sinovels Chapter 424: How To Lose If You Have A Clear Card?
Chapter 424: How To Lose If You Have A Clear Card?
While domestic netizens are discussing the luxury annual meeting of Future Group and Blue Star Electronics and expressing their envy and jealousy, there is an undercurrent surging across the ocean on Wall Street in North America.
On February 13, New Century Financial Corporation, the second largest subprime mortgage company in North America, issued a profit warning for the fourth quarter of 2006.
Subsequently.
Huifeng Holdings announced its results and increased its provision for subprime housing credit in North America by an additional US$7 billion, totaling US$10.573 billion, an increase of 33.~6%.
As soon as the news came out, the stock market plummeted that day, with the Hang Seng Index falling 777 points, or 4%.
at the same time.
Major investment banks in North America, including Merrill Lynch, Citigroup, Bear Stearns, JPMorgan Chase, etc., have all incurred huge losses, which have not yet been disclosed.
As the second largest subprime mortgage company in North America, New Century Financial is facing a 17.4 billion-meter debt squeeze from Wall Street, which has made the company struggling, facing a bankruptcy crisis, and has even entered a countdown to bankruptcy.
For a while.
Panic among investors is spreading.
The first fuse of the North American subprime mortgage crisis has been lit.
Compared with the undercurrents on Wall Street, Lu Yi spent the New Year happily.
Time flies to March.
Domestic employees are returning to work one after another.
March 10th.
John Paulson in North America contacted Lu Yi.
"Hi, John, how are you doing?" Lu Yi looked at the figure of John Paulson displayed on the computer screen and asked with a smile.
"Thank you for your concern, Mr. Lu. I'm fine."
"Mr. Lu, since the beginning of this year, the number of mortgage default cases has reached a new high. There have been nearly 500,000 cases, which is much higher than the 300,000 cases in the same period last year."
"Mr. Lu, the market operation has been derailed now. 11
"The market should have collapsed in February, but so far Standard & Poor's has not lowered the value of mortgage bonds. It is obvious that the mortgage bond market has been manipulated by intentional people.
John Paulson said.
Regarding this situation, Lu Yi was not surprised at all.
To put it bluntly, the subprime mortgage crisis in North America was actually caused by a group of investment institutions on Wall Street.
Don’t Wall Street investment banks such as Goldman Sachs, JPMorgan, and Merrill Lynch see the risks involved?
You can even see it with your feet!
However, there is profit in it!
So what are you waiting for? Let’s take over.
then.
After the economists, university professors and data models evaluated it, they repackaged it and the new product CDD appeared.
By issuing CDO bonds, bond holders share the risk of home loans.
What to do if the bubble finally bursts?
Hold on to it for now, and then find the taker.
As for who is the taker?
Anyway, it’s not investment banks like Wall Street.
As for the people's hard-earned money being sucked dry, haha, it has nothing to do with my Wall Street investment bank!
Lu Yi asked: "How much have I lost now?"
John Paulson said: "According to the policy agreement, more than 30 million yuan in monthly premiums are paid to the bank, and the current loss has reached about 9%."
"In other words, I have lost 540 million meters of gold." Lu Yi said.
John Paulson quickly explained: "Mr. Lu, please believe me, although I have no evidence, but now the major banks are busy passing on the crisis. Every bank such as Goldman Sachs, Merrill Lynch, Citigroup, etc. are selling junk bonds crazily. Give it to consumers who have no doubts, and let consumers pay for their greed [before they lower the bond price shield after they have finished selling."
Obviously.
John Paulson was afraid that Lu Yi would choose to redeem because of this huge loss.
Lu Yi smiled and said: "John, don't be nervous, I have no intention of launching an attack.
"You know, this is a protracted battle that requires 100 battles. You can lose the first 99 battles, but you have to win the last battle for me."
"The one who laughs last is the real winner."
"I don't care about short-term losses, I only care about the final result."
After hearing this, John Paulson breathed a sigh of relief, showed a relieved smile, and said: "Mr. Lu, thank you, thank you very much, please rest assured, the winner of the last battle will definitely be me."
In John Paulson's opinion, Lu Yi is definitely the best investor he has ever encountered in his career.
If it were anyone else, and he heard that he had lost hundreds of millions of gold, he would have been scolded by the explosion on the spot and asked for redemption.
"I believe in you, John, go fight! Your name will shine on Wall Street!" Lu Yi said with a smile.
That is to say, he knows that the subprime mortgage crisis will definitely happen, and he also knows that John Paulson's hedge fund is making a lot of money. If he doesn't know all this, he will definitely explode on the spot like everyone else.
…Please give me flowers…………
to be honest.
The subprime mortgage crisis is a bright card in his eyes, so how can he lose?
Ended the call.
John Paulson's mentality, which was about to explode, has stabilized.
Originally, according to his prediction, the market would collapse in February, but as a result, subprime mortgage bonds did not collapse as he expected, which almost made his mentality collapse.
Because the default rate is skyrocketing, but the market is still singing and dancing, this makes him firmly believe that the market is artificially manipulated, although there is no evidence.
From Lu Yi, he received understanding and support, which stabilized his mentality that was originally on the verge of collapse.
He can't be sorry for Lu Yi's trust. He is a person with professional ethics!
In fact, for Lu Yi, the biggest difference between him and other investors is that even if the 6 billion meters of gold are wasted, he will still be one of the richest people in the world and will not be worried about it. any negative impact on his career.
The impact of losses is not big, but the profits are huge.
In this case.
Naturally, he just sat back and watched the situation change.
Of course.
Unlike Lu Yi's mentality of sitting tight on Diaoyutai, the mentality of major Wall Street investment banks is about to explode.
The North American subprime mortgage bond bubble is about to be blown by them.
The profit warning issued by New Century Financial Company is a precursor to the bursting of the bubble.
It was originally a way of playing that they were good at, but now they are losing it.
Why?
Can mortgage customers expect to be compensated by investing in CDO bond contracts if they default?
Obviously not!
An investor who purchases a CDO bond contract with 10,000 meters of gold cannot afford to pay compensation of 100,000 meters or even hundreds of thousands of meters of gold.
then.
Not only did the investors go bankrupt, but the banks also had to pay out of their own pockets because there was no institution to cover mortgage defaults.
However, the liquidation of the CDO market contract will cause public panic, so everyone will run on the bank to recover their deposits, and then the bank will quickly go bankrupt.
Under such circumstances, the major investment banks on Wall Street will naturally try their best to avoid this situation.
But obviously, you can cover it up for a while and find a few takers. But the plate is so big that it can't be covered. We are not fools. It is impossible for everyone to be a taker. In the end, the bubble will burst and the corpse will burst. !.