Wall Street Legend

  Chapter 388 is all bullshit!

Yes.

  Ye Dongqing is laying the groundwork for the upcoming subprime mortgage crisis in two years, expressing her views in public.

  Choose the entry point on credit rating agencies, bluntly saying that these companies are not doing well, and they give up the exploration of objective truth for the sake of money, putting the entire CDO market in a dangerous situation.

It is now February 2005. Over the past four years, due to the continued prosperity of the US housing market and the low level of US interest rates in the past few years, the US subprime mortgage market has developed rapidly. Seeing the benefits, the businessmen rushed in resolutely, and heated up the market more and more.

  Subprime loans in the real estate industry are different from ordinary loans. They are mainly aimed at people who do not have enough assets and income and want to buy real estate. According to regulations, the interest rate is relatively stable in the first few years, and then increases or decreases according to the fluctuation of market interest rates.

People feel that investing in real estate is profitable, coupled with the fact that lenders’ review is not strict enough, the United States, where the market has been cold for decades, once again set off a real estate boom. The subprime mortgage market in other fields is also overheated, and even more A variety of financial products attract waves of money.

It can be expected that with the subsequent cooling of the US housing market, especially the increase in short-term interest rates, subprime mortgage repayment rates will also rise sharply, and the repayment burden of home buyers will be greatly increased, which will probably cause large-scale loan defaults .

  The history is strikingly similar.

This is due to the flaws in the market management mechanism, which some people mistakenly believe that there are loopholes to exploit. The vigorous development of the subprime loan market has not changed with the arrival of Ye Dongqing. Where there are interests, there are desperate businessmen. Very reasonable.

   Actually.

   Judging from the current situation, the subprime mortgage market is indeed very good, and the crisis has just shown signs of a crisis. For example, what Ye Dongqing said just now is that the default rate is rising and credit rating agencies are useless.

   It’s not that I haven’t thought about watching the fire from the other side, and wait until the time is almost ripe to enter the market to make a fortune.

However, Ye Dongqing is no longer the poor poor **** who wanted to get rich but couldn't sleep in 2002. This benefit is not very important to him, and it will only make those who invest in hedge funds The rich man and himself are even richer, but for the majority of ordinary people who have invested in real estate, once the subprime mortgage crisis occurs like in the previous life, they will lose everything.

   This is caused by the sense of social responsibility of being a super rich. In addition, Ye Dongqing also feels that another economic crisis may affect his personal interests, and benefits and risks coexist.

Since there is already so much money that he can't spend it all in this life, and the speed of spending money is far slower than the speed of making money, he feels that there is no need to make profits through such accidents and impose his own happiness on the pain of many ordinary people. That's why I made a reminder in this public place.

Having said so much in one breath, when he picked up the water glass at hand, there were people whispering and talking in his eyes, even the old Soros, Mr. Dario and others had serious expressions. Considering the current scale of subprime mortgages, if This industry is not as safe as originally imagined, and they can predict how far-reaching the impact will be.

   It is no secret that the vast majority of people at the scene know about spending money on ratings.

Ye Dongqing knew that what he said would definitely offend those credit rating companies, but he didn't care, because the current business dealings are not too many, and there won't be too many in the future. If these agencies lower the ratings or valuations of his companies, Doesn't it just confirm the criticism that they are not objective and fair? The three major credit rating agencies have benefited from lagging policy support and currently share 95% of the global rating market. The good times are too many. Some expansion over the years.

  He doesn’t know whether he can change the current situation and quickly contain the crisis before it is born, but he will definitely try his best. He has already thought of asking some people in Washington and the current chairman of the Securities and Exchange Commission to talk about it.

If he is lucky, he can also make a fortune by shorting these institutions and companies that hold too many junk subprime mortgage products. As a businessman, how can he let go of the money he should make? In the morning, he has already talked with Mr. McCord and Mr. Wu Di I have contacted them separately, and it is estimated that they are already trying to build a position.

  The investigation has been carried out beforehand, and the scandal is true. Now that the shady scene has been uncovered, the credit rating companies and the subprime mortgage market will probably fall into a quagmire. After all, Ye Dongqing's influence is not small.

The next topic continued to focus on credit ratings and subprime mortgage business. People at the scene listened very carefully. From time to time, some people used their mobile phones to send messages, or went out to make calls directly. Some were selling subprime mortgage assets, and some had already smelled the dollar bill , ready to try to short.

  For this group of people, the ticket price of only three thousand dollars is not in vain. Ye Dongqing has already explained it in detail, so detailed that they can also perceive the signs of danger...

   It is never easy to show off. If you are not strong enough, you will be slapped in the face, especially when it touches the interests of certain people.

  Generally speaking, the interest rate of subprime housing loans is two to three percentage points higher than the interest rate of normal loans. Except for Ye Dongqing, most of the fund managers at the scene have allocated subprime mortgage assets, and some are making money in the periphery.

Some people were thinking, and some were so angry that they jumped the wall. For example, a manager of Bear Stearns, who had a heavy position in subprime mortgages, suddenly stood up and shouted, "It's all nonsense! The credit rating is fine. , the subprime mortgage market is fine, I don’t know where you got the data from, but neither the default rate nor anything else is that high!”

  Including Ye Dongqing, people looked at this guy one after another. He was walking out angrily and was about to leave.

In addition to him, one of the global insurance giants, an executive of American International, the parent company of AIA, also left suddenly. Said that there is a risk of credit rating water injection.

  Whether he listens or not is someone else's business. Ye Dongqing has the chance to win, and he doesn't feel ashamed at all. His face is built on success every time, and he doesn't need others to add color to him.

He continued to elaborate on other points of view as if nothing had happened, and finally concluded: "Credit rating agencies must carry out a comprehensive rectification and strengthen supervision to rebuild market confidence. As for subprime housing loans, I don't think they will be It is a good thing to lend large sums of money to people who may not be able to pay at any time. If it continues to develop, it will inevitably cause a chain reaction and lead to a financial crisis. Judging from the current scale of subprime mortgages, the crisis already exists, but when will it break out? The problem…"

   After speaking, he turned off the microphone, got up and left the venue, obviously not planning to give others a chance to ask questions.

Because of this public statement, an "earthquake" is already on the way. In such a short period of time, there are suddenly large orders to short Moody's, Fitch and Standard & Poor's. Still growing...

  (end of this chapter)