I'm back in 1990

Chapter 777: The Ultimate Goal

The first thing Huang Xiaochuan said to Zhang Sui when he saw her at noon the next day was, "How are you? Did you get some rest?"

Zhang Sui smiled and said, "It's great, I haven't slept so soundly in a long time."

The two walked side by side, and Zhang Sui quietly moved back half a body distance, maintaining this distance from her boss throughout.

Huang Xiaochuan nodded and began to introduce the restaurant they were in to Zhang Sui.

"The head chef of this restaurant is a master of Huaiyang cuisine. I've been here once before, and the Huaiyang dishes here are indeed very authentic, so I specially brought you here to try them."

"Thank you! If the boss says it's good, then it must be great!" Zhang Sui flattered at the right moment.

Huang Xiaochuan laughed: "Hahaha, I'm just saying, but don't take it all at face value! You'll have to taste it yourself to know if it's good or not."

During the meal, the two only discussed the lunch menu and didn't mention anything else. Zhang Sui didn't ask any questions either, because she knew this wasn't a place to discuss work. Since they had summoned her back from so far away, the matter they were talking about must be highly confidential.

After lunch, Zhang Sui followed Huang Xiaochuan back to the office and found that it had changed since she came yesterday. The once spacious room now had a medium-sized conference table and related facilities and equipment, and the original floor-to-ceiling windows had been covered by curtains.

Zhang Sui was taken aback for a moment. Fortunately, she was no stranger to this situation. However, to confirm, she took out her phone and checked. Sure enough, the signal in this office was blocked. Zhang Sui was certain that there must be anti-eavesdropping devices in this office.

She immediately became extremely alert; with such a display of force, she was definitely planning something big.

Huang Xiaochuan pointed to the conference table, then said to Zhang Sui, "Have a seat!"

Then Gao Song delivered a document. Zhang Sui glanced at it; it was a confidentiality agreement. She didn't ask any questions or look at it; she simply signed her name on the document.

After Gao Song left, Huang Xiaochuan began to get back to the main topic.

"Take a look at this data first. After you've finished looking at it, we'll discuss the next steps." He said as he inserted the key into the laptop and entered a series of passwords.

He then handed over control of the computer to Zhang Sui, who skillfully opened the folder and began reading quickly.

As a financial industry elite who has worked in the United States for many years, she is very familiar with the data in this report.

This report primarily addresses the US subprime mortgage crisis and the risks associated with financial products derived from it.

In fact, Zhang Sui had also sensed that the risks associated with subprime-related financial derivatives had been increasing recently, but the market remained enthusiastic about them, with large amounts of funds flowing in and out, resulting in massive trading volume and value. If a more specific figure had to be used, the entire Ponzi scheme would now be worth tens of trillions of dollars. The source of this figure is very clear: firstly, the scale of subprime loans alone has already reached 1.2 trillion dollars, and the financial derivatives such as BSE and CDO generated from this have reached tens of trillions of dollars.

With such a massive amount involved, the consequences of a collapse would be unimaginable.

"Will the Federal Reserve raise interest rates?" Zhang Sui had some doubts about this prediction in the report.

In her view, based on current market trends and her forecast for the US economy next year, the possibility of the Federal Reserve raising interest rates is extremely low. The US economy is like a huge engine, running very smoothly and at an ever-increasing speed. Raising interest rates would be like reducing the fuel supply to this engine, which would cause the speed to drop rapidly, leading to a series of unpredictable consequences. Therefore, she is skeptical about this.

But her boss gave her a definite answer: "Yes, as you should have seen, according to macroeconomic analysis and relevant data, the US economy has already reached an overheated state. If it is not curbed, the bubble will only get bigger and bigger. If I were the chairman of the Federal Reserve, I would not hesitate to prick this ever-growing bubble as soon as possible, because once it gets too big, the later it is pricked, the more serious the consequences will be."

Zhang Sui remained silent. The boss was right; it seemed that was indeed the case. If she were in his shoes, she would have made the same decision.

However, it is difficult to predict when this crisis will erupt, which is the most crucial question. Many think tanks have reached this conclusion through research: as long as the economy is on the rise, bubbles will be generated, which is normal. But when they will erupt is the most important question.

However, this question should already have an answer, otherwise her boss wouldn't have called her back. Furthermore, Zhang Sui trusts her boss completely; he accurately predicted the bursting of the internet bubble and its timing beforehand. Therefore, this time, Zhang Sui naturally chooses to unconditionally trust her boss as well.

After all, in macroeconomic theory, her boss is the absolute king, and the Clark Medal is his scepter.

"Boss, I'm listening."

"Open another folder, and I'll explain my plan to you," Huang Xiaochuan said, gesturing for Zhang Sui to open another file within the key folder.

After Zhang Sui opened the window, Huang Xiaochuan said to her, "It's the end of May now. You need to clear out all the bs and cdos we have by the end of this year, that is, before December 31, 2006. If the numbers are too large and we can't clear them all out, we need to find a way to hedge these positions."

By early next year, that is, before February 2007, you should make sure you have a large amount of cash, short-term treasury bonds or other high-quality liquid assets on hand to store up enough ammunition for the coming crisis.

Once you get back, immediately review all investment departments and withdraw from any business involving high leverage.

Zhang Sui nodded and wrote it all down, and she memorized it. This information could not be transmitted through any paper or network; it had to be stored in her mind.

After Huang Xiaochuan finished speaking, he didn't continue, but instead asked Zhang Sui, "You know what to do next, right?"

Zhang Sui already has a general plan for this: "I will immediately activate an offshore hedge fund to prepare for the next step."

Once your instructions arrive, I will immediately short-sell the stocks of investment banks and commercial banks that hold large amounts of subprime-related products, and simultaneously purchase credit default swaps (CDs).

When the market crashes, the stock prices of banks holding large amounts of subprime assets will inevitably plummet, allowing short sellers to reap huge profits. CDS are essentially "insurance" against defaults by these financial institutions; their value will actually soar during a crisis. This kind of precise operation is not Huang Xiaochuan's forte, which is where Zhang Sui's importance becomes apparent.

Huang Xiaochuan couldn't help but applaud him: "Very good! That's it! You don't need to wait for my instructions. I'll let you know now. As soon as the funds are in place, start building the position."

"Received!" Zhang Sui accepted the task readily.

Only then did Huang Xiaochuan reveal his true purpose to Zhang Sui: "After the above plan is completed, there is one more thing you need to do, and that is my ultimate goal."

Zhang Sui sat up straight, staring intently at her boss.

"After the liquidation, our next step is to convert the financial gains into long-term strategic assets. You need to do everything in your power to acquire a bank. We need that valuable financial license and a low-cost source of funding. Do you understand what I mean?"

Zhang Sui replied crisply, "Understood!"

Seeing that his capable subordinate had understood his intentions, Huang Xiaochuan smiled slightly, pressed a button, and all the curtains slowly opened, letting in the sunlight again.

Huang Xiaochuan looked at Zhang Sui and said, "Don't rush back. You can rest for a few days in Shanghai. Once you go back, you won't have time to rest."

"Oh no, boss!" Zhang Sui originally wanted to say no, but after thinking about it, she accepted her boss's kindness.