Book One: I Came, I Saw, I Conquered!

Book One: I Came, I Saw, I Conquered! Chapter Sixteen: Crazy Trades

Markbaum pored over the documents in his hands. They were an analysis Zhang Yu had spent the past two days and nights putting together, laying out in detail why the subprime mortgage market would collapse.

"Come on, what's my little bit of money worth? Wall Street is too complicated for me to handle." Markbaum gave a self-deprecating laugh. "I've heard that a fund manager on Wall Street named John Paulson bought two billion dollars' worth of CDS a while ago, and he'll probably buy even more. Before that, he was a nobody, and supposedly Soros is backing him."

"How much capital do you have? If it's too little, I'm afraid there won't be much I can do for you," Markbaum asked, somewhat surprised.

That was how it worked: Zhang Yu put up forty million dollars and used ten times leverage to buy four hundred million dollars' worth of CDS tied to 3B-rated securities. But he didn't need to pay Deutsche Bank four hundred million dollars upfront.

That was why he wanted to help Markbaum.

His voice was quiet, but to Markbaum it sounded exceptionally cold.

Markbaum was still puzzled about what kind of investment could bring such huge returns in so little time. But he knew better than to pry, and agreed without hesitation.

Zhang Yu didn't rush him. He waited patiently beside him.

"Of course. I've been waiting for this day." A smile tugged at Zhang Yu's lips.

The two exchanged phone numbers. Markbaum drove Zhang Yu back to Butler University, then sped off in his Ford Mustang.

"..."

There was no answer from the other end of the phone.

"That's right. Are you free on Monday? I've arranged to meet Greg Lippmann, and we'll go to Wall Street to complete the trade," Markbaum said.

"So I need to make more money."

"I have forty million dollars. It's not much, but it should be enough to take part in CDS trading."

Soon an hour had passed. Markbaum's brow furrowed more and more as he reached the final pages of the report.

"Millions are wailing, while we laugh!" He turned to look west, toward Butler University's gates. His gaze seemed to stretch thousands of miles, all the way to the Golden Gate Bridge standing on the distant West Coast.

It was an almost perfect financial instrument for shorting subprime securities.

At last, he let out a long sigh, looked up, and handed the documents back to Zhang Yu.

Zhang Yu came back to himself and followed him. He went with Markbaum, his assistant, and his bodyguard to Deutsche Bank.

Markbaum was still puzzled about what kind of investment could bring such huge returns in so little time. But he knew better than to pry, and agreed without hesitation.

"Mark, you sound angry," Zhang Yu said unhurriedly.

"Mr. Baum, do you still want to go long on subprime securities?" Zhang Yu took the documents and spoke calmly.

It was an almost perfect financial instrument for shorting subprime securities.

The two exchanged phone numbers. Markbaum drove Zhang Yu back to Butler University, then sped off in his Ford Mustang.

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"I want to short the subprime market, but I don't know how to get started. I need you to help me get past the ISDA Master Agreement requirement. Otherwise, I can't trade CDS directly," Zhang Yu said.

Of course, if subprime securities plunged on the trading market, he would earn a staggering return of at least 1,200 percent on his principal!

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

"All right, you're right, you heartless bastard..." Markbaum sounded helpless. "I've already contacted Greg Lippmann. I'm planning to put in a billion dollars, max out the leverage, and convert it all into CDS."

"Just call me Mark. Thanks, Ronan. I never imagined the real estate market could be this terrifying." Markbaum shook his head as he started the car. In a low voice, he said, "I'll send people to investigate across the country. There's definitely a bubble in the subprime market. Right now, I just want to know how big this damn bubble is and when it'll burst!"

Markbaum was still puzzled about what kind of investment could bring such huge returns in so little time. But he knew better than to pry, and agreed without hesitation.

"Millions are wailing, while we laugh!"

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

"If you get involved, the financial crisis will get worse. It won't change the overall picture, but I imagine it'll leave thousands more people homeless. You're such a kind person—you wouldn't make money this way, surely?"

