Homecoming of Rebirth

Let alone housing prices, the housing prices that we Chinese people care about were simply not enough in the United States at that time, and there were even more absurd ones.

That is, as long as you are not a homeless person or a bankrupt, as long as you have a job, even if you are a restaurant waiter or a temporary worker, you can buy a house.

Even, you can buy a house without a down payment!

Because, there is no down payment at all.

Have fun?Own your own house without spending a penny?

Haha, not only no down payment is required, but the interest rate is also low!But don't think this is a good thing, this is a disaster, the last madness of capital.

Let's see how the 0 down payment comes from.

Banks and institutions have gone crazy in order to make profits, and a house can be loaned twice through operations.

For example, for an apartment with a 30% down payment and a 70% loan, the loan financial institution can first use formal channels to loan 70% from the bank, which is similar to our loan process.

Then under their operation, use the same house to make another loan contract, and loan 30% of the down payment from the bank.

Therefore, you can own a house without spending money, and the interest rate is still low.

Who would not be happy with such a good thing?

We must know that housing anxiety exists in any society, and it is common.

This directly led to the brutal growth of the US housing market in those years, and the surge in users' desire to buy.Moreover, even if you have the money to buy a house in full, you need a loan.

However, for a considerable number of people, they do not have financial thinking and long-term plans.I just want to buy a house in front of me, but I don’t think about whether I can support the high loan, and the disaster caused by the risk of losing my supply after unemployment.

Not to mention that after the thunderstorm in the bubble real estate market, housing prices plummeted, and houses became negative equity.The capable middle class could not support the pressure brought by the housing, and went bankrupt one after another.

Before the thunderstorm, these borrowers with zero down payment, low household income, and weak anti-risk ability became subprime loans, that is, loan users with high risk of supply interruption.

What's even worse is that capital is still insatiably greedy even knowing that subprime loans are highly risky.In order to pursue the maximization of interests, the real estate market loans in the United States have been linked to finance.

That is, these subprime loans were packaged into financial products, which eventually led to the subprime mortgage crisis sweeping the world.

These are the insights brought by Qi Lei's past life memories.

However, how to explain it can make Wu Ning realize that the US housing market will collapse within two or three years?This is a problem.

After thinking for a long time, I suddenly asked, "Let me ask you, how big is the CDS market in the United States?"

Wu Ning raised his eyebrows, suddenly asked what is this for?But it's not a problem, "Probably more than 60 trillion!"

CDS is [Credit Default Swap].Anyone who knows a little about the U.S. financial system knows that.

To put it bluntly, many banks, institutions, and capital often adopt leverage operations in order to earn huge profits.

As for leverage operations?

For example, a bank has 100 billion investment funds. No matter what project he invests in, assuming a profit of 5%, that is 100 billion to earn 5 million.

However, if the bank takes 100 billion as collateral to borrow 3000 billion, this is called 30 times leverage.Then look at the profit of 5%, but it is completely different. 3000% of 5 billion is 150 billion!

It is equivalent to a capital of 100 billion, which is a 150% windfall profit.

But conversely, if the loss is 5%, then the bank not only loses its own 100 billion, but also owes 50 billion.

Risks come with benefits.This is leverage.

Then the problem arises, the capital also knows that the risk of increasing leverage is too great, must find a way to avoid it?

Someone came up with a way to "insure" leveraged investments.This insurance is called CDS, credit default swap.

For example, Bank A with 100 billion assets found another bank or insurance company B in order to avoid risks.

A said to B, "How about you insuring my loan against default? I will pay you 1.5 million premiums every year for 10 consecutive years, a total of 15 billion."

A's abacus is that if he makes a profit, I will give you 150 billion of the 15 billion profit, and I will not lose money.If you lose, you will pay 150 billion yuan, and it has nothing to do with me.Right?

B also thought about it carefully, and did a statistical analysis carefully, and found that the probability of losing money in the business A is doing is only 1%.

Once the accounts are settled, suppose I receive 15 such guarantee contracts, 100 billion multiplied by 1500, which is 1 billion. 150% loses money, and I lose 1350 billion for a single loss. I still have [-] billion left, and I still have something to earn.

Therefore, B agreed to insure A.

AB thinks that this business is beneficial to them, and everyone is happy.

Then, pay attention!The game of drumming and passing flowers has begun.

After B made the deal, C was greedy, so C approached B and said, "Sell me these 100 CDS orders!"

"I'll give you 6.5 million for one order, a total of 650 billion. Do you want to do it?"

When B thinks, it will take ten years to get the profit of 1350 billion yuan, but now he can earn 650 yuan as soon as he changes hands, and there is no risk, of course he will do it!

Therefore, C is equivalent to (1350 billion-650) 700 billion to get the CDS list and take the risk.

Then, C didn't want to recover the profit in ten years, so he sold it to D again.

D is sold to E, and then, F, G, H... are circulated one by one, which forms the CDS market.

So how big is this market?Just now Wu Ning said, more than 60 trillion.

In this way, subprime loans are packaged and sold in the US CDS market.

Moreover, it is the financial product with the highest profit margin among them.

Because capital is not stupid, knowing that it is risky.The risk is high, and the insurance premium will naturally be high!

What's more, in order to sell higher-risk subprime mortgages, financial institutions have developed various packaged services.That is, subprime loans and high-quality loan products are packaged and sold, making subprime loans ubiquitous in the CDS market.

