Set sail1992

Hearing Tang Changhao's words, Song Yuehua also frowned: It seems that this is really the case...

He is not a professional economics or finance scholar. Although he is in charge of economics, he is more in charge of industry, so after hearing what Tang Changhao said, he also realized that something was wrong, but his knowledge in the economic field and his knowledge of the American economy and His understanding of finance was not that deep, so although he also felt that something was wrong, he couldn't tell what was wrong.So like Tang Changhao, Song Yuehua also turned his gaze to Zhang Qihang with doubts on his face.

"The two leaders are really good, and they immediately realized the problem," Zhang Qihang nodded affirmatively, "Normally speaking, according to the MBS method, there is almost no risk in doing so, and the bank can always play this game." Going on, even the banking system in our country is very excited about the asset securitization game. Driven by the banking system, the country issued the "Administrative Measures for the Pilot Securitization of Credit Assets" the year before last, and wanted to pilot the securitization of credit assets. It's just that the overall scale of credit loans in our country is not large, everything is being explored, and the localization of MBS is also being discussed..."

Speaking of this, Zhang Qihang paused for a while, and then he emphasized his tone: "Everything looks good, but the question is, is MBS really a perfect method that has only advantages and no disadvantages?
Another one, are we too idealistic about capitalists and capital, and underestimating their greed?Marx said in "Das Kapital" that for a 300% profit, capitalists can sell the noose that hangs them. "

"Yes, this is it!"

As soon as Zhang Qihang's words fell, Tang Changhao slapped his thigh excitedly. In addition to being excited, he looked at Zhang Qihang with undisguised appreciation: "Xiao Zhang is right, there is no real perfection and no harm in the world. There are only good ways, and there is no capitalist who is not greedy...Xiao Zhang, go on."

He became more and more interested in what Zhang Qihang was going to say next.

The same is true for Song Yuehua, Zhang Qihang's words made him suddenly enlightened!
That's right, that's what happened. There is no perfect solution to a problem that satisfies everyone in this world. If there is, there must be some problem that has not been exposed, and the deeper the problem is hidden , the greater the danger may be!As for the greed of capitalists and capital, is there much to say?For this point, no matter how overestimated it is, because there is no lower limit for capital and capitalists.

Like Tang Changhao, he couldn't wait to hear what Zhang Qihang had to say next.

Zhang Qihang nodded, and continued: "Since normal housing mortgage loans can be used as MBS, then subprime housing mortgage loans can also be used as MBS, but compared to the MBS of normal housing mortgage loans that have almost no risk, The risk of MBS obtained by using subprime housing mortgage loans is much greater. The reason? As I have just said, the main applicants for subprime housing mortgage loans are those with low income, unstable income or no income at all. , Their ability to pay may only last for two or three years or even a few months.

Of course, it is not ruled out that these people have found a good job with a stable income during this period, but overall, compared with ordinary housing mortgage loans, applicants for subprime housing mortgage loans have a very high risk of being cut off. , and once those who have applied for subprime housing mortgage loans choose to cut off the payment, those who have purchased MBS asset packages will be the first to be impacted..."

"Xiao Zhang, I'm going to make a plan." Tang Changhao suddenly interrupted Zhang Qihang and asked, "The bankers who do MBS can see this question, and those who buy MBS asset packages can naturally see it too. After all, you can invest in this Surely the people or companies involved in this kind of project are not stupid, can they fail to see the risks? Didn’t they take any measures?”

Zhang Qihang smiled and nodded: "You're right, those who buy MBS asset packages are not idiots and idiots, on the contrary, they are very smart, and they are not only very smart, but also have professional financial and capital management personnel. You can see the hidden dangers and hidden risks.

The bank also knows this, so the bank has calculated a risk control line: as long as the foreclosure rate of the homeowners with subprime mortgage loans does not exceed 5%, the MBS asset package is profitable.

