Rebirth of Hong Kong's tycoons, shorting Eagle Sauce

More and more people found that they had fallen into a trap.

Their repayments rose rapidly as the adjustable interest rate rose.

In the spring of 2007, their loans came like a flood.

A subprime borrower's repayments rose from $1,200 a month to $2,000 a month!

Most families had a hard time paying the original $1,200, and had to use credit cards and borrow money from everywhere, not to mention the higher monthly payments.

With no other choice, the stripper could only choose to give up and continue to default.

The lender took her house and put up a sign saying it was for sale.

Don't think that everything is over when the house is taken away by the lender. You need to continue to repay the loan before the house is sold.

Even if it is sold at a discount, the sale price of the property cannot fully repay the debt...

In the end, the stripper got nothing. Not only did she not become rich, she became a big debtor.

The stripper is just a microcosm of the masses in the beautiful country.

The number of mortgage defaults has been rising rapidly since 2007, from 70,000 to 1.5 million.

In just a few months, the number of defaults has exploded!

The housing prices have collapsed, and the nightmare of real estate developers in the United States has come.

They were very surprised that people who were still looking at houses last month have completely disappeared this month, and people's willingness to buy houses has undergone a great reversal.

There are a large number of vacant houses circulating in the market, second-hand houses cannot be sold, and new buildings with high prices are even more difficult to sell.

So much so that in the first quarter of 2007, the sales of Universal Real Estate showed the largest decline since its establishment!

The shareholders were naturally very dissatisfied with this result, and Gilton took the initiative to resign.

Real estate developers are not having a good time, and banking and financial institutions are having an even worse time.

Because the income of their mortgage securities products is rapidly declining due to a large number of defaults.

In their financial reports, the income is also declining sharply.

This is not the worst thing. After being reminded by their subordinates, the two senior executives of Citibank finally remembered their mortgage default credit insurance business.

"Isn't this a profitable business? Why should we lose money?"

The female manager and the male manager were unable to understand for a while.

Because they were used to collecting money, in their perception, this was a business that was sure to make money.

So when the salesperson reported to them, they were extremely surprised.

After a long time, they realized something and suddenly looked ashen.

"There have been so many defaults, which have triggered the insurance regulations. Do we actually need to pay money?"

The two people are good at math, and conservatively estimated that they will have to pay 3.5 billion US dollars.

"Why did you notify us only now? You should have notified us when the compensation reached 1 billion US dollars."

The salesperson said aggrievedly:

"Everything broke out too quickly. There were only a few thousand defaults last month, but this month it has reached 30,000!"

The female manager said firmly:

"Then pay it as soon as possible, and then close the mortgage default credit insurance as soon as possible!"

The male manager also echoed:

"Yes, close it now immediately. We would rather default unilaterally than close it!"

They made a good calculation and simply tore up the contract, otherwise they would become the sinners of Citibank.

Hearing the two people's urgent urging, the salesperson said helplessly:

"If we want to default unilaterally, we need to pay 30 billion to the four foundations!"

Both of them were stunned. In order to keep that idiot, they promised the huge default compensation solemnly...

Now it seems that they are the idiots who know nothing.

The fools who were once laughed at by them are probably laughing at their ignorance.

"Sue them, they are maliciously blackmailing our bank..."

But not long after, they received another bad news.

The four major funds that shorted subprime mortgages are selling their insurance contracts with major banks to the market.

As soon as the contract was put on the table, it was snapped up by all parties.

Because people found that mortgage credit defaults will become more and more frequent in the future, but they can buy insurance contracts from the four major funds for hedging!

This gave some banks that were about to lose their pants in the bet a hope of survival.

The four funds disrupted the insurance contracts and put them into the market, which was snapped up by the public and institutions.

The two general managers of Citibank were full of question marks.

Their betting contracts are scattered in every corner of the world, and almost every institution in the financial street holds one of their contracts.

They secretly said it was bad.

"It's over,Once we choose to tear up the contract, we will face condemnation from the entire industry!"

And the largest buyer of mortgage credit default insurance contracts is Cayman Capital!

Both managers swallowed their saliva in fear. They could bully the four major short-selling funds, but the chances of winning against Cayman Capital were very low.

At least Cayman Capital has never lost a lawsuit on Wall Street.

Cayman Capital's attitude was also extremely tough:

"Pay the money quickly, or declare bankruptcy directly. If you go bankrupt, you will have to pay the money!"