A week later, Zhang Yu was reading in his apartment when Markbaum called him.

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"If you get involved, the financial crisis will get worse. It won't change the overall picture, but I imagine it'll leave thousands more people homeless. You're such a kind person—you wouldn't make money this way, surely?"

"Ronan, what are you staring at? Let's go," Markbaum called from ahead.

They found Greg Lippmann, Deutsche Bank's chief CDS trader. Markbaum put up five hundred million dollars, and Zhang Yu put up forty million. Both used ten times leverage, buying fifty billion and four billion dollars' worth of CDS products, respectively.

At last, he let out a long sigh, looked up, and handed the documents back to Zhang Yu.

His voice was quiet, but to Markbaum it sounded exceptionally cold.

"Mark, I think I can see the future."

This was a reckless trade that wagered everything.

Zhang Yu watched the car disappear into the distance, a faint smile appearing on his face.

"Come on, what's my little bit of money worth? Wall Street is too complicated for me to handle." Markbaum gave a self-deprecating laugh. "I've heard that a fund manager on Wall Street named John Paulson bought two billion dollars' worth of CDS a while ago, and he'll probably buy even more. Before that, he was a nobody, and supposedly Soros is backing him."

A week later, Zhang Yu was reading in his apartment when Markbaum called him.

"We don't need to worry about anyone else. We just need to get our own share," Zhang Yu said reassuringly.

"Thanks."

"Then I'll be counting on you," Zhang Yu said gratefully.

"This will be a financial crisis that affects the whole country—no, the whole world..." Markbaum murmured.

"Ronan, thanks. If it weren't for you, I'd have kept going long on subprime securities. When the market crashed, I would've gone bankrupt. I'd have had no choice but to jump off a building. I owe you a favor—a big one. If you ever need help, just ask."

Markbaum was still puzzled about what kind of investment could bring such huge returns in so little time. But he knew better than to pry, and agreed without hesitation.

Silence settled over the car. After a while, Markbaum spoke gravely:

Silence settled over the car. After a while, Markbaum spoke gravely:

This was the first time he had ever told anyone his goal. If he weren't planning to short the subprime market with Markbaum, he wouldn't have told a soul.

Soon an hour had passed. Markbaum's brow furrowed more and more as he reached the final pages of the report.

"Ronan, thanks. If it weren't for you, I'd have kept going long on subprime securities. When the market crashed, I would've gone bankrupt. I'd have had no choice but to jump off a building. I owe you a favor—a big one. If you ever need help, just ask."

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"I have forty million dollars. It's not much, but it should be enough to take part in CDS trading."

In his previous life, he'd been an investment analyst, but he'd never been here. Now he was a basketball coach, carrying a fortune as he stepped onto this street.

"What's your dream? To become a billionaire? If that's all, I think you're about to make it," Markbaum joked.

He'd heard a lot about Zhang Yu from Rickert. The young man was supposedly studying in the United States on a scholarship, and came from an ordinary family. Where had he gotten the money to enter the financial market?

On Monday, Zhang Yu flew to New York with Markbaum on his private jet.

The two exchanged phone numbers. Markbaum drove Zhang Yu back to Butler University, then sped off in his Ford Mustang.

Zhang Yu paused to think, then said, "Forty million? Where did you get that much money?"

Markbaum blurted out the question, then realized he'd let something slip. "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

Of course, if subprime securities plunged on the trading market, he would earn a staggering return of at least 1,200 percent on his principal!

"That's right. Are you free on Monday? I've arranged to meet Greg Lippmann, and we'll go to Wall Street to complete the trade," Markbaum said.

"Whoa, an NBA team owner in his twenties? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Why not? I want to be an NBA championship-winning head coach."

"All right, you're right, you heartless bastard..." Markbaum sounded helpless. "I've already contacted Greg Lippmann. I'm planning to put in a billion dollars, max out the leverage, and convert it all into CDS."

Markbaum had already signed the ISDA Master Agreement, since he was able to go long on subprime securities.

