Chapter 130: Collective Individual Bankruptcy

James is a senior investment broker at Brook Investment Company. He is senior because he has been in the industry for five years. After graduating from university with a degree in finance, he applied for and was hired by the newly established Brook Investment Company. He has grown up with the company.

dressed in a custom-made, high-end suit, wearing sunglasses, and driving his beloved car down the main road in South Brighton, looking full of energy. This Porsche is his new sports car that he just bought. He sits in the driver's seat, shaking his head to the loud music. A few minutes later, he drives to the bottom of the Finance Building, parks in the underground parking lot, and takes the elevator to the office to go to work.

This is his normal routine every weekday, but today is a bit special, because today is his first day as team leader, and he needs to give a lecture to all the team members.

"Sometimes a decision can determine your future, so you have to be careful in everything. Today I'll tell them about that. Those damn guys, I really look forward to the way they reluctantly call me boss. Just thinking about it is already very exciting! But there's no way around it. The world is full of miracles. I didn't know that the name Zhou Ming could bring such a big change to me.'

James, who was waiting for the elevator, muttered to himself, and in the end he couldn't help but laugh out loud. James couldn't help but be so happy, because he was able to get to where he is today because of a phone call a few days ago.

That phone call was from a former client of his, Cindy, who was also a relative of his. She had bought a house and he had handled her subprime loan business. But that wasn't important. What was important was that she revealed an important piece of information to him. She said that someone wanted her to file for personal bankruptcy, and that the person was a Chinese named Zhou Ming.

This was big news. James remembered that his boss had said to let him know if he heard from this person, and although he couldn't remember whether it was at a meeting or in a bar, he was sure that his boss had said something like that.

So James went to see his boss with a 'try me' attitude and told him everything. A few days later, he received a bonus of 150,000 US dollars and was promoted to team leader of the investment department.

James had no doubt that this must be the benefit of that piece of news. He had been working at this company for five years, and apart from the insurance paid by the company and the visible increase in his annual bonus, everything else had remained stagnant.

"Chinese people? I always thought that apart from those yellow-skinned little bitches being very easy to fuck, they didn't have any other advantages. It seems that this is not the case either!'

James said with a smirk, before taking the elevator up to the top floor and finally to his own office. This was also a perk of the promotion: having his own independent office, instead of sharing a large office with other agents.

As soon as he closed the door to his office, James heard the phone on his desk ring. He picked it up and connected it, and immediately a roar came from the other end of the line: 'James, you son of a bitch bastard, give me back my house, I haven't breached any contract!'

James immediately moved away from the phone, and when the voice on the other end had died down, he said, 'You must be Cindy. I think what you need is a can of Sprite, because only the coldest Sprite can calm you down. And I want to say that your house has nothing to do with me. I only know that you did breach the contract, so the company had to repossess your property to avoid losses. This is what I made clear to you when we signed the contract.'

'But I have already asked a lawyer, and I have not committed any breach of contract!' Cindy retorted.

'I fully believe this, then you can choose to let your lawyer sue us. If the court rules against the company, I believe the company will definitely give you a very generous compensation,' James said.

'Frak! James, you scoundrel, I understand, you are playing with me, I will make you regret it, and your company, go to hell!' Cindy roared.

James shrugged nonchalantly: 'Okay, if that makes you feel better, I don't care.'

James hung up the phone, sat down in his office chair, but soon the door to his office was knocked open and a white man ran in, panicking, shouting, 'James...boss, it's bad!'

James frowned. 'My friend, you must remember that a gentleman must always maintain his composure, even when dealing with the most outrageous of people. Otherwise, you will never be able to rise above the common herd. Just like me, someone just called and insulted me, but I remained composed. Isn't that wonderful?'

The man nodded, and then James asked, 'Now, can you tell me what's going on?'

The man suddenly realised: 'Oh, yes, Conway Law Firm just called. Forty people from the communities of Shiba, Bailey and Quill have simultaneously applied for personal bankruptcy in their respective courts.'

'Forty people have simultaneously applied for personal bankruptcy. Are you sure you're not fooling me?' James said with a hint of sarcasm.

"This is true. You know my father works in the court, and he's the one who told me the news. He also asked me if so many personal bankruptcies would affect our company,' the man said.

'What impact could it have? The court will auction off their house, and the proceeds from the auction will be used to pay off the debt. Right now, the real estate business in Brighton is booming, and if we can find a way to deal with these auctioned assets, we might be able to make another profit!' James said happily.

However, the happy James did not know that the same news was also spreading in the offices next to him, and in the end, the news reached Brook, the chairman of Brook Investments.

