Rebirth: It’s Like Flowing Water

The latest website: American real estate? This reminded Qi Lei instinctively of the subprime mortgage crisis.

Three years later, the global economic crisis caused by the bad loans of US real estate.

Instinctively, he wanted to shake his head and prevent Wu Ning from wading into this muddy water.

But after thinking about it, it seems that it is not so simple. You cannot arbitrarily think that you cannot invest in real estate in the United States because of the subprime mortgage crisis. The truth may be just the opposite.

And Wu Ning saw Qi Lei pondering, and also expressed some of his thoughts and considerations.

"Now is the best time for the real estate market in the United States, and with Desheng as a background, I can easily obtain land and development licenses. I can even take advantage of financial facilities to realize a complete set of land acquisition, development, sales, loans, and loan financial products. real estate services.”

"There's a lot of profit here."

Wu Ning knew that Qi Lei was actually very disgusted with real estate speculation. I have said more than once before that there is no problem with the marketization of commercial housing, but it is not feasible to completely apply the real estate route of Western countries.

Because the family-oriented Chinese way of thinking is very different from Western liberalism.

The position of houses in the hearts of Chinese people is far greater than that of the West, which will form a deformed market with an extremely unbalanced supply and demand relationship.

The common people desperately need real estate, but they have high demand and cannot develop the self-discipline of the market.

Among all commodities, real estate may be the commodity with the highest tolerance of the people, which will naturally encourage the greed of merchants and consolidate the plundering position of merchants.

And the proportion of real estate to the happiness of Chinese people is very large, and it is easy to cause a lot of unnecessary troubles.

But then again. I'm not speculating on real estate in China, and I'm going to harm the American people. Wu Xiaojian really has no psychological burden at all.

"I think it can be done! It's not necessarily less profitable than the stock market, and it's less risky."

Qi Lei nodded subconsciously and followed, "The risk is low now, but it may not be so in the future."

Aside from personal emotional factors, Qi Lei knows all too well that now is not just the best time for U.S. real estate, but the craziest time.

After pondering for a long time again, he finally nodded, "Yes!"

Wu Ning was overjoyed, and Qi Lei said yes, then the matter was half done.

"However!" Qi Lei changed the conversation and looked at Wu Ning seriously, "You can only play for two years, three years at most, and then you have to get out."

Wu Ning was puzzled, "Why?"

Two or three years is too short for the real estate market.

Qi Lei replied, "Because, the U.S. property market will have to collapse in three years at most!"

Wu Ning listened with an edge, and the corner of his mouth twitched, "No... can't it? You haven't seen how hot the US property market is, how could it collapse in two or three years?"

"Impossible! Absolutely impossible!"

Qi Lei smiled, "Don't believe me, listen to my analysis."

Wu Ning obviously didn't trust him, "Tell me about it."

…

Many people may think that China's real estate industry has ushered in a decade of madness since 2004. But in fact, compared with the United States in the years before the subprime mortgage crisis, it is completely pediatric.

Due to the Asian financial crisis in 1998 and the bombing of NLM by NATO in Europe, a large amount of funds flowed into the United States.

Subsequently, the collapse of the Internet bubble compresses the largest capital sponge and releases more funds.

And so much money is gathered in the United States and has nowhere to be released. At the same time, before and in the early days of the war on terrorism, the national income of the United States had considerable purchasing power, so a lot of money poured into the real estate market.

This is the same for any country in the world.

If you have money, you can build a house, and no one is exempt from the custom.

This directly led to the unprecedented expansion of the U.S. real estate market from around 2000 to 2007.

Almost crazy.

How crazy is it?

Not to mention housing prices, the housing prices that we Chinese people cared about were not enough in the US at that time, and there were even more absurdities.

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

You can even buy a house without a down payment!

Because there is no down payment at all.

Have fun, right? Can you have your own house without spending a penny?

Oh, not only do you not need a down payment, but the interest is also low! But don't take this as 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 for profit, and a house can be loaned twice by operation.

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

Then, under their operation, make another loan contract with the same house, 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.

This kind of good thing, who is not happy with ordinary people?

You know, housing anxiety exists in any society, and it is widespread.

This directly led to the brutal growth of the U.S. real estate market in those years, and users’ desire to buy surged. Moreover, even if you have the money to buy a house in full, you need a loan.

However, for a considerable part of the people, they do not have financial thinking and long-term planning. I only want to buy a house in front of me, but I don’t consider whether my own ability can support high loans, and the disaster that the risk of supply cuts after unemployment will lead to disaster.

Not to mention that after the boom in the bubble real estate market, house prices plummeted and houses became negative equity. The able-bodied middle class could not support the pressure of housing and went bankrupt.

Before the thunderstorm, these lenders 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.

To make matters worse, capital is still insatiable when knowing that subprime loans are high-risk. In order to pursue the maximization of interests, the US property market loans are linked to finance.

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

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

However, how can Wu Ning realize that the U.S. housing market is going to collapse within two or three years? This is a problem.

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

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

CDS stands for Credit Default Swaps. Anyone who knows a little about the U.S. financial system knows it.

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

As for the leverage operation?

For example, a bank has 10 billion investment funds, no matter what project it invests in, assuming a profit of 5%, that is 10 billion to earn 500 million.