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"Forty million is enough. I can get you set up with an ISDA agreement at Deutsche Bank, currently the biggest CDS seller in the market. I can introduce you to their trader Greg Lippmann. He called me the day before yesterday and was pushing CDS hard."

Though he had forty million dollars, CDS weren't sold on the open market. He couldn't buy them even if he wanted to.

"Mr. Baum, do you still want to go long on subprime securities?" Zhang Yu took the documents and spoke calmly.

"But you'll need to set up an investment company first. Individuals can't sign an ISDA agreement. If you trust me, I can help with that, too," Markbaum reminded him.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

Markbaum was still puzzled about what kind of investment could bring such huge returns in so little time. But he knew better than to pry, and agreed without hesitation.

He'd heard a lot about Zhang Yu from Rickert. The young man was supposedly studying in the United States on a scholarship, and came from an ordinary family. Where had he gotten the money to enter the financial market?

A week later, Zhang Yu was reading in his apartment when Markbaum called him.

"How much capital do you have? If it's too little, I'm afraid there won't be much I can do for you," Markbaum asked, somewhat surprised.

"'Millions are wailing, while we laugh!'"

They found Greg Lippmann, Deutsche Bank's chief CDS trader. Markbaum put up five hundred million dollars, and Zhang Yu put up forty million. Both used ten times leverage, buying fifty billion and four billion dollars' worth of CDS products, respectively.

On Monday, Zhang Yu flew to New York with Markbaum on his private jet.

"Come on, what's my little bit of money worth? Wall Street is too complicated for me to handle." Markbaum gave a self-deprecating laugh. "I've heard that a fund manager on Wall Street named John Paulson bought two billion dollars' worth of CDS a while ago, and he'll probably buy even more. Before that, he was a nobody, and supposedly Soros is backing him."

Silence settled over the car. After a while, Markbaum spoke gravely:

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"Of course. I've been waiting for this day." A smile tugged at Zhang Yu's lips.

"This will be a financial crisis that affects the whole country—no, the whole world..." Markbaum murmured.

This was the first time he had ever told anyone his goal. If he weren't planning to short the subprime market with Markbaum, he wouldn't have told a soul.

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

This was why he wanted to help Markbaum.

His voice was quiet, but to Markbaum it sounded exceptionally cold.

That was how it worked: Zhang Yu put up forty million dollars and used ten times leverage to buy four hundred million dollars' worth of CDS tied to 3B-rated securities. But he didn't need to pay Deutsche Bank four hundred million dollars upfront.

"Nothing happened. I just got lucky and made a successful investment over the past two months," Zhang Yu said with a smile.

"Mark, I think I can see the future."

"Mark, I think I can see the future."

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

Though he had forty million dollars, CDS weren't sold on the open market. He couldn't buy them even if he wanted to.

"Mark, you sound angry," Zhang Yu said unhurriedly.

Zhang Yu left Deutsche Bank feeling as though he'd put down a tremendous burden. He looked up at the narrow strip of sky and suddenly smiled.

Markbaum was still puzzled about what kind of investment could bring such huge returns in so little time. But he knew better than to pry, and agreed without hesitation.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

That was how it worked: Zhang Yu put up forty million dollars and used ten times leverage to buy four hundred million dollars' worth of CDS tied to 3B-rated securities. But he didn't need to pay Deutsche Bank four hundred million dollars upfront.

This was why he wanted to help Markbaum.

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

That meant that if subprime securities kept rising for ten months, Zhang Yu would lose everything, unless he put in more money.

This was why he wanted to help Markbaum.

"Mark, you sound angry," Zhang Yu said unhurriedly.

"Forty million is enough. I can get you set up with an ISDA agreement at Deutsche Bank, currently the biggest CDS seller in the market. I can introduce you to their trader Greg Lippmann. He called me the day before yesterday and was pushing CDS hard."

Though he had forty million dollars, CDS weren't sold on the open market. He couldn't buy them even if he wanted to.

