The fake rich man and the beautiful goddess guest chased me

Soros doesn't care about the life and death of Fannie Mae and Freddie Mac.

Even if they go bankrupt, it has nothing to do with Soros' hedge fund.

What Soros cares about is the investment banks that are also on Wall Street, in the financial industry, and the big brothers in the financial industry - Goldman Sachs, Morgan Stanley, Lehman Brothers, and Merrill Lynch.

You know, although the investment banks did not directly participate in Soros's actions this time, they still provided a lot of funds to Soros's alliance!

It can be said that 20% of the funds of Soros' alliance are provided by the four major investment banks of Goldman Sachs, Morgan Stanley, Lehman Brothers, and Merrill Lynch! !

If their stocks plummet, it is very likely that they will have to withdraw the funds in advance.

This is an unbearable blow to Soros, who has already gained an absolute advantage in the balance of victory!

This is something that Soros absolutely does not want to see happen to him! !

Druckenmiller quickly answered Soros' question: "It's subprime credit!!! Subprime credit!!!"

"Subprime credit is the housing loans that our country's banks provide to people with low credit scores, lack of income proof, and heavy debts."

Soros interrupted: "I know what subprime credit is. Get to the point!!!"

Drukenmiller said: "Subprime mortgages are a high-risk, high-return industry."

"Subprime housing credits are estimated, combined, and packaged by Wall Street financiers using financial engineering methods to form bills and securities products."

"Then, this These products are sold in the secondary mortgage market. "

"And the four major investment banks, such as Morgan Stanley, use a high leverage of more than 20 times to purchase these products in order to make huge profits."

"And our hedge funds are also buyers of these products."

Soros said seriously: "Are you talking about credit default swap insurance contracts?"

"Yes, such financial derivatives are high-yield products, but their risks are also uncontrollable."

"At least Quantum Fund will never buy such products."

When Soros said this, many people in the room changed their faces.

Soros did not buy credit default swap insurance contracts, but they did!!

As soon as Soros said this, he had figured out why investment bank stocks plummeted.

At this time, Soros was left with only horror!!

It's over!!!

This time, the crisis he faces is even bigger than he just imagined!!

Why did the stocks of top investment banks such as Lehman Brothers and Morgan Stanley plummet?

It is because they bought a huge amount of financial derivatives related to subprime products.

This financial product is equivalent to default insurance for bank mortgages, especially subprime loans.

When house prices rise, buying these financial derivatives is profitable, and it is quite profitable!

However, when house prices fall, when home buyers or mortgagees do not repay their mortgages, this default insurance needs to be paid!!

Because of the plummeting house prices, buyers cannot repay their loans, or do not want to repay their loans, so the risk goes to the bank that lent them money.

However, those large commercial banks, through financial derivatives such as credit default swap insurance contracts, have also transferred the risks to the investment banks and hedge funds that own these derivatives!

And those who ultimately bear the huge insurance compensation are investment banks and hedge funds!!

What is scary is that because these investment banks and hedge funds use leveraged investment principles, even if all their assets are lost, it is not enough to repay the debt.

Investment banks and hedge funds that purchased these financial derivatives not only suffered heavy losses, but also faced the risk of bankruptcy.

When the investment banks went bankrupt, the original commercial banks also lost the insurance payer, and they will also face bankruptcy!

After sorting out all the ideas, Soros finally discovered the impact of the collapse of housing prices on investment banks and hedge funds! !

They not only have to pay a large sum of money, but also face the crisis of bankruptcy! !

The less than 10% drop in the stocks of those investment banks is just the beginning.

Because there are only a few people who can think through all the details like Soros.

So now only some very sensitive and smart people are selling the stocks of investment banks! !

When the public knows all this and understands that the plunge in housing prices will eventually lead to the bankruptcy of investment banks.

The stock prices of the four major investment banks will undoubtedly plummet! !

And because hedge funds cannot be listed, they are not greatly affected by the stock market!

However, any hedge fund that purchased a large amount of financial derivatives related to subprime mortgages will also face hisA devastating blow that they cannot bear!

If they are greedy and use high leverage, bankruptcy is the only possibility! !

Obviously, the hedge fund tycoons present also quickly figured out what Soros thought.

Tepper's Appaloosa Investment Management Company is using high leverage to hold a large position in subprime derivatives! !

At this time, Tepper didn't care about the honor of the country at all and sniped the Chinese currency.

He stood up anxiously: "Sorry, I can't stay here anymore."

"All my funds will be withdrawn!!"

"Good luck to everyone!!"

Similarly, the heads of hedge funds who held subprime derivatives like Tepper hurriedly stood up.

At this time, they were already busy with their own affairs, so naturally they had no time to play with Soros.

If they had made billions or even more in the foreign exchange market with Soros before!

But this time, if what they imagined happened, a large number of subprime mortgages would default.

The losses they will face are tens of billions of US dollars, or even bankruptcy!

Looking at the originally full conference room, more than half of the people have left.

Soros collapsed on the chair helplessly.

Soros knew that he lost this time! !

And lost miserably! !

And Soros also knew that he would lose not because of any problems with his layout or any action arrangement.

This was originally a battle that must be won.

Even in Soros's budget, the Chinese government can only hold on for an hour at most, and their foreign exchange reserves will be exhausted.

Soros knew that he would lose, entirely because of the sudden plunge in US housing prices, because of the scandals of Freddie Mac and Fannie Mae! !

Because his greedy allies all used high leverage to buy subprime-related financial derivatives.

But losing is losing!

The four major investment banks have urgently withdrawn all funds entering the Chinese currency foreign exchange market.

Most of the hedge fund allies that Soros had called together also retreated.

With the amount of money that everyone in Soros's combat meeting room had, they were unable to withstand the foreign exchange reserves of the Chinese government!