Chapter 147: CDS Tavern Market

State Street is the most important street in the financial district of Brighton. Not only is it home to the famous Old State Assembly and the Federal Reserve Bank of Brighton, but it is also home to some of Brighton's most important financial institutions and investment companies. In addition to some famous financial buildings, there is also a well-known pub called Barton's.

The Button Tavern is located on State Street near the exit of the subway station. Its decor is very much in the style of the Gilded Age, and the interior is more like a cafe than a tavern.

At 9am, a black Buick parked in front of the Button Tavern. A middle-aged man with grey hair at the temples and two Chinese people got out of the car. They were Ming Zhou** and Brooke.

Since the direction had been agreed, it was naturally time to put it into action, so Ming Zhou and Brooke came out together.

When they reached the door of the pub, Zhou Ming looked up and surveyed the place before turning to Brooke and asking, 'Is this the CD market you were talking about?'

Brooke instinctively felt disgusted with Zhou Ming, but he also understood that he now had to rely on Zhou Ming to take revenge on the Adams family for abandoning him, so he could only let go of those unnecessary obsessions and nod his head in agreement. He then led Zhou Ming into the pub, which was already filled with people. In the end, they chose a table by the window.

After sitting down, Brooke gave Zhou Ming a brief introduction to this Barton Tavern. Brooke said that he was brought up by the CDS market. Because a few years ago, Barton Tavern was just a very ordinary tavern on State Street, and because the location was chosen close to the subway exit, people often came to drink there every day. The number of people was not large, but it was enough to cover the daily expenses of the tavern.

As the saying goes, if you don't make a profit, you're losing money. The owner of Barton's Tavern thought the same way, but then something happened that completely changed his mind.

One day, the owner of Barton's Tavern was having a drink and chatting with an investment broker when he learned that the CDS market was now on the rise, and the investment broker predicted that it would be the mainstream in the future.

The pub owner had been doing business on Wall Street for years, and of course he knew many investment brokers and naturally knew what the CDS market was. However, he did not want to enter the CDS market to make a fortune, because he did not have the capital for it. Later, the owner learned that these investment brokers all had no fixed trading location, and each client had to be interviewed by phone, which was a very bad thing, because it meant that only the brazen-faced would be more likely to succeed.

Everyone wants fairness, and investment brokers are no exception. Therefore, more and more investment brokers hope to have a fixed trading location and information channels.

However, the difficulty is that the CDS market is an emerging investment market. The most critical thing is that it is completely independent of traditional securities finance. It is not regulated by any stock exchange, and only the two parties to the transaction conduct direct transactions through investment brokers. It is precisely for this reason that it is obviously difficult to regulate a market without any institutional supervision. The tavern owner saw this business opportunity.

So the tavern owner, relying on his personal connections with various investment brokers, invited them to conduct all their transactions in his tavern, where he would provide the best drinks.

Perhaps in the beginning, those investment brokers were reluctant to trade in the pub because of the owner's reputation and personal connections. But as the pub owner's operations and the CDS market continued to grow and expand, Barton's Pub gradually became more accepted by investment brokers and gradually became a regular trading venue. The pub owner is no longer limited to just providing a venue. He has personal connections with many investment company brokers and can also exchange information.

After hearing the history of Barton's Tavern, Zhou Ming could only feel that business opportunities are really everywhere, as long as you can be good at discovering them.

'The trading here usually starts at 10 o'clock in the morning, because in the past, brokers used to come here to chat with their clients after work near noon or in the afternoon, and this habit has continued. Now, due to the booming CDS market, we have to come here early, otherwise we worry that there will be no seats left if we come late,' Brooke told Zhou Ming.

Zhou Ming nodded in understanding, but still asked curiously, 'So what are the rules for trading here now?'

'It's a broker model,' Brooke explained. 'Everyone involved in trading must find a qualified broker to register, and then these brokers will come together to allocate trades based on each person's offer, and they will take a commission from each trading contract. The current trading commission is 5 per thousand of the transaction amount, which means that for every CDS contract worth $1,000 traded, the broker will get a $5 commission.'

Zhou Ming laughed as he listened to Brooke's introduction: 'So does that mean that Barton's Tavern has turned itself into an exchange?'

But Brooke nodded seriously: 'You could say that, but compared to the complete third party of an exchange, Barton's Tavern still has too many problems. He does not verify the identity and qualifications of the two parties to the transaction. As long as there is an investor with a broker, he will recognise them, and as long as the investor can afford it, he will also give the investor insider information and so on.'

Zhou Ming understood this very well. After all, businessmen are just like this, only concerned about profit. Since you pay more, why shouldn't I give you the best treatment? As for messing up the market and one's own reputation, what is real is the money in your hands. Maintaining a virtuous cycle in the market is something that big entrepreneurs who aspire to monopolies do. But the problem is that not every businessman who discovers a market has the strategic vision of a big entrepreneur.

Put simply, not everyone who sets up a c2c e-commerce platform can become a certain cloud or a certain treasure. It is only too normal to be eager for quick success and then ruin one's own market and reputation.

But this has nothing to do with Zhou Ming. What he cares about is how he can participate in the transaction.

