Chapter 2524 Promise

"Feng, I know you must have made a comprehensive judgment. I am eager to know your opinion."

"That's it, Hank," Feng Yiping also acted very solemnly at this time.

Considering that he will receive excessive returns from this crisis, and that it will not be easy to get back these returns in small amounts, he still cherishes this opportunity to make friends with the head of the U.S. Treasury Department.

It's okay to give it a try, but if you don't cooperate, it's still easy to make people angry.

There are definitely not many opportunities for people like Paulson to lower their heads and even come to ask for advice.

"Can you tell me a statistic, that is, what proportion of all current housing loans are subprime loans?"

"Because you and I both know that the core of this crisis lies in mortgages and subprime mortgages, right?"

Otherwise, it wouldn’t be called the subprime mortgage crisis, would it?

Paulson thought for a while and quickly said, "This is not data that needs to be kept confidential. I may be asked this question tomorrow when I am at Stanford's Hoover Institution."

"We have completed more than 1 million residential mortgage loans, of which," his voice was heavy, "more than 700,000 were subprime mortgages,"

Feng Yiping couldn't help but open his mouth.

He has already predicted that, but more than 70% of residential mortgage loans are subprime? No one could hear such authoritative data and remain calm.

It’s all in such a mess, it would really be a damn thing if something didn’t go wrong.

Paulson glanced at Feng Yiping and then looked out the window.

He was a little embarrassed to look at Feng Yiping, because when he was at Goldman Sachs, he must have handled a lot of similar securities.

Feng Yiping sighed, "When financial practitioners lose their awareness of risks..."

Paulson couldn't help but add, "Regulators are also doing little,"

"Come on," Feng Yiping laughed, "just ask anyone on Wall Street to see who likes so-called regulation?"

"Or, just find someone on Wall Street and ask him what he thinks of the Governor of New York State?"

The current governor of New York State, Elliott Spitzer, served as the Attorney General of New York State from 1999 to 2006 (the same character played by Chuck Crozier in the American TV series "Billions"). During his tenure, he served two Something that makes ordinary people happy: cleaning up Wall Street and cracking down on the illegal behavior of business giants.

He has also achieved remarkable results, including giants such as Richard Grasso, the former chairman of the New York Stock Exchange, and Maurice Greenberg, the former CEO of American International Group, who were all successfully brought down by him. Therefore, he also has the "Sheriff of Wall Street" " known as.

But for this person who "supervises" them, Wall Street mostly regards him as the god of plague.

Paulson turned to look out the window again, having nothing to say because.

"Stop talking about that," Feng Yiping couldn't help but patted Paulson on the shoulder, "Hank, the big bomb is Freddie Mac and Fannie Mae!"

"What do you mean?" Paulson asked.

"After listening to this data, I am even more certain that in the future, neither Wall Street investment banks nor commercial banks, which have also disclosed a large amount of loss data, as well as related insurance companies... will not be spared,"

"As for Freddie Mac and Fannie Mae," he shook his head, "there will definitely be problems,"

House prices in the United States are now falling nationwide. Therefore, everyone knows that the two mortgage giants Freddie Mac and Fannie Mae must be suffering heavy losses at this time.

Another main reason why Freddie Mac and Fannie Mae have become big bombs is that the mortgage securities or bonds guaranteed by them account for at least 15% of the total value of outstanding bonds in the United States!

When no one wanted the relevant securities, Feng Yiping didn't even dare to think of their losses.

And if something goes wrong with Freddie Mac and Fannie Mae, who can afford the trillions of dollars in real estate-related securities they issued?

That would be equivalent to Paulson and his friends having a leaky house, a continuous rain, and a mudslide, and then another hurricane, Katrina's level, a hurricane that human beings can't resist...

By then, it's too late to do anything.

"So Hank, don't think too much and prepare a rescue plan,"

Feng Yiping spoke with ease and certainty, but Paulson was sweating through his clothes.

When the matter has nothing to do with us, we are relatively relaxed and can make all kinds of judgments and decisions, but when we really face it, it will not be so easy.

In this matter, Paulson is the one who will take direct responsibility.

"So, what about the scope? How big is the scope?" Paulson's voice was a little bitter.

Feng Yiping patted him on the shoulder again, "In this matter, I think it's better not to have any illusions. To be prudent, it's better to consider all banks."

"Whether it's those that are doing well or those that are not doing well,"

"Because at this time, we can't tell which banks are doing well and which banks are facing a bad situation, right?"

"For example, if you call the CEO of Bear Stearns now, what do you think they will say?"

"The difficulties we are facing must be temporary, right?"

Paulson fully agrees with this.

As the former King of Wall Street, he knows those guys on Wall Street very well.

They will never let go until the final moment of life and death. Even when they let go, they are probably still thinking that a miracle will happen soon - as if the miracle is specially prepared for them.

"What's the amount?" Paulson was already thinking about the next question.

The US bailout plan seems to be 700 billion?

"In this regard, I think 500 billion, 700 billion, or even more are all understandable. After all, I remember that in January, in order to stimulate the economy, the spending package proposed by the president totaled close to 150 billion U.S. dollars. ?"

It was mid-January. One of the measures adopted by George W. Bush in order to boost the economy was to give the U.S. economy a shot in the arm through one-time tax rebates and tax cuts to encourage companies to purchase equipment. .

The result is better than wasting money. Many Americans, including Huang Jingping, will still receive tax refunds, but it will naturally not benefit the overall U.S. economy.

"The funds used in that plan are close to 1% of GDP. For such a broad rescue plan, I think even if it reaches 10%, it won't be excessive, right?"

In order to deal with subprime mortgages, our country has a plan of 4 trillion yuan. In the United States, this is to save lives. Even if it is to invest one trillion US dollars, is that a lot?

"Similarly, Congress is still a big problem, but the sooner we make such preparations and do the work of Congress, then the action will be more timely, right?"

"Do you think it is better to purchase illiquid assets or directly inject capital?" Paulson asked again.

He has actually considered this issue. It is easier for Congress to approve the purchase of illiquid assets, that is, mortgage securities, but direct capital injection will definitely produce faster results.

"That's the technical category," Feng Yiping said, "and I believe that after the crisis, all the funds used for rescue should be recovered,"

"I can even confirm that there will definitely be a lot of profits,"

It has to be said that as long as we survive this crisis, including many banks, the benefits will still be very good.

That is to say, by then, their stock price will definitely rise again, and they will make some profit when they recover their investment.

Paulson stood up, "Thank you, Feng," he said solemnly, "I owe you a favor,"

"Hank, let's stop being so vulgar, okay," Feng Yiping smiled.

Paulson's smile was a little dry, and he said to himself, it's better for us to be more vulgar.

"Isn't it right for friends to help each other?" Feng Yiping put his hand affectionately on his shoulder, "What's wrong with others? I'm very happy that you can ask for my opinion on such an issue."

"I'm also glad that I can get advice from you when I encounter difficult problems in the future,"

A favor? cut! It’s not that cheap!

Paulson's smile paused for a moment. That's right. How could someone as smart as Feng Yiping just let himself be fooled?

He probably knows what Feng Yiping wants. He also understands that Feng Yiping is not a person without a bottom line, so he has no burden. "You have my phone number, don't you?"

This is acquiescence.

"But Feng, I suggest you go to New York next week,"

"That's what I meant," Feng Yiping understood what Paulson was trying to remind him.

Bear Stearns is the first company they want to settle their investment in. This first company must be a good example, otherwise, the road for their fund to recover its investment will definitely not be smooth.

"There happens to be a dinner party that I recommend you attend," Paulson said.

ps: Please vote for the weekend!