One week later.

Michael Barry, the head of the successor fund, sat in the seat where John Paulson had sat, and the person sitting face to face with him was Luo Sheng.

After meeting, Michael's image was very different from Luo Sheng's impression. He could not see John Paulson's straight suit dress in a financial man.

A T-shirt + shorts is a standard for Michael. He likes to run around the office barefoot and has a drum set in his office.

Michael lost one eye because of cancer when he was a child, and his current eye is a fake eye.

When he was in the second grade, he began to learn about the stock market. He started to simulate investment. When he was in middle school, he had already begun to invest real money in stock market trading.

But in fact, he almost became a doctor at the beginning.

However, investment attracted a lot of attention, and almost spent all his free time in the evening, and also opened a special blog for this.

This led to him falling asleep while standing and breaking the patient's oxygen tent during a complicated surgical operation. He was eventually kicked out of the operating room by the doctor. He completely bid farewell to his doctor's career at the age of 29, and thus set foot on Wall Street and became a trader.

Those who know him are used to calling him Dr. Michael, not Mr. Michael.

As it turns out, Michael belongs to Wall Street and is born an excellent trader.

He founded Successor Capital in 2001, creating a very amazing rate of return for investors. In the year of its establishment, he brought investors a terrifying return of 55.44%.

At this time, Luo Sheng looked at Michael. He didn't know what the head of the successor capital was. If it really didn't work, he would rather manage the remaining $2.9 billion with Paulson's hedge fund.

So Luo Sheng decided to make a scene and asked: "I have $2.9 billion in cash lying in the bank now and lose tens of thousands of dollars a day. The return on investment of the successor capital is quite amazing. I hand over the $2.9 billion to you to manage Michael, but before that, I need you to answer two questions: First, how much cash does the successor fund have now, and second, what will you do with my banknotes?"

Without any hesitation, Michael immediately responded: "$1.3 billion, if you hand over $2.9 billion to me, I will use it to bet with the U.S. housing market and exchange credit defaults."

Suddenly, Luo Sheng stared at the two with a blank look, subconsciously spread his hands and said, "What?"

When Michael saw Luo Sheng, he recognized him. A technology giant from China, a super rich man in the top ten of the world's richest man and the youngest billionaire in the world.

However, Michael does not think that he can do it as easily in the financial market as the technology industry. In his opinion, Luo Sheng contacted him this time because he was mostly interested in the successor capital that brought good returns to investors, so he wanted to entrust a sum of funds to inject the successor capital into the successor capital to hedge and preserve or appreciate the value, that's all.

Michael is still a little proud of being able to attract such a super rich man.

So he told Luo Sheng: "In the 1930s, the U.S. housing market plummeted by about 80%, and half of the loans were defaulted, but there were many signs in advance, and anyone could see that, for example, one of the characteristics of the investment craze is the rapid increase in the complexity and ratio of financial fraud. Do you know that these problems are rising at the moment? And it has already hit a new high since the 1930s."

Luo Sheng shook his head: "So, what does this have to do with you about the gambling housing market?"

Michael smiled slightly and said, "You may be confused by mortgage guarantees, subprime mortgages, bond levels, but this is normal. Wall Street likes to use these seemingly high-end terms to make non-professionals think they are professional, and even make investors unable to interfere with those investments."

It's dinner time, Luo Sheng invited guests.

He poured Michael a glass of wine, then looked around the delicious food on the table and thought about the good things to start with that plate, and said casually: "When eating and drinking, it is best to say something that can make me, a non-professional, understand it."

"Thank you for your wine."

Michael responded politely, took a sip and continued: "The so-called mortgage bonds are to make big banks crazy about making money. They make billions of dollars with the handling fee of 2% per bond. But later they found that there were not enough loans, and only those who could afford a house with good jobs were limited. The banks had to fill it with higher risk credits to keep their money-making machines running. These high-risk credits are subprime mortgages."