"Mr. Baum, do you still want to go long on subprime securities?" Zhang Yu took the documents and spoke calmly.

"But you'll need to set up an investment company first. Individuals can't sign an ISDA agreement. If you trust me, I can help with that, too," Markbaum reminded him.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"Ronan, thanks. If it weren't for you, I'd have kept going long on subprime securities. When the market crashed, I would've gone bankrupt. I'd have had no choice but to jump off a building. I owe you a favor—a big one. If you ever need help, just ask."

"Forty million is enough. I can get you set up with an ISDA agreement at Deutsche Bank, currently the biggest CDS seller in the market. I can introduce you to their trader Greg Lippmann. He called me the day before yesterday and was pushing CDS hard."

"Whoa, an NBA team owner in his twenties? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

Zhang Yu paused, then continued, "Millions are wailing, while we laugh!"

"Why not? I want to be an NBA championship-winning head coach."

"Just call me Mark. Thanks, Ronan. I never imagined the real estate market could be this terrifying." Markbaum shook his head as he started the car. In a low voice, he said, "I'll send people to investigate across the country. There's definitely a bubble in the subprime market. Right now, I just want to know how big this damn bubble is and when it'll burst!"

A week later, Zhang Yu was reading in his apartment when Markbaum called him.

"But you'll need to set up an investment company first. Individuals can't sign an ISDA agreement. If you trust me, I can help with that, too," Markbaum reminded him.

"You go ahead," Markbaum said. He wasn't surprised at all; he didn't think he was so charming that Zhang Yu would run around on his behalf.

Zhang Yu watched the car disappear into the distance, a faint smile appearing on his face.

"Just call me Mark. Thanks, Ronan. I never imagined the real estate market could be this terrifying." Markbaum shook his head as he started the car. In a low voice, he said, "I'll send people to investigate across the country. There's definitely a bubble in the subprime market. Right now, I just want to know how big this damn bubble is and when it'll burst!"

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Forty million is enough. I can get you set up with an ISDA agreement at Deutsche Bank, currently the biggest CDS seller in the market. I can introduce you to their trader Greg Lippmann. He called me the day before yesterday and was pushing CDS hard."

"I have forty million dollars. It's not much, but it should be enough to take part in CDS trading."

They found Greg Lippmann, Deutsche Bank's chief CDS trader. Markbaum put up five hundred million dollars, and Zhang Yu put up forty million. Both used ten times leverage, buying fifty billion and four billion dollars' worth of CDS products, respectively.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

Though he had forty million dollars, CDS weren't sold on the open market. He couldn't buy them even if he wanted to.

If subprime securities kept rising steadily, he'd only need to pay a monthly premium of one percent on the four hundred million dollars—four million dollars—until the forty million was gone.

Markbaum pored over the documents in his hands. They were an analysis Zhang Yu had spent the past two days and nights putting together, laying out in detail why the subprime mortgage market would collapse.

Silence settled over the car. After a while, Markbaum spoke gravely:

CDS products were tied to CDOs in the subprime market. They came in different ratings, from highest to lowest: 3A, 2A, A, 3B, 2B, and B. 3A-rated bonds were high-quality bonds backed by the government, with the lowest risk and lowest returns. B-rated bonds carried the highest risk and the highest returns.

"Of course not. I want to become an NBA championship-winning head coach."

"All right, you're right, you heartless bastard..." Markbaum sounded helpless. "I've already contacted Greg Lippmann. I'm planning to put in a billion dollars, max out the leverage, and convert it all into CDS."

Markbaum had already signed the ISDA Master Agreement, since he was able to go long on subprime securities.

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"Forty million is enough. I can get you set up with an ISDA agreement at Deutsche Bank, currently the biggest CDS seller in the market. I can introduce you to their trader Greg Lippmann. He called me the day before yesterday and was pushing CDS hard."

"Mark, I think I can see the future."

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"Nothing happened. I just got lucky and made a successful investment over the past two months," Zhang Yu said with a smile.

