Shenhao starts from a fake rich man

Soon, Druckenmiller figured out the cause of the U.S. stock crash.

Druckenmiller said, “George, an hour ago, a couple of edited videos appeared on social media!!”

“Some people who have no ability to repay and no loan qualifications, use their disguised identities and properties that do not even belong to them to get a grade of A or higher in Freddie Mac and Fannie Mae!”

And in the end, all of these people got the loans. ”

“Damn, Freddie Mac and Fannie Mae are two damn companies!!Don’t they just have a little bit of government background?

“As soon as this material broke out, these two companies were directly finished!!”

“They have completely lost the trust of the public!!”

“There are even many people who have begun to call them the main culprits of the collapse in housing prices!!

Soros still frowned: “In this way, Freddie Mae’s stock price fell by 32.02%, and Fannie Mae fell by 28.67%. ”

“But what does this have to do with investment banks???

Soros didn’t care if Freddie Mac and Fannie Mae lived or died.

Even if they fail, it has nothing to do with Soros’s hedge fund.

Soros cares about the same Wall Street, the same financial industry, or the big brother in the financial industry – investment banks like Goldman Sachs, Morgan Stanley, Lehman Brothers, Merrill Lynch.

223 wants to know that although the investment bank did not directly participate in Soros’s action this time, it still sent a lot of money to Soros’s alliance!

It can be said that 20% of the funds of the Soros alliance are all transferred by the four major investment banks of Goldman Sachs, Morgan Stanley, Lehman Brothers, and Merrill Lynch!!

If their stock plummets, they will most likely have to withdraw their funds in advance.

This is an unbearable blow for Soros, who has already achieved absolute superiority on the scales of victory!

It’s a Soros who definitely doesn’t want to watch what happens to him!!

Druckenmiller was quick to answer Soros’s question: “Is it subprime credit !! subprime credit !!”

“Subprime credit is the kind of housing loans that our country’s banks give to people with low credit scores, missing proof of income, and heavy debts. ”

Soros interrupted: “I know what subprime credit is. Talking about the !! point”

Druckenmiller said, “Subprime mortgage is a high-risk, high-yield industry. ”

“Subprime housing credit has been estimated, combined, and packaged by Wall Street financiers using financial engineering methods to form notes and securities products. ”

“And then (BHEG), those products are sold on the collateral secondary market. ”

“And the big four investment banks, such as Morgan Stanley, in order to make huge profits, they use high leverage of more than 20 times to buy these products. ”

“And we, the hedge funds, are also this buyers. ”

Soros said solemnly: “Are you talking about credit default swaps (CDS)??”

“Yes, such financial derivatives are a product of income, but their risks are also uncontrollable. ”

“At least the Quantum Fund would never buy such a product. ”

When Soros said this, the faces of many people changed.

Soros didn’t buy a credit default swap insurance contract, but they did!!

——————————————

As soon as Soros spoke, he had already figured out why the investment bank’s stock had plummeted.

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At this time, all that was left in Soros’s heart was horror!!

It’s over!!

This time the crisis he faced was even bigger than he had just imagined!!

Why did the stocks of top investment banks like Lehman Brothers, Morgan Stanley, plummet?

It is because they bought a huge amount of financial derivatives related to subprime mortgage products.

This financial product is equivalent to default insurance for the bank’s housing loans, especially subprime credit.

In the case of rising housing prices, it is profitable to buy these financial derivatives, and it is quite profitable!

However, when the house price falls, when the buyer or mortgagee does not repay the mortgage, this default insurance needs to be paid!!

Buyers can’t afford to repay their loans, or don’t want to repay their loans, because house prices have plummeted, so the risk goes to the banks that give them loans.

However, those large commercial banks have passed on the risks to the investment banks and hedge funds that own these derivatives through financial derivatives such as credit default swap insurance contracts!

And those who end up paying huge insurance premiums are investment banks and hedge funds!!

The scary thing is that because these investment banks and hedge funds use the principle of leverage, even if they lose all their assets, it will not be enough to pay off their debts.

Investment banks and hedge funds that buy these financial derivatives are not just losing so much money, but they are in danger of bankruptcy.

And the investment bank goes bankrupt, and the original commercial bank has also lost the insurance payer, and they will also face bankruptcy!

Cleared all the ideas. Soros finally discovered that the collapse of housing prices has an impact on investment banks and hedge funds!!

Not just are they going to lose a lot of money, they are in danger of going bankrupt!!

The less than 10% drop in the stocks of those investment banks is just the beginning.

Because, there are only a few people who can think through all the details like Soros.

So, now there are only some very sensitive smart people who are selling the stocks of investment banks!!

When the public knows all this and understands that the collapse of housing prices will eventually lead to the collapse of investment banks.

The stock prices of the four major investment banks will undoubtedly plummet!!

Hedge funds, on the other hand, have not been hit much on the stock market because they cannot be listed!

However, any hedge fund that has purchased a large number of subprime mortgage-related derivatives will also face a devastating blow that they cannot bear!

If they are greedy and use high leverage, bankruptcy is the only possibility!!

Obviously, the hedge fund tycoon sitting here also quickly figured out what Soros had in mind.

Teper’s Appaloosa Investment Management Company is using high leverage to hold subprime derivatives!!

At this time, Tepper didn’t care about the honor of any country at all, and sniped the soft girl coin.

He stood up anxiously: “I’m sorry, I can’t stay here anymore. ”

“All my funds will be withdrawn!!”

“Good luck everyone!!”

Similarly, the heads of hedge funds, like Tepper, who hold subprime derivatives, hurriedly got up.

At this time, they are already too busy to take care of themselves, so naturally they have no time to play with Soros anymore.

If you say that they followed Soros in the foreign exchange market before, they made billions or more!

But this time, if what they envisioned happened, a large number of subprime mortgages defaulted.

The losses they will face are tens of billions of dollars, or even bankruptcy!_

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