The unparalleled talent of the country started from Harbin Institute of Technology

July 2008, Manhattan, New York, Wall Street, Morgan Stanley headquarters office building.

Warren Anderson's expression was ashen as he looked at Naftali Benzvi, the squid man, sitting in the boss's chair. His heart sank to the bottom.

"Naftaliburn, I'm here on behalf of Lehman Brothers to discuss a partnership with you. We simply need to borrow $1.5 billion from your company."

"But is the cooperation proposal you put forward even a cooperation? You're humiliating me, humiliating Lehman Brothers!"

He was furious, but powerless to do anything about it.

It's so painful to ask for help; Anderson had forgotten when he last begged someone so humbly.

Naftali, however, remained unperturbed and smiled slightly.
"I am not trying to humiliate you, nor do I mean to humiliate Lehman Brothers."

After a pause, he suddenly leaned forward, his eyes sharpening.
"I'm only asking for double the normal market rate. That shouldn't be a big problem for Lehman Brothers, right?"

"You're so angry, is it because Lehman Brothers has some financial problems?"

This is a blatant and overt test.

Warren Anderson was furious; his fists were clenched tightly, but he quickly loosened them.

Getting angry doesn't serve any purpose; it only makes the other person happier.

For Naftaliben, Anderson's presence before him today actually proved one thing: the rumors of Lehman Brothers' bankruptcy were probably true.

The main issue is that recently, Lehman Brothers actually suppressed its second-quarter financial report and did not release it to the public. At the same time, CEO Richard Fuld, President Warren Anderson and other executives were actually seeking to raise funds from other banks.

Bank of America, Morgan Stanley, Goldman Sachs, Citigroup, and others have all received related cooperation requests.

Within Wall Street, rumors have been circulating that Lehman Brothers may have gone bankrupt.

What may seem like a rumor could actually be true.

Naftali already knew that Lehman Brothers had a large number of subprime mortgage contracts and investments in real estate.

This is reflected in the financial reports for the whole of last year and the first quarter of this year.

The subprime crisis began at the end of last year, gradually spread in the first quarter of this year, and intensified in the second quarter, causing a great uproar.

Being on Wall Street, Naftaliben certainly felt the tense, suffocating atmosphere of impending doom very clearly.

Naftaliben even suspected that Warren Anderson's $1.5 billion loan was an attempt to make a quick buck before Lehman Brothers collapsed, so that the money would become the company's debt and have nothing to do with Anderson.

After all, it's not news that an executive has too many projects that are losing money and is blatantly seeking personal gain.

Ponzi schemes are nothing new.

So it's not impossible that Warren Anderson is running a Ponzi scheme. They're all seasoned veterans; it's not surprising that they'd do anything for profit.

"Do you think that's possible?" Anderson countered.
"If you don't want to, then forget it, but I'll remember the humiliation you've caused me and the company!"

After saying that, he stood up and prepared to leave.

This was a strategy of retreating to advance, which had always been successful, but this time, he clearly miscalculated.

Naftali was already certain that Lehman Brothers' financial situation was dire, so he naturally wouldn't easily promise a loan. The interest rate he just mentioned was just an excuse to scare them off.

In retrospect, Anderson's reaction has proven his guess to be correct.

Two hours later, Warren Anderson appeared in the CEO's office at the Lehman Brothers headquarters.

Richard, sitting in front of him, also had a very unpleasant expression.

As expected, Lehman Brothers' competitors on Wall Street did not disappoint them; none of them were willing to lend money to the company.

In fact, once a loan is agreed upon, various due diligence investigations will definitely be conducted on the collateralized loan, and unexpected events may still occur.

Therefore, when borrowing money, Richard and Anderson set the loan amount below the baseline. Unfortunately, these wolves and tigers on Wall Street were still too shrewd.

If they couldn't borrow money, then there was no way to cover the losses Lehman Brothers incurred in the second quarter.

