Chapter 1673: Receiver and Backer (5/10)

"Send someone to contact and see if Feng Yu can be invited to the White Palace as a guest." Xiao Bu Shi said.

"President, this is not good, Feng Yu is from Huaxia after all. If we do this, it will make people think that we want to further strengthen economic and trade exchanges with Huaxia."

Hearing this, Xiao Bu fell silent. This matter is obviously not something he can decide on his own, although he thinks there is nothing wrong with it. It seems that this position is very beautiful, but every word and deed is subject to too many restrictions.

"Then you find a way to let me meet Feng Yu, and you know exactly what to do, right?"

Feng Yu didn't know that Xiao Bushi had already decided to meet and chat with him, and he was still watching the stock market.

For two consecutive days, the stock price of New Century Financial Corporation has fallen by 15%, and the decline has continued, and it is estimated that it will continue to fall, as long as they can't explain the news from the media.

As for some small real estate finance companies, the decline was even more severe, generally exceeding 18%, and two companies even directly announced that they were going to file for bankruptcy protection.

This application for bankruptcy protection is even worse, making investors even more distrustful of companies in the real estate industry.

"Boss, the stocks of these companies have indeed plummeted. We can make a lot of money by short selling, right?"

Fengyu Consulting borrowed a lot of stocks of these real estate companies from some financial institutions, and after selling them in large quantities, coupled with the help of the news, the stock prices of these companies plummeted, which meant that Fengyu Consulting could make a lot of money.

Selling stocks is a loss on the books, but short selling can make more money.

"In fact, I didn't make much money. The stocks of these companies are not our main investment direction at all."

Although the stock prices of these companies have fallen by a large margin, the market is too small, and the number of stocks that can be lent is not large. Moreover, Feng Yu only let Fengyu Consulting mainly operate the New Century Financial Company, and only a little bit of the others.

These are just experiments. Looking back, Liangfang Group is the main direction of attack.

"Boss, why do you think that these companies may not all go bankrupt? Now, it seems that these companies must be finished?" Ralph humbly asked for advice.

"Because the U.S. government, or Xiao Bushi, must not let these companies go bankrupt. They will definitely find a way to save it."

"Guess what they will do?" Feng Yu asked with a smile.

Ralph thought for a while: "Find another company to take over?"

"Correct!" Feng Yu snapped his fingers, "For the current plan, they can only find other companies to take over. Taking over the business of these companies, they also took over the debts of these companies!"

"But this is far from enough. These companies will cause a large number of people to lose their jobs, which is not a small problem. At the same time, what is more serious is that there are too many companies that have gone bankrupt, which they can't imagine!"

If only one or two companies go bankrupt, then it is really just a trivial matter. Anyway, the market value of the bankrupt ones, even New Century Financial Corporation, is less than three billion US dollars.

With the scale of the two Fangfang Group, a loss of three billion US dollars a month may not be able to hurt the bones. Of course, it would be different if you lost that much every month.

In Feng Yu's eyes, Liangfang Group is simply two takeover heroes,

He is also the ultimate backer!

In the previous life, the two Fangfang Group filed for bankruptcy, which led to the real collapse of the US stock market. Before that, at least they could linger on their last days, and there were some rescues.

The main reason for the bankruptcy of Liangfang Group is that they became the successors and finally took the blame for this unlucky situation.

In fact, the subprime mortgage crisis was mainly caused by these small real estate finance companies, and the two rooms are responsible for it. But in the end, everyone generally believed that the matter was caused by the two groups.

Of course, the collapse of the Liangfang Group is also the reason why this matter has become more serious.

The two main groups are to package these loans, issue bonds, and sell the bonds to investors. Under normal circumstances, the risk of this kind of bond is very low, because at the beginning, the creditworthiness and repayment ability of those who can borrow are very trustworthy.

Therefore, the bonds issued by Liangfang Group are sought after by many investors, including Huaxia State-owned Assets in the previous life. To a certain extent, some people interpret this as the national debt of the United States, completely forgetting that these are two private companies.

By doing this, they have completed a process of asset securitization.

At that time, the two housing groups were very strict in reviewing the mortgage loans for purchase, and they did not buy those subprime loans at all.

But later, more and more financial companies engaged in subprime loans, and at the request of Xiaobu Shizheng, Liangfang Group also began to buy these high-risk subprime loans.

Then adjustable rate mortgages are rampant, and low interest rates are used to lure people to buy houses with loans. Many people with ordinary incomes also live in large and good houses. But then interest rates adjusted, their loan repayments were recalculated, and many households who could have repaid their loans couldn't.

These are all done by those small companies. The two groups really didn’t do it at the beginning, and they don’t need to do it. After their high-quality loans are made into bonds, it is enough to make money.

But it's not working now, those small companies are going to die, Xiao Bushi asks for assistance from the two Fangfang Group.

How to aid is to eat the mortgage loans of those small companies and sell them in the form of bonds.

At this time, the bonds of the two groups will start to deteriorate. From low-risk, low-yield bonds to high-risk, high-yield bonds, the original intention of many people's investment is completely different.

Everyone has become accustomed to the low-risk bonds of the two groups, which is an inherent impression. When these high-risk bonds are issued, many people will buy them without hesitation, and then it is equivalent to getting on the boat, but it will be very difficult to get off the boat!

These small financial companies, because those who have not repaid their loans, are dragged down, but they have to repay loans to banks and other institutions, so they can only find ways to borrow money.

Yes, there are many properties mortgaged to them, but this is not easy to realize in the first place, and it has depreciated. They can only borrow money to tear down the east wall and make up for the west wall.

The leverage of some financial companies has become particularly high. Many products that normally only have a leverage of ten times, in their company, can have a leverage of twenty times, or even twenty-five times, or thirty times.

What does this mean? It means that they have manipulated a large amount of funds with a small margin. How big is the risk? How fragile should the capital structure be?

At this time, they still couldn't figure out what to do, so they could only conceal some situations, and even made some small financial tricks.

When these were exposed by Feng Yu, their company had no choice but to go bankrupt. In order to prevent the situation from deteriorating, the Two Rooms Group can only be the taker, and thus become the backer!

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