From houses to cars, from credit cards to telephone bills, loans are everywhere.

Locals rarely buy a house in cash at one time, usually with long-term loans.

But we also know that unemployment and reemployment are very common phenomena in the United States.

How can these people with unstable income or no income buy a house?

Because their credit rating is not up to standard, they are defined as subprime lenders.

About 10 years ago,

At that time, advertisements of loan companies appeared on TV, newspapers and streets.

Or fill your mailbox with attractive flyers:

"Have you ever thought about the life of the middle class? Buy a house! 』

"Not enough savings? Go get a loan! 』

"No income? Looking for it? Loan company! 』

"Can't afford the down payment? We offer zero down payment! 』

"Worried that interest rates are too high? We offer a preferential interest rate of 3% for the first two years! 』

"Still can't afford it every month? It doesn't matter. You only need to pay the interest in the first 24 months, and you can also borrow the principal after two years.

Pay again!

Think about it, you must have found a job or been promoted to manager two years later, and I'm afraid you can't afford it then! 』

"I'm worried that I still can't afford it after two years? Gee, you are so careful,

Look at how much the house has risen now compared with two years ago. Then you can sell it to others.

Not only live two more years, but also get rich! Besides, you don't have to pay,

I believe you can do it. Don't I dare to borrow it, don't you? 』

Under such temptation, countless American citizens did not hesitate to choose a loan to buy a house.

Are you worried about their debts in two years? American citizens who have always been quite optimistic will tell you,

Anyone who plays movies can be a governor, and maybe I can run for president in two years. )

Huh? The loan company has made amazing achievements in just a few months.

But the money has been lent out, can it be recovered?

The chairman of the company.-hmm? Sir, that's also a person who is familiar with American economic history.

It is impossible not to know that the real estate market is also risky.

So it seems that this income can't be absorbed by yourself, and you need to find a partner to share the risk.

So what? Looking for the leading brother in American financial circles-investment bank.

These people are big names (Merrill Lynch, Goldman Sachs, Morgan),

What do they do every day? Even if you are full, you are idle.

So I gathered Nobel economists, Harvard professors and financial engineers.

Using the latest economic data model, after a financial alchemy (copula has been almost refined at this time),

Make several analysis reports to evaluate whether a stock is worth buying.

There is already a bubble in a country's stock market, and this group of bosses in the risk assessment market,

Do you think they think there is any risk?

Just kidding, the risk can be seen with your feet! But there are profits, so why hesitate? Take over!

So economists, financial engineers and university professors use data models and stochastic simulations to evaluate,

After repackaging, a new product-CDO was born.

(Note: Debt-backed bonds,

To put it bluntly, it is a bond. By issuing and selling such CDO bonds, bondholders can share the risk of housing loans.

It's too risky to sell like this, and no one will buy it.

Assume that the risk level of the original bond is 6, which belongs to medium and high.

Therefore, investment banks divide it into two parts (shares): advanced CDO and ordinary CDO.

In case of debt crisis, senior CDO has the priority to pay compensation.

In this way, the risk levels of the two parts become 4 and 8 respectively, and the total risk remains unchanged.

But the former is a low-risk bond. With the golden words of investment banks,

Hold seminars in high-end hotels,

I sent beautifully made powerpoints and excel spreadsheets, and of course they sold out!

But what about the remaining high-risk bonds with a risk rating of 8? Hedge funds,

So the investment bank found a hedge fund,

That's a role in the financial world.

Living a life of licking blood with a knife, the risk is very small!

So I borrowed money from the bank with the lowest interest rate in the world through connections.

Then buy this part of ordinary CDO bonds in a big way,

Before 2006, the loan interest rate of the Bank of Japan was only1.5%;

The interest rate of ordinary CDO may reach 12%,

So hedge funds make a lot of money just through spreads.

In this way, something wonderful happened.

At the end of 200 1, American real estate soared, more than doubling in just a few years.

Oh, my God, it's like? Like the advertisement at the beginning of the loan company,

There won't be anything that can't pay off the house loan at all.

Even if there is no money to pay back, you can still make a fortune selling the house.

As a result, people who borrowed money to buy a house went to Afghanistan. Loan companies, large investment banks, ordinary banks,

Everyone makes money from hedge funds,

But the investment bank is not very happy!

At first, I thought the risk of ordinary CDO was too high, so I lost it to hedge funds.

I didn't expect these guys to earn more than themselves, and their net worth rose desperately. I know I kept it for fun.

Therefore, investment banks also began to buy hedge funds, intending to share a piece of the action.

It's like eating for a long time at Azhai's house and just seeing that annoying puppy next door.

I was going to poison it, but I didn't expect the puppy to eat it, but it became stronger and stronger.

A Zhai was dumbfounded. Is moldy food more nutritious?

So I started eating by myself!

Now I am very satisfied with hedge funds. Who are they?

I have 1 yuan in my hand, so I can find a way to borrow 10 yuan to play.

