642.Chapter 642 The financial crisis broke out

As a result, no one was disappointed by Zhou Midnight. The next day, Barclays Bank responded to Zhou Midnight and was willing to accept Zhou Midnight's terms. The two parties joined forces to hunt down Barclays Bank's high-quality assets to avoid competition.

In the evening, the management team represented by Agius flew from London to New York and had secret consultations with Zhou Ziye. The two parties made statistics on the high-quality assets of Lehman Bank, and respectively proposed acquisitions to Lehman Bank. Application.

However, an even more shocking news the next day made their application unobtrusive, because only two of the four major investment banks, Goldman Sachs and Morgan Stanley, also proposed to the Federal Reserve to become a bank holding company. Request.

This news was almost the same as the bankruptcy of Lehman Bank and shocked everyone. The U.S. stock market fell sharply by more than 30% in three days like a landslide. Almost all people have no confidence in the current market, and the collapse is unstoppable.

Beginning Monday, Lehman Brothers, the fourth largest investment bank, filed for bankruptcy protection, and Xianlin Securities, the third largest investment bank, was acquired by Bank of America. The three major indexes of the New York stock market fell sharply, setting the biggest one-day drop since the September 11 incident. Some people say that this is a once-in-a-hundred-year earthquake, and some people use the financial turmoil as a metaphor for this crisis. This financial turmoil also reminds many people of the Great Depression of 1929. The stock market plummeted since 200, and the stock market's performance has surpassed the 1929 stock market crash, becoming the worst financial crisis in American history.

Lehman Brothers' stock has fallen to only 7% of what it was a year ago. After they declared bankruptcy, they were completely uninterested. Like Lehman, there are many companies whose stocks have fallen to less than 10% of their original value. In the past three days, the number of stockholders who have jumped from the building has exceeded triple digits.

The bankruptcy committee of Lehman Brothers did not hesitate. They approved the acquisition applications made by the Bank of East Asia and Barclays Bank on the 18th and reported them to the Federal Reserve.

The Federal Reserve soon announced on the 20th that it would approve the request of the two banks to sell the Lehman headquarters in New York, two data centers, and some investment management assets in the United States to them at Midnight Zhou.

Zhou Ziye acquired Lehman's bank headquarters building and two data centers for 1.35 billion yuan. Barclays Bank, on the other hand, obtained part of its assets under management in New York at a price of 700 million U.S. dollars.

At the same time, Lehman Bank's high-quality management assets of more than 30 billion U.S. dollars in the United States were also put on the market by the bankruptcy committee, attracting a large number of giant crocodiles.

On the 21st, the Federal Reserve approved the application of Goldman Sachs and Morgan Stanley to switch from an investment bank to a commercial bank. This was a rapid forced transformation. Since then, Goldman Sachs and Morgan Stanley can set up branches of commercial banks to absorb deposits, and they can also permanently enjoy the right to obtain emergency loans from the Federal Reserve together with other commercial banks, which are expected to tide over the difficulties. In fact, it was precisely by absorbing people's deposits that these two investment banks successfully passed the difficult times.

On the 22nd, Japan's largest securities company Nomura Holdings and Lehman Brothers signed two consecutive agreements to acquire Lehman's business in the Asia-Pacific region except South Korea and its businesses in Europe and the Middle East. French electric power giant edf acquired its subsidiary company eep from Lehman Brothers, a gas company located in Europe, edf integrated its gas supply business through the acquisition of eep. On the same day, the two largest private capital operating companies in the United States reached an agreement with Lehman Brothers to spend US$2.15 billion to acquire a number of investment management businesses under Lehman Brothers.

On the 24th, Guangbo Investment, Bank of East Asia, Barclays Bank, Goldman Sachs, Morgan Stanley, and Bank of America, six banks and institutions, spent 32 billion U.S. dollars to purchase more than four of Lehman Brothers Bank. Hundreds of billions of dollars in assets and bonds under management, while assuming Lehman's more than 380 billion U.S. dollars of debt.

Although this business seems to be not profitable now, it is purely to relieve the burden of the US government and Lehman Bank, but Zhou Ziye is very clear that when the economy improves, these bonds will once again become priceless.

Of course, with the exception of Zhou Midnight, everyone else has no bottom, including Goldman Sachs and Morgan Stanley, they did not expect that the bankruptcy of Lehman would cause such a big crisis. This is where they made a mistake. The current financial crisis has not only scared ordinary people, but also made them feel that things are out of control and become frightened.

Only Zhou Ziye knows that it only takes two or three years for things to get better. Now spending 32 billion U.S. dollars, it can make a profit of more than 30 billion in two to three years. Of course, this business can be done.

As time entered October, Nomura Holdings once again signed an agreement with Lehman to acquire Lehman Brothers' back-office business in India. The once glorious Lehman had been dismembered and torn apart in less than three weeks. At this point, Lehman has finally fallen to the bottom, and they still have more than 200 billion US dollars of book debt in their hands, as well as "junk bonds" in their hands.

