Sha Zhu's Rebirth in the Courtyard: Starting with Hitting Someone in the Head

Chapter 408 Everyone's Drunk, But One Remains Sober

He Chen looked at the US housing market sentiment and real economy data transmitted back simultaneously, his tone solemn.

"The US housing market has cooled down completely."

"A wave of defaults has already occurred, the collapse of credit at the grassroots level has begun to spread upwards, affecting the entire financial system."

He knew very well that this was just the beginning.

Systemic risks, once they break down, are impossible to stop and will only snowball.

He Xin stared at the position data on the screen, his mindset calm and composed.

Since the trial run began at the end of last year, all the premiums spent and the small unrealized losses incurred in the early stages are insignificant in the face of the current economic climate. What everyone else sees as risk is an opportunity for the He family.

"That old man is truly amazing; calling him a god of finance wouldn't be an exaggeration," He Xin exclaimed. "The market is starting to panic, but that's far from enough. Right now, only small and medium-sized institutions are collapsing. The real collapses of giants, market panic, and a global liquidity crunch are still to come."

"Our current pace is absolutely correct. We are steadily building positions, patiently accumulating strength, and remaining calm and composed."

Just as the three were calmly reviewing the situation, the encrypted private line rang.

He Xin answered immediately.

On the other end of the line, He Yuzhu's voice remained calm and steady, without the slightest ripple, as if the financial turmoil sweeping across Europe and America was just a trivial matter.

"You all saw the market situation in March."

There was no questioning, just a simple confirmation of the facts.

He Xin replied in a deep voice.

"Dad, you're amazing. Everything came true. Subprime mortgage institutions are on the verge of bankruptcy, and market panic is spreading, just as you predicted."

He Yuzhu said calmly, "Don't be surprised, this is just a normal development. Remember, all the turmoil this year was just the prelude."

"Don't accelerate your position increases just because the risks from March have materialized, and don't let short-term market panic affect your mindset. Continue to steadily advance your hedging strategy, improve all overseas trading channels and SPV compliance structures, and ensure all preliminary work is done thoroughly."

"Once this full cycle is over, we'll lock in at least 120 billion in net profit. This year's task is to accumulate enough resources and wait for the ultimate opportunity in the next year or the year after."

In just a few words, the overall plan for the year was finalized once again.

Avoid being rash, impetuous, and greedy for short-term fluctuations.

Stability is the greatest victory.

After hanging up the phone, the trading room fell silent.

Outside the window, Hong Kong's traffic flows busily, and the international financial center remains gleaming. The vast majority of outsiders still don't understand the situation and are still hoping for a market rebound and a continuation of the bull market.

Only the three He brothers knew the truth.

The thunderclap this spring is merely the prelude to this century's financial storm. The real, devastating tsunami is quietly gathering momentum in the not-too-distant future.

The He family, however, had already positioned themselves at the forefront of the storm, with a multi-billion dollar strategy in hand, waiting to reap the rewards.

As April arrived, the situation across the ocean continued to deteriorate.

Unable to withstand the continuous surge in bad debts, New Century Financial formally filed for bankruptcy protection. The news caused quite a stir in the financial circles of Europe and the United States.

But it was just a brief tremor. After a brief dip, the US stock market did not experience a sustained collapse, and many institutions quickly spoke out, saying that this was only a problem within a single industry and would not spread to the overall economy.

He Xiao pulled up the statistical reports on the US housing market and flipped through them page by page.

"New Century has collapsed, but other subprime institutions are still struggling. Many bad debts are covered up by these institutions using various financial means, and the number of defaults is still rising, but the market is deliberately downplaying this."

He clearly saw that risks were accumulating, but they were being suppressed by market sentiment. The public couldn't see them, and most institutions didn't want to see them.

He Xin stared at the CDS position records on the terminal. The positions were being rolled out steadily as planned, without any sudden increases. Despite consistently paying substantial premiums each month, the account balance remained at a manageable unrealized loss. The market was indeed moving in the direction they had predicted; it wasn't time to cash in the profits yet.

