The decline of the three major stock indexes does not seem to have caused much panic in the market. The downward trend www.biquge.info in the subprime loan market was evident from January 2007 and fell by 40% in three months until April, when New Century filed for bankruptcy protection.

The U.S. stock market reached the tipping point of collapse only in October, six months after the subprime mortgage market began to collapse, and the stock market began to crash in a sharp downward spiral.

Chief among them is that people don't recognize the seriousness of the matter. From a geographical point of view, real estate speculation in the United States was initially concentrated in a small area, but no one expected that the snowball would become bigger and bigger, and the regional crisis would quickly spread throughout the United States.

In the aftermath of the Asian financial crisis, international demand for safe, or perceived safe, dollar assets has risen due to the need for reserves, and there is a huge demand for fixed-income securities, whether sovereign wealth funds or foreign central banks.

This further explains why securitized debt structured around U.S. real estate prices can be issued to some extent around the world. Correspondingly, the financial crisis triggered by the United States has also spread to the world's major economies.

Securitization has helped the U.S. government achieve its policy goals of unlocking liquidity, boosting growth and employment, and improving social welfare, which has been a successful "financial project," but the flip side of achieving policy goals is that risks are accumulating.

The U.S. government is undoubtedly the biggest beneficiary, which is why when the subprime mortgage crisis broke out, all the bankers collectively played scoundrels, lying directly on the ground, letting the crisis ravage, and finally forced the government to bail out the market, injecting capital into the collapsed CDOs again and again, and continuously buying MBS bonds that were already garbage.

Andy holds a $7.2 billion CDS bond with a principal of 600 million and leverage, although it is not as crazy as Michael Bray, a long crooked melon and cracked date, who shorted 20 billion, but it is also the best of the big shorts this time.

George Soros, the god of shorting, pulled down his old face and ran to see Michael Bray again and again under the recommendation of his nephew, and as soon as they met, he said a lot of "old drivers take me" to this rising star, and Michael Bray was entangled in no way, so he had to give a rough explanation. He hurried back to draw the gourd in the same way, and immediately went home to short more than a billion CDS.

This U.S. government and Wall Street-led loan concession campaign to give out loans to the poor who can't afford to buy a home has finally detonated a huge backlog of risks.

The reason why Andy is more interested in CDS shorting is that CDS is mainly issued by large insurance companies like AIG, and his bug is that you can buy insurance without owning the underlying assets. It's equivalent to buying a car insurance for Lao Wang's car next door, if he crashes, you will be very happy to get the claim, and Lao Wang doesn't know it.

However, it seems that everything is developing in the favorable direction of Andy's group of big shorts, in fact, those small and medium-sized shorts who are short CDS, but lack liquidity funds, have long begun to jump up and down in a hurry, well, it is an adjective that adds fuel to the fire, hot pan ants scurry, and so on.

Because the price of MBS's original bonds is still high, and MBS's re-securitized CDS still maintains a AAA rating, the cash flow in hand is insufficient, the liquidity is insufficient, and the short-selling price does not fall but rises, so they have to lose money and inject funds into the margin account, and if they do not make up for it, they will be forced to liquidate.

Andy played with the marker in his hand, sat on the boss's chair, put his feet on the table, shook his body slightly, the chair followed back and forth, and looked at the various data displayed on the LCD screen in front of the conference room that had been changed to a strategic command with a relaxed expression.

Alvitatre walked over to Andy and sat down with an ugly face, "These damn bastards, full of lies!"

"Hehe, don't be angry, Al, isn't this something we've thought of a long time ago? In fact, this time we took the lead and gently swung a shot, and it has already played a domino effect, and the reason why MBS is still high and CDS ratings are not downgraded, is just to pretend to be okay and lure other peers to buy the junk bonds that it is eager to sell and can bankrupt the company, so as to get out. And the baton bearers of the drumming and passing the flowers, those fools are not worthy of pity.

Hehe, you don't know how many phone calls I've received these days, my grandfather has called me to keep silent and not to say anything about the subprime mortgage crisis in public. ”

Andy threw the marker pen in his hand on the desk, crossed his hands around his chest, rested his head on the back of the chair, and chuckled mockingly.

"But boss, we lose a little bit of the money in the D margin every once in a while... ”

"Okay, Al, it's useless to complain, you know better than anyone else, their strength is not what we can currently contend with, they just hold on, what can we do, our margin is enough for us to hold on until they can't hold on, with more than 100 million deposits for billions of profits, no loss, moreover, CDO insurance has begun to make money, although it is pitiful, but now at this point, we must have enough patience, the darkest hour before dawn has passed, we will usher in the fiery sunrise！”

"As the fog thins out and the truth is about to be revealed, I wonder what other greedy guys will take over the garbage. ”

Andy's eyes were half-closed, he glanced at Al, and chuckled, "Wall Street's greed is in the blood, full of fraud and lies, and they're just playing a game called, "When the dust settles, who are the fools between us and them?" ”

When Alvitatre heard the boss's complaint, he couldn't help but shake his head and laugh, he didn't expect the young boss to be so calm. You must know that the risk of shorting is not ordinary, and if you are not careful, you will die without a place to be buried.

In fact, how could Andy not know the risk of shorting, and he also summed up the three major fears of making shorts bigger in this subprime mortgage crisis.

First, I bought a lot of CDS and found that the relevant assets were in default, and the price of CDS remained unchanged, thinking that the whole system was colluding to make fraud. It is now at this stage that makes the bears miserable and ridiculed by the investment banks who have returned to normalcy.

Second, the CDS in my hand finally made money, and I began to worry that the bankruptcy of the investment bank of the gambling opponent would turn their CDS into waste paper.

Third, in the end, the warehouse was finally emptied and the money was obtained, but I found that I might be targeted by the FBI or occupied by "Occupy Wall Street", and the pressure of public opinion was too great.

Although it is Andy's summary of the three big fears of the bear, it does not include himself, some people don't want him to shout "the wolf is coming", and they will naturally pay something. Tell Andy through the mouth of old Smith, he is not a stunned young man, he knows what compromise is, if you want to make money, you have to smash other people's pots, and people will dare to kill you, such as Kennedy, tsk, the favorite thing to do is to smash the pot, whether it is an opponent's or an ally's, so it's like a myth.

"Boss, there have been a lot of phone calls to the company recently to inquire about the news, especially the financial adviser of Goldman Sachs Group, Kesai, wants to visit you. Alvitatre wasted no time in saying.

Andy glanced at Al with a smile, shook his head and said, "They Goldman Sachs are the main target of Michael Bray's bet, and aren't the CDOs responsible for R&D?" I'm not interested in seeing him, okay, I'm going to pick up my girlfriend from work, tsk, look at the changes in this more than a week, the stock market has regained its vitality, it's time to rise, MBS doesn't fall and rise, CDS is still AAA, although there are companies that go bankrupt, but everyone is still the same, what happened on April 2, it's almost a joke, it seems that my two weekly magazines have been slapped in the face... ”

Alvitatre shrugged his shoulders and watched helplessly as his young boss patted his ass and left, it seemed that he could only say sorry to his old friend, whether it was out of professional ethics or a non-disclosure agreement, he could not reveal a single word of information to anyone.

Andy, on the other hand, has no intention of meeting the other party, this kind of selling these MBS with great fanfare and touting how good they are, and privately inventing CDO as a hedge insurance to short MBS on the other hand is very immoral, and Goldman Sachs is undoubtedly the most awesome in playing this routine.