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

Zhang Yu wasn't American and didn't feel much sympathy for the American people.

Silence settled over the car. After a while, Markbaum spoke gravely:

Markbaum pored over the documents in his hands. They were an analysis Zhang Yu had spent the past two days and nights putting together, laying out in detail why the subprime mortgage market would collapse.

"..."

This was the first time he had ever told anyone his goal. If he weren't planning to short the subprime market with Markbaum, he wouldn't have told a soul.

Zhang Yu paused, then continued:

Markbaum had already signed the ISDA Master Agreement, since he was able to go long on subprime securities.

"Ronan, what are you staring at? Let's go," Markbaum called from ahead.

"Millions are wailing, while we laugh!"

Zhang Yu watched the car disappear into the distance, a faint smile appearing on his face.

"If you get involved, the financial crisis will get worse. It won't change the overall picture, but I imagine it'll leave thousands more people homeless. You're such a kind person—you wouldn't make money this way, surely?"

"Just call me Mark. Thanks, Ronan. I never imagined the real estate market could be this terrifying." Markbaum shook his head as he started the car. In a low voice, he said, "I'll send people to investigate across the country. There's definitely a bubble in the subprime market. Right now, I just want to know how big this damn bubble is and when it'll burst!"

"Mark, I think I can see the future."

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"..."

"But you'll need to set up an investment company first. Individuals can't sign an ISDA agreement. If you trust me, I can help with that, too," Markbaum reminded him.

"If you get involved, the financial crisis will get worse. It won't change the overall picture, but I imagine it'll leave thousands more people homeless. You're such a kind person—you wouldn't make money this way, surely?"

"Just call me Mark. Thanks, Ronan. I never imagined the real estate market could be this terrifying." Markbaum shook his head as he started the car. In a low voice, he said, "I'll send people to investigate across the country. There's definitely a bubble in the subprime market. Right now, I just want to know how big this damn bubble is and when it'll burst!"

"Mark, I think I can see the future."

"Most loan agreements clearly state that adjustable rates will take effect in 2007. When that happens, interest rates will soar. Many people won't be able to pay their suddenly doubled mortgage payments, and defaults on subprime loans across the country will skyrocket. The whole subprime market will burst like a balloon." Zhang Yu spoke calmly.

"..."

"Nothing happened. I just got lucky and made a successful investment over the past two months," Zhang Yu said with a smile.

"Millions are wailing, while we laugh!"

Zhang Yu looked at the car disappearing into the distance, a faint smile appearing on his face.

"Ronan, thanks. If it weren't for you, I'd have kept going long on subprime securities. When the market crashed, I would've gone bankrupt. I'd have had no choice but to jump off a building. I owe you a favor—a big one. If you ever need help, just ask."

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

At last, he let out a long sigh, looked up, and handed the documents back to Zhang Yu.

"If you get involved, the financial crisis will get worse. It won't change the overall picture, but I imagine it'll leave thousands more people homeless. You're such a kind person—you wouldn't make money this way, surely?"

"All right, you're right, you heartless bastard..." Markbaum sounded helpless. "I've already contacted Greg Lippmann. I'm planning to put in a billion dollars, max out the leverage, and convert it all into CDS."

"Why does money have anything to do with it? You're too young. No team would hire you to coach," Markbaum said, puzzled.

"Mark, I think I can see the future."

"Whoa, ten billion dollars! Mark, why are you still in Indiana?"

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

He turned to look west, toward Butler University's gates. His gaze seemed to stretch thousands of miles, all the way to the Golden Gate Bridge standing on the distant West Coast.

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Why does money have anything to do with it? You're too young. No team would hire you to coach," Markbaum said, puzzled.

"Mark, I think I can see the future."

"Whoa, ten billion dollars! Mark, why are you still in Indiana?"

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

He turned to look west, toward Butler University's gates. His gaze seemed to stretch thousands of miles, all the way to the Golden Gate Bridge standing on the distant West Coast.

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"I have forty million dollars. It's not much, but it should be enough to take part in CDS trading."

