Recast youth

Chapter 997 No conditions to create conditions

"Financial leverage, middlemen earn the interest difference." Ye Feng continued.

"Yes."

Wen Yueqi said this and said briefly: "In this way, it has developed into the current situation. Since the end of 2001, real estate in the United States has soared, more than doubling in just a few years. In this way, it is like Aniu Loan Company It’s the same as the advertisement at the beginning. There is no chance that you can’t pay back the house. Even if you don’t have the money to pay back, you can still make a lot of money by selling the house. As a result, from people who took out loans to buy houses, to Aniu Loan Company, to all major Everyone from investment banks to banks to hedge funds is making money.”

"But people are greedy, and the investment banks here are not very happy. They thought that the risks of ordinary CDOs were too high, so they threw them to hedge funds. Unexpectedly, these guys made more than themselves, and their net worth kept rising. Early Knowing that I was keeping it for fun, investment banks also started buying hedge funds, hoping to get a piece of the pie.”

Wen Yueqi laughed and made an analogy: "It's like "Old Hei" had sour food at home. He happened to see the annoying little flower dog next door. He originally planned to poison it, but he didn't expect that the little flower dog would eat it. It’s okay, but he’s getting longer and stronger. “Old Hei” was confused now. Could it be that sour food is more nutritious, so he started eating it himself.”

"It's a bit like passing the ball around. It all depends on who takes over in the end. Whoever takes over will be unlucky." Ye Feng shook his head. He was what many people called the taker on the Internet in his previous life. However, Ye Feng did not see what netizens said in his previous life. The receiver.

But here in the United States, the takeover man was really born.

"After you didn't tell me about this before, I didn't pay much attention to it. Now I think clearly about how big the risk is."

Wen Yueqi said to Ye Feng: "Actually, it is a little different from beating flowers and passing drums. In this case, most institutions will just make the plate bigger and bigger. In the end, the situation will really appear like you said. If the loan crisis breaks out, then the top few of the pyramid will suffer a devastating blow, just like an avalanche, the financial plate will collapse all of a sudden."

Ye Feng nodded: "Actually, I don't like Wall Street."

"Why?" Wen Yueqi looked at Ye Feng.

Ye Feng thought for a moment and said: "Because these are capitalist markets, and capitalists are relatively greedy. To put it bluntly, the subprime mortgage crisis hidden in the United States this time is because capitalists are no longer satisfied with only those borrowers with good credit, so They targeted subprime borrowers and wanted to squeeze the last bit of value out of them, which led to this situation."

Wen Yueqi did not comment on what Ye Feng said, but instead said: "Do you know what the value of Wall Street is?"

Ye Feng shook his head.

"The value of Wall Street is to make money, and make money in a variety of ways."

Wen Yueqi said to Ye Feng: "Greed is exactly the nature of Wall Street bankers, the wolf nature."

Ye Feng spread his hands: "So they will suffer the consequences."

"you are wrong."

Wen Yueqi shook her head: "Some things they don't do, others will do. In the final analysis, this is determined by the market, not by one of them. How many parties have come in to play what I told you before? Loans Companies, borrowers, investment banks, hedge funds, and insurance companies, it can be said that all financial giants in the United States have come in. This is a trend and the wolf nature of Wall Street. To survive on Wall Street, there is no predatory mentality. There is no way to stand at the top of the pyramid. Think about it, can a sheep survive if it is surrounded by wolves? Obviously it cannot."

"Well, you're right, my thinking was a little unsound."

Ye Feng nodded. At this time, he found that he had fallen into a misunderstanding, that is, he was acting from the perspective of a future person. He was reborn from the future and witnessed the occurrence of the financial crisis, so he knew that these would inevitably happen. .

But what if you haven’t witnessed this?

Would you say that with such certainty?

Ye Feng knew that he couldn't. After all, a person who had read the answer test was not qualified to laugh at those who had not read the answer test, even if they only scored 0 points. "Don't keep a low profile."

Wen Yueqi looked at Ye Feng with a smile: "If you hadn't reminded me, I would never have thought that the United States would have such a huge risk now. It's amazing to think about it. This is a fund of more than [-] trillion US dollars. Once If something goes wrong, there will really be a small earthquake in the United States, and the impact will be very large."

After saying the last sentence, Wen Yueqi sighed, the subprime mortgage crisis is no longer something that can be avoided artificially, but a hidden danger that has been gradually buried over the past five years.

But despite this, Wen Yueqi still couldn't believe it. She looked at Ye Feng and asked: "Are you really sure that the subprime mortgage crisis will break out?"

"I'm sure." Ye Feng nodded.

"Okay, I see."

Wen Yueqi pursed her lips, then looked at Ye Feng with a hint of eagerness in her eyes and asked, "Then what are you going to do now?"

Ye Feng lit a cigarette and said in an extremely calm tone: "My idea is to bet on subprime mortgage defaults and start shorting some cheap, unpopular, small market capitalization, and illiquid junk stocks."

"It requires a lot of capital."

Wen Yueqi said: "In addition, it is difficult to short-sell in the U.S. housing loan market now, because no one believes that housing prices will fall, so there are no short-selling tools in the U.S. housing loan market."

Don’t have a short selling tool?

This was something Ye Feng didn't expect. He didn't know enough about the financial market in the United States. He knew that the subprime mortgage crisis would break out, so he thought of shorting the housing loan market in the United States, so that he could definitely make money.

Now Wen Yueqi actually told him that he had no tools to short the US mortgage market?
Ye Feng frowned and asked, "What should we do?"

"It's also simple."

Wen Yueqi smiled and said: "If there are no conditions, we will create conditions. Credit default swaps are the best tool for betting on subprime mortgage defaults. We can select several subprime loan types and sign credit default swaps with investment banks. This way In this case, once the underlying asset defaults, you can obtain compensation income of 30 to 50 times the premium. This is a cost-effective investment with a profit-loss ratio. The key now is that the risk of the subprime mortgage crisis will break out, but when will it break out? How long do you have to wait, otherwise the 1.5% annual premium you have to pay before the real explosion of subprime mortgages will be equivalent to a net loss."

At the end, Wen Yueqi waited for Ye Feng to answer.

Ye Feng was silent for a moment, then raised his head and said firmly: "In one to two years at the latest, the subprime mortgage crisis in the United States will definitely break out."

Wen Yueqi looked at Ye Feng teasingly: "Are you really so sure?"

Ye Feng avoided Wen Yueqi's eyes and continued, "Any business in this world has some gambling aspect to it."

"Okay, then sister is putting the funds in her hands at your fingertips."

Wen Yueqi liked Ye Feng's avoidance. She leaned down, supported her arms on the table, looked for Ye Feng's eyes, and said jokingly: "If you lose, you must remember to support your sister in the future."

Ye Feng felt even more unnatural, because Wen Yueqi's collar was exposed, and he could just see two snow-white circles in his field of vision, which were very attractive.

(End of this chapter)