America's No. 1 financial conglomerate

Chapter 526 If you want to eat meat, you have to bleed.

"Let me tell you about the situation in Asia."

Ernst Asset Management, in terms of capital, currently focuses its main business on three major sectors.

The first major segment focuses on the Russian market and extends to global financial derivatives trading.

This also included shorting Wall Street operations, mainly using the funds borrowed by Ernst for financial maneuvering.

The second major segment focuses on acquisition and integration business in the private equity sector. This includes industry integration in the HVAC sector, private equity investment in immigration-related industries, and recent investment in high-quality assets in the sports industry.

This sector follows the logic commonly found in private equity funds: resource integration, nurturing and value-added development, and eventual IPO exit.

After acquiring a target company, the company enhances its asset value by optimizing its governance structure, injecting advanced management models, and expanding market channels, and then realizes capital realization after listing.

The last one focuses on strategic acquisitions, concentrating on high-growth industries and core asset development.

Investments in internet startups, purchases of shares in publicly traded internet and semiconductor companies, and the profits made after the Asian financial crisis all fall into this category.

These companies invest in and purchase shares in Asian companies like Samsung Electronics.

Some people do it to make money, and eventually they'll liquidate their entire inventory.

Others, however, are simply trying to secure a position first, hoping to eventually join the board of directors when the time is right.

In Asia, for Ernst Asset Management, the current market trend has already ended.

Although the harvesting of the Asian market has only just begun for American capital, and the next two to three years will be a window of opportunity for American capital to make its moves in Asia, Ernst Asset Management is unlikely to be involved in this.

We've already won over Samsung; if we're still not satisfied, then we're just being ungrateful.

This is an unspoken understanding among everyone; whoever breaks it will inevitably become the target of public criticism.

But now an opportunity has suddenly arisen, and even if Ernst Asset Management gets involved, Wall Street can't really say anything, so there's no reason not to try and seize it.

The key is still the financial company. Acquiring it would allow us to use it as a bridgehead for Ernst Asset Management in Asia, which has enormous strategic value.

"A week ago, the South Korean side once again lowered the asset valuation of Seoul Bank." Jane Fraser placed a fax on Ernst's desk. "This valuation is 17% lower than the one from more than a month ago, but it still does not include off-balance-sheet bad debts in the accounting scope."

Ernst tapped his fingertips lightly on the table, his gaze falling on the key data in the document. After a moment of contemplation, he asked, "What is Morgan Stanley's stance? After all, they are the financial advisor appointed by the South Korean government."

This is America's cannibalistic approach: not only are the referees on their side, but even the football association is on their side.

Morgan Stanley is essentially a platform, a service-oriented asset management company that helps upstream entities match downstream entities, completes transactions in the middle, and earns commissions.

But they don't even consider whether it's fair and impartial to let Morgan Stanley help the South Korean government sell assets, especially to its own brother.

The South Korean government understands this, but it can't do anything about it because it was assigned by its American "daddy".

As a condition of the IMF aid, South Korea had to accept a financial advisory body appointed by the United States.

Even if Morgan Stanley is rejected, other American banks will inevitably take over. In essence, it's all the same: if the wolves leave, the tigers will come.

"I received inside information three days ago that Morgan Stanley has submitted a new offer on behalf of HSBC." Jane Fraser's tone was tinged with sarcasm. "HSBC is demanding a 70% controlling stake in Seoul Bank and has proposed to lower the valuation of the bank's office building by another third. Even so, they are still dissatisfied with the current asset valuation and have hinted that they need to further reduce the price."

She said with a smile, "It is said that Lee Heon-jae, chairman of the Financial Supervisory Commission of South Korea, almost stormed out at the negotiation site, but because the IMF representative was present, he could only hold back in the end. He had no other choice."

What should I do if I can't bear it?

The IMF has clearly stipulated that the financial sector must be open in order to receive foreign exchange bailouts.

For South Korea now, the most difficult issue is not its domestic economy. Thanks to the ripple effect of companies like Isotope and Samsung, South Korea's unemployment rate has stopped declining and is showing signs of recovery, indicating that the domestic economy has begun to show signs of recovery.

However, the pressure of huge foreign debt remains unresolved, with a large amount of maturing dollar loans and interest urgently needing to be repaid.

South Korea's domestic dollar reserves are severely insufficient, forcing it to comply with the IMF's requirements by selling core financial assets in exchange for dollar liquidity.

This is exactly the same model the US government used to deal with bankrupt savings banks in the past; it is essentially a helpless transaction of exchanging assets for survival.

"It's said that the South Korean public is reacting strongly to this?" Ernst's face showed a complex expression, neither sarcasm nor mockery.

Jane Fraser picked up her coffee and realized it was empty. She picked up the phone on the table, called her secretary, gestured to Ernst, and then ordered two coffees.