And now there is no way to delay any longer; the financial report must be released as soon as possible, and once it is released, Lehman Brothers' stock price will inevitably plummet.

How to do?
Have you sold the stocks you hold?

After a long silence, Anderson suddenly asked.

Richard paused for a moment, then shook his head: "Not sold yet. It's not the final moment yet, what's the rush?"

shit!

Anderson didn't believe the other party hadn't sold out. Saying it wasn't the final moment yet was ironic!

how can that be possible?
What's going on now? It's extremely urgent! Anyway, Anderson had already sold all his stocks half an hour before the stock market closed today.

We had no choice but to sell, because Lehman Brothers was beyond saving.

Nearly 10 billion US dollars in losses, damn it, who can afford that?
Just then, the phone on the desk rang. It was another vice president, Caspian Thorne, calling.

“Richard, I’m at Maple Capital’s office building right now. Their president, Corwinda, just agreed to lend us $1.2 billion, but we need collateral of equivalent value, as well as notarization and background checks.”

this is a good news.

But Maple Capital would never make such a foolish move. Since their president agreed to lend money, they must have some information, right?

After all, the fact that they were willing to lend money to Lehman Brothers at this point in time meant they must have something to rely on. In any case, Richard couldn't believe that Colwinda hadn't heard the rumors about Lehman Brothers' serious losses in the second quarter and its impending bankruptcy.

"Okay, I'll arrange for the team to go over and sign the contract right away. You must keep them on your toes!"

Richard Fuld was overjoyed and jumped to his feet, excitedly saying...

Although it's only a $1.2 billion loan, it's already a pretty good breakthrough.

Let's wait and see what happens in Europe and Japan. If new capital is willing to lend, then Lehman Brothers might actually be able to weather this crisis.

Half an hour later, Richard personally arrived at the Maple Capital office building and met with Corwinda.

"Cole, thank you so much. A friend in need is a friend indeed."

Upon meeting, Richard immediately extended his hand and greeted Colvinsa with great enthusiasm, his expression as sincere as could be.

That's the hypocrisy of Wall Street. Richard wouldn't have been so enthusiastic if Cole Windsor hadn't lent a helping hand to Lehman Brothers today.

"No problem, no problem."

Korwinda smiled calmly, already knowing what was going on.

The situation at Lehman Brothers was even worse than Maple Capital had predicted at their meeting.

Otherwise, CEO Richard Fuld certainly wouldn't have come in person.

Although we're all on Wall Street, it's just a few steps from one building to another. We can definitely get there quickly within half an hour by walking and taking the elevator.

So visiting other people's homes is indeed very convenient and simple.

The problem is that Richard Fuld, as the CEO of Lehman Brothers, was in some ways even more powerful than Warren Anderson, the president.

It's worth noting that Lehman Brothers was the fifth largest investment bank in the United States, while Maple Tree Capital was the third. Although there was a difference in the size of the two companies, Richard Fuld's status was actually similar to that of Hela O'Brien.

Well, there is a slight difference, because Hela O'Brien is the CEO and President of Maple Capital, which means that he holds most of the power within the company.

Richard, such a big shot, arrived within about half an hour after hearing that Maple Capital was willing to lend him $1.2 billion.

This is enough to show that Lehman Brothers was in dire need of money.

"Please come to the conference room and sit down to talk."

After exchanging pleasantries, Corwinda spoke first, and Richard nodded, concealing his excitement.

The situation is quite simple: he needs to keep Corwinda calm and make sure the loan is successfully issued.

However, what followed in the negotiations left Richard speechless.

Because Corwinda actually set her sights on those subprime mortgages from Lehman Brothers, wanting to buy them up and short them!

Isn't this a total rip-off?
This also means that Maple Capital is very pessimistic about the US real estate and subprime mortgage market, implying that the current subprime crisis will continue to decline rather than stop and rebound.

