it's just a little."

As I said on Weibo, ordinary people lack risk awareness and risk identification ability, and even in the midst of a financial crisis, they still have illusions or understand the world according to their own understanding.

The elites use the flesh and blood of ordinary people as their own food for the winter, and by lighting matches to make ordinary people have the illusion of a cold winter, I just said that it is winter.

There's nothing wrong with that. ”

Zhou Xin is very honest, he can't get used to this kind of behavior for a long time, because he also became rich by studying.

But after becoming rich, this wealth only turned him into the so-called middle class, and in fact the social resources at his disposal were extremely limited. Because entrepreneurship has stepped on the tuyere of the times, there is no shortage of "upper-class people" around him.

From the communication of these "upper-class people", Zhou Xin knew that although these people and ordinary people were still the same species, the resources they had at their disposal made them insurmountable barriers.

There is a very good saying, moving the interests of the upper strata is like taking their lives, changing the ideas of the lower strata is like digging their ancestral graves, and the ideas of the lower strata are the source of wealth of the upper strata, and those who try to explain all this are their common enemy.

The upper class uses various means to blind the cognition of the bottom, and after entering the era of self-media, there is no shortage of people who have spied on the truth of the world and individuals at the top to reveal these truths to the bottom.

Zhou Xin is now trying to play that role.

Because of the phone, Zhou Xin didn't know that Henry looked tired in the White House, and he was at least ten years older than when he was at Goldman Sachs.

"Newman, you tell the bottom that we're in a financial crisis right now, and that doesn't help them make the right decisions, it only adds to their troubles."

Zhou Xin asked: "Henry, to be honest, is it in crisis now?" ”

Henry replied, "Yes." ”

He knew that he and Zhou Xin were in the same class, everyone's information was shared, and it was impossible for him to tell nonsense, which was disrespectful to the other party and disrespectful to himself.

Zhou Xin said: "I'm just telling the facts, I don't need to care if they will add to their troubles after they know."

I know what you mean, the vast majority of ordinary people, who do not have the determination to cut their flesh, even if they know that it is a financial crisis, will not immediately sell stocks, but will have illusions.

There are too few people who can act and know in unison. But this is not a reason for us to hide the reality, the crisis is more serious than ever, and what we need to do is to face it. ”

Henry sighed: "You're right, but the more people know, the more radical behavior they may have, which will affect our rescue plan."

Moreover, you have already affected a considerable number of investors and are trying to redeem the wealth management products they have purchased, and the liquidity in the market will be further tightened. ”

Zhou Xin smiled: "It seems that my words still have an effect." ”

Henry continued: "Madoff, in particular, has reason to suspect that the Madoff hedge fund is a Ponzi scheme on an unprecedented scale.

According to an investigation by federal financial regulators, until 2004, Madoff's hedge fund had never done anything, he simply deposited his money in the bank, and then relied on the principal to pay investors the so-called returns.

This Ponzi scheme has been maintained by him for 20 years, and the emergence of Internet finance has helped him expand the scale of the Ponzi scheme by another tenfold, which is terrifying.

This will be an unprecedented crisis.

We need time to deal with this crisis, and your rhetoric has left us with no time. Henry Paulson's tone was full of frustration.

With such a big bubble, I don't know how serious the consequences will be.

(End of chapter)