The other side of capital is cruelty and dirty, and the filthiness in society is nothing compared to it, and the more he comes into contact with this, the more Guan Qiu understands.

handed over the matter to Su Wenhai, and returned to Shanghai early the next morning.

During this month, many things happened in Shanghai, the most important of which was the fall of Shen Jing's father, Shen Chaozong.

Rats leave a sinking ship...... No, it should be pulling out the radish and bringing out the mud, pouring a large number of people, this is an invisible blood exchange, bloody wind and rain.

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

……

……

Fast forward to the end of 2006, when the U.S. real estate that had been in the limelight for five years finally fell from its peak, and the food chain finally began to break, and the U.S. subprime mortgage crisis officially set sail.

When it comes to the global financial turmoil triggered by the subprime mortgage crisis in 2008, many people don't really know what is going on.

This matter has to start with the concept of consumption in the United States.

Loans are a very common phenomenon in the United States, from houses to cars, credit cards to phone bills, loans are everywhere, and locals rarely buy houses in full, often for a long time.

But we also know that unemployment and re-employment are very common in the United States, and how can these people who have an unstable or even no income at all buy a house?

Since '98, U.S. loan companies have been advertising on television, in newspapers, on the streets, and even in mailboxes filled with enticing flyers.

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

"I don't have any money. ”

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

"I can't even afford a down payment. ”

Loan company: "It's okay, we offer zero down payment." ”

"But I still can't afford to pay off my monthly loans. ”

Loan company: "It's okay, you only need to pay interest for the first 24~36 months, and the principal of the loan will be repaid when it expires, and I believe you will definitely find a job at that time." ”

"What if I still can't find a job and can't afford to pay the loan in a year or two?"

Loan company: "It's okay. Look at how much the house has risen now compared to two years ago? When the time comes, if you sell it to someone else, you will not only live for nothing for two years, but you will also make a lot of money! Besides, I dare to borrow, but you still dare not borrow?"

Under such temptation, countless Americans who do not even have a job do not hesitate to choose to take out a loan to buy a house.

From '98 to the first half of 2006, the U.S. real estate market achieved phenomenal results.

And the huge risks hidden behind these loans, those large and small financial companies in the United States will not be unaware, they know that it is impossible to monopolize the interests in them, so they find the leading big brother in the American economic circles - investment banks.

These guys led by Merrill Lynch, Goldman Sachs, and Morgan, what are they doing?

It's just that I have nothing to do all day long, and I am idle, so I get a group of Nobel economists and professors at Harvard University, use the latest economic data model, and after some tinkering, make a few analysis reports, so as to evaluate whether such and such a stock is worth buying, and the stock market of such and such a country has a bubble.

A group of people who cheat and cheat in the risk assessment market, how can they not see the risks involved?

Absolutely.

But there is a profit, so what are you hesitating about, do it.

So economists and university professors repackaged it with data models and came up with a new product - CDO.

The so-called CDO is a collateralized debt bond, or to put it bluntly, it is a bond, and through the issuance and sale of this CDO bond, the bondholder can share the risk of the home loan.

However, the risk is too high and no one buys it, these guys who cheat and cheat in the financial market, their eyes rolled and they thought of an idea, they divided the debt into two parts: senior CDO and ordinary CDO.

In the event of a debt crisis, senior CDOs have the right of first refusal.

Suppose the original bond risk level is 6, which is medium to high, and the risk level of these two parts becomes 4 and 8 respectively, and the total risk remains unchanged, but the former belongs to the medium and low risk bonds.

But the question remains, what about the remaining ordinary bonds with risk level 8?

Investment banks have found hedge funds.

What kind of person is a hedge fund, it is a bullish person who buys short and sells long in the financial world around the world, and lives a life of licking blood from the knife edge, and this risk is just a small meaning.

So with his connections, he borrowed money from the banks with the lowest interest rates in the world, and then bought these ordinary CDO bonds on a large scale.

Before 2006, the central bank's lending rate was only 1.5 percent, and the interest rate of high-risk ordinary CDOs was as high as 12 percent.

Then the magic happened, since 2001, the real estate in the United States has soared, from the people who take out loans to buy houses to the loan companies, to the major investment banks, hedge funds, and lending banks, all of them are full of brains.

This is not the end of the matter.

Investment banks quickly became unhappy. At the beginning, I thought that the risk of ordinary CDOs was too high to throw them to hedge funds, but I didn't expect those guys to earn more than themselves, and they knew that they would keep it for fun, so investment banks also began to buy hedge funds, intending to get a piece of the pie.

