Extraordinary Genius

Feng Yu woke up from his sleep and the plane was about to land. He came to New York again.

Windstorm Consulting purchased shares in many US real estate companies, and this time he came to see when it would be best to sell them.

As many in previous generations know, the US has experienced a severe subprime mortgage crisis this year, rapidly spilling over into the global financial industry, and most people think of it as a fuselage, a two-room group.

But in fact, there's already something going on right now, and the real trigger is America's second-largest subprime mortgage lender, the New Century Finance Corporation.

What do you mean, subprime mortgage? In other words, the US divides personal credit into five tranches, of which the first and second tranches have excellent and good credit, preferential loans can be made, and the remaining three tranches have low credit, only subprime loans can be used.

To put it bluntly, subprime loans are loans that are reserved for people who have poor credit and low incomes.

Many people know that people on the US side like to live on loans. All kinds of bank loans, early spending on credit card swipe cards, etc., they think this is a good life and enjoy life in their lifetime.

And the way Huaxia saves money, and then saves enough money to consume it, is ridiculous to them.

Because of many products, when you save enough money, the price has risen. Price increases may exceed bank interest. So why not spend on loans, both to enjoy a better life and maybe save money?

But this is also ridiculous, because many products, over time, have fallen in price, which means that the product purchased is devalued.

So you pay a lot of interest on this product, and naturally you lose more. Sure, you enjoyed it ahead of time, but you could have let that burden crush you for half your life.

Unless it is just needed, living like this, in the view of many Huaxians, is eating grain, it is the act of losers!

Many Huaxians are afraid to lend, but the US side of the loan is very bold, what if it is not? It's easy. Why don't you take another loan from another bank and pay the money back?

Two credit card sleeves, one month short of each other's repayment time, give you one more month to earn money, and you can pay it back.

Theoretically, but what if you don't make enough money? I borrowed $10,000, and you had to repay $10,200, but if you borrow another $10,200 from another bank, you'd have to repay more.

After swiping through multiple credit card covers, you'll find that $10,000, originally borrowed, has turned into $12,000 and is still growing.

As long as one bank thinks you're late for repayment and stuck with you, then this brush package dies, and the lenders, they may have to use other assets to cover their debts. If not already, the only option is insolvency protection.

Looks like bankruptcy is a protection for you, and the money can be repaid in no hurry, or even without having to. But during bankruptcy protection, all your spending needs to be restricted, and you need to be supervised by banks, even the police ~ the police. How can you accept people who are used to living comfortably?

A lot of older people like this. Once bankrupt, some of them prefer to go to jail, eat and drink better than starve to death on the corner.

Normally, when you loan, banks and other financial institutions must assess your ability to repay and confirm that you will be able to repay the money.

You either have a steady income, a fixed mortgage on assets, or a guarantor, etc.

But in the US, these are all for concessional loans. These conditions can be relaxed for subprime loans.

As long as you can prove that you have income, you can basically lend. Guarantors are not scrutinized at all, and even many of them do not have a profession, so they simply need to find a short-term job. There are mortgages, mortgages are simply not worth the price, and businesses dare to lend.

A lot of people here have the same idea as the Huaxians, that is, they are still young, they don't want to go to jail, how good the world is out there.

The root cause was Boo X, who, when he came to power, launched a housing purchase programme for ethnic minorities. He intends to complete at least five and a half million minority families in the course of his tenure.

He said that promoting the purchase of houses was an important factor in the security of the United States.

But how can families belonging to ethnic minorities buy a home when they themselves are poorly educated and have difficulty finding good jobs with stable incomes?

At this point, the subprime loan scheme is needed.

Subprime loans, the interest to be paid, are themselves at least two to three percent higher than preferential loans, and the worse your credit, the higher the interest.

Speaking of which, do you have the feeling that this subprime loan, basically, is from a lean sheep, the thinner you are, the more you are.

Low incomes, higher interest rates on loans, and greater pressure on them to repay, present a serious risk.

It is these people who are most likely not to repay the loan, so that the bank will incur losses, bad debts and bad debts.

But the bank loss, what does it have to do with the two housing groups?

The two housing groups, which are an important part of the promotion plan, buy mortgages from banks and then make money.

What does that mean? The bank would have lent out a million dollars and could have recovered one million dollars in principal and one million in interest, but sold it to two housing groups for only 1.5 million dollars.

So the banks have more capital turnover to lend to those who buy houses, while the two housing groups also earn an interest. When you see this, do you feel familiar?

Many finance companies lend money to individuals, which is actually a high ~ interest ~ loan. What if they don't get the money back? Sell the borrower and sell it to the billing companies.

Loans of one million, repayment of two million, they sell ~ billing company 1.3 million, collection ~ billing company find a way to recover 1.5 million and make money. They have some profits, the billing company has some profits as well.

Two Housing Group, to be honest, is the role of the collection ~ billing company, but with the acquiescence of the State ~ Council, the accounts were converted into bonds and other financial products issued.

Two Housing Groups, who did make a lot of profits at the beginning, say their CEOs, earn over $15 million a year, and only a few of the world's top 500 corporate CEOs can compete.

Where did the two housing companies get the money to buy the bank mortgage? One is the listing of shares, the other is the issuance of own funds, bonds, etc.

Previously, China National Assets bought a lot of bonds from two housing groups, and it lost a lot of money and paid for the crisis in the US.

However, in this world, Huaxia Guozhi has already sold the bonds of two houses, even the shares in the real estate industry have been sold according to Feng Yu's advice. This mistake can only be made by the US people themselves!

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