Chapter 893 - 360: Are They Exactly the Same?

Chapter 893: Chapter 360: Are They Exactly the Same?

For Jiang Banxia, there are no holidays.

After work, she originally thought she would have someone send over some food later, too lazy to eat from the cafeteria.

But as soon as she got home, she saw Li Yang already busy in the living room.

Her assigned dormitory is sixty square meters, definitely spacious for one person.

Li Yang said while laying out the dishes: "Going right after those US Bonds, huh? How much leverage did you use?"

"Ten times, no idea how much money I can make."

"What’s the scale like now?"

"I’ve only sold six hundred billion US Dollars."

Compared to the trading volume of US Bonds, this scale is indeed not big.

Jiang Banxia has only been in the position for a month, so maybe the project team’s personnel hasn’t been fully equipped.

Six hundred billion US Dollars, just the interest alone, she has to pay twelve billion annually.

But the gains from shorting US Bonds definitely exceed this interest.

For example, the ten-year US Bonds she borrowed and sold now have a coupon rate of 1.25%, so the ten-year interest is 12.5 Dollars. US Bonds have no compound interest and settle interest once a year.

However, interest rates will start rising next year, quickly reaching 4.75%, so the ten-year interest on these ten-year US Bonds will be 47.5 Dollars.

On the market, the ten-year US Bonds with a 1.25% coupon rate have an interest difference of 35 Dollars with those having a 4.75% coupon rate. So, wanting to sell the US Bonds with a 1.25% rate means lowering the price by 35 Dollars.

Jiang Banxia exploits this price difference, earning this 35 Dollar spread.

US Bonds are inherently leveraged products, and she adds more leverage on top of them, which is quite terrifying in magnitude.

On the secondary market, US Bonds are essentially futures. Calculating accurately isn’t as simple as Li Yang thought; there are year differences to consider and the interest from Jiang Banxia’s leverage.

But even without leverage, Jiang Banxia can still earn thirty points in the second half of next year without any problem.

"Let’s eat first."

"Alright."

Jiang Banxia happily sat down and took a bite with her chopsticks.

"Not washing hands, huh?"

"Nope!"

"Fine, fine, I didn’t wash my hands while cooking anyway!"

"It’s even, it’s even!"

Jiang Banxia inexplicably had an appetite.

Her mood hasn’t been great recently; although she didn’t reject work, various regulations still made her uncomfortable, completely different from her previous life.

She never thought about leaving, after all, once she decides to do something, she definitely won’t quit halfway.

Besides, Li Yang is accompanying her in Capital City.

After eating, Jiang Banxia lay on the sofa, as for exercising? That’ll come later.

Li Yang cleaned up a bit, then got some fruit and joined Jiang Banxia on the sofa.

As soon as he sat down, Jiang Banxia’s head snuggled over, lying on his lap.

She said slowly: "Actually, shorting US Bonds now still carries risks. If time drags on, my funding costs will be huge, even if interest rates rise. If the rate hike is moderate, I might still lose money."

On this matter, Jiang Banxia lacks financial intuition.

In her view, US Dollar interest rates won’t rise fast. Last year, they were still cutting rates, directly reducing by 100 basis points.

US Bonds are still being issued in large quantities, if there’s a rate hike expectation, who would buy their US Bonds now?

Even with poor inflation data lurking behind, Jiang Banxia believes they’ll grit their teeth and hold on for a year or two.

Just need to hold on for two years, her operations here face the risk of losses. If the hike progresses slowly, raising 25 basis points at a time, about 100 basis points in a year, she won’t earn much.

Of course, if the Federal Reserve continues cutting, she’d suffer heavy losses.

In this aspect, she purely trusts Li Yang’s judgment.

"So why gamble on US Bonds right away?"

Li Yang asked in return.

"The global financial market is too chaotic, and I’m a newcomer with not much say. The first project definitely can’t be too small. I’m not only dealing with US Bonds. Just that the other projects haven’t matured yet."

"Boeing?"

"And Bitcoin, I’ll deal with them."

"Bitcoin is illegal, they even issued special regulations in March, changing the nature compared to before."

Previously, the country just didn’t acknowledge Bitcoin. Now, with dedicated regulations, it’s deemed illegal.

Trading Bitcoin may risk funds being confiscated, accounts controlled.

"Yeah."

Li Yang: "..."

He realized his worries were unnecessary.

Because they were the ones who made those regulations.

Besides, even if discovered, just confiscate the funds; it still ends up back in their own pockets.

Jiang Banxia didn’t continue questioning Li Yang on the logic behind the Federal Reserve raising rates, as Li Yang clearly wasn’t inclined to divulge.

Perhaps it’s just his gut instinct?

And Li Yang had no way to elaborate.

He couldn’t possibly say it was Da Mao and Ermao driving it, right?

The significance of US Dollar rate hikes lies in curbing their inflation and reducing US Dollar liquidity globally, leveraging this to crash some economic bodies for harvesting.

But they absolutely won’t predict the black swan emerging in February next year. Despite their keen intelligence, they only learn of accurate info in January next year.

After that black swan event, global economies were directly crushed.

Originally, the US Dollar rate hike aimed at dropping global premium asset prices by around thirty percent, but Da Mao and Ermao’s black swan accelerated this drop globally.

If they don’t raise rates to withdraw global US Dollars, this financial war will be utterly lost for them.