After speaking.

Shen Jiannan picked up the coffee that didn't cost money and tasted it, and Charlie Cao immediately took out the contract he had prepared and handed it to the HSBC group.

There are five servings in total, one for each person.

The HSBC group looked at each other, their faces were smiling, and they had to grit their teeth to restrain themselves.

This is a long preparation.

How arrogant and unsightly it would take to be so stupid.

The market has long proven an idiom.

The strong are always strong.

Thailand came out on top of the Four, thanks to the opening of the Bank of Thailand's financial markets, which will be like a magnet to absorb the world's capital into Thailand.

With countless capital pouring in, it is impossible for Thai real estate to fall even if it wants to.

Is it stupid?

From HSBC's point of view, this is indeed a very stupid investment, and from Shen Jiannan's point of view, it is also a very stupid investment. In other words, anyone who is well-versed in economics, finance, and trading will think that this is a very stupid investment.

Whether it is securities, futures, resources, etc., there will be some kind of law in its rise and fall.

This kind of law can be called a trend.

The formation of a trend is caused by a combination of various reasons, which can be said to be the general trend, or it can be said to be the inevitable result of the game of various comprehensive factors.

Just as countless small rivers flow into a large river, the roar of a large river is simply impossible for people to resist.

To put it simply, the formation of a trend does not happen in a day.

In the same way, when a trend comes to an end, it doesn't break down in a day.

In terms of probability and statistics.

In an uptrend.

The probability of being able to reach the highest is very low.

Based on the calculation of 365 days per year, then there is only one highest in the year, and if you do the statistics in 10 years, then the probability is 1 in 3,650.

The real estate industry moves for decades, and the probability of the price becoming the highest is 1 in 10,000.

This is the easiest logical math problem.

But because it's simple.

It is as simple as the securities market, the futures market, or the material and real estate markets.

There will always be people who feel that they can sell for the highest or buy the lowest.

Every year, every day.

In a falling market, there will always be countless smart people who choose to buy the bottom, and in a rising market, there will always be countless smart people who choose to short sell.

Human ingenuity is that we like to complicate simple things.

Cohen Merrywether has seen so much about this.

If you don't want meat, you can't catch a wolf.

Merry Weather's thoughts, Shen Jiannan knew it.

None of these bankers are cunning like foxes, and if they all think he's smart, he'll be able to walk away now.

No one is going to do a deal that they know will lose money.

HSBC's senior management is all financial elites with professional backgrounds, and after going back and forth a few times, several people quickly figured out what the contract that Capital One took out was.

This is a VAM agreement.

It is very similar to the credit default swap in the U.S. real estate bond market, but different from the credit default swap in the U.S. real estate market, which uses the price of bond assets as the underlying asset.

With well-known real estate in many cities in Thailand as the subject matter, the weighted average valuation is adopted, and the international currency is US dollar as the calculation unit.

Of course, settlements are also in US dollars.

When the weighted flat index of housing prices continues to rise, Capital One pays HSBC a monthly premium sufficient to fulfill the contract

When the composite housing index continues to fall, banks have to pay Capital One insurance premiums.

Somewhat similar to an insurance contract that preserves the value of a property.

For example, help a friend buy a life insurance or vehicle insurance, but the beneficiary is the policyholder.

Not quite, though.

In a conventional life or property insurance contract, the maximum amount of compensation is calculated based on the amount paid by the policyholder and the number of years of insurance. If there is an accident in the contract to the insured or the asset, the insurance company will pay according to the terms of the contract.

However, if there is no accident in the middle of the insured subject, then the policyholder's annual premium is equivalent to paying in vain.

It can be said that in a conventional insurance policy, the insured or assets are the subject matter.

After the performance is completed, no matter how much premium the policyholder has paid, as long as there is no accidental loss in the contract of the insured subject matter, the premium will be completely owned by the insurance company.

It is also a bit similar to securities, futures, and foreign exchange options contracts, and this subject matter is nothing more than the Thai real estate market.

Through this contract, there is no need to associate an agreement with the physical object, so that the transaction quantity of the buyer and seller can be multiplied indefinitely from the physical quantity.

The text of this contract given by Capital One is equivalent to buying a weighted option contract for value preservation insurance for real estate investment in Thailand.

If the value of the home rises, Capital One's premiums will be wasted. Capital One can only benefit from this when the value of the home falls.

This contract is similar to an insurance contract in that the bank has a similar performance role as an insurance company.

The insured payout ratio is one of the important parameters in an insurance policy.

The contract text given by Capital One naturally also has this kind of compensation ratio parameter.

For a contract with an underlying payout value of $100 million, Capital One is required to pay a premium of 1% per annum.

That is, if Capital One were to purchase a credit default swap worth up to $100 million, it would be required to pay a premium of $1 million per year. If the price of the house rises or is higher than the value he had at the time of the purchase contract, Capital One would lose $1 million in vain.

Only when the price of the property is lower than the value of the underlying purchase can Capital One receive the HSBC payout.

This payout is calculated based on the value of the loss of the property insured by Capital One.

For example, the average price of real estate in Bangkok is $1,000 per square meter.

Then as long as the weighted value of the property in Thailand is greater than or equal to $1,000, Capital One buys a $1,000,000 credit default swap and loses $1,000,000.

Only when the average price of a property in Thailand is less than US$1,000 will Capital One be able to receive a payment from Standard Chartered.

The amount of this payout depends on the actual price of the comprehensive weighted price of the Thai property at the time of Capital One's redemption contract or the expiration of the option contract.

If it's $990, Capital One will receive the Standard Chartered payout, and the lower the price, the greater the HSBC payout.

The payout is calculated as 10 USD multiplied by 500%.

Putting down the papers in his hand, Cohen Merryweather rubbed his nose, he couldn't help it, he was afraid that he would laugh out loud, and it would not be good if he scared the big fat sheep in front of him away.

After kneading it several times in a row, Cohen Merweyser finally restrained the urge to laugh, and he looked at Shen Jiannan very sincerely and said.

"Shen, as a friend, with all due respect, this is really a very stupid investment. ”

Not a loss is a top banker.

Shen Jiannan raised his eyebrows slightly, he can still be so hypocritical at this time, no wonder this guy can be in charge of HSBC.

What will these guys look like in the future?

Shen Jiannan also suddenly wanted to laugh.

But fortunately, this guy is very controlling.

Straightening his face, he said with the feeling of wanting to twitch.

"I only care about the solvency of your banks when the Thai property index falls, yes. I'm worried that your bank won't have the money to pay me. ”