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A discordant quarrel broke out between a husband and wife in a villa in a certain community in New York, USA.
"We have no money to repay the loan, and the house will be taken away, do you know?"
"No one thought this would happen!"
"Then what's going on now?"
"There is still some money in the education fund. Let's pay off the mortgage first, and then I will think of other ways."
The man walked out of the house and got into the car, but instead of starting the car and leaving immediately, he lit a cigarette with a sad look on his face.
He is a fund manager with an annual salary of 200,000. He talks and laughs with Wall Street elites every day and attends high-level cocktail parties.
It¡¯s this elite class, but they can¡¯t afford this month¡¯s mortgage.
Because more than 60% of the cases in his hands were in default, if the money was not returned, his salary would be greatly reduced, so that he would not repay the loan.
Americans don¡¯t like to save money. All they can use is the funds from their children¡¯s education fund, but after all, this is not a long-term solution.
"Made, I have to get my money back today no matter what!"
He put out his cigarette and started the car.
Similar scenes are happening in every corner of the United States.
Because the U.S. Reserve has raised its benchmark interest rate, the repayment amount of subprime home loans has increased significantly, and many people have been unable to repay on time.
Homeowners who choose subprime loans are people with poor credit. When faced with difficulties, their choice is simple and crude: default directly!
Financial institutions will not tangle with them to repossess the house and sell it on the market.
A large number of houses suddenly appeared in the hot real estate market, and house prices began to continue to fall. The decline in house prices caused many people to feel that it was not worthwhile to repay the loan.
There are more and more defaults, more and more houses are being dealt with, the price of houses is getting lower and lower, and more and more people are defaulting.
The entire real estate market has fallen into a disgusting cycle, and it is Hunter who caused this cycle.
The U.S. Reserve raised its benchmark interest rate twice in three consecutive weeks, rudely detonating the subprime mortgage crisis and creating a financial nightmare.
When Yi Xiaohai rushed to the United States, Lu Zhixin told him that the situation was out of control.
"Why did it change so quickly?"
"Mainly caused by the explosion of Wall Street P Fund."
The MBS market is booming. In order to make money, many financial institutions make loans to fake customers, bribe rating agencies, and sell contracts into MBS with good credit ratings.
Originally, real estate was booming and things were not exposed. However, as real estate fell, many things could no longer be hidden.
Wall Street P Fund holds US$10 billion in assets. They bought US$10 billion worth of MBS through Lehman and recently there have been a large number of defaults.
According to previous practice, Lehman came forward to collect debts. If the owner was unable to repay the money, he would sell the house directly.
If house prices are normal, the p fund will not suffer any loss when selling houses. The key is that house prices fall so fast that many houses sold by the p fund will suffer losses.
P Fund was dissatisfied, and Lehman took a tough stance, saying that they were only responsible for collecting debts, and only P Fund was responsible for the losses.
The whole thing would have ended here,
Because Lehman really has no obligation to compensate P Fund, P Fund can only admit that it is bad luck, but P Fund discovered the problem.
The owner of the MSN contract in their hands, that is, the lender, does not exist at all, but was forged by Lehman, and the rating agency even cooperated with Lehman in the forgery!
When things got serious, P Fund launched an investigation, and the results were shocking.
For 90% of the contracts in their hands, the lenders do not exist, and some are people who have been dead for many years!
The P Fund sued Lehman, and rating agencies including Moody's, Fitch and Standard & Poor's were also sued in court.
"Now P Fund has 10 billion U.S. dollars in contracts, and there are almost hundreds of thousands of houses to deal with. The real estate market completely collapsed yesterday."
Yi Xiaohai no longer knew what to say.
When he came to the United States, he thought that there would be a long gestation period. After all, the explosion would not happen so quickly. He did not expect that the P Fund would directly bring things to a climax.
If there is a problem only with the subprime housing mortgage loan, the house has value, the credit is good, and the income is stable, and the loan will continue to be repaid.
The collapse of the real estate market means that houses are no longer valuable, and those with money may not want houses.
For example,
For a 1 million house, a 30-year loan requires a repayment of 1.4 million. Now the house is worth 500,000. Why do they continue to repay it?
In other words, the subprime mortgage crisis may come soonwill come.
¡°Are you ready to short the market?¡±
¡°We bought CDS from many insurance companies in the United States through overseas companies, with a total value of approximately US$50 billion.¡±
"Now that property prices have dropped like this, how much compensation do those companies need to pay?"
"More than a trillion."
¡°It¡¯s not enough, keep buying, buy whatever you can.¡±
Yi Xiaohai wants to completely destroy the financial order of the United States. Naturally, the more the better.
Lu Zhixin reminded him:
¡°Even if we continue to buy, those companies may not be able to afford the losses. If they declare bankruptcy, we may not be able to get our money back. Moreover, American financial companies have strong risk aversion strategies, so we may not get any benefits.¡±
Financial companies are best at using rules to avoid their own risks. Simply put, they use equity and company nature to make the most money and bear the least responsibility.
Yi Xiaohai doesn¡¯t care,
If you can¡¯t afford the compensation, go bankrupt. If you don¡¯t want to go bankrupt, go to the government for help. He also has a way to get companies that are risk-averse to cough up their money.
Even if the money from the Han and Tang Dynasties cannot be recovered, it doesn't matter, there will be people who will be more anxious than him.
"What is the current situation of Wall Street investment banks?"
"There is no movement from Goldman Sachs. Morgan Stanley was cheated by Hunter and suffered heavy losses. The financial companies and allies under the Locke family all evacuated early. They also sold most of MBS to Han and Tang. I followed the instructions and accepted them."
"Hunter is a thief, but he probably didn't expect that things would develop so seriously."
Hunter couldn¡¯t possibly have thought of things that Yi Xiaohai hadn¡¯t thought of. He was probably regretting his own stupidity now.
"I guess the contract they sold us is not a good thing. If there is a breach of contract, the house will be taken over directly and traded at a super low price in the second-hand market, and the real estate market will be smashed into a hole!"
The life and death of Wall Street financial companies are closely related to real estate.
The current real estate market has not yet truly collapsed. Yi Xiaohai hopes to smash through the real estate market in the shortest possible time.
By then, those financial companies will have no choice but to wait for death. I am afraid that the United States will not be able to sit still and start bailing out the market. Otherwise, the financial industry will collapse and the U.S. economy will completely collapse.
It¡¯s exactly what Yi Xiaohai said,
The current economic structure of the United States is single. They no longer create wealth themselves, but plunder the wealth of other countries through U.S. dollars and finance.
Although it seems very exciting and other countries are aggrieved, the risks are very high.
When no country has the strength to target them, they can sit back and relax. But if they encounter people like Yi Xiaohai, they may be in serious trouble.
Yi Xiaohai decisively added fuel to the fire, making it burn even more intensely.
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