How to do?
Richard was sitting in a chair, and although the conference room was filled with cold air, his forehead was still sweating.

He's overthinking and too nervous.

Or perhaps he was simply too terrified.

Lehman Brothers had so many subprime mortgages on its hands, and it lost more than eight billion dollars in the second quarter. The reason it hasn't collapsed yet is because its financial report hasn't been released yet, and also because the company is powerful enough.

After all, it is the fifth largest investment bank in the United States, and its capital is quite strong.

Now, Maple Capital is rushing in to take a bite, and it may be the biggest and thickest bite of the pie.

Although no one knows how widespread the subprime crisis will be or when it will erupt on a large scale, Maple Tree Capital's decision to invest $1.2 billion to short subprime mortgages demonstrates their extreme pessimism.

Richard thought about it for a long time, but still couldn't figure it out.

After a long while, Richard finally took a deep breath and signed his name on the contract.

Corwinda immediately smiled; the deal was finally done.

The following week, Lehman Brothers still did not release its financial report, and announced that the second-quarter financial report would not be released for some time because of a fire in the finance department.

The public will only glance at such news and then forget about it.

However, when investors saw this news, their mentality instantly collapsed, especially those who had bought Lehman Brothers stock, who felt like they wanted to die.

The company had already incurred losses several months ago after the release of its first-quarter financial report, and everyone was hoping that the second-quarter financial report would make up for those losses.

Because the wave of economic globalization is more pronounced nowadays, and the overall global economic trend is still upward, people still have illusions.

Unfortunately, Lehman Brothers was already on the verge of collapse, so of course it wouldn't release its financial report so quickly. The classic excuse for delaying came out: a fire broke out in the finance department!
This reason is not only terrible, but also extremely far-fetched.

Damn it, how come the fire didn't send the finance department and all the company's top executives to meet Satan?

Ordinary stock investors are unaware of the specifics, while big-time retail investors are trying to find connections, and market manipulators are withdrawing immediately.

Because the situation was so unbearable, there must have been problems within Lehman Brothers.

But before the big players could withdraw, Lehman Brothers' short positions suddenly increased, and the number of short positions on the market rose rapidly, leaving everyone dumbfounded.

The dealer took one look, closed his eyes, and said, "Sell it, who cares?"

The current situation clearly indicates that someone knew in advance that Lehman Brothers was going to collapse, so they took advantage of the news of the fire in the finance department to short the company and make a small profit.

No, it's also possible that they'll make a fortune.

The seasoned retail investors were stunned by what they saw, while the ordinary retail investors remained on the sidelines.

Unfortunately, the dominoes soon fell, and retail investors rushed to escape, with no one daring to hold Lehman Brothers stock anymore.

However, at this moment, there are too many orders to sell, and many people are constantly fleeing in a stampede, causing the stock price to continue to fall.

Market sentiment was thus stirred up, and Lehman Brothers' stock price plummeted by 35 percent in just half an hour.

Horror!
Those who held short positions are probably eating their fill right now.

In Harbin, at Harbin Institute of Technology, Wang Jun'an was still reporting to his father about the profits from this wave of business.

Wang Yifei was already drooling with envy. She really wanted to witness such history in person, but unfortunately she couldn't leave right now and had to stay at the astronaut training center for training.

It's really tough.

Even more upset than her was Bai Doufu, because no one had informed her of such a big event.

"Dad, aren't you being too biased? You let my second brother invest, and my eldest sister invested too, why didn't you tell me? I also have my own little stash, I can invest too, it's such a profitable business."

Bai Doufu burst into tears, complaining bitterly.

"Stop. If you cry again, go back to your room and sleep!" Wang Duoyu said with a headache.

After Bai Doufu stopped crying, Wang Duoyu said:
"You're not an adult yet, so you can't attend our family meetings. You'll understand when you turn eighteen. Don't feel like you're missing out now; you'll realize how lucky you are later." (End of Chapter)