The Youngest Son of Sunyang

In fact, the bank's work is very simple. Between the money entruster and the borrower, they take a fee called the loan margin (the interest rate on the loan and the interest rate on the deposit car).

As a former banker, I felt like a government official because of the benefits of a simple job, a stable salary and a guaranteed full year without errors. Instead, I couldn't get out of the picture.

However, there are those who cannot hide their glittering skills in any field.

There were geniuses hiding in these simple banks, and their geniuses focused on how to make enormous money all at once.

In the early 1980s, when a new military coup broke out and South Korea could not escape the ecology of the backward country running the gym elections, three geniuses came up with a bizarre fortune in America.

Louis Lanier, the Receivables Manager of the Investment Bank Salomon Brothers; Lariphink, Founder of the Investment Manager Blackrock; and David Maxwell, CEO of the U.S. Federal Housing Mortgage Corporation, created an ingenious commodity called Mortgage Backed Security (MBS) … No.

Until now, mortgage lending was a simple task of borrowing money as a mortgage and earning principal and interest for 10 and 20 years. However, as a bank, it is stable, but it is just a yawn that lends large amounts of money and is distributed over long periods of time. It was also a necklace tied up.

These three geniuses looked at mortgage loans in the eyes of commodities, not in the eyes of banks.

Mortgage lending is a stable long-term return, even if it's small.

It found that retired seniors, financial earners and principal losses matched the stable investments they were most reluctant to pursue and made mortgage loans an MBS product.

In fact, the reason they came up with this idea was because of the interest rate.

In 1979, the Federal Reserve Board raised the interest rate, causing the financial sector to suffocate with 'money’, and the mortgage market began to shake.

No one buys a house with a high interest rate loan.

But politicians are always on the side of rich people, preventing them from ever losing anything.

On September 30, 1981, the U.S. Congress made a witty bill for a beloved financial institution.

If the financial sector manages to arrange housing loans, it is tax-deferred, and moreover, legislation has been passed to compensate for all losses incurred in the process.

If you just sell loans, it becomes a system where money rolls in, and the so-called securitization era has begun.

Now the bank loaned out a lot of money as collateral, took a fee and began handing over the bonds to others.

The worry of recovering funds disappeared, and loans were not tied up for long periods of time.

The bank paid its mortgage on the mortgage as its main line of business.

The investment bank, Salomon Brothers, took enormous relay fees by dividing and repackaging the bonds by risk.

Even if you mix three or four dangerous loans into one secure loan, you'll still be able to conjure up more than $200 million in a year in 83.

Financial professionals don't spend weekends with golf anymore. I enjoyed a sailing party on a luxury yacht and flew on a private plane to Venice to eat delicious pizza.

Their big party is almost over, and I plan to show up around the end to charge for it.

Of course, the party costs are not paid by the bankers. The American people will pay for it.

Rachel Arief, CEO of Miracle, New York, was pleased to meet her for a long time and immediately turned into a serious face.

“So you're saying we should leave it to investors to choose, right? ”

“Yes. My judgment can't always be right. We're going to leave those investors who believe that MBS is stable, except for those investors who think it's a big risk. ”

“What about the people who withdraw their investment? ”

“Tell them to choose, too. We have stable government bonds. We have Hollywood funds. ”

“You bet against the collapse of mortgage securities? ”

“Yes. If there are investors willing to bet with me, it's their choice, too. ”

“I don't think there are any investors to follow you. ”

“What about Rachel? Where are you going to bet? ”

Rachel Arief frowns.

“I know MBS is Gorisk. But I don't think there's going to be a collapse. We'll be delayed.”

“Because collapse is the fall of American finance? ”

“Yes. The Federation will hold them off at all costs. The fall of Wall Street will sink the global economy as well as the United States. ”

At this moment, the idea of the collapse of the American economy is just as absurd as the idea of the United States turning from capitalism into a socialist state all at once.

“So Rachel is sustain? ”

“No, weighing. Put it all away for now. I'll keep an eye on your next investment. ”

“Let's email the customers. to ensure risk classification. ”

“What do you consider your investment to be? ”

I think it's crazy to see the collapse of the American economy, but I really wonder, because I was the only one who ever got it wrong.

I was sure, I did not use the same word.

“Half, as always. Isn't this the truth? ”

“All in 50%? Your entire fortune? ”

“I'm not property. I'm property in the United States. And I'm still young. I have time and money to start all over again. ”

Rachel still sighs.

“Wonka will be nervous just because your money moves. In the history of Wall Street, there could have been this much money moved at once. ”

“Half.”