Even after the bankruptcy protection period, the value of these bonds rebounds, but the expenses incurred and the value at that time will be unprofitable. Therefore, not only Zhou Ziye, but also other people have no interest in these bonds.

During this period, the U.S. government has also been seeking reforms. The Bush administration formally submitted a bill to rescue the financial system to the U.S. Congress. The Treasury Department will be authorized to purchase up to $700 billion in non-performing mortgage assets. The US government hopes to solve all problems within two years, and hopes to solve this problem before it affects the real economy, so as to avoid the Great Depression like the 1930s.

However, during the previous subprime mortgage crisis, the U.S. government and the U.S. consortium were vicious against foreign institutions, pitting almost all foreign institutions into it. Other countries have completely abandoned the United States. Even their younger brothers, Japan and the United Kingdom, the finance ministers and central bank governors of the Western Group of Seven countries have said after telephone consultations that other members of the Western Group of Seven countries have refused to participate in the US financial rescue plan.

This moment even plunged the United States into the abyss. The largest savings and loan bank in the United States, Seattle-based Washington Mutual Corporation, was seized and taken over by the Federal Deposit Insurance Corporation on the 25th local time, becoming another large-scale bankruptcy in the United States. Bank.

On September 29, the U.S. House of Representatives rejected the 700 billion dollar rescue plan. U.S. stocks plummeted. The Dow plunged by 777 points. The entire U.S. market was weak and the Dow continued to sink.

The U.S. House of Representatives rejected the $700 billion bailout plan, and the Senate tried to save it and is scheduled to vote on the case on Wednesday.

On October 2, the US Senate voted 74 to 25 to pass the new version of the 700 billion US dollar rescue plan proposed by the Bush administration. The total amount of the rescue plan voted by the US Senate increased from the original 700 billion US dollars to 850 billion US dollars. Provisions have been added to extend the tax reduction plan and increase the bank deposit insurance ceiling from US$100,000 in 2008 to US$250,000.

The purpose is to appease the nervous American public and support economic growth. It is expected to help the global stock market and put pressure on the House of Representatives. Some members of the House of Representatives are considering turning to support the bill.

Sure enough, in the House of Representatives vote the next day, the House of Representatives finally passed the bailout bill, letting everyone breathe a sigh of relief. Unfortunately, the stock market that day did not rise because of this good news, but continued to decline.

The rescue plan authorizes the government to purchase the non-performing assets of banks and other financial institutions to help them get out of trouble. However, the U.S. Treasury Department and the Federal Reserve have many specific problems that have not been resolved.

Perhaps the most difficult problem they face is how to determine the purchase price for a large number of non-performing assets. With no potential buyers, many non-performing assets and securities currently have no market prices at all. If the purchase price standard set by the government is quite low, it will help protect the interests of taxpayers, but it will not help financial institutions to make up for losses and continue to develop. This is contrary to the original purpose of the rescue plan. And if the acquisition at a high price means that American taxpayers will pay a higher price, it may cause public dissatisfaction.

Treasury Secretary Paulson has set up a work team to implement the rescue plan, and will recruit five to ten asset management companies to help rescue the market. This team will be responsible for the definition of non-performing assets of the bank, asset value assessment and acquisitions. In the past few weeks, the Treasury Department has contacted Blackrock Corporation, Pacific Investment Management Corporation and Legg Mason Corporation. These three asset management companies provided informal advisory services to the Treasury Department during the White House's negotiation of the rescue plan with Congress.

However, where does the money come from? This is a big question. The U.S. government's own constraints and pressure from domestic taxpayers have determined that this huge sum of money cannot be borne by the U.S. government, that is, the U.S. taxpayers. The US government will eventually pay for the bailout by selling its own debt or issuing national debt. Economists estimate that the scale of US foreign debt will therefore be pulled up to more than 70% of GDP. The high scale of foreign debt has seriously affected the enthusiasm of foreign investors for U.S. Treasury bonds. Other members of Europe and the G7 have not shown a substantial response to the US rescue plan, and Japan and China, the largest creditors of the US, have also become more cautious.

Fortunately, during the financial crisis, the performance of the US real economy was not bad. In the financial market, confidence is the key, so the plan is to restore market confidence first. If the market panic subsides, banks resume lending, and mortgage loans become easy to obtain, it will encourage housing prices to rise or stop falling.

The U.S. government has also taken some related measures recently. For example, the government provided guarantees for the US$3.4 trillion money market mutual funds, and banned short selling of financial stocks. In other words, short selling is not allowed. The consequences of fines and annulment of treaties.

Even Treasury Secretary Paulson and Fed Chairman Ben Bernanke, who designed the plan, dare not guarantee that the new plan and the old mechanism will be successful. The success of the rescue plan depends on many factors. The market is becoming extremely sensitive and fragile. It is also crucial that other developed countries adopt relevant cooperative measures. This is reflected in the plan's massive stock market rebound after the announcement, or the plan's massive stock market decline while awaiting approval from Congress. For the US Congress, saving or not saving is a difficult choice.

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