Spark

"How cruel!"

In the office, Chen Guo said with a sad face.

Just two days ago, he was still discussing with Chen Nian that the biggest difficulty in the construction machinery project was not technology, capital and resources, but the market.

As a result, now, the opponent has dealt him a heavy blow!

Direct price reduction of 20%!

What is this concept?

For many projects that require the use of large machinery, if the 20% cost can be saved, the profitability of the entire project may turn from negative to positive.

And, that's the impact on the desktop.

Under the table, the person in charge of the project is likely to get millions or even tens of millions of personal benefits because of such a big price cut.

Under this huge temptation, the wind direction of the entire market will undergo irreversible changes.

How easy is it to fight against it?

Even if the plan Chen Nian mentioned can be realized, and the technology of the product is 10 years ahead of the same level of products, I am afraid that such a disadvantage cannot be recovered.

Unless, while the technology is 10 years ahead, the price will be lower than them

This is pure idiot's dream.

Looking at the bitter Chen Guo, Chen Nian who was sitting opposite couldn't help feeling a little anxious.

A long time ago, he had thought about the "butterfly effect".

He knew that with his arrival, the situation in this world would definitely change, and the balance between various forces would also be broken, but he never thought that the impact would be so great.

The economic suppression was actually more than 10 years ahead of schedule.

Of course, the other party is not using extreme methods now. The so-called price reduction and dumping is more based on the inherent attributes of the market rather than relying on administrative power.

But it can be seen that the opponent's assessment of its own threat is actually developing by leaps and bounds.

It is very likely that in a short time in the future, their methods will be further upgraded and will reach their peak quickly.

And is our side really capable of responding equally to them?

impossible.

Even after 10 years, our equivalent means are extremely limited, let alone now.

Now, the U.S. economy has not completely entered the hollow stage, the first financial crisis after the 21st century has not yet arrived, and the mud in the Middle East quagmire has just passed their insteps.

It can be said that the current United States is the strongest form since the 21st century.

How easy is it to use your undeveloped strength to collide with their strongest form?

This time the crisis is really beyond the scope of what I can solve.

After thinking for a while, Chen Nian said:

"If it doesn't work, we will raise tariffs equally and limit the other party's import prices?"

"No, it goes against our WTO commitments."

"Of course, in fact, they were the ones who broke the promise first, but the problem is that other Western countries, other partners don't care about this."

"All they can see is that we practice trade protectionism and raise tariffs arbitrarily."

"Once such an impression is solidified, it will hit us even harder."

After a pause for a few seconds, Chen Guo continued:

"What's more important is that we will soon enter 2006, and 2008 will be the Olympic Games."

"This is a critical window period, and we cannot make any major diplomatic moves at this juncture."

"I think you know what I mean too."

"In many cases, it's a choice of last resort."

Chen Nian nodded helplessly, and he had nothing to say about this matter.

However, referring to the 2008

Chen Nian's heart suddenly moved.

Although the butterfly effect happened, it is impossible for the storm to really sweep all corners of the whole world.

At least, the cause of the financial turmoil in 2008 should not have been affected.

——

No, it's even possible, it will get stronger.

The reason is simple. In a series of confrontations in the early stage, the United States lost a large amount of funds and foreign exchange. In the original soybean campaign alone, the positions lost by major investment institutions reached the level of hundreds of billions.

Not to mention the subsequent impact on several airlines due to the birth of J-22 and J-20B, and the subsequent chain effect.

In a word, in the current US capital market, they are short of money.

Since there is a shortage of money, where can the money come from the fastest?

real estate.

CDS.

The so-called CDS, whose official name is credit default swap, is essentially a financial instrument for leveraged investment.

A very simple example, suppose a residential house sells for $100,000, but the client only has $5,000 on hand, but the real estate company decides to sell the house to the client in order to quickly withdraw funds. What should it do?

It's very simple, guide residents to take loans, and get enough loans of 100,000 US dollars.

But the problem is that under the "down payment" of 5,000 US dollars, the leverage of this loan is as high as 20 times. No bank dares to do such a high-risk business, and the plan cannot be implemented at all.

At this time, things appeared a strange circle.

The client wants to buy a house, the real estate company wants to sell the house, and the bank wants to earn interest, but because of the element of "risk", this seemingly "mutually beneficial" transaction cannot be reached.

It has to be said that this is definitely a major loss.

So, how to make up for this loss?

At this time, a genius in the banking system stepped forward.

He suggested that a third-party agency could be found as a guarantee for the transaction.

The bank pays the institution an insurance premium of US$500 per year, and the institution will pay the full amount of funds for the bank in the event of a default.

And if there is no default, the money goes to the agency.

In this way, the risk of the bank has been passed on, and the transaction between the real estate company and the client can continue.

Hearing this proposal, the insurance company immediately made an actuarial calculation.

Then, they found that the current default rate in the entire real estate market is extremely low, even less than 1%.

In other words, there is only a 1% chance of the insurance premiums they receive needing to pay for breach of contract.

As long as their comprehensive insurance rate is greater than 1%, this business will be done.

So, logically, the business was done.

Everyone was happy and everyone got what they wanted.

If the matter ends like this, the positive effects of CDS will undoubtedly far outweigh the negative effects.

However, capital is greedy, and it will never stop there.

After seeing that the insurance company made huge profits without any effort, the third-party investment company was moved.

They have to get a piece of the pie.

Therefore, they found the insurance company and obtained the ownership of the CDS by paying the full amount in one lump sum.

After setting this precedent, investment banks including JPMorgan Chase and Lehman Brothers suddenly realized.

Isn't this a debt transaction?

Since it is a debt transaction, then go to the exchange!

