Chapter 403: This Isn't Investing, It's Digging Up Their Ancestral Tombs

David Cohen's complexion, within a few minutes, underwent a dramatic shift from fervent worship to extreme confusion, then to terrified incomprehension.

He felt his brain, that precise instrument soaked for four years at the Wharton School and honed for several years in Wall Street's trading pits, had completely overloaded and emitted a harsh alarm.

"Boss, you… what did you say?"

He stammered, each word spat out with unusual difficulty.

"Buy credit default swaps on Lehman Brothers AAA rating MBS? Short them?"

He took a deep breath, trying to use his professional knowledge to organize his language, to explain the absurdity of the order to this Eastern "deity".

"But… that's impossible! That's AAA rating! It's the highest credit rating given by Moody's and S&P! That means its default risk, theoretically, is at the same level as U. S. Treasury! It's zero!"

"Buying CDS on such assets is like buying earthquake insurance for a mountain built of granite! The insurers will laugh their heads off; they'll treat it as free money! Every penny we invest will, over time, become their profit! This is the most basic common sense in finance!"

This time, not only David, even Li Junjie, who had always blindly worshipped Lu Qingshan, stopped the pen in his hand.

He furrowed his brows, quickly scribbled "MBS", "CDS", "AAA rating" in his notebook, then drew a big question mark.

He couldn't understand.

Previously, every move the boss made, whether shorting Morgan as a feint or suing the police station by leveraging force, always had a clear, Eastern military‑strategy‑consistent logic behind it.

But this time, he couldn't read it.

It didn't fit any strategy; it was even anti‑business, anti‑logic.

"Brother, what's this… CDS, is it similar to the shorting we do on Hong Kong Island?"

Lu Qingjun leaned over, whispering to Li Junjie.

Li Junjie shook his head, his expression solemn.

"The nature is similar, both bet on a decline. But the target is completely different. Our previous short of stocks bet a company was mismanaged. Now the boss wants to bet that America's safest financial assets will turn into junk. This… this is no longer betting a single company's bankruptcy; it's betting the foundation of the entire financial skyscraper will collapse."

Lu Qingjun inhaled a sharp breath of cold air.

Though he didn't grasp those complex terms, he understood the phrase "foundation collapse."

This is not investment, this is digging up someone's ancestral tomb!

The whole apartment's air grew heavy and oppressive because of this incomprehensible order.

Ye Ning and Zhang Qianru said nothing, but their clenched fists and tight jawlines revealed the huge inner shock.

Facing everyone's confusion and panic, Lu Qingshan did not explain immediately.

He walked to David Cohen, picked up a pen on the table.

"David, tell me, these MBS, i. e., mortgage‑backed securities, what are their underlying assets?"

David was startled and instinctively answered, "They're residential mortgages. Banks bundle tens of thousands of individual home loans into securities and sell them to investors."

"Very good."

Lu Qingshan asked again.

"Then why do rating agencies give them an AAA rating?"

"Because… because these loans are divided into tranches. The highest‑priority tranche gets repayment first, carries the lowest risk, so it's AAA rating. Moreover, with houses as collateral and U. S. home prices constantly rising—historically never a large‑scale drop—the default risk is extremely low. Add various complex financial models and insurance…"

David spoke more fluently; these were the textbook standard answers.

Yet as he spoke, he stopped.

Because he saw Lu Qingshan drawing on a blank sheet with that pen.

He first drew a foundation, labeled "Subprime loan."

On the foundation, he erected a magnificent skyscraper, its walls bearing "MBS", "CDO" and other dazzling financial products.

At the very top, he drew a golden Crown with three A's written on it.

"Everything you said is correct."

Lu Qingshan set down the pen, pointing at the simple picture.

"This skyscraper looks beautiful, right? The Crown is dazzling. But what if I tell you the foundation is rotten?"

"Rotten?"

David was puzzled.

"'Subprime loan'—loans to people without stable jobs, insufficient income, or even credit histories. Do you think they can still pay?"

Lu Qingshan's voice was calm, yet it made David's heart jerk sharply.

"But… but there's a house as collateral! Even if they can't pay, the bank can repossess the house, auction it, and since home prices keep rising, the bank won't lose!"

"What if home prices stop rising? What if they start falling?"

Lu Qingshan's question was like a drill, piercing the supposedly unbreakable logical loop in David's mind.

"No… impossible… How could U. S. home prices possibly fall?"

