American Fortune Life

\u003c"readability-styled"style=":inline;"\u003eThe decline of the three major stock indexes did not seem to cause much panic in the market. The downward trend of the subprime loan market began to emerge from January 2007 until April, after the New Century Company filed for bankruptcy protection, it had fallen by 40% in three months.

However, the U.S. stock market reached the critical point of the collapse in the following October, that is to say, six months after the subprime mortgage market began to collapse, the stock market began to collapse in a sharp downward spiral.

Chief among them is that people do not realize the seriousness of the matter. From a geographical point of view, the real estate speculation in the United States was initially concentrated in a small area, but no one expected that the snowball would get bigger and bigger, and the regional crisis would quickly spread to the whole United States.

After the Asian financial crisis, due to the need for reserves, the international demand for safe or considered safe US dollar assets has increased. Whether it is a sovereign wealth fund or a foreign central bank, there is a huge demand for fixed-income securities.

This further explains why securitized debt structured around US real estate prices can travel to some extent around the world. Correspondingly, the financial crisis detonated by the United States has spread to all major economies in the world.

Securitization has helped the U.S. government achieve policy goals such as releasing liquidity, promoting growth and employment, and improving social welfare. It can be described as a successful "financial engineering"; but the other side of achieving policy goals is that risks are constantly accumulating.

The U.S. government is undoubtedly the biggest beneficiary, which is why when the subprime mortgage crisis broke out, all the bankers collectively acted like rogues, lying on the ground directly, allowing the crisis to ravage, and finally forced the government to rescue the market. It injected capital into the collapsed CDO, and successively acquired mBs bonds that were already junk.

Andy held a 600 million principal and used leverage to short 7.2 billion US dollars of CDS bonds. Although he was not as crazy as Michael Bree, a crooked figure who shorted 2 billion, he was also a big short this time. The best of the best.

The god of short selling, George Soros, put down his old face and ran to see Michael Burry again and again under the recommendation of his nephew. As soon as they met, he said a lot of words to this rising star, "the old driver took me." Michael Burry was entangled. As for the method, I had to give a general introduction to the trick. He hurried back to do the same, and immediately went home and shorted more than a billion cds.

This preferential loan campaign led by the US government and Wall Street for the poor who cannot afford housing has finally detonated a long-standing huge risk.

The reason why Andy pays more attention to shorting CDs is that CDs are mainly operated by big insurance companies like aIg, and his bug is that you can buy insurance without owning the relevant assets. It is equivalent to buying a car insurance for Lao Wang's car next door. If he crashes, you will be very happy to get the compensation, and Lao Wang doesn't know about it.

However, it seems that everything is going in a favorable direction for the big shorts like Andy. In fact, those small and medium shorts who shorted CDS but lacked liquidity have already started to jump up and down in a hurry. Well, it is adding fuel to the fire. , ants scurrying around in a hot pot, etc. are all adjectives that are anxious to get angry.

Because the original bond price of mBs is still high, and the cds re-securitized by mBs still maintains an aaa rating, the cash flow in their hands is insufficient, and the liquidity is insufficient. Inject funds into the margin account, and if you don't make up, you will be forced to close the position.

Andy played with the marker pen in his hand, sat on the boss chair, put his feet on the table, shook his body slightly, and the seat turned back and forth, with a relaxed expression, he looked like he had changed into a strategic headquarters. Various data displayed on the LCD screen in front of the conference room.

Alvetrie walked over to Andy with an ugly expression and sat down, "These damn bastards are full of lies!"

"Ha ha,

Don't be mad, Al, isn't this something we've already thought about? In fact, this time we took the lead in swinging a shot lightly, which has already played a domino effect. The reason why the mBs remains high and the cds rating does not drop is just to pretend nothing happened and lure other peers to buy it and sell it eagerly. Junk bonds that put companies out of business. And the successors of the process of drumming and passing flowers, those idiots are not worthy of pity.

Hehe, you don't know how many calls I have received these days. My grandpa has called me to keep silent and stop expressing my remarks about the subprime mortgage crisis in public. "

Andy threw the marker in his hand on the desk, crossed his arms, rested his head on the back of the chair, and smiled mockingly.

"But boss, we lose a little bit of money in the deposit every time..."

"Okay, Al, it's useless to complain. You know better than anyone that their power is not something we can contend with at the moment. They are just holding on. What can we do? Our margin is enough for us to persist until they When you can't hold on, you can exchange more than 100 million deposits for billions of profits, and you won't lose money. Besides, hasn't cdo insurance started to make money? , the darkest hour before dawn is over, and we will welcome the fiery sunrise!"

"As the fog thins and the truth is about to be revealed, I wonder what other greedy guys will take over the garbage."

Andy closed his eyes half-opened, glanced at Al, and said with a chuckle, "The greed of Wall Street is in the blood, full of fraud and lies, and what they are playing now is just a game called, "After the dust settled , us and them, who is the idiot? "game."

Alvetrie couldn't help shaking his head and laughing when he heard the boss's complaints. He didn't expect the young boss to be so calm. You must know that the risk of shorting is not so great, and if you are not careful, you will die without a place to die.

In fact, how could Andy not know the risks of short selling, and he also summed up the three major fears of being a big short seller in this subprime mortgage crisis.

First, I bought a lot of cds and found that the relevant assets were in default, and the price of cds remained unchanged, thinking that the entire system was colluding to cheat. We are at this stage now, making the bears miserable and ridiculed by investment banks returning to normalcy.

Second, the cds in their hands finally made money, and they began to worry that their cds would become waste paper due to the bankruptcy of their opponent's investment bank.

Third, the warehouse was finally emptied and the money was obtained, but I found that I might be targeted by the FBI or occupied by "Occupy Wall Street", and the pressure of public opinion was too great.

Although Andy summed up the three major fears of short sellers, it does not include himself. Some people don't want him to yell "Wolf is coming", so they will naturally give something. Tell Andy through old Smith's mouth, he is not a stupid young man, he knows what compromise is, if he wants to make money, he has to smash other people's pots, and they dare to kill you, such as Kennedy, tsk tsk, what I like to do the most Things just go down the drain, whether it's an opponent's or an ally's, so it's like a myth.

"Boss, recently there have been many calls to the company to find out the news, especially Kosai, the financial advisor of Goldman Sachs Group, wants to visit you." Alvitley said without losing the opportunity.

Andy glanced at Al with a half-smile, shook his head and said, "Goldman Sachs is the main bet against Michael Bray, and isn't they responsible for the development of cdo? I'm not interested in meeting him. Well, I want to pick up the girl." My friend is off work, tsk tsk, look at the changes in the past week, the stock market has regained its vitality, it should rise, mBs does not fall and rises, cds is still AAA, although some companies have gone bankrupt, but everyone is still as if nothing happened, What happened on April 2nd has almost become a joke, it seems that my two weekly magazines have been slapped in the face..."

Alvetrie shrugged and watched helplessly as his young boss patted his butt and left. It seemed that he could only say sorry to his old friend. Whether it was due to professional ethics or a confidentiality agreement, he could not reveal even a word to anyone. information.

As for Andy, he has no intention of meeting the other party. On the one hand, he sells these mBs with great fanfare and touts how good they are, and on the other hand, he privately declares that hedging insurance such as cdos to short mBs is very immoral, and Goldman Sachs undoubtedly plays this game This kind of routine is the best.

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