Extraordinary Genius

“Send someone to see if you can invite Feng Yu to the White House.” Boo Ten said.

“President ~ This is not very good, Feng Yu is a Huaxian after all. By doing so, we will be expected to further strengthen our economic and trade dealings with Huaxia. ”

When I heard this, Boo stopped talking. Obviously, it wasn't something he could decide on his own, although he didn't think it was too bad. Seems like a nice spot, but every word is too much of a constraint.

“Then find a way for me to meet Feng Yu. What exactly do you want to do? Do you have any idea? ”

Feng Yu didn't know, Boo X had decided to meet and talk to him, and he was still looking at the stock market.

For two consecutive days, New Century Financial Corporation stock prices have fallen by fifteen percent and are expected to continue to fall as long as they are unable to explain the media explosion.

As for some small real estate finance companies, the decline was even stronger, generally exceeding eighteen per cent, and even two companies had announced directly that they were applying for bankruptcy protection.

This application for bankruptcy protection is compounded by increased investor mistrust of companies in the real estate industry.

“Boss, the stocks of these companies are really falling, can we make a lot of money selling short operations? ”

Windstorm Consulting borrows a lot of stock from some financial institutions, then sells it in large quantities, and with the help of the news, the price of these companies falls dramatically, which means that Windstorm Consulting can make a lot of money.

Selling stocks is a loss on the book, but selling short can make more money.

“It doesn't really make much money, and the stocks of these companies are not the main investment direction at all. ”

The declines in the prices of these companies, while not insignificant, are too small to lend much stock. And Feng Yu only let Feng Yu consult over there mainly operate a new century finance company, all the others just a little bit.

These are just experiments, and going back to the two-room group is the direction of the main attack.

“Boss, why do you think these companies aren't necessarily bankrupt? Looks like these companies are doomed now, huh?” Ralph begged for a lesson.

“Because of the US political axe, or Xiaobu X, we must not watch these companies go bankrupt, they will definitely find a way to save them. ”

“Guess what they'll do?” Feng Yu asked with a smile.

Ralph thought, “Find another company to take over? ”

“Correct!” Feng Yu shouted, “For now, they can only find other companies to take over. Take over the business of these companies and also take over the debts of these companies! ”

“But this is far from enough. It is not a small problem that these companies can cause a large number of people to lose their jobs. And more seriously, there are too many companies in bankruptcy, which they can't imagine! ”

If it's just one or two companies going bankrupt, then it's really just a small thing, and these things that are going bankrupt right now, even the new century finance companies, have a market value of less than $3 billion.

At the size of a two-room group, losing $3 billion a month is not necessarily going to hurt your bones. Of course, if you lose so much each month, it's different.

In Feng Yu's eyes, the two-room group is simply two palletizers and the ultimate backpacker!

In the previous life, the two housing groups applied for bankruptcy, which led to a real collapse of the stock market in the United States. At least there was still room for salvation.

And the main reason for the bankruptcy of the two housing groups was that they became the Patron, eventually carrying this unlucky black pot.

In fact, the subprime mortgage crisis, mainly caused by these small real estate finance companies, is a backbone for both housing groups. Ultimately, however, there was general agreement that this was caused by the two-room group.

Of course, the collapse of the two housing groups is also what made the matter worse.

These loans were mainly packaged, bonds were issued and bonds were sold to investors. Normally, the risk of such bonds is very low, because at the outset, people who are able to lend, both their creditworthiness and their ability to repay, are very trustworthy.

So the bonds issued by the two housing groups have been sought after by many investors, including former Huaxia state-owned assets, and even to some extent, some people have interpreted this as US treasury bonds, completely forgetting that these are two private companies.

By doing so, they have completed a process of asset securitization.

At that time, the two housing groups were very strict in reviewing the mortgages they purchased, and they didn't buy the subprime loans at all.

But then more and more financial companies made subprime loans, and the two housing groups started buying these riskier subprime loans at Xiaobu's request.

Then you can adjust the interest rate mortgage rampant, tempt people to buy houses with low interest rates ~, many people with average incomes also live in very good houses. But then the interest rate was adjusted, and the loans they were going to repay were recalculated, and many families who could have repaid the loans were also unable to do so.

These were all done by small companies, and the two housing groups really didn't do it, and they didn't have to do it, and their high-quality loans were bonded enough to make enough money.

But not now, those small companies are going to die, Boo Ten asked for assistance from the two-room group.

How to aid, instead of eating the mortgages of those small companies and selling them as bonds.

At this point, the bonds of the two housing groups will begin to deteriorate. From low-risk, low-yield bonds to high-risk, high-yield bonds, the original intent of many people to invest is completely different.

It's an inherent impression that two-house bonds are low risk. When these high-risk bonds are issued, many people don't hesitate to buy them, and then it's like getting on a boat, and getting off a boat can be tough!

These small financial companies, because those who fail to repay their loans are dragged down and they have to repay their loans to institutions such as banks, can only find ways to borrow money.

Yes, there are plenty of mortgages for them, but this is not easy to realise first, and it's already devalued. They can only replenish the West Wall by borrowing money.

The leverage of some financial firms is starting to get particularly high. Many products that normally have only ten times more leverage, in their company, can have twenty times more leverage, even twenty-five times, thirty times more.

What does that mean, that they manipulate a lot of money with a little margin, and what's the risk? How fragile should the capital structure be?

At this point, they still can't figure out what to do, so they can hide things and even make small financial moves.

When these were exposed by Feng Yu, their company had to go bankrupt. In order to prevent the situation from getting worse, the two-room group can only be this takeover man, thus turning into a backstabbing man!

……