They found Greg Lippmann, Deutsche Bank's chief CDS trader. Markbaum put up five hundred million dollars, and Zhang Yu put up forty million. Both used ten times leverage, buying fifty billion and four billion dollars' worth of CDS products, respectively.

On Monday, Zhang Yu flew to New York with Markbaum on his private jet.

"Come on, what's my little bit of money worth? Wall Street is too complicated for me to handle." Markbaum gave a self-deprecating laugh. "I've heard that a fund manager on Wall Street named John Paulson bought two billion dollars' worth of CDS a while ago, and he'll probably buy even more. Before that, he was a nobody, and supposedly Soros is backing him."

Silence settled over the car. After a while, Markbaum spoke gravely:

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"Of course. I've been waiting for this day." A smile tugged at Zhang Yu's lips.

"This will be a financial crisis that affects the whole country—no, the whole world..." Markbaum murmured.

This was the first time he had ever told anyone his goal. If he weren't planning to short the subprime market with Markbaum, he wouldn't have told a soul.

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

This was why he wanted to help Markbaum.

His voice was quiet, but to Markbaum it sounded exceptionally cold.

"Why does money have anything to do with it? You're too young. No team would hire you to coach," Markbaum said, puzzled.

"Once I have enough money to buy a team, I'll be its head coach," Zhang Yu said calmly.

"Millions are wailing, while we laugh!"

The narrow street before him was lined with towering buildings that blocked almost all the sky, and crowded with pedestrians. Zhang Yu was filled with emotion.

This was a reckless trade that wagered everything.

At last, he let out a long sigh, looked up, and handed the documents back to Zhang Yu.

That was how it worked: Zhang Yu put up forty million dollars and used ten times leverage to buy four hundred million dollars' worth of CDS tied to 3B-rated securities. But he didn't need to pay Deutsche Bank four hundred million dollars upfront.

This was a reckless trade that wagered everything.

"Ronan, the investigations I sent people to conduct in more than a dozen cities have turned up something horrifying. The subprime market isn't a bubble—it's a powder keg, like the Balkans before World War I. It's about to explode, and people all over America are still buying houses. Those bankers belong in hell. Fuck!"

This was a reckless trade that wagered everything.

That was how it worked: Zhang Yu put up forty million dollars and used ten times leverage to buy four hundred million dollars' worth of CDS tied to 3B-rated securities. But he didn't need to pay Deutsche Bank four hundred million dollars upfront.

"Ronan, what are you staring at? Let's go," Markbaum called from ahead.

A week later, Zhang Yu was reading in his apartment when Markbaum called him:

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"Ronan, what are you staring at? Let's go," Markbaum called from ahead.

"Of course. I've been waiting for this day." A smile tugged at Zhang Yu's lips.

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

He'd heard a lot about Zhang Yu from Rickert. The young man was supposedly studying in the United States on a scholarship, and came from an ordinary family. Where had he gotten the money to enter the financial market?

This was an almost perfect financial instrument for shorting subprime securities.

"Forty million is enough. I can get you set up with an ISDA agreement at Deutsche Bank, currently the biggest CDS seller in the market. I can introduce you to their trader Greg Lippmann. He called me the day before yesterday and was pushing CDS hard."

"I have forty million dollars. It's not much, but it should be enough to take part in CDS trading."

They found Greg Lippmann, Deutsche Bank's chief CDS trader. Markbaum put up five hundred million dollars, and Zhang Yu put up forty million. Both used ten times leverage, buying fifty billion and four billion dollars' worth of CDS products, respectively.

"Come on, what's my little bit of money worth? Wall Street is too complicated for me to handle." Markbaum gave a self-deprecating laugh. "I've heard that a fund manager on Wall Street named John Paulson bought two billion dollars' worth of CDS a while ago, and he'll probably buy even more. Before that, he was a nobody, and supposedly Soros is backing him."

Silence settled over the car. After a while, Markbaum spoke gravely:

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"Of course. I've been waiting for this day." A smile tugged at Zhang Yu's lips.

