The other side of capital is cruelty and dirtyness. The filth in society is simply a slight witch compared to it. As we get in touch with this, the deeper Guan Qiu understands this.

He left the matter to Su Wenhai, and Guan Qiu returned to the Shanghai Stock Exchange early the next morning.

In the past month, a lot of things have happened in the Shanghai Stock Exchange, the most important thing is the fall of Chen Jing's father Chen Chaozong.

The tree fell and the money scattered... No, it should have been pulled out the radish and brought out the mud, and a large area of ​​people was poured out. This was an invisible blood exchange and a bloody storm.

At the same time, Tianxiu Group officially announced on September 1 that it will set up the group headquarters in the Lujiazui Financial District of Shanghai Stock Exchange, and the planned group building will break ground in March next year...

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Time soon reached the end of 2006. The US real estate industry, which had been in full swing for five years, finally fell heavily from its peak. The food chain finally began to break, and the US subprime mortgage crisis officially set sail.

Speaking of the global financial crisis caused by the subprime mortgage crisis in 2008 in previous life, many people actually don’t know what’s going on. Even if they know a little bit, they are just hearing about it after dinner.

This matter has to start with American consumption concepts.

Loans are very common in the United States. From houses to cars, credit cards to phone bills, loans are everywhere. Locals rarely buy houses in full, and usually take long-term loans.

But we also know that unemployment and reemployment are very common phenomena in the United States. How do these people who have unstable income or even no income buy a house? Because their credit rating does not meet the standards, they are defined as subprime lenders.

Since 1998, American loan companies have been advertising on TV, newspapers, streets, and even mailboxes.

The loan company asks you: "Do you want to buy a house and live a middle-class life?"

"I have no money."

Loan Company: "It's okay, I'll lend it to you."

“I can’t even afford the down payment.”

Loan Company: "It's OK, we offer zero down payment."

"But I still can't pay back my monthly loan."

Loan Company: "It doesn't matter. You only need to pay interest in the first 24 to 36 months, and then pay it back after the principal of the loan expires. At that time, I believe you must have found a job."

"What if I can't find a job and can't afford the loan after one or two years?"

Loan company: "It doesn't matter. Look at how much the house has increased compared to two years ago? Then you can sell it to someone else. Not only will you live in for two years in vain, but you can also make some money! Besides, I dare to lend, but you dare not borrow it?"

Under such temptation, countless Americans who don’t even have a job chose to buy a house without hesitation.

From 1998 to the first half of 2006, the US real estate market achieved amazing results.

The huge risks hidden behind these loans are not unaware of the financial companies of all sizes in the United States. They know that it is impossible to monopolize the benefits, so they find the leading brother of the American economic industry - investment bank.

What do these guys led by Merrill Lynch, Goldman Sachs and Morgan do?

Even if I have nothing to do when I am full all day, I am idle. I have brought in a bunch of Nobel economists and professors from Haval University. After using the latest economic data model, I have made several analysis reports to evaluate whether a certain stock is worth buying. The stock market in a certain country is already bubbled.

How could a group of guys cheating on food and drink in the risk assessment market?

Of course you can see it.

But there is profit, so why are you hesitating?

So economist and university professor repackaged it with data models and created a new product - cdo.

The so-called CDO is a debt-secured bond. To put it bluntly, it is a bond. By issuing and selling this CDO bond, the holders of the bond share the risks of housing loans.

However, the risk is too high and no one buys it. These guys who cheated on eating and drinking in the financial market turned their eyes and thought of an idea. They divided the debt into two parts: high-end cdo and ordinary cdo.

In the event of a debt crisis, senior CDO has the right to pay first.

Assuming the original bond risk level is 6, which is medium or high. After the change, the risk levels of the two parts become 4 and 8 respectively, and the total risk remains unchanged. However, the former is medium or low-risk bonds. With these guys' three-inch tongue, the advanced CDO sold a lot of money!

But there is also the problem, what should I do if I have the remaining ordinary bonds with risk level 8?

Investment banks found hedge funds.

Who is hedge funds? They are awesome people who buy short and sell a lot in the financial world around the world, and they live a life of licking blood from the edge of a knife. This risk is just a minor point.

So, based on the relationship, I borrowed money from the bank with the lowest interest rates around the world, and then bought this part of ordinary CDO bonds in large quantities.

Before 2006, the Bank of Japan's loan interest rate was only 1.5%, and the high-risk ordinary CDO interest rate was as high as 12%. You can make a lot of money by relying on interest spread hedge funds alone.

Then something magic happened. Since 2001, real estate in the United States has soared, from people who buy houses with loans to loan companies, to major investment banks, hedge funds, and lending banks, all of them have made a lot of money.

Things are not over here.

Investment banks were soon unhappy. They thought that ordinary CDO was too risky and threw it to hedge funds. Unexpectedly, those guys made more money than they did. They knew they would keep it for fun, so the investment banks also started buying hedge funds, intending to get a share of the pie.

Now hedge funds are so happy. Who are they? They can find a way to borrow 10 yuan to play with bandits. Now they are honest with the sought-after CDO?