After hanging up the phone, she sneered, "The emotions of the South Korean people are indeed unusually high. Almost every day, protesters gather in front of the Financial Supervisory Commission to burn American flags and protest that selling the bank is an act of surrendering national sovereignty and humiliation."

However, there was no sympathy in her tone: "But emotions can't be used as money. Their anger is just a helpless venting, and it has no practical meaning."

In the eyes of seasoned capitalists like Ernst and Jane Fraser, this kind of protest based on nationalistic sentiment is the most powerless form of expression.

The anger of the weak cannot change the rules of the game of capital, much less reverse the established pattern of the market.

It's more like the helplessness of the weak, even laughable.

"What are your thoughts on the Seoul Bank project?"

Seoul Bank is the project that Ernst Asset Management is going to be involved in.

It wasn't that it wanted to snatch food from the tiger's mouth; rather, the food came to it on its own.

It can only be said that investing in Samsung helped Ernst Asset Management gain recognition in South Korean high society, establishing a positive image for the company.

Compared to the exploitative practices of other American capital firms, Ernst Asset Management's acquisition, while also a case of squeezing money at rock-bottom prices, was at least priced like Korean cabbage, rather than the rotten leaves of other companies.

The key point is that HSBC is not a US-based company, which is very important.

A glint of shrewdness flashed in Jane Fraser's eyes. "HSBC is too greedy, and Wall Street capital wants to repeat its old tricks, playing the game of being a prostitute while pretending to be virtuous."

"How can you possibly succeed every time if you want to extract the maximum profit while avoiding public condemnation?"

Do you think HSBC just wants to lower prices?

In fact, they want to cut the Gordian knot and get things over with quickly, more than anyone else.

HSBC's management team in Asia is already operating at full capacity. Having just completed the acquisition of Hang Seng Bank in Hong Kong last year, it has yet to fully streamline its business structure and internal management.

Even after successfully acquiring Seoul Bank, they lacked sufficient management resources for integration, yet they remained fixated on securing absolute control and operational dominance.

Such unreasonable demands could plunge HSBC's Asian operations into chaos, intensify internal factional struggles, and in severe cases, even lead to the collapse of the entire Asian business line.

HSBC's top management couldn't possibly be unaware of this, but they had no other choice.

As Jane Fraser said, some guys on Wall Street are like prostitutes who want to have their cake and eat it too.

On the surface, HSBC is a financial giant headquartered in the UK, but in reality, its control has long been jointly held by American and British capital.

A large amount of American capital has become a hidden shareholder of HSBC through shareholding, and HSBC's expansion in the US market has also been deeply intertwined with American influence.

In 1987, it acquired a 51% stake in HSBC and further acquired full ownership, renaming it HSBC Bank.

HSBC is currently in talks with Liberty Mutual Bank and SRC Financial Corporation regarding an acquisition. Once the deal is completed, HSBC will become a major player in the global financial industry.

It is the third largest depository institution in New York State and the tenth largest bank in the United States.

These acquisitions were not cash acquisitions, but were conducted through stock swaps.

Ernst also knew that HSBC would spend $155 billion a few years later to acquire Home Finance, a US credit card issuer and subprime lender, and in 2005 it acquired Metris, directly gaining access to the US credit and credit card markets.

Retail finance and other business areas.

Without the support of American forces, even if HSBC knelt in front of the White House for a long time, it wouldn't have been able to do this.

What does this mean?

This indicates that HSBC, the British financial giant, can receive the same treatment as Bank of America in the United States.

The financial crisis triggered by Wall Street allowed HSBC to easily get a piece of the pie, even though it was one of South Korea's eight major banks.

is it possible?

All of this is driven by the power of Wall Street.

HSBC played the villain, but the lion's share of the profits went to the Americans.

Jane Fraser's eyes gleamed with excitement. "I've already had someone investigate. Seoul Bank's brand is still very valuable; in the 1980s, its lending volume was the highest in South Korea. If we can divest the non-performing assets, the return on equity can reach at least 15% within three years."

She then picked up a pen and wrote down the terms "price," "control," and "management" on a piece of paper.

He then explained, "We can give up the fight for control if we offer South Korea a reasonable and acceptable price, thus allaying the South Korean government's concerns. However, the management rights must be firmly in our hands."

Ernst then suddenly realized something and burst into laughter. "So, perhaps I should host a dinner for the bigwigs of Wall Street sometime?"

Ernst knew why Jane Fraser was like that.

First, Citibank only wanted to select 100 good branches, leaving the mess for the South Korean government. This kind of behavior is extremely unacceptable.

Now HSBC is pulling this stunt, which doesn't seem like a collaboration at all; it looks more like they're trying to take advantage of us and leave us with nothing.

In contrast, the extortion by Ernst Asset Management was seen as a blessing in disguise by South Koreans.

With Seoul Bank setting an example, it's hard to guarantee that a second or third South Korean company won't come knocking on their door.

Ernst Asset Management wasn't trying to acquire them; it was targeting Wall Street.

If you want to eat meat, you have to bleed me a little.