However, if the bank takes 10 billion as collateral and borrows 300 billion, this is called adding 30 times leverage. Then look at the profit of 5%, but it is completely different. 5% of 300 billion is 15 billion!

Equivalent to a capital of 10 billion, it is a 150% profit.

But conversely, if it loses 5%, then the bank not only loses its own 10 billion yuan, but also owes 5 billion yuan.

Risk and benefit go hand in hand. This is leverage.

Then the problem arises. Capital also knows that the risk of adding leverage is too great, so you must find a way to avoid it, right?

Some people have come up with a way to "insure" leveraged investments. This insurance is called CDS, credit default swap.

For example, Bank A with assets of 10 billion yuan found another bank or insurance company B in order to avoid risks.

A said to B, "How about you help my loan with default insurance? I will give you 150 million in premiums every year for 10 consecutive years, a total of 1.5 billion.

A's abacus is that if I make a profit, I will give you 1.5 billion of the 15 billion profit and I will not lose. If you lose, you will pay 15 billion, and it has nothing to do with me. Right?

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

Once I settle the account, suppose I receive a guarantee contract of 100 orders, 1.5 billion times 100, which is 150 billion. If I lose 1% of money, I will lose 15 billion for a single loss, and I still have 135 billion left, so I can still make money.

So, 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 begins.

After B did this business, C became jealous, and C found B, "Sell me these 100 CDS orders!"

"I'll give you 650 million for a list, a total of 65 billion. Do you want to do it?"

When B thinks about it, it will take ten years to get a profit of 135 billion yuan, and now he will make 650 yuan when he changes hands, and there is no risk, of course!

Therefore, C is equivalent to (1350-650) 70 billion to get the CDS list and take the risk.

Then, C didn't want to recover the profits in ten years, and sold it to D again.

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

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

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

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

Because capital is not stupid, you know that it is risky. The risk is high, and the premium is naturally high!

To make matters worse, in order to sell higher-risk subprime mortgages, financial institutions have come up with various package 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 Xiang Wu Ning, "Have you ever thought about it, housing prices in the United States will not keep rising."

"Also, its financial cycle is very fixed, it's about a trough every 10 years, and the next trough is two or three years later."

"By that time, will house prices continue to rise against the trend?"

Wu Ning, "…"

No one can guarantee this, right?

Qi Lei, "Once the economy declines and the property market is sluggish, according to the current carnival in the property market in the United States, do you know the consequences?"

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

Qi Lei, "Do the math again, how many subprime loan defaults will eventually be caused by the income pressure brought about by the economic downturn and the panic brought about by stagnant housing prices?"

"I estimate, no less than 20%!"

This is real data from past lives.

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 housing market default swap guarantee agreement.

The profits of the big guys are also calculated at 1%.

I suddenly tell you that the rating of a certain CDS product has dropped, and 20 out of 100 orders defaulted.

One is worth 15 billion, and 20 is 300 billion.

Beating the drums to spread the flowers, it will not be passed on to the last big grievance, and the compensation will be 300 billion. The top ten institutions in the United States can't stand it either! 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.

The collapse of this level of capital institutions will bring catastrophic consequences and induce a global financial tsunami.

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

"Don't do it?"

Qi Lei smiled, as long as Wu Ning didn't get in and out with a fierce guy.

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

Wu Ning pondered, "I have a count."

This topic is over, but Wu Xiaojian still remembers it in his heart.

As for what to do or not, that is Wu Ning's own business, Qi Lei doesn't care. However, looking at Wu Ning's sly eyes, Qi Lei guessed that he didn't hold back any good farts.

Still that sentence, Wu Ning is really cheap, and Qi Lei doesn't know what he can do.

When Wu Ning returned to the house, Cheng Lele was already asleep.

In a daze, he gave Wu Ning a place, "The bed is so hot, get in here!"

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

Naturally, she moved a lot, disturbing Cheng Lele, "Sleep? I won't sleep if I don't!"

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

Cheng Lele didn't listen to him like a joke, and he was a little bit energetic, so he stood up: "What are you thinking? Let me hear it!"

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

Cheng Lele pouted, "I regret going out. My head is in a pickle jar. What did I have to study on someone else's site?"

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

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

She couldn't fall asleep from left to right, so Wu Ning gave her some popular science.

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

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

Suddenly, a sentence came, "If things continue like this, Ding Lei will not be the first, nor will he be the last."

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

Cheng Lele frowned, "Didn't the stone say that there is no handle outside?"

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

"Then what do you want to do?"

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

Wu Ning murmured, "Isn't it better to prepare more?"

"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 didn't feel sleepy. She knew that Wu Ning was serious.

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

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

"Forget it, if you don't understand it, you don't understand it! Anyway, I'll just say a word, no matter what you do, my mother can't help you, and it won't hold you back."

"Hehe." Learning from Xu Qian's smirk and acting like a spoiled child, UU reading www.uukanshu.com is rarely gentle, "I can shout cheers!"

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

"Just learn, cute."

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

Cheng Lele, "You!"

Ow! A scream resounded through the night sky.

Qi Lei and Xu Qian were both swayed, Qi Lei's facial features were twisted, and his eyes were full of curiosity, "What are you playing? It's so exciting? How about... Let's try it too?"

ooh...

…

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