So they mortgaged the cdo bonds they had to the bank for a 10-fold loan, and then continued to chase the investment bank to buy ordinary cdos.

When the agreement was signed, the ordinary cdo had to be sold to them.

Investment banks were very upset. In addition to continuing to buy hedge funds, these guys have created a new product called CDS - [Credit Default Exchange].

Don’t you all think that the original CDO has high risk? Then I will take out some of the money from the CDO every year as a security deposit and give it to the insurance company for free, but if there are risks in the future, everyone will bear it together.

When the insurance company saw that CDO was so profitable, and that it could share the profit without paying a cent. Isn’t this giving me money for free, so I followed it.

Hedge funds think that since they have made money for several years, the risks will become increasingly greater in the future. If you share part of the profit, the insurance company will bear half of the risk, so let's take them together to play.

Well, this financial product called "cds" is also popular.

Do you think it's over here?

Too naive.

Those Wall Street financial geniuses who eat people and don’t spit out bones have come up with innovative products based on CDS.

They took out 5 billion US dollars of the money they earned from CDs as margin and set up a fund, assuming it is called "SX Fund", which is specially used to invest in and buy CDs.

This fund, built on a series of previous products, is very risky, but they invested the 5 billion yuan they had earned as margin. If the fund suffers losses, then use the 5 billion yuan to advance it first. Only when the 5 billion yuan is lost will the investor's principal start to lose.

Before that, you can redeem it in advance, with the starting scale of US$50 billion.

If you buy a fund that costs 100 yuan, you won’t lose your own money even if you lose 90 yuan. If you make a profit, you will all be your own. Damn, is there any fund in the world that is more exciting than this?

When the rating agency saw this genius idea, he didn't hesitate to give aaa rating!

As a result, this "SX Fund" went crazy again, and various pension funds, education funds, financial products, and even banks from other countries entered the market one after another.

Although the initial scale was originally scheduled to be 50 billion US dollars, it is impossible to estimate how many billions of dollars were issued in the future, but the margin of 5 billion did not change.

If the current scale is 500 billion yuan, then the margin can only guarantee that the net value of the fund is not less than 99 yuan and you will not lose money.

In the last life, at the end of 2006, due to the decline in housing prices, the time limit for preferential loan interest rates also came. First, ordinary people were unable to repay the loan, and then the loan company went bankrupt, and hedge funds suffered huge losses, which then affected insurance companies and loan banks.

Citigroup and Morgan successively released huge losses reports, and at the same time, major investment banks investing in hedge funds also suffered losses. Then the stock market plummeted, and the public generally lost money, and the number of people who were unable to repay their mortgages continued to increase.

Finally, the US subprime mortgage crisis broke out.

In this life, the United States still has not escaped this fate.

Talos, which was deployed early, and the hedge funds under Xinghai International Investment Co., Ltd., joined hands with International Capital to short US real estate, banks, stock markets, and insurance companies.

Park Ruo and Guan Qiu flew to the United States one after another and took charge in person.

Time soon entered 2007.

At the end of February, the second largest subprime mortgage lender in the United States, New Century Financial Company, was suspended by the New York Stock Exchange for trading on the verge of bankruptcy.

With the first domino being pushed, the US subprime mortgage crisis officially broke out, and the Dow Jones Index fell by 5 percentage points in three days.

Soon, HSBC announced that North America's housing loan mortgage business suffered huge losses and wrote down $10.8 billion in related assets.

Subsequently, more than 30 US subprime mortgage companies closed down one after another.

According to statistics in the first quarter, more than 500,000 houses in the United States were taken back by banks and entered the auction process.

In June, funds under the U.S. fifth largest investment bank, Bear Stearns, suffered huge losses due to their involvement in the subprime mortgage bond market, causing a sharp drop in U.S. stocks.

By early August, the tenth largest mortgage lender in the United States, the United States Housing Mortgage Investment Company, filed for bankruptcy protection in the court, becoming another large mortgage lender in the United States to file for bankruptcy after New Century Financial Company.

On August 9, BNP Paribas announced the suspension of three of its fund transactions involving US mortgage business;

The European Central Bank announced that it would provide 100 billion euros of funds to relevant banks, a move that caused a sharp drop in European stock markets.

On August 13, Ruisui Group, the parent company of Ruisui Bank, the second largest Japanese benzene bank, announced that losses related to US subprime mortgages have reached 200 billion yen, equivalent to nearly 2 billion US dollars.

Japan and South Korean banks have already suffered losses due to the US subprime mortgage storm.

On August 17, the US Dow Jones Industrial Average fell below 13,000 points, closing at its lowest point this year, and the S&P 500 also fell to a situation where there was no annual profit.

During this time when countless people around the world were crying, some people laughed uncontrollably. In addition to the international capital that shorted the US housing market, these people also included Guan Qiu.

I use a sentence that someone said in the previous life to describe Guan Qiu’s current mood: I don’t care whether he has money or not, anyway, I don’t have money as much as I do.
Chapter completed!