David muttered, this already exceeded his realm of understanding, like debating whether the sun could rise from the west.

"Nothing is impossible."

Lu Qingshan walked to the floor‑to‑ceiling window, looking at the bustling Steel Jungle outside.

"When banks, to earn commissions, grant loans to a bartender who can't even afford a down payment, a single mother juggling three jobs yet still in deficit, or even a dog, this game's outcome is already predetermined."

"When Wall Street's geniuses package these doomed junk loans through complex structuring, polish them into the safest AAA rating assets, and sell them to pension funds, insurance companies, and banks worldwide, they have themselves planted the dynamite."

"And rating agencies, to earn hefty rating fees, turn a blind eye, comfortably stamping these dynamite with a 'safe and harmless' seal."

His voice was not loud, but each word struck like a hammer on everyone's heart in the room.

Cold sweat seeped on David Cohen's forehead; he wanted to retort, but found he couldn't utter a single word.

Because he had seen and heard how Wall Street traders privately sneered at those Nebraska Redneck migrant workers, who spent their life savings to buy these products they themselves didn't understand.

Li Junjie's breathing grew rapid, his pen frantically scribbled across the notebook—not to record, but to vent the shock inside.

He finally understood!

What the boss saw was not some financial model, nor any market data.

What he sees is the greed at the deepest core of humanity!

The greed of banks, the greed of Wall Street, the greed of rating agencies!

These three kinds of greed intertwine, giving birth to the greatest financial bubble in human history.

And Lu Qingshan, what he intends to do is not to drift with the current in this bubble, but to ignite it at the climax of this revelry!

"Brother... I get it!"

Lu Qingjun slaps his thigh hard, his face flushed bright red.

"These bastards just take a pile of rotten wood, coat it with a layer of gold paint, and sell it as gold! What we need to do now is bet on that paint—sooner or later it will flake off!"

"It's not betting that it will flake off."

Lu Qingshan turns around and corrects him.

"We must personally scrape that layer of paint off."

He looks toward the team, already fully in the zone.

"So our mission is not to argue with the market over whether house prices will fall, nor to debate the authenticity of the AAA rating with rating agencies."

"Our mission is to buy! To purchase every insurance available against these junk assets!"

"The more they think we're foolish and the harder they sell, the more we must buy!"

"When the entire market becomes our counterparty, and everyone believes they've locked in profit from our 'insurance premium,' that's when we cast the net."

He extends a single finger.

"I will make Lehman Brothers, that century‑old investment bank, be the first to go bankrupt because of the insurance they sold us themselves!"

"Boom!"

David Cohen's body jolted violently; he braced himself on the sofa, preventing another collapse.

On his face, terror has vanished, replaced by an expression that looks like witnessing a miracle, a mix of awe and ecstatic joy.

Madman!

This boss is a complete madman!

Damn it, I actually started worshipping this lunatic wildly!

"Ye Ning!"

Lu Qingshan issues the order.

"Yes!"

"Activate the Lookout account, Phase One, two billion US Dollar. Target: all 5‑year CDS corresponding to AAA rating MBS issued by Lehman Brothers. Contact every investment bank and broker we can reach, buy anonymously. Get all London staff on duty, moving now."

"Zhang Qianru!"

"Present!"

"Simultaneously begin registering new or acquiring clean Offshore companies and trusts, preparing to receive the second and third batches of capital. Legal documents must be flawless, and the funding channels must be absolutely isolated."

"Li Junjie, David!"

"Present!"

"You two are responsible for gathering every negative piece of information about the US Subprime market risk, no matter how small or insignificant, and file them all. We need ammunition."

"Qingjun!"

"Hey! Brother!"

"Watch over David, don't let him pass out again."

Lu Qingshan, unusually, cracks a joke, easing the tense atmosphere a bit.

The whole team, like a precision machine whose target has been reset, instantly springs into high‑speed operation.

Confusion, bewilderment, Fear, all swept away.

In their place comes an unparalleled excitement at the prospect of participating in and witnessing history.

At that moment, Ye Ning's encrypted communicator rang.

After answering, she listened for a few seconds, then looked up, her expression oddly fixed on Lu Qingshan.

"Boss, the head of Goldman Sachs' trading division just contacted us through an intermediary."

"They said they've heard we're aggressively buying MBS CDS on the market, and they're more than willing to become our primary counterparty."

Ye Ning pauses, then adds.

"They also said, as long as our price is reasonable, they'll sell us as much as they have."