What's wrong with me being a rich man?

Chapter 480 Profit
From May to June, the global automotive industry exhibited the word "systemic".

Whether it's Yu Xing hiding behind the scenes, the tightening regulations, or the car companies that have been running into trouble, no one expected things to develop to this point.

The short-selling attack on Renault by Guoshanfeng was initially thought to be just a slippery slope for the automaker, but it has only continued to slip. Emissions fraud has been exposed one after another, two top executives have stepped down in disgrace, the title of "King of Short Sellers" has become a mere title amidst the hype, and anti-monopoly actions have opened a new chapter, making it all the more dizzying.

Amidst this bewildering situation, the Bosch Group finally stepped forward to refute the accusations, presenting a warning email sent to Volkswagen engineers as early as 07, but even this "minor matter" seemed to have lost its impact.

On June 18, Volkswagen Group, which had been suspended from trading for a long time, resumed trading amid sharp public criticism, with its stock price plummeting by 15 points and its market value evaporating by more than 20 billion euros.

However, unlike the Black Ten Minutes last month, this time even many people in Europe have similar opinions – they deserved it.

Normally, ordinary people and users don't really feel anything about car emissions, and the amount of emissions doesn't affect normal use.

However, the emergence of such a major and successive scandal in the automotive industry, a pillar industry, coupled with the government's swift allocation of bailout funds, while effectively cutting off the transmission of risks, has led to a rapid decline in the reputation of car companies in the market due to criticism from the United States, attacks from European opposition parties, and relentless media scrutiny.

Unlike the Chinese market, the rise of political correctness regarding environmental protection in Europe is indeed a significant force, and it is matched by voters who agree with this concept. To some extent, they also incorporate automakers' "clean diesel" promotions into their car-buying considerations. The current situation is undoubtedly a form of deception.

Political maneuvering and the treacherous world of business.

As Yu Xing gazed at the German stock market from Lingang, he saw Volkswagen's failure and seemed to hear the clinking of gold coins in his ears.

Liu Wanying is still in Hong Kong and has not returned. Whether the profits from this round of trading can be successfully recovered depends on the capital operations in the next few days. Meanwhile, another part of the funds obtained through CDS are being converted into CDOs, which will have to be shifted from short-term to medium- to long-term.

Synthetic CDOs are tiered securities issued based on CDSs, and the returns are divided into two parts: one is the fixed income received in installments during the term of the CDO, and the other is the principal recovered upon maturity or early liquidation of the CDO.

This European investigation is a cross-border operation that has fully mobilized regulatory agencies in different regions. It is indeed the most stringent scrutiny that the mountain peak has ever encountered. Fortunately, it will ultimately have to face not only the mountain peak, but also the offshore structures that global funds rely on.

No matter how much pressure Europe exerts, offshore financial hubs such as the Cayman Islands, the British Virgin Islands, Barbados, and Seychelles are unlikely to allow the investigation to proceed. Furthermore, European countries such as Switzerland, Luxembourg, and Malta are also finding it difficult to provide more information.

In this case, Germany's BaFin's "presumption of illegality" is both unreasonable and effective; however, it is difficult to determine whether the frozen funds truly belong to Guo Shanfeng.

By mid-June, BaFin had frozen a staggering 4 million euros.

According to the statement made by the relevant person in charge, Moric, to the media, "We have successfully dealt a heavy blow to the short sellers who have been undermining the stability of the European financial market." However, according to his private conversations with his colleagues, there was a second part of the statement that he could not state publicly: "But we do not know whether the mountain peaks were among those severely damaged."

Over-the-peak offshore design techniques are very sophisticated, and funds were invested early on. At that time, it was very likely that the operation was carried out in accordance with proper procedures, so it is difficult to distinguish through technical means.

Morric and Carlos from the French AMF worked side by side to track down unusual funds, but they also had to admit their despair, feeling that it would be difficult to pinpoint the next peak in the future, and if global financial information continued to advance, the peak would have long since disappeared.

Carlos, being younger and more optimistic about the future, both comforted and encouraged Morric: "Over the Peak will definitely continue its operations. I will go back and apply to retain the investigation team targeting Over the Peak. Over the Peak is indeed very powerful, but even powerful short sellers like Soros and Chanos have suffered defeats. People always make mistakes. We can wait for Over the Peak to make a mistake. Maybe this time they will fight amongst themselves because of the unfair distribution of spoils."

However, if we set aside the obsession with the "Over the Peak" strategy and only consider the persistent criticism from well-known American hedge funds, the results are still quite good. On June 23, Liu Wanying, who was responsible for the operation of the "Over the Peak" fund, finally returned to Lingang, looking quite tired.

Along with her came some profits from two rounds of short selling. This time, Guoshanfeng used a combination of stocks, options, and hedging, and the gains might be worthy of the praise from her peers.

Currently, over $8 million has been transferred from Europe to offshore companies, and nearly $6 million remains in company accounts in various European countries awaiting the direction of Volkswagen's stock price. Meanwhile, nearly $5 million has been converted into CDOs.

This CDO is like a large, fixed-term deposit; you can either wait to withdraw it upon maturity or quickly liquidate it at a discount.

The first thing Liu Wanying said to Yu Xing was, "Boss Yu, I can give you an even more expensive car."

When she successfully shorted the car for the first time, she gifted him a Mercedes-Benz S-Class, which is still Yu Xing's usual vehicle to this day.

Upon hearing this, Yu Xing laughed and said, "I'm already selling all the cars I make, why would I need an expensive car?"

Liu Wanying's second sentence turned into a sigh: "Europe has frozen more than 5000 million euros of our assets this time. This is all I can do. Volkswagen is a once-in-a-lifetime opportunity. If we can really set up a public hedge fund, we can make even more profits this time."

Because Renault set an example, European regulators acted swiftly, fully validating the impossible trinity of high returns, low risk, and high liquidity.

After a moment of silence, Yu Xing said, "This has exceeded my expectations. I find it hard to imagine the scale of these funds."

Liu Wanying laughed and said, "Director Yu, it's not even as high as your market value, Mr. Bai Xiaosheng."

Yu Xing shook his head repeatedly. Market value and cash flow are two different things. If you have to measure them, this money is enough to rebuild three more silicon carbon groups.

"Have you considered how to use this money?" Liu Wanying asked more formally.

Yu Xing hesitated for a moment: "Silicon Carbon Group needs financing, MUS also needs funds to invest overseas, and domestic supply chain companies need capital injection. If possible, I hope that Silicon Carbon Group can continue to increase the proportion of funds allocated to research and development."

He counted on his fingers and said, "And Liu Jiankai's Kebit exchange has great potential for the future. Red Falcon Capital's own investment activities definitely need to keep funds in reserve. It seems like your CDO has taken the money out to lend. We still have to wait for the funds in Europe. Is there enough money in the offshore company to allocate?"

Liu Wanying pondered for a moment, then said, "Short selling is not my intention, but I hope I have enough money."

Both Silicon Carbon Group and Silicon Carbon Data are big spenders, and they also take a significant share from other sources, in addition to her own willingness to make achievements in investment.

She suddenly changed the subject: "European car companies are suffering, and Japan has been criticizing them and touting their manufacturing spirit. Once we've had a chance to regroup, we'll launch a counterattack and use Kobe Steel as a sacrificial lamb."

We offer sacrifices to the sword, to the mountain peak, the sword of Damocles hanging over the automotive industry.

(End of this chapter)