What's wrong with me being a rich man?

Chapter 476 Guiding Principles
Short selling is allowed in the domestic stock market, but there is a certain capital threshold. It was first piloted in 2010 with 90 stocks, and last year it was expanded to nearly 900 stocks.

Yu Xing feigned confusion towards Li Song, while Li Song took the half-truth as gospel.

Yes, why must we learn from the mountain peak and try to make it in the overseas market?

There are roads to cross mountains, and there are bridges to conduct genuine research.

As Mr. Yu said, his contacts are all within China, and his wife's contacts are with various industries within China. These are all appropriate bridging information. In fact, Mr. Yu's thoughts and remarks are also extremely valuable.

Li Song, his mind firmly on his principles, had completely sobered up and immediately realized his lapse in composure...

Is it appropriate for Mr. Yu to know that he is using his own money to short sell overseas, while also considering short selling domestically?

He knew that President Yu had always looked down on even the most outstanding people.

Since we've studied the mountain peak, we should also learn its style. Real research only needs to use "truth" as a weapon to criticize "scams," and the hidden financial movements can be completely separated from it.

Li Song's eyes flickered. He slowly took two sips of tea, sighed softly, and tried to make amends: "Hey, I was just saying a few words in anger."

Yu Xing blinked: "I understand."

Li Song feigned embarrassment: "Sigh, I'm just in a bad mood today, so I drank a few too many glasses of wine."

Yu Xing nodded immediately: "I understand."

Li Song didn't know exactly how President Yu understood or comprehended things. After hesitating for two seconds, he said, "I'm the kind of person who likes to talk big when I'm drunk, like saying I'll do..."

Yu Xing waved his hand and said frankly, "President Li, I was just chatting casually. Even if you are interested in shorting in the domestic market, it is based on your own understanding of the market and the company. It's not like you're deliberately trying to become a short seller like Guo Shanfeng."

"Mr. Yu, there's something I'm not sure if I should say." Seeing that Mr. Yu was sincere, Li Song carefully uttered the same words.

"Haha, Mr. Li, we're all on the same side. Not to mention Mr. Xu's support for me, we've known each other for years," Yu Xing said sincerely. "What's there to say now?"

Li Song nodded and said, "Okay, President Yu, Volkswagen committed fraud, and Guoshanfeng shorted the stock. Many people are blaming Guoshanfeng for stirring up the crisis. Do you think so too? Isn't it a car company like Volkswagen that made the mistake first? Why do you have such a strong opinion about Guoshanfeng?"

“Well…” Yu Xing pondered for a moment, “President Li, I may have been a little emotional, but there are so many short sellers in the global market. Even if they initially shorted the company by exploiting loopholes in the fraudulent scheme, they often end up confusing the public for their own profit.”

He gave an example: "Like Chanos, who quietly shorted the market this time, he is a world-renowned short seller. According to his own account, at least 3% of his information is wrong. Mr. Li, do you think he made the mistake by accident or on purpose? Or could it be that he continued to make the mistake because he had already invested money?"

Li Song was surprised that President Yu was quite knowledgeable about short sellers and found it difficult to answer for a moment.

After a moment of silence, he said, "At least the mountain peaks have been reasonable and well-founded so far. Even with the previous Vania Pharmaceutical Company, although we talked about its business model, it was ultimately proven that it did have significant internal problems."

Yu Xing countered, "How many mountains are there in the world?"

Li Song didn't give the obvious answer. Yu Xing didn't pursue the discussion, but simply sighed, "Confusing the public and prioritizing profit over righteousness, that's the norm for short sellers, isn't it? However, if this kind of thing is done domestically, it probably won't last long. In the end, those who do many unrighteous things will surely perish."

Li Song felt that these words were somewhat extreme, and suspected that President Yu was referring to him.

He lost control after drinking today, and his beloved career was once again belittled. Although he was grateful to President Yu, he still wanted to regain some face, so he deliberately said, "President Yu, global car companies like Renault and Volkswagen Group are all committing fraud. As the head of Silicon Carbon Group, you must uphold your moral bottom line."

Yu Xing nodded and said seriously, "Yes, that's why I talked with President Xu and the others early this morning about how the Carbon Silicon Group's principle for entering the automotive industry is to honestly manufacture cars. But this industry upheaval is still a wake-up call and we should learn from it."

Li Song stared wide-eyed at President Yu, seeing that he was completely unperturbed by Li Song's provocation, and felt a pang of guilt.

He was emotionally distraught tonight and couldn't help but say, "It would be great if the domestic market could produce a short seller like the one who hits the peak."

Yu Xing smiled slightly and stopped discussing the topic. "If the real research is transferred to China and you cause trouble, just don't mention me."

Li Song left the Silicon Carbon Group with heavy thoughts on his mind, expressing his heartfelt apologies and gratitude before leaving.

After some hesitation, Yu Xing decided not to call Xu Xin. He didn't know exactly how "Real Research" worked, but seeing how unhappy President Li was, he decided not to add to her troubles.

He had originally planned to have a phone call in the office, but Li Song's actions ruined his mood, so he simply drove to the seaside alone, enjoying the sea breeze and gazing at the moon before finally calling Liu Wanying.

Liu Wanying has been extremely busy lately, as she has to manage funds, keep track of developments, and deal with time zone differences.

At 10 p.m., her voice was unusually clear.

As Liu Wanying listened to Yu Xing talk about Li Song, she didn't just treat it as entertainment. She said thoughtfully, "Since Renault was shorted, the stock prices of European car companies have been fluctuating and falling. When Volkswagen was shorted, the cost of shorting was much higher. Li Song was probably one of the later investors to follow the trend, and then he encountered a series of policies from the EU... It's really difficult for him to be under such pressure."

"The most profitable funds were those that were shorting Volkswagen before us. Even though it was suspended from trading and there were bans, they could still make money except for those without physical CDS."

Europe's current financial market policies are primarily aimed at cutting off the transmission of greater risks. While the short-selling funds are being investigated for irregularities, they are not the primary target. Of course, this still brings considerable pressure.

Liu Wanying drank half a cup of bitter coffee and mentioned what she had been busy with these past few days: "Although the German and American short sellers are at loggerheads, it seems to have had an effect. Germany has given us a grace period, and some of our CDS contracts are being converted into synthetic CDOs, which can circumvent German regulations on CDS without physical entities."

CDO is a secured debt instrument.

This transformation process circumvents Germany's latest policy scrutiny by converting CDS into tradable securities, allowing credit risk to be transferred in the market. For companies like Guoshanfeng, this means they can transfer the risk of their CDS holdings without purchasing physical securities.

This practice is not uncommon; in fact, during the 2008 financial crisis, there were too many synthetic CDOs, which eventually led to systemic risks and widespread problems.

After listening briefly, Yu Xing asked, "Are Chanos and the others also going around like this?"

“Chanos and his team have higher costs than us.” Liu Wanying became noticeably happier upon hearing this question. “We were making less money initially, but seeing that Chanos and his team are probably losing money, I suddenly feel that it’s not so bad.”

(End of this chapter)