"This is just the first wave of impact," He Xin said slowly. "The market still harbors illusions. As long as there are illusions, there won't be a real stampede. Many investors see a giant fall and think the bad news is over, so they start buying at the bottom."

He Xiao nodded slightly. "This is the kind of bull trap that Dad warned us to be wary of. If we lose our composure and go all in now, we'll easily be worn down by the back-and-forth fluctuations later on. We just need to stick to our established rhythm."

For the remainder of April, the market oscillated between these contradictory states. Bad news kept emerging, with small and medium-sized subprime lending institutions constantly falling into losses, laying off staff, and scaling back their operations.

However, the market index dips briefly but quickly rebounds. Bullish sentiment remains dominant, with the vast majority of analysts still believing that a widespread collapse in the US housing market is unlikely. The market fluctuates, showing no signs of a sudden collapse, only a steady accumulation of strength beneath the surface.

Time slowly slipped into May.

The weather in Hong Kong is getting hotter every day. The three brothers continue to do their jobs.

He Xiao mainly focused on the security of all funds and the entire offshore compliance structure, repeatedly checking the documents of each SPV layer to ensure that there were no legal loopholes in the fund channels.

He Xin continued to advance the hedging positions in small steps according to the original schedule, checking the transactions daily, avoiding being greedy or reckless. He Chen continued to collect fundamental information on companies in various industries in the United States, compiling and filing a batch of high-quality companies that could be invested in later, and marking them.

The three brothers, immersed in the market, watched the prices fluctuate daily, their mindset constantly being tested. They had completely trusted their father's judgment, but being in a volatile market inevitably brought them inner trials.

Despite the clear signs of crisis, the market has repeatedly rebounded, and the outside world is filled with euphoria. An ordinary investor would easily begin to doubt their own judgment.

Fortunately, they understood that all these fluctuations were within the script their father had previously described. The three felt neither elation nor restlessness, but rather a calm and patient anticipation. They knew the main event hadn't even begun, and all the current ups and downs were merely preparation.

Far away in a Beijing courtyard house, the scene is quite different.

He Yuzhu won't be constantly in front of the financial terminal. During the day, he can drink tea or take a stroll as he pleases. He doesn't need to worry about the martial arts base; He Yang and Zhou Heming will arrange everything. He'll only check the terminal in his study when there are important news alerts.

Of the children remaining in the courtyard, Jingsong, Jingyi, Jingzhao, and Jingchuan are taught traditional classics, calligraphy, and classical Chinese texts by Lou Xiao'e every day. In the afternoons, the sound of children reading aloud can often be heard coming from the east wing.

Sometimes, He Yuzhu would sit on the porch, watching the children recite their lessons, their heads swaying as they did so, and he felt a deep sense of peace. Thousands of miles away, the financial world was rife with undercurrents, but his own courtyard remained peaceful and quiet. One outside, one inside, two worlds apart.

In late May, overseas markets experienced another significant recovery.

US stock indices have rebounded, prompting numerous financial media outlets to proclaim that the subprime mortgage crisis is over and the worst is behind them. Much of the capital that had previously fled the market to avoid risk has now returned.

Inside the Hong Kong trading room, the three brothers remained calm as they watched the market recover on the screen.

He Chen placed a newly printed list of mortgage default statistics on the table.

"It's just a superficial recovery. The underlying overdue figures haven't decreased; this is being selectively ignored by the market. The risks haven't disappeared; they've just been temporarily covered up."

He Xin tapped her fingertips on the table. "That's exactly what's most harmful. It makes everyone lower their guard, so that when the real storm comes, they'll be caught completely off guard."

He Xiao looked at the screen, her tone calm.

Outside the window, Hong Kong's skyscrapers stand tall, and the streets remain bustling. Most people in the world are immersed in a false sense of peace. Only the Ho family knows that a much larger storm is quietly brewing.