As a result, CDS products were launched.

Its price has been pushed higher and higher, like a stock, squeezing the last sliver of potential from the original contract.

The only pillar of its existence is the ever-rising room.

Because, as house prices go up, so does the value of the original contract.

——

But can house prices really keep going up?

Obviously not.

In fact, most of these CDS transaction contracts that have driven up housing prices come from subprime loans, that is to say, loans specially provided to people with low education levels, low financial capabilities, or who have already had a record of default.

There is no doubt that the probability that they will not be able to repay the loan is very high.

So in the end, the real estate bubble was burst, and the biggest financial crisis in the 21st century came.

Looking back at the entire process of the financial crisis, the most critical point is the hype of CDS.

So what if the speed of CDS hype is faster than in his previous life?

Chen Nian lifted his spirits, and said to Chen Guo:

"Help me check the current size and default rate of subprime loans in the United States."

"In addition, help me see the latest transaction size and price of CDS in the US financial market."

Hearing Chen Nian's question, Chen Guo opened his mouth in astonishment.

"What do you mean? Why do you want to check this stuff all of a sudden?"

Chen Nian pondered for a moment, then said:

"I have an idea now."

"This dumping strategy is obviously impossible to be done by Caterpillar itself."

"Behind them, it can be said that there must be official support from the United States."

"Since we want to support, we must invest money."

"Then what if their official has no money?"

"You mean, you want to start directly from their capital chain?"

"That's unlikely."

Chen Guo looked a little puzzled, but he still picked up the phone in his hand and called the economic consultant of the Spark team.

It was Chen Feiyun who answered the phone.

After listening to his request, Chen Feiyun also raised the same question:

"Why do you need this data?"

Chen Nian said all his thoughts, as well as his judgment on the subprime loan and CDS market, and the latter was stunned.

"Xiao Nian, where did you know these things?"

"CDS's requirements for financial and economic knowledge are not something ordinary people can figure out with just a few glances."

"Saw it by accident in the library."

Chen Nian replied without changing his face.

".Well, let's say it was seen by the library."

"However, although the theory you said is correct, the trend is not necessarily correct."

"According to our knowledge, the current default rate in the US subprime mortgage market is still extremely low, at most it is between 1% and 2%."

"Such a default rate is actually not enough to trigger the storm you are talking about."

"You must know that their financial market is an extremely mature market, and their tolerance for risk is quite high."

“There must be a lag in the default rate.”

Chen Nian interrupted Chen Feiyun's words and said firmly.

"Lag? This is indeed a problem, but we have no way to effectively judge it. It is a very simple reason, the unemployment rate of the other party remains at a low level, and the average wage level has even increased."

"In this case, there's no reason why their default rate should go up."

"Then check their residential housing transfer rate, and also, check the number of new second-home purchases by urban residents. If these two figures have increased year-on-year, it proves that my judgment is correct!"

"Okay, I'll do it now."

At this moment, Chen Nian's authority came into play. Although Chen Feiyun still had doubts about Chen Nian's judgment, out of trust, he still chose to carry it out.

After hanging up the phone, Chen Guo looked at Chen Nian and asked:

"So, what's your plan? Even if something goes wrong with the CDS you were talking about, what can we do?"

"You have to solve this problem from the capital chain, but I really don't see how this has much to do with the capital chain"

Hearing Chen Guo's words, Chen Nian laughed and replied:

"This is actually not something that technicians need to understand. Next, I need you to do something for me."

"No matter what the price is, no matter how big the pie is, we must hold back our domestic enterprises, and we must not let them advance their procurement plans because of Caterpillar's preferential treatment."

"I need time, and this time must be at least six months."

"clear."

Chen Guo nodded.

Although he doesn't understand economics, he understands technology and equipment.

He knows that if domestic companies really take advantage of this opportunity to purchase aggressively, then the demand for construction machinery in the next one to two years, or even two to three years, will be fully occupied by foreign capital, and even if domestic equipment is manufactured, there will be no market space.

And this vacuum period is enough to kill the units involved in the project, including XCMG and Sany.

The two discussed the specific plan for a while, and Chen Guo felt more and more that Chen Nian's overall strategy was mature, but before he could sigh, the phone on the table rang.

It was Chen Feiyun who called. As soon as the call was connected, he couldn't wait to say:

"Xiao Nian, the situation is as you expected!"

"Their default rate has indeed not increased significantly, but the second-hand housing transaction market is indeed more active than ever. Even, according to rough statistics, the turnover rate of second-hand housing in some major cities has reached more than 5%!"

"In addition, the number of second homes you mentioned is temporarily unavailable, but I consulted several colleagues in the United States. According to their information, at least in his circle, the investment attribute of housing has been deeply rooted in the hearts of the people."

"In other words, this data will definitely not be low. Your inferences have all come true!"

There was undisguised surprise in Chen Feiyun's words, and then he continued:

"Does that mean that their default rate will rise in the next step? Our chance is here?"

Chen Nian shook his head subconsciously, and replied:

"No, not enough."

"Based on the current situation, they have at least one to two years left."

"We have to add fire to them, so you need to figure out a way."

"My suggestion is, on the one hand, start with the CDS, and on the other hand, you can consider how to make their housing prices plummet in a short period of time."

"Understood, I will arrange it!"

Chen Feiyun hung up the phone excitedly, while Chen Guo in the office was still confused.

He asked:

"So, what are you going to do?"

Chen Nian smiled and replied:

"It's very simple."

"I'm going to detonate the financial crisis in the United States."

In the past two days, it has been a little less, because I am working on my teeth.

At present, two teeth will be extracted, one will be filled, and the other will have a root canal tomorrow...