"This will be a financial crisis that affects the whole country—no, the whole world..." Markbaum murmured.

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

That was why he wanted to help Markbaum.

His voice was quiet, but to Markbaum it sounded exceptionally cold.

That was how it worked: Zhang Yu put up forty million dollars and used ten times leverage to buy four hundred million dollars' worth of CDS tied to 3B-rated securities. But he didn't need to pay Deutsche Bank four hundred million dollars upfront.

"Nothing happened. I just got lucky and made a successful investment over the past two months," Zhang Yu said with a smile.

"Mark, I think I can see the future."

"Mark, I think I can see the future."

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

Though he had forty million dollars, CDS weren't sold on the open market. He couldn't buy them even if he wanted to.

"Mark, you sound angry," Zhang Yu said unhurriedly.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"Of course. This is a financial crisis that will affect the whole world. Many people will lose everything, and millions upon millions of ordinary people will lose their homes." Markbaum sounded furious.

That meant that if subprime securities kept rising for ten months, Zhang Yu would lose everything, unless he put in more money.

This was why he wanted to help Markbaum.

"Why does money have anything to do with it? You're too young. No team would hire you to coach," Markbaum said, puzzled.

"Mark, I think I can see the future."

"Whoa, ten billion dollars! Mark, why are you still in Indiana?"

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

He turned to look west, toward Butler University's gates. His gaze seemed to stretch thousands of miles, all the way to the Golden Gate Bridge standing on the distant West Coast.

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Why does money have anything to do with it? You're too young. No team would hire you to coach," Markbaum said, puzzled.

"Mark, I think I can see the future."

"Whoa, ten billion dollars! Mark, why are you still in Indiana?"

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

He turned to look west, toward Butler University's gates. His gaze seemed to stretch thousands of miles, all the way to the Golden Gate Bridge standing on the distant West Coast.

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."

"I have forty million dollars. It's not much, but it should be enough to take part in CDS trading."

They found Greg Lippmann, Deutsche Bank's chief CDS trader. Markbaum put up five hundred million dollars, and Zhang Yu put up forty million. Both used ten times leverage, buying fifty billion and four billion dollars' worth of CDS products, respectively.

On Monday, Zhang Yu flew to New York with Markbaum on his private jet.

"Come on, what's my little bit of money worth? Wall Street is too complicated for me to handle." Markbaum gave a self-deprecating laugh. "I've heard that a fund manager on Wall Street named John Paulson bought two billion dollars' worth of CDS a while ago, and he'll probably buy even more. Before that, he was a nobody, and supposedly Soros is backing him."

Silence settled over the car. After a while, Markbaum spoke gravely:

Only after signing the ISDA Master Agreement could someone trade high-risk financial derivatives. That was the access Zhang Yu needed.

"Of course. I've been waiting for this day." A smile tugged at Zhang Yu's lips.

"This will be a financial crisis that affects the whole country—no, the whole world..." Markbaum murmured.

"Millions are wailing, while we laugh!"

"Though you're in your twenties and own an NBA team, that's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Why does money have anything to do with it? You're too young. No team would hire you to coach," Markbaum said, puzzled.

"Mark, I think I can see the future."

"Whoa, ten billion dollars! Mark, why are you still in Indiana?"

"Forty million? Where did you get that much money?" Markbaum blurted out. Realizing he'd let something slip, he added, "Sorry, I didn't mean to pry into your private life. I was just surprised. It doesn't match what Todd told me about you."

He turned to look west, toward Butler University's gates. His gaze seemed to stretch thousands of miles, all the way to the Golden Gate Bridge standing on the distant West Coast.

"Whoa, a twenty-something NBA team owner? That's... insane! But if the real estate market is about to collapse, what else is impossible? Go for it, man!"

"Your dream is to become a billionaire? If so, I think you're about to make it," Markbaum joked.

"Let's call it Dream Investment Company. I hope it'll help me achieve my dream."