Brook was unable to sit still when he got the news. After all, he was very different from James. He knew exactly what the current subprime mortgage market was like. It was no longer just a matter of everyone's loans being repaid as soon as the borrower's collateral was auctioned off. Due to the rise of the credit default swap, or CDS, market, all subprime loans had been insured with CDS contracts, and the CDS contracts had been driven up to astronomical prices.

In other words, in the speculative atmosphere of the CDS market, the profit of CDS contracts has been driven down to a very low value. In other words, the stability of real estate and subprime loans is what maintains the credit value of CDS, and once a large-scale subprime loan default occurs, the opportunistic speculation in the CDS market will be terminated immediately, and the market that has been maintained will collapse instantly.

Of course, Brook doesn't care who ends up with these CDS contracts, which have almost lost their profit, nor does he care which companies will go bankrupt instantly. He can also sell the CDS contracts he holds before the crisis breaks out, but the subprime loans are something he can't get past no matter what.

The reason is simple. If the company holding the CDS contract goes bankrupt, it means that he has lost his insurance.

You have to know that all the subprime loans he lent out were borrowed using leverage from the bank, and the loan amount was 40 times the total assets of Brook Investment Company. Previously, the loans could only be borrowed with insurance, but now that the insurance has been lost, it means that the money has to be repaid in full by himself. However, that money is 40 times the total assets of the company.

In the face of such a huge number, even if he is the senior senator Brook, there is only one way out, which is to go bankrupt immediately. Even the Adams family cannot save him, because his value is far less than 10 billion US dollars.

So Brook immediately rushed to the company and notified all the important managers of the company to come to the meeting, including the recently promoted team leader James.

Brooke sat directly above the conference table. He looked around the meeting room before slowly saying, 'Gentlemen, Brook Investment Company has been established for five years. You are all the best people selected by the company. So can one of you tell me what is going on and why our borrowers have all applied for personal bankruptcy at the same time? Did you all fire them?'

Brooke became more and more agitated as he spoke, and in the end he angrily slammed his hand on the table. Faced with Brooke's anger, these people lowered their heads, none of them knowing what to say.

Brooke cursed, 'A bunch of useless idiots!'

Then he suddenly thought of something and said, 'I remember someone saying something about this before, right? Someone received a call from a borrower saying that a Chinese person was inciting them to file for personal bankruptcy. Who is he? Is he in this meeting room today?'

With Brooke's words, everyone looked at James, who was sitting in the corner, trembling.

Brooke also looked at him: 'Your employee badge on your chest tells me your name is James. Hello, I need you to tell me what happened.'

Faced with Brooke's sudden question, James was completely at a loss. He stammered and replied, 'Hello, Mr. Brooke. I don't know either. I just received that phone call. I don't understand why they would file for personal bankruptcy together. And after bankruptcy, shouldn't they liquidate their assets? Maybe we can still benefit from this to make up for our losses.'

'It's to cover your own losses! No, it should make you a fortune,' said Bruck, glancing at everyone in the meeting room and asking, "Is that what you're all thinking?"

To this question, everyone from the company's general manager to the secretary shook their heads in denial, and they were all cursing James.

'Mr. Brook, we definitely don't think that way. We all think that this is the company's biggest loss. It's all this James's greed. He just bought a Porsche sports car with his bonus. He said he also needs a villa. This is his greed. He's like an insatiable demon, it's disgusting, but we don't think that way!' Everyone spoke one after the other, all trying to distance themselves from James.

'I'm sorry for what I just said, I don't have those kind of thoughts, I'm only thinking about the company. Mr. Brook, please trust me!' James, who had recovered, immediately explained, but no one listened to him.

At this time, Brook waved his hand and said, 'Okay, stop talking.'

The meeting room fell silent, and Brooke said to James, 'Mr James, I can forget about what happened before. Next, I need you to convince those borrowers to stop filing for personal bankruptcy, or if they do, they must pay in full all the interest on each and every loan.'

'How is that possible?' James exclaimed. 'It's impossible to stop borrowers from filing for bankruptcy without any preferential terms, and since they're already bankrupt, there's no way they can pay back the interest!'

"I'm sorry, but that's not within the scope of my considerations,' said Brooke, 'I only know that if you can't do it, not only will I take back your bonus, I will also let my lawyer sue you for processing non-performing loans in violation of regulations. You will bear full responsibility for this and face personal bankruptcy, as well as a minimum of 20 years in prison. I hope you understand.'

Brooke's words hit James like a heavy hammer, making him despair instantly and collapse in his seat.