Hollywood New Century

In Manhattan, New York, Simon is sitting in his office of the Nine-headed Bird Fund, and the news is reporting that New Century Financial, the second-largest subprime mortgage company in the United States, declared bankruptcy on March 14.

U.S. Treasury Undersecretary Robert Steele said the U.S. government is closely watching the problems emerging in the subprime mortgage industry and believes the current situation is certainly "manageable."

"Simon, since 2005, there have been default repayments. Do you think the subprime loan market will burst?" Nancy Davis has a hard time believing that such a huge market built by Wall Street elites will burst.

Simon smiled and said: "New Century Finance is just the first step. Pay close attention to the stock price of Fannie Mae and Freddie Mac. In the financial crisis of the 1930s, Roosevelt's New Deal shouted the slogan of home ownership in the United States, and made From a private equity company like Freddie Mac that is implicitly guaranteed by the government, and then a Fannie Mae, the bonds of the two houses are rated as top-level credit bonds just like the national debt!"

"Commercial banks lend money to people with low credit assessments and charge high interest to let them buy a house and make subprime loans; in order to avoid risks, they pool these mortgages together to form a mortgage-backed securities (MBS) that is lower than subprime mortgages. The profit is higher than the mortgage interest and sold to an investment bank;”

"After the investment banks bought back these mortgage securities, they began to design financial derivatives to extend the financial line. They also packaged these into subordinated bonds - collateralized debt obligations (CDOs) and sold them to the world. The investment banks also A new product, credit default swap (CDS), has been designed, so that if investors who buy subprime bonds are worried about the risk, they can also buy credit default swaps and let insurance companies take part of the risk."

After Simon finished speaking, he looked at Nancy Davis and smiled: "HSBC, let's not talk about these large commercial banks, and then involve Morgan Stanley, Merrill Lynch, and other big investment banks, and subprime loans. Corporate contacts, and finally brought in the insurance industry, the real estate in the U.S. has become so big! Half of the blame lies with the five major investment banks.”

"Your Wall Street elites develop financial derivatives as much as Hollywood develops movies!"

Nancy Davis smiled. She was also a former executive of Goldman Sachs, one of the five largest investment banks.

"Simon, the two houses are endorsed by the U.S. government. At present, the funds involved in the two houses exceed 5 trillion US dollars. Various investment banks, hedge funds and state pensions have bought many shares and bonds of the two houses." Nancy Day Weiss certainly doesn't believe there will be a big bubble in the housing market right now, there will be, but it's not going to be allowed to happen from top to bottom.

"The market determines capital, Nancy, in fact, you know very well that these CDOs are just a bunch of junk put together. What about CDS insurance, and the junk with insurance, is the credit assessment still credible now?" Simon leaned on the On the chair, with a dull face,

"Goldman Sachs gave those subprime bonds A, 2A, and for what, you should be very clear."

"Many elites on Wall Street are aware of the existence of this bubble. Although they have added an insurance policy, the root is chaotic. The market is too hot now, so who is the biggest taker now?"

Nancy Davis said: "Subprime mortgage buyers, subprime investors, and of course Merrill Lynch, Goldman Sachs, Morgan Stanley, Lehman Brothers, Bear Stearns five investment banks!"

"Simon, do you know what will happen if there is a problem with subprime loans?" Nancy Davis looked serious,

"Many buyers can't pay the loan, the house price falls, and the capital is insolvent. The bank forcibly repossesses the property, but a lot of bad debts; the five major investment banks will be dragged to death by the loan, which will trigger a new round of financial crisis!"

Simon nodded and continued: "In addition to the strength of the US dollar after the Iraq War, and the US's control of Iraqi crude oil, the US is now stronger. Perhaps this time it should be called a financial tsunami more appropriately!"

Nancy Davis said with a wry smile: "Everyone knows this, but the U.S. government will not let the subprime market collapse. After all, no one knows when the bubble will burst, and no one feels that they are the last takers. !"

"Yeah, Nancy," Simon walked over, patted her on the shoulder, and laughed, "If God wants to destroy it, he must first make it crazy!"

"By the way, Simon, Apple's stock price has been rising since the launch of the new phone. When we started, it was 60 to 70 US dollars per share. The Nine Head Bird Fund bought about 3 million shares according to your request. Now the stock price It's almost $90!" Nancy Davis said with a laugh.

"Relax, when Apple's new phone is officially launched in the second half of the year, I think the stock price can at least double!" Simon is quite familiar with Apple. These 3 million Apple shares account for about 0.56% of Apple's shares.

The market value of Apple's $1.5 trillion in the future is eight or nine billion dollars. After all, Apple's market value is less than $50 billion!

"You do short-term investment?" Nancy Davis was a little surprised. You are optimistic, and the rally is not bad now. You want to sell.

"Well, let's talk about it when the time comes. You can also use this stock as a mortgage for a bank loan, as long as it rises well," Simon was also tempted by what she said!

I have acquired more than 3 million shares of Apple in two or three months. Wouldn’t it be too much of a pity if I sold it?

"By the way, the Phoenix Fund has received an investment of 10 million US dollars from Hollywood, and the nine-headed bird has about 10 million. Now there is only so much that can be used!" Nancy Davis really did not expect that Hollywood The stars are so generous.

"Who invested in?"

"Nicole Kidman and Anne Hathaway, $8 million and $2 million!" laughed Nancy Davis.

"It turns out that you can buy some of the company stocks I mentioned to you before. After all, it is better to use my funds in venture capital. The high-risk game is not suitable for Phoenix Fund!" Simon plans to make Phoenix Fund a famous company in the future. The private equity fund of the company can also act as an ammunition depot for itself at that time, and now it needs a stable rate of return.

Walking out of the office of the Nine-headed Bird Fund, Simon came to Manhattan's Central Park, and it was still a little cold in New York in March.

However, Simon smelled the hot money here, and he could not feel the slightest cold wind in his hot heart.

Go crazy, dinner before you die is the craziest!