At this time, Qi Lei asked Wu Ning, "Have you ever thought about it, the housing prices in the United States will not keep rising."

"Moreover, its financial cycle is very fixed. It is almost a 10-year trough, and the next trough will be two or three years later."

"By that time, can housing prices continue to rise against the trend?"

Wu Ning, "..."

No one can guarantee this, right?

Qi Lei, "Once the economy goes down and the real estate market slumps, do you know what the consequences will be based on the current carnival in the real estate market in the United States?"

Wu Ninghan came down, "So, it seems a bit scary."

Qi Lei, "If you do the math again, how many subprime loans will eventually default due to the income pressure brought about by the economic downturn and the panic brought about by the stagnation of housing prices?"

"I estimate that it will not be less than 20%!"

This is the real data of the previous life.

What is the concept of 20%?

Originally, institutional banks and insurance companies calculated a default rate of 1%.The entire CDS market is based on this for the default swap guarantee agreement in the housing market.

Everyone's profit is also calculated at 1%.

Suddenly tell you that the rating of a certain CDS product has dropped, and 100 out of 20 orders are in default.

One will pay 150 billion, and 20 will be 3000 billion.

Beat the drum to pass the flower, and if it is passed to the last big injustice, it cannot be passed on, and the compensation will be 3000 billion.Even the top ten large institutions in the United States can't stand it!Including Desheng.

In fact, in the original time and space, a large number of American financial giants such as Lehman Brothers and New Century Finance fell down.

The collapse of a capital institution at this level has disastrous consequences, and it has also triggered a global financial tsunami.

"Crack!" Wu Xiaojian was completely speechless, "I just want to speculate in real estate, is it so scary?"

"Don't do it?"

Qi Lei smiled, as long as Wu Ning doesn't rush in and get out.

"It's up to you! Don't be greedy, it's really nothing to hit two quick punches."

Wu Ning mused, "I have counted."

Even if this topic is over, Wu Xiaojian still remembers it in his heart.

As for whether to do it or not, that is Wu Ning's own business, Qi Lei doesn't care.However, looking at Wu Ning's sneaky eyes, Qi Lei reckoned that he didn't hold back anything.

Still the same sentence, Wu Ning is so cheap, Qi Lei doesn't even know what he can do.

When Wu Ning returned to the room, Cheng Lele had already fallen asleep.

In a daze, he made room for Wu Ning, "The quilt is so warm, get out!"

Wu Ning got in, but couldn't sleep, thinking about what Qi Lei said just now.

Naturally, she moved a lot, which disturbed Cheng Lele, "Sleep or not? I won't sleep if I don't!"

Wu Ning was speechless, "Don't make trouble, think about something!"

Cheng Lele didn't look like a joke, but she was a little energetic, so she stood up: "What are you thinking? Let me listen!"

Wu Ning glanced at her, "Ding Lei hasn't returned to China yet, so he's a bit deceptive."

Cheng Lele curled her lips, "I even regret going out, my head is soaked in pickles, why did I have to go to other people's territory to learn?"

Wu Ning is not on the same channel: "Stone said that the subprime mortgage crisis will break out in the United States within three to two years."

Cheng Lele, "What is the subprime mortgage crisis?"

Left and right couldn't sleep, so Wu Ning gave her a popular science.

Cheng Lele was still confused and confused, "I still don't understand, can it be prevented?"

"Prevention? Ha ha." Wu Ning sneered, "I still give him research on prevention?"

Suddenly came a sentence, "According to this development, Ding Lei is not the first, nor will he be the last."

"Shitou, me and Xu Qian, sooner or later we have to follow in his footsteps!"

Cheng Lele frowned, "Didn't Shishi say that there is nothing outside?"

Wu Ning, "It's not a question of whether or not there is."

"Then what do you want to do?"

Wu Ning, "What do I want to do..."

Wu Ning murmured, "Is it always right to be extra prepared?"

"I'm in a hurry, let this crisis and that crisis explode in my hands, and I will die!"

Cheng Lele: "..."

A chill rose from the bottom of her heart, and she was completely sleepless. She knew that Wu Ning was serious.

After a long silence, Cheng Lele simply moved Wu Ning's arm, put it under his head, and pressed against him.

"I still don't understand, what should I do?"

"Forget it, if you don't understand, you don't understand! Anyway, I will just say, no matter what you do, my old lady can't help you, and I won't hold you back."

"Hey." Like Xu Qian, she smirked and acted coquettishly, which is rare and gentle, "I can shout for you!"

"Pfft." Wu Ning laughed, "Don't be like Xu Xiaoqian!"

"Go to school, cute."

Wu Ning, "Xu Xiaoqian is pretending to be stupid, but you are really stupid, there is a difference!"

Cheng Lele, "You!"

Ow! !A scream resounded through the night sky.

Both Qi Lei and Xu Qian stood up, Qi Lei's facial features were distorted, his eyes were full of curiosity, "What are you playing? It's so exciting? How about... let's try it too?"

oh oh...

……

Chapter 598

Early the next morning, Wu Ning and Qi Lei stood in the small kitchen washing up.

Wu Ning kept looking at Qi Lei with a weird expression, "What did you do last night? So exciting?"

Qi Lei glanced at him indifferently, "How dare you criticize me? Are you quiet?"

Wu Ning was stunned for a moment, "Is it very big? Crap! This dilapidated house of yours has to be demolished quickly, it's not soundproof at all."