This hedge fund is happy again, who are they, bandits who can find a way to borrow 10 yuan to play with 1 yuan in their hands, and now they can be honest with the sought-after CDO?

So they pledged the CDO bonds in their hands to the bank in exchange for a 10-fold loan, and then continued to chase the investment bank to buy an ordinary CDO.

When the agreement was signed, the ordinary CDO had to sell it to them.

The investment bank was very unhappy, and in addition to continuing to buy hedge funds, these guys also came up with a new product called CDS - [Credit Default Exchange].

Don't you all think that the original CDO is risky, then I will take out some money from the CDO as a guarantee every year and give it to the insurance company in vain, but in the future, if there is a risk, everyone will bear it together.

The insurance company saw that the CDO was so profitable, and it didn't need to pay a penny to share the profits, so it didn't give me money for nothing, so it followed suit.

The hedge fund thinks, anyway, it has been making money for a few years, and the risk will become bigger and bigger in the future, and the insurance company will take half of the risk when a part of the profit goes out, so let's take them to play.

Well, this financial product called "CDS" is also selling well.

You thought that was the end of it?

It's naïve.

The Wall Street financial geniuses who eat people and don't spit out bones have once again come up with innovative products based on CDS.

They put $5 billion of the money they earned from CDS as margin and set up a fund, let's say it's called the "SX Fund", which is specifically used to invest in CDS.

The risk of this fund built on a series of previous products is very high, but they have invested 5 billion yuan as a margin, if the fund loses, then use the 5 billion to advance, only the 5 billion yuan is lost, and the investor's principal will begin to lose.

And before that, you can redeem it early, with an initial offering size of $50 billion.

100 yuan to buy a fund, lose 90 yuan will not lose their own money, but the money is their own, slot, is there a more cool fund in the world than this?

When the rating agency saw this genius idea, it simply did not hesitate: give AAA ratings!

As a result, this "SX fund" has gone crazy again, and various pension funds, education funds, wealth management products, and even banks from other countries have entered the market.

Although the initial offering size was originally set to be 50 billion US dollars, it is impossible to estimate how many billion will be issued in the future, but the margin of 5 billion has not changed.

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

At the end of 2006, as housing prices fell and the deadline for preferential lending rates arrived, ordinary people were unable to repay their loans, and then loan companies collapsed, hedge funds suffered large losses, which in turn affected insurance companies and lending banks.

Citigroup and JPMorgan successively issued huge loss reports, while major investment banks investing in hedge funds also lost money, and then the stock market plummeted, and people generally lost money, and the number of people who could not repay their mortgages continued to increase.

Eventually, the subprime mortgage crisis in the United States erupted.

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

Talos, which was deployed early, and the hedge fund under Xinghai International Investment Co., Ltd., united with international capital to short U.S. real estate, banks, stock markets, and insurance companies.

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

Fast forward to 2007.

At the end of February, New Century Financial Corporation, the second-largest subprime mortgage lender in the United States, was suspended from the New York Stock Exchange due to its imminent bankruptcy.

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

Soon after, HSBC announced that its North American home loan mortgage business had suffered huge losses, writing down $10.8 billion in related assets.

Subsequently, more than 30 U.S. subprime mortgage companies went out of business.

According to the statistics of the first quarter, more than 500,000 homes in the United States have been repossessed by banks and entered the auction process.

In June, the fund of Bear Stearns, the fifth largest investment bank in the United States, caused huge losses due to its involvement in the subprime mortgage bond market, causing the US stock market to fall sharply.

At the beginning of August, the 10th largest mortgage lender in the United States, the American Home Mortgage Investment Corporation, filed for bankruptcy protection from the court, becoming the second large mortgage lender in the United States to file for bankruptcy after New Century Financial Corporation.

On August 9, BNP Paribas announced the suspension of the trading of three of its funds involved in the U.S. mortgage business;

This was followed by the European Central Bank's announcement of 100 billion euros of funding to the relevant banks, a move that caused European stock markets to tumble.

On August 13, Mizuho Group, the parent company of Mizuho Bank, the second largest bank in Japan, announced that losses related to subprime mortgages in the United States had reached 200 billion yen, equivalent to nearly 2 billion US dollars.

Japanese and Korean banks have already suffered losses due to the subprime mortgage crisis in the United States.

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

In this time when countless people around the world are crying, some people are laughing behind their backs, in addition to those international capital who are short the US housing market, of course, including Guan Qiu.

To use a sentence said by Wang in his previous life to describe Guan Qiu's current mood: I don't care if he has money when I make friends, I don't have money anyway.