American Fortune Life

The decline of the three major stock indexes did not seem to cause much panic in the market. The downward trend in the subprime loan market has been prominent since January 2007. Until April, after the New Century company filed for bankruptcy protection, it had fallen by 40% in three months.

The US stock market reached the critical point of the collapse, but in October, that is, six months after the subprime mortgage market began to collapse, the stock market began a crashing spiral decline.

The main thing is that people don't realize the seriousness of the matter. From a geographical point of view, the real estate speculation in the United States was initially concentrated in small areas, but no one expected that the snowball would get bigger and bigger, and the regional crisis quickly spread across the United States.

After the Asian financial crisis, due to the need for reserves, the international demand for safe or considered safe US dollar assets rose. Whether it is a sovereign wealth fund or a foreign central bank, there is a huge demand for fixed income securities.

This also further explains why securitized debt built around US real estate prices can be issued to some extent around the world. Correspondingly, the financial crisis triggered by the United States spread to major economies around the world.

Securitization has helped the US government achieve its policy goals of releasing liquidity, promoting growth and employment, and promoting social welfare. It can be described as a successful “financial project”; but on the other side of achieving policy goals, risks are accumulating.

The U.S. government is undoubtedly the biggest beneficiary. This is why when the subprime mortgage crisis broke out, all bankers collectively lied to the ground and allowed the crisis to fester. The government eventually forced the government to rescue the market and reciprocate. The company injected capital into the collapsed do, and successively took out mbs bonds that were already junk.

Andy has a leverage of 600 million principals to use the leverage to short $ 7.2 billion of CDs bonds. Although he is not as short as 20 billion as Michael Bray, a long crooked figure, is short. The best of them.

The **** of shorts, George Soros, pulled down his old face and went to see Michael Bray again and again after the introduction of his nephew. As soon as he met, he said a lot of "old drivers take me" to the rising star. Michael Bray was not entangled. Method, I had to give a rough idea. He hurried back to draw the gourd in the same way, and immediately went home to short a billion CDs.

This impoverished loan concession issued by the US government and Wall Street to the unaffordable house has finally triggered a huge backlog of risks.

The reason why Andy values ​​DS shorts is that CDs are mainly issued by insurance companies such as AIG, and the bug is that you can buy insurance without owning the relevant assets. It is equivalent to buying a car insurance for the next-door Pharaoh's car. If he crashed, you would be happy to get a claim, and Pharaoh did n’t know.

However, it seems that everything is moving in the favourable direction of the big shorts of Andy. In fact, the small and medium shorts who have short CDs but lack liquidity have long started to jump up and down. Well, it is fueling the fire. , Hot pot ants scurrying and all the adjectives in a hurry.

Because the original bond price of mbs is still high, the mbs re-securitization CDs still maintain the aaa rating, the cash flow in their hands is insufficient, the liquidity is insufficient, and the short price does not fall but rises, they have to lose money in it, Funds are injected into the margin account, and positions will be forcibly closed without replenishment.

Andy was playing with the marker in his hand, sitting on the boss chair with his feet on the table, shaking his body gently, the seat turned back and forth, and a relaxed expression looked like it had been changed to the strategic command. Various data displayed on the LCD screen in front of the conference room.

Alwittlie walked to Andy and sat down with an ugly face. "These **** bastards, full of lies!"

"Oh, don't be angry, Al, isn't this something we thought about a long time ago? In fact, this time we took the lead in gently wielding a shot, and have already played the domino effect. The reason why mbs is still high now, cds rating is not The drop is nothing more than pretending to be okay and enticing other colleagues to buy junk bonds that it is anxious to sell and that can bankrupt the company, and get out of it. And those who take the drum and pass the flower process are not worthy of pity.

Hehe, you do n’t know how many calls I have received these days. My grandpa called me to keep me silent, so do n’t make any more remarks about the subprime crisis in public places. "

Andy threw the marker in his hand to the desk, hung his hands around his chest, put his head on the back of the chair, and laughed mockingly.

"But boss, every time we lose a little money in the d bond ..."

"Well, Al, complaining is useless. You know better than anyone else. Their power is not what we can currently fight. They are dead support. What can we do? Our deposit is enough for us to stick to them. When you ca n’t support it, you can exchange more than 100 million margin for billions of profits without losing money. Also, is n’t cdo insurance already starting to make money? Although it ’s pitiful, but at this step, you need to be patient , The darkest hour before dawn is over, and we will usher in a fiery sun! "

"As the fog grows thinner, before the truth can be revealed, I really want to know which greedy guys will take over the garbage."

Andy closed his eyes half-opened, glanced at Al, and chuckled, "Wall Street's greed is flowing in the blood, full of fraud and lies. They are only playing now," , Who are we and they are silly? "game."

Arvitelli heard the boss's grumble and shook his head and laughed. He didn't expect the young boss to be so calm. You know that the risk of shorting is not generally high, and you can die without care.

In fact, how can Andy not know the risk of shorting, he also summed up the three major fears of shorting the subprime mortgage crisis.

First, I bought a handful of CDs and found that the relevant assets were in default, and the CDS prices have remained unchanged, thinking that the entire system colluded to make a fake. Being at this stage now makes the bears miserable and ridiculed by the return to normal investment banks.

Secondly, the cds in my hand made money, and I started to worry about the bankruptcy of the betting opponents' investment bank to make their cds waste paper.

Thirdly, the warehouse was finally emptied and the money was received. However, I found that I might be caught by fbi or occupied by "Occupy Wall Street". The pressure of public opinion was too great.

Although it was the short three big fears summarized by Andy, but it did not include himself. Some people did not want him to shout "the wolf is coming", so he would naturally give something. He told Andy through old Smith's mouth that he was not a gimmick. He knew what compromise was. If he wanted to make money, he would smash someone's pot. People dare to kill you. For example, Kennedy, hey, what he likes most. The thing is the pot, whether it is the opponent's or the ally's, so it's like being mythically.

"Boss, but recently a lot of calls came to the company to listen to the wind, especially Kosai, the financial adviser of Goldman Sachs Group, wanted to visit you." Alvitre said at a good time.

Andy glanced at Al with a smile, and shook his head and said, "They are Goldman Sachs, but Michael Bray is the main target of gambling, and isn't that the one in charge of R & D? I'm not interested in seeing him, well, I want to pick up a girl Friends are off work, alas, look at the changes in this more than a week, the stock market has regained vitality, it should rise, mbs do not fall and rise, cds is still aaa level, although there is a company bankruptcy, but everyone is still the same, What happened on April 2 was almost a joke. It seems that my two weekly magazines were slapped ... "

Arvitelli shrugged, looked helplessly at his young boss and patted his buttocks and left. It seems that he can only say sorry to his old friends. Whether it is due to professional ethics or confidentiality agreements, he cannot reveal any words to anyone. information.

Andy is even more inadvertent to see each other. This kind of one-handedly selling these mbs and touting them is so good. The other hand, privately inventing cdo such hedge insurance to short mbs is very immoral, and Goldman Sachs undoubtedly plays this. This is the best game to play ...

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