At 16:00 on September 15th, Eastern Time, the stock market closed. The Dow Jones Index plummeted 4%, and the international financial market was bleeding.

Among them, AIG Group, a behemoth with assets exceeding one trillion U.S. dollars, was on the verge of death in just one trading day. The once proud CDS business turned into the sharpest dagger and cut through AIG's arteries. Panic was like a shark smelling blood.

Came for a safari.

A series of "market free" actions such as runs, redemptions, and compensation made AIG unable to struggle, and its stock price plummeted by more than 60% in a single day.

Li Zhiyi's short position of 3 million with 8 times leverage became an inconspicuous little shrimp among countless safari behemoths. He made a perfect profit of 14.4 million from the ultra-short-term operation within the day and exited the market.

And he actually didn't want to take profits so early, but Goldman Sachs couldn't bear it. The funds he leveraged were not Goldman Sachs' own funds, but were borrowed by Goldman Sachs from the market.

Wall Street financial institutions all rely on overnight lending and short-term financing for daily operations. No one is willing to lend money to Goldman Sachs at the moment. Liquidity is in trouble. Goldman Sachs can only forcefully liquidate its positions without respecting its credibility.

"14.4 million, you are really a genius."

In the Columbia University dormitory, Henry sighed from the bottom of his heart after listening to the phone call between Li Zhiyi and the Goldman Sachs traders.

Li Zhiyi Feng Qingyun smiled lightly and replied: "Genius is not so cheap, this is just the beginning."

"So... what will you do next? Buy CDS at a low price with a full position?" Henry asked, looking out the window in a depressed mood.

At this moment, large-scale protests are taking place on campus, as well as outside the campus. Some extreme party organizations have already shouted slogans that Wall Street should be burned to the ground and Blankfein (Goldman Sachs CEO) and his gang should be hanged.

It is foreseeable that there will be "party" activities on the streets such as shopping for zero dollars and burning cars as bonfires in the evening. As a patriotic and passionate young man, Henry is really embarrassed to see these.

"Don't worry, the price of CDS will be cheaper than toilet paper in another week, and then you can have a full warehouse." Li Zhiyi expressed his thoughts without reservation.

Henry sighed: "Although your analysis is correct so far, I still want to ask you why you are so sure that the U.S. economy will not be completely destroyed."

"It's a bet, not a certainty. I believe that God will bless the United States and I am willing to coexist and die with the American economy." Li Zhiyi said a cold joke.

"This joke is not funny. You have always been hostile to the United States."

Hearing this, Li Zhiyi sneered and lit a cigarette: "Because your country will force this disaster to be passed on to the whole world. Whether it is the strategic partner country you call or the third world country, they will serve you and the great people in your heart."

America’s shit wipes its ass.”

"And my motherland will be the biggest payer of this, so why can't I be hostile to the United States?"

At the end, Li Zhiyi added softly but firmly: "I don't believe in any bullshit. God bless the United States. Your country has raped the whole world like bandits. What I believe is that my motherland has the ability to save your country."

China has not fully integrated into the international financial market, so it has not faced this crisis head-on. The biggest losses have been in many overseas investment projects, such as Li Zhiyi’s old club holding a CDO worth tens of billions of dollars in Fannie and Freddie, CIC’s investment in Morgan Stanley, and Blackstone Fund

Such investment losses.

However, as the world faces the risk of financial recession, exports, one of my country's three pillars that drive the economy, have been abolished. In 2008, my country has not yet achieved internal circulation and relies heavily on the growth of external demand.

So I had no choice but to wipe the U.S.'s butt, which is why many people said that China was the biggest victim of the financial crisis and questioned why the U.S. was rescued.

It's not that I want to save him, but that the two powers are harming each other, whichever is the lesser, so I have to save him.

"OK, Zhiyi, you know I don't want to discuss politics with you, I just can't imagine how to get out of this crisis."

Henry was like a deflated rubber ball. He paused and continued: "What kind of disaster do you think this financial tsunami will cause? How many people will be unemployed and how many people will be homeless?"

This crisis reminds many people of the Great Depression of the 1930s. In hindsight, the United States is not dead, but people with a little financial knowledge today will feel desperate.

Unemployment and homelessness data were not intuitive to Li Zhiyi. He knew that another set of data could fully explain the disaster. By November 2008, the gun ownership rate in the United States surged to 42%, which was not only the first in the world but also the highest in the history of the United States.

.

"No matter how long the night is, day will always come." Li Zhiyi looked out the window at the sky shrouded in twilight early and replied.

Henry also looked up through the window and exhaled smoke: "I hope so."

When the sun shines directly on the Tropic of Capricorn, the northern hemisphere enters winter, and the days become shorter and the nights become longer in New York. Winter is approaching not only for the economy, but also for the weather, and storms continue to sweep...

A wisp of cold wind blew by and the smoke dissipated. US Treasury Secretary Paulson, standing on the rooftop of the New York Government Building, couldn't help but shudder and put out his cigarette butt: "What did Buffett say?"

Then-Fed Chairman Bernanke replied: "He is willing to talk to Goldman Sachs."

"Let's talk?"

"We can only exert as much pressure as possible. That's Buffett. He doesn't sell anyone's face." Bernanke replied depressingly.

Paulson, an old man over 60 years old, shook his head: "It's not pressure, it's a threat. If the market is ruined, no one can think about it. I still have some time left in my term, and he must rescue Goldman Sachs, otherwise I will kill him."

nice."

"Okay, I'll tell him." Bernanke was suppressed like a little daughter-in-law by his colleague's iron fist.

"Then it's time for us to talk about AIG. Is everyone here?"

Paulson buttoned up his suit and cheered up. As he spoke, he and Bernanke left the rooftop and returned to the conference room.

At 21:50 on September 15, the U.S. Department of Finance held a meeting to save AIG. During the meeting, Paulson vigorously suppressed opposition and passed the proposal under tremendous political pressure.

At 9:00 on September 16, the Federal Reserve issued a US$85 billion cash mortgage loan to AIG. AIG's stock price stabilized and did not continue to plummet. In the next few days, a total of US$182 billion in loans were issued, with the mortgage subject being up to 79.9% of AIG's preferred shares.

.

In other words, the Federal Reserve nationalized AIG in disguise. Since Fannie and Freddie, Paulson once again spent real dollars to fire into the panic and save the market.

But when he pressed the gourd and lifted the ladle, he was not given time to smoke a cigarette and take a breath. Washington Mutual Bank was dying and asked him for help.

Washington Mutual is the largest savings bank in the United States, with assets of $307 billion and deposits of $188 billion. It is obviously another giant that is too big to fail.

The fiscal department meeting on the evening of September 18 failed to pass the proposal to rescue Washington Mutual Bank.

When the market closed on September 19, Morgan Stanley was in a hurry. It lost US$1,100 in liquidity in one week. The remaining US$550 on its books can be expected to be exhausted when the market opens next week.

Goldman Sachs was in emergency at the same time on the same day. Buffett ultimately failed to resist Paulson's threat, but he was not someone to be messed with. He spent $10 billion to help Goldman Sachs, and the government had to provide the same amount of money to help.

So Goldman Sachs and Morgan Stanley jointly applied to the Federal Reserve to become a holding bank, hoping to obtain a bailout from the Federal Reserve.
Chapter completed!