'So, Congressman Brook, your participation would be the greatest help. I believe that with the strength of your investment company, it should be no problem to get a VIP qualification at this Barton Tavern,' Zhou Ming asked.

To this question, Brooke replied proudly, 'Of course. My investment company is the biggest customer here!'

Brooke's pride lasted only two seconds, and then he sighed and said, 'But that's all in the past. Now my company is on the verge of bankruptcy. And with the worsening of the subprime mortgage crisis, I'm afraid the situation here has also changed. You know, things that are customary are the most unreliable.'

Zhou Ming smiled, then relaxed in his chair and said to Brooke, 'Just wait then.'

In this way, Zhou Ming and Brooke waited for an hour in their seats. As the time gradually approached noon, the number of people in the Barton Tavern gradually increased. Compared to when they arrived, there were only about ten people, but now there were at least a hundred people in the tavern.

However, even though there were so many people gathered in the tavern, there were still empty tables. This was not because the tavern was so big, but because these seats were reserved for powerful people.

The people who can be considered big shots here are naturally the CEOs or chairmen of investment companies, because whether it is the CEO of Brighton Bank or members of several major families of the consortium, they are all out of his reach. In the past, when Brook came here, the best seats had to be reserved for him, but now he could only come early with Zhou Ming.

'Damn it, I will definitely propose a bill in the parliament to ban this kind of illegal gathering place!' Brook said angrily.

Zhou Ming did not pay any attention to Brooke's anger, but his words made Zhou Ming very interested, because even though Brooke's investment company had gone bankrupt, at least his position as a senior senator was still there for the time being. A camel that has been reduced to skin and bones is still bigger than a horse. No matter how snobbish the owner of Barton's Tavern was, he still had to give such people face when doing business. How could he not even reserve a seat?

Then there was only one reason for this, and that was that those people who were coming were more important than Brooke!

With this in mind, Zhou Ming's gaze swept back and forth, seeing at least ten empty tables inside, which meant that there were quite a few 'big shots' coming.

Stopping Brooke, who was cursing and cursing at the tavern owner, Zhou Ming asked, 'Usually you chairman and general managers, you don't come to the tavern to trade, do you?'

Brooke replied with a look of shock, 'Of course not, how could we come to a place like this? Even if I fired all the employees in my company, I could still find my clients over the phone!"

Bruker's answer was also what Zhou Ming was thinking. Generally speaking, these "big shots" have their own ways and would not personally go down to the market to trade with ordinary brokers. But now that there are so many empty tables here, it means that those "big shots" have been driven to a dead end by the subprime mortgage crisis and can only come here to take their chances. After all, compared to ordinary brokers, they have more decision-making power.

Nearly an hour had passed, and people kept coming into the tavern. The place had become so densely populated that it had become a veritable 'marketplace'. Many people had no place to sit, and they just moved back and forth with a glass of wine in their hands. Almost everyone spoke with their faces pressed together. They kept making hand gestures or shouting loudly so that the other person could hear them clearly.

Zhou Ming still sat there, in the midst of this environment, as if there were 800 ducks quacking in his ears, which was extremely annoying.

Brooke, who was sitting across from him, had already become impatient. He took out a handkerchief and covered his nose and mouth, while covering his ears with one hand, as if breathing in even one more breath of the air here and listening to even one more noise here would immediately kill him.

Zhou Ming also didn't like the murky air here, but the wait was still effective, because during the nearly hour-long wait, Zhou Ming saw that all the seats in the tavern that were originally empty had been filled, and those people were also covering their mouths and noses with handkerchiefs in the same way that Brook was, with extreme disgust.

Brook of course understood Zhou Ming's thoughts, so he leaned over to Zhou Ming and introduced him, 'Those over there are all decision-makers from well-known investment companies on State Street. Look at the one in the red tuxedo over there, he is Jamal, the chairman of Caribbean Investment Corporation; the one next to him at the table talking to him is Madison, the CEO of Lewis Investment Corporation.'

Then Brooke pointed to the other side and said, 'The two investment companies over there are also worth noting. One is Martin, the chairman of St. Martin Investment Company; the one sitting behind them is Leo, the chairman of New Dawn Investment Company; and over there...'

Zhou Ming listened silently as Brooke introduced the companies. When he was finished, Zhou Ming immediately asked him, 'These are all the biggest investment companies in Brighton, right?'

'This is only the largest investment company on State Street and nearby, but this is the financial centre of Brighton, and that's about it,' Brook replied.

Zhou Ming then asked, "Which of these companies have a closer relationship with the Adams family, like you, Congressman Brook, who has received a lot of support from the family and almost belongs to the Adams family business?"

Brook was stunned for a moment, and he asked in a daze, 'Chinese, are you really going to do this?'

'Do you think I'm joking?' Zhou Ming asked in return.

Brooke took a deep breath and said, "I understand. I can tell you that these companies basically all have a deep relationship with the Adams family, because the CDS market was promoted by the Adams family behind the scenes."

'I see. Then let's get started,' Zhou Ming said with a smile.

And with Zhou Ming's words, Brooke snapped his fingers and called the waiter at the tavern.