On October 23, 2007, the American Bankruptcy Institute announced that the number of consumers filing for bankruptcy in September increased by 23% year-on-year to nearly 69,000.

These bankrupt people are basically the so-called middle class and even the small rich.

On October 24, 2007, affected by the subprime mortgage crisis, the world's top brokerage Merrill Lynch announced a loss of $7.9 billion in the third quarter of 07, and the day before that, Japan's largest brokerage Nomura Securities also announced a loss of $620 million in the quarter.

The financial industry, which has been in the limelight for nearly a decade, has ushered in its biggest round of adjustment, but until now, it is estimated that no one believes that this round of crisis will have a greater impact on the American financial industry than the Great Depression of 1929.

On October 30, 2007, the largest Swiss bank in Europe by assets announced that it had incurred a quarterly loss of CHF 830 million in the third quarter for the first time in nearly five years due to losses on subprime mortgage-related assets.

In today's global economic integration, the subprime mortgage crisis, which originated in the United States, has begun to have an increasingly obvious impact on countries around the world.

"Mr. Guan, our funds have entered the NASDAQ and the New York Stock Exchange through multiple accounts."

"The first wave of funds first shorted those blue chip stocks, in addition to Ford Motor, aimed at big banks such as Flower Bank and Merrill Lynch", Guan Weidong began to lay out the general direction of investment.

"Is Ford going to deal with them?"

"Well, to make their stock price fluctuate as much as possible, go down, and make the people at Ford feel the tension."

"If that's the case, you might not be able to make much money."

"It doesn't matter, in order to make their stock price fluctuate more fiercely, we can arrange for some people to short and long Ford at the same time, in short, toss Ford as much as possible without losing money."

"Mr. Guan, there is a contradiction between Ford Motor and our group? We are a bit thankless to do this, if it is placed in normal times, it may not be able to achieve the goal well, but now that the subprime mortgage crisis is getting worse, the financial market has become a bit of a rumor, but it is convenient for us to copy."

"Don't ask what you shouldn't ask, this is a task arranged by Mr. Jiang personally, and everyone can follow the instructions."

"Okay, resolutely implement the instructions of the big boss, Mr. Guan, you can watch a good show on the sidelines, and ensure that the gang of people in the financial department of Ford Company want to live and die."

……

Fannie Mae President's Office.

Fannie Mae was founded in 1938 when millions of families in the United States were unable to own their homes or were at risk of losing them due to a lack of continued access to mortgage funding.

The U.S. government established Fannie Mae to increase the liquidity of mortgage funds and reduce the cost of home ownership.

Initially, Fannie Mae, as a government agency, was only authorized to purchase mortgages that were guaranteed by the Federal Housing Administration.

In 1968, Fannie Mae became a private company, and its rights were extended to the purchase of mortgages that were not guaranteed by the Federal Housing Administration.

Fannie Mae is an integral part of the U.S. housing industry, operating in the U.S. secondary mortgage market, ensuring that mortgage banks and other lenders have sufficient funds to lend to homebuyers at low interest rates.

Fannie Mae does not lend directly to homebuyers, but it supports mortgage funding by purchasing mortgages from various lenders that lend directly to homebuyers.

Lenders that do business with Fannie Mae are part of the primary mortgage market.

Primary market lenders include mortgage companies, deposit and loan institutions, commercial banks, credit unions, and national and local housing credit institutions.

These lenders sell mortgages in the secondary market.

"President, we have to ask Congress for support for homeownership for low- and moderate-income Americans, which they estimate we are doing, but now this area has become the hardest hit by default."

"Has the finance department calculated this year's profitability?"

"It has been calculated several times, and it is conservatively estimated that it will lose $5 billion this year."

"So much? This will eat up all the profits we made in previous years."

"That's not the most important thing, the biggest problem now is that many of the mortgages we bought have defaulted, and it will definitely be more serious in the future, and if there is no follow-up funding support, we may soon default."

"How to talk to several major banks to see if they can borrow a batch of funds for emergency."

"We've been talking about it, and now there are a lot of institutions in the stock market that are shorting us, and our stocks have been very volatile lately."

"The wall is falling down, and everyone is pushing it."

……

Goldman.

"Partners, the theme of our meeting today is to discuss how our company can survive in the current subprime mortgage crisis."

The partnership system has a very old tradition on Wall Street, and many international investment banks originated from this system, including Goldman Sachs, Merrill Lynch, Morgan Stanley, etc., among which Goldman Sachs's partnership system is the most famous.

On Wall Street, becoming a partner at Goldman Sachs can be compared to the CUHK Lotto, not only because partner status means a good salary and a step to the highest position in the firm, but also because the probability of becoming a partner is extremely low.

Interestingly, Goldman Sachs traditionally gets a personal call from the Goldman Sachs CEO for newly promoted partners, so many people wait anxiously for that call before and after the actual list is announced.

A former Goldman Sachs partner once said that receiving that phone call was the best moment of his life.

After all, Goldman Sachs has about 35,000 employees, but only 300-400 partners.

"President, judging from the current analysis of the Securities Investment Department, we believe that this crisis is only the beginning so far, and it is far from the time when the harm is deepest, and I think it is necessary for our company to further improve the emergency plan to face the deteriorating financial market."

"President, judging from the situation of commodity trading, we feel that the subprime mortgage crisis is only a small storm in the economic development, and will not have much impact on the economic development of the United States and even the world. The current oil prices, iron ore and other commodity prices are still strong, and we have reason to believe that the market is still booming."

"President, the analysis of our investment banking department feels that the impact of this crisis on the financial industry should be very strong. At present, the world's major banks have been affected by the subprime mortgage crisis, and Citigroup, Merrill Lynch, and UBS have all announced historic losses last quarter, and it is hard to believe that this loss can be greatly improved immediately in the next quarter."

"President ......".

"President ......".

People from various departments of Goldman Sachs have expressed their own opinions.

However, no matter how they look at it, they cannot stop the wheel of history.

(End of chapter)