"But it is just a bunch of aaa-level mortgage loans. In the past, there was a guarantee from the federal government, but now it is different. There is no guarantee and it is divided into a bunch of levels. The highest is aaa, and you can get the repayment first, and the lowest is b, and you will get the repayment first. However, the profit of level b is good, but the risk is high, and sometimes it will be defaulted. If b and bb continue to develop, they will drop from low risk to similar to garbage."

Michael drank a sip of wine again and commented that Luo Sheng, who was enjoying dinner with his head down, said freely: "This is the lowest level of consumer credit rating. There is no need to provide proof of income. The floating interest rate is also junk. The default rate has increased from 1% to 4%, and as long as it rises to 8%, many BBB ratings will be zero. So I want to short these bonds, which is to bet."

Luo Sheng immediately looked up at him: "You said that the 8% default bond value will be zero, and now it is 4%..."

Michael: "That's right!"

Luo Sheng: "What if it reaches 8%?"

Michael even leaned back to his back to the seat, hugged his arms and remained silent for a moment, and then looked at Luo Sheng: "If it reaches 8%... the economic situation in the United States will...bo!! It will even cause a comprehensive economic disaster. Sooner or later, someone will discover this investment goal. Mr. Luo, we must act quickly."

Luo Sheng was still calm and asked, "You want to use my money to short mortgage bonds. How do you confirm that these bonds are worthless?"

Michael answered patiently: "I have studied the measurement and analysis. The housing market is entirely supported by these bad debts. This is a time bomb. I want to short it!"

Luo Sheng asked again: "How to do it? My company also bought real estate in the Bay Area. As far as I know, mortgage bonds do not seem to have insurance contracts or options."

Michael answered in an orderly manner: "Sir, this is what I want to do. I want the bank to help me tailor the insurance. Then, I will buy credit default swaps, just like the insurance of bonds. As long as the bond defaults, the credit default swap will compensate me. Mortgage bonds will definitely collapse slowly. If you give me $2.9 billion, I can bring you tens of billions of dollars in excess short-term returns."

Luo Sheng chewed the food and said for a moment: "It's quite tempting, but Wall Street is under his feet. Why didn't anyone notice this?"

Michael laughed sarcastically: "The whole Wall Street is in a carnival moment, greed and madness are busy selling bonds and collecting fees."

Luo Sheng asked again: "Will these bonds really be so bad? Is it legal?"

Michael replied: "No one knows the content of the bonds. I have seen 65% of AAA mortgage bonds, but in fact 95% are subprime mortgages with consumer credit ratings below 550 points. What happens when the market feels that the risk is too high? Secured debt certificates will turn the housing market crisis into a national economic disaster, even spreading from the United States to the world."

Speaking of this, Michael stared at Luo Sheng brightly and waited for his reply. The latter was picking up the napkin, wiping his mouth and shook it aside.

After a moment, Luo Sheng said calmly: "She is my assistant. I will ask her for $2.9 billion tomorrow."

Michael couldn't help being stunned for a while. After coming to his senses, he subconsciously let out a long sigh and finally showed a bright smile. He couldn't help but glance at Qin Weimu who was sitting next to him without saying a word throughout the whole process and looked at Luo Sheng again, and said solemnly: "Thank you, Mr. Luo, thank you for your trust in me."

Not long after, Michael Barry left.

He took away US$2.9 billion in investment from Luo Sheng, of course it could not be cash. This money had been prepared for a long time and could be transferred to the account of the successor's fund the next day.

As soon as Michael Barry left, Qin Weimu looked at Luo Sheng with a smile: "You guy has a good acting skills, and you can't see any flaws."

"It's versatile and rich, and it's more billions." Luo Sheng smiled and suddenly felt aroused in his heart and added quickly: "It's getting late, so why not stay here for one night, huh?"

Actually, it was just around 7 o'clock in the evening.

Qin Weimu was too lazy to pay attention to him and soon left Luo Sheng's room. She wanted to prepare contract materials with the successor fund tomorrow.

...
Chapter completed!