“Huh?"

“Half my assets will go to the moon. ”

A smile spread over Rachel's face.

“50% chance. Half chance? Isn't it too formal? ”

“What are you talking about? I just told you. Wonka's gonna be nervous? So you're only loosening half of it so you don't get nervous. The other half needs to be solved in London. You don't think the world's finances are all about Wall Street, do you? ”

“The City? ”

The City is simply called the City of London. It is the smallest administrative district in London, the centre of London's history and the heart of the financial community. It is also an autonomous jurisdiction.

The Bank of England is home to over 5,000 financial institutions including JP Morgan Chaser, Goldman Sachs, Morgan Stanley, Bank of America, City Groups and HSBC. The city's area is exactly the same as Yeouido's, but the size of money moving is different.

“Yes. You can digest half of it, too. Everyone will be happy to hear that there's an intro. ”

Rachel's eyes flutter.

Because I knew that if the Wall Street crash happened, I might pull the trigger.

It's like dropping billions of dollars of bombs at once.

* * *

The first thing to do was recover the money buried in the mortgage securities.

If you take it out at once, the Wall Street will get sloppy. He exchanged his commodities very little by little and sold the mortgage securities taking care not to be different from usual transactions.

Since it was a popular product, there was no problem digesting the volume sold.

“I got rid of all the MBS. What are you gonna do with this money now? ”

“A bet. All in that mortgage bonds turn into paper towels! ”

“When will I know the outcome of that bet? ”

Rachel still didn't believe me.

“Next year.”

It's coming too soon, and I don't believe it any more. If I had said 10 years, I would have nodded my head. Ten years later, when malicious bonds will begin to accrue, I will have time to recover, but not next year.

Impossible is just another word with such a slight chance.

"Since 2005, volumes have begun to spill: two percent fixed rates over the course of two years, but starting this year, the interest rate has to be 10 percent or more, and American citizens can't afford that. ”

“They're stable enough to have a house. It may be dangerous, but it won't be easy to collapse all at once. ”

“Who's stable? Subprimes, literally underrated, underqualified, not primed. The problem is that people who can't afford it have three or four houses. Even if you only have three, the interest to pay jumps to 30 percent. ”

After a steady investment, Rachel did not see the greedy nature of the Wall Street.

Whether they're screwed or risky or small, those people who are in a hurry to get their money out of the box can draw out their license plates and approve a mortgage loan if they show up at the window.

“All right, go for it. So how do you want to place a bet? ”

“Credit default swaps (CDS. Credit Default Swap). ”

Credit default swaps are a type of insurance in case of bankruptcy.

For example, if Apple has 100 million won of bonds and Apple goes bankrupt, 100 million won of bonds will fly into the air. I buy insurance to avoid these risks. The insurance method is also simple.

In case of bankruptcy within a decade, the insurer pays 200,000 KRW in full each year. The reason why insurance is cheap is because Apple is a very sound company and has no chance of going bankrupt in 10 years.

There is no risk, so insurance is cheap.

For companies with low credit and poor health, insurance premiums will naturally go up.

What's interesting here is that greedy Wall Street humans have turned insurance into gambling.

Anyone who does not have one $10 in Apple bonds can be insured. Anyone can pay 200,000 KRW each year and get 100 million KRW if Apple goes bankrupt within a decade.

You can place bets on Apple's shares and bonds, even if they don't fail. The annual premium is the betting chip and wins 100 million.

Rachel shakes her head.

“We have not yet issued a credit default swap for financial instruments. Howard, you're trying to buy a product that doesn't exist. ”

The conclusion was false, and Rachel sighed.

“Make it. Those in finance who believe that mortgage securities are safe will welcome me with a double glance, thinking that if I pay my claim, it's public money. It's hard to make a claim, so I don't think there's a problem. ”

“Who are those people in finance who are going to listen to this crazy story? ”

“Goldman Sachs, Deutschevank, Morgan Stanley, Barkless Capital, Marylinch, Citigroup, Bank of America, Credit Switzerland, J.P. Morgan, UBS. There are so many of them.”

“Why not Bearstons and Reman Brothers? These are the top groups, too?”

When the names of the supermassive financial companies that dominated the Wall Street came out of my mouth, Rachel said as if to make fun of them.

“Oh, those two companies are going to be out of payment. If I sign a credit default swap, I don't have the money, I can't get it. ”

Even when the United States was listed, Rachel opened her mouth as soon as she thought that the supermassive finances would collapse next year.