Now, with the CDO fever, of course, you have to do something big!

So they mortgaged CDO bonds to banks,

In exchange for 10 times the loan to operate other financial commodities,

Then continue to chase investment banks to buy ordinary CDOs.

Coco, we signed an agreement, but these ordinary CDOs are ours! !

Investment banks are really unhappy. In addition to continuing to buy hedge funds and selling ordinary CDOs to hedge funds,

They launched a new product called CDS (note: credit default swap)

Wall Street is a hotbed of these genius products:

Don't ordinary investors think the original CDO is risky?

Then I will get insurance, and I will take some money from CDO as insurance premium every year.

Free to the insurance company, but if there is any risk in the future, everyone will bear it together.

The insurance company represented by AIG thought, yes, CDO is making so much money now,

1 cent to share profits without paying. Isn't that giving us money for nothing every year?

Hedge funds think it's okay. They've been making money for years.

In the future, the risks are getting bigger and bigger, and only a part of the profits go out.

There is an insurance company to bear half the risk!

So everyone is happy again, win-win! CD is also very popular!

But the story is not over yet:

Because "smart" Wall Street people have come up with innovative products based on CDS!

Let's find more ordinary investors to share it. Suppose CDS brings us 5 billion.

Now I have issued a new fund to invest in CDS.

Obviously, the risk of this fund based on previous products is very high.

But I put the 5 billion yuan I earned before as a deposit.

If this fund loses money, then use this 5 billion to pay in advance.

Only when this 5 billion is lost will the principal of your investment begin to lose money.

Before that, you can redeem it in advance and raise 50 billion yuan for the first time.

God, is there a better fund than this?

1 yuan face value of the fund, 10% loss will not lose their own money, but every penny earned is their own!

Rating agencies saw this genius plan and simply did not hesitate: give AAA rating!

The result is that this fund can be sold like crazy, all kinds of retirement funds, education funds, wealth management products,

Even banks in other countries are buying.

Although the initial fundraising scale was originally 50 billion yuan,

However, it is almost impossible to estimate how many billions of dollars were subsequently issued.

However, the deposit of 5 billion yuan has not changed.

If the existing scale is 500 billion yuan, the deposit can only guarantee that the net value of the fund will not lose 1% of the principal.

In other words, the probability of losing money is higher and higher.

By the end of 2006, the American real estate, which had enjoyed five years of scenery, finally fell heavily from its peak.

The food chain finally began to break.

After the term of preferential loan interest rate comes due to falling house prices,

First, ordinary people can't afford to repay their loans.

then what The loan company went bankrupt,

Hedge funds lost a lot of money,

Then, AIG insurance company and loan bank were implicated, and Citigroup and Morgan released huge loss reports one after another.

At the same time, the major investment banks that invested in hedge funds also suffered losses.

Then the stock market plummeted and people generally lost money.

The number of people unable to repay their mortgages continues to increase.

Then there is a vicious circle.

In the end, wall street couldn't hold on.

Threaten the government to rescue the market quickly.

The government saved this side, but it couldn't save that side.

Busy as a bee, it was finally advocated by Wall Street tycoon Paulson.

Of course, Paulson is the former CEO of Goldman Sachs.

Before he became secretary-general of the Ministry of Finance, he accumulated the company's $500 million.

Of course, he knows about subprime mortgages.

Otherwise, can you retire so easily?

Good, but even though he abdicated

But what about a bunch of friends on Wall Street?

Of course, keep it well.

Otherwise, I'm sorry for so many years of feelings.

But how to save it?

Had to threaten the government and take 700 billion dollars from American taxpayers.

Of course the government is not happy.

But Paulson really deserves to be the CEO of the strongest investment bank in N years.

The eloquence is first-class, which makes those government officials, presidents and leaders of both parties dizzy.

I cann't do it without saving it

Finally, Bush spoke.

Speech in front of the whole country 14 minutes, MBS (mortgage back insurance)

Who knows how much American IQ can understand in this 14 minute?

Anyway, anyway, Bush finally couldn't help it.

Senate overtime work

Even on weekends, there is no emergency agreement.

I finally got out this week and took it to the House of Representatives.

People in the House of Representatives don't know what these things are.

But how did they all get elected?

People vote, they all represent the interests of the people.

In order to keep the senator's position

We can only vote against it

As a result, after the voting results came out, the party and the Democratic Party blamed each other.

Nobody dares to offend Wall Street.

Now investors and Wall Street are scared.

How much effort have those big banks made to ensure that this bill can be passed?

Destroyed Washington mutual bank over the weekend.

Wachovia was closed on Monday.

The result still failed.

That is a kind of distress.

American politics is also in chaos.

No choice

Keep voting. He must pass.

I hope that the second round of voting in the House of Representatives will pass ~

Unfortunately, stocks are still falling.

It is estimated that the next round is the revision of accounting standards.