In addition, in order to further reduce risks, banks are also very smart when packaging MBS assets. This asset package is not all composed of normal housing mortgage loans, but some of them are normal housing mortgage loans, and some are substandard housing loans. In this way, even if some homeowners with subprime mortgages choose to cut off the payment, they still have the backing of normal mortgage loans, which can guarantee the income of the entire MBS asset package... Nothing more It is possible that you could earn 10% before, but now you can only earn 7%, or even 5%, or 3%, but in general, you will not lose money. "

"Um……"

Tang Changhao and Song Yuehua nodded together. The whole logic of what they said made sense. A group of the smartest people are doing business. How could it be possible to leave such an obvious loophole?
But in this way, the two became more curious about Zhang Qihang's analysis of the US economic crisis: How could there be a global economic crisis comparable to the oil crisis in the 70s?
Zhang Qihang went on to say: "This loss will naturally have little impact on those who buy MBS products with their own money. It is nothing more than a matter of earning more and less earning. What happened, the two leaders should know that the stock market investment and futures market in Europe and the United States can be leveraged. In fact, not only stocks and futures, securities products can also be leveraged, and the lower the risk of the product, the greater the leverage. Like this kind of MBS asset package, it is normal for investment institutions to have a leverage of [-] to [-] times, because only in this way can they make money."

Hearing Zhang Qihang's words, Song Yuehua was shocked: "Increasing the financial leverage to [-] to [-] times? Isn't this too risky? If there is a slight fluctuation, the position may be forced to liquidate."

After finishing speaking, seeing that Tang Changhao was somewhat puzzled and puzzled, Song Yuehua explained to him: "For example, an investment institution has its own funds of 10 billion U.S. dollars. If it is 20 times the financial leverage, it is equivalent to the funds he can deploy. From the previous 10 billion to 200 billion, even if there is only a 5% profit, it is still 10 billion. Compared with the funds I hold, the profit has doubled! If it is 30 times If the leverage is high, the funds that can be allocated suddenly soar to 300 billion. Even if the profit is 5%, it is 15 billion.

Of course, while the financial gear has brought rich returns to speculators, it also greatly magnifies the risks of speculators. If the financial products he speculates on fall by 5%, the loss is 10 billion. At this time , The bank will force liquidation, but the bank will not bear the loss, which means that as long as there is a 5% loss, the speculator will directly lose his principal. "

"So that's what financial leverage is about." Tang Changhao nodded again and again, feeling very emotional: "In other words, the greater the leverage, the greater the risk?"

Song Yuehua smiled and nodded: "That's what happened."

Tang Changhao then turned his head to look at Zhang Qihang: "Xiao Zhang, you continue to talk... Now listening to your explanation, I think this matter is getting more and more interesting."

Zhang Qihang went on to say: "It's just MBS. The bank thinks it's not enough. It thinks that if the leverage is too high, the risk is too great. They also borrowed from the CDS of the insurance industry...that is, credit default swaps...and came up with a plan for the subprime mortgage market. Credit default swap products.

Let me give you an example. For example, a bank in the United States that engages in subprime housing mortgage lending has issued loans worth 100 billion U.S. dollars. Based on a 10-year total profit of 40%, the total profit is 40 billion. However, at the same time, the bank I am also a little worried, thinking that in as long as 10 years, there will definitely be many subprime mortgage applicants who will not repay the loan due to various reasons, which will lead to a large number of bad debts in the bank.

What should be done at this time to avoid this risk as much as possible?
So credit default swaps, or CDS, came into being. At this time, the bank found another financial institution... usually an insurance company... to discuss, saying that you can design an insurance product for me, and I will give you 3 million US dollars. For insurance premiums, if a lender fails to repay the loan, you will pay for the loss. In this way, the bank will earn 37 billion U.S. dollars without taking risks.

As for insurance companies, of course, they can't agree to it outright, but to conduct investigations. After the investigation of a professional investigation company, the insurance company found that the current economic development momentum is good, although there are indeed some people who cannot change. However, this ratio is very low, about 1% to 1.5%. That is to say, when the subprime housing mortgage loans issued by banks in Canada total 100 billion U.S. dollars, the maximum is only 1.5 million U.S. dollars. Not yet, in this way, even in the worst case, I collect 3 million US dollars in premiums, even if I lose 1.5 million US dollars, I can still earn 1.5 million or even 2 million US dollars. This business can be done, almost 100% profit Woolen cloth.

Of course, insurance companies are not good men and women. After some internal discussions, they went to the bank again and said that the risk of your loan is too high. According to our research and evaluation, the potential risk of default is as high as 3%, which means that I don’t have a penny. Earn, I will work for you all, this is absolutely impossible, unless you increase the premium to 6 million US dollars, otherwise I will not do it!

The final result was that after some bargaining and arguing, the two parties reached an agreement on the figure of 5 million US dollars, and the bank paid 5 million US dollars in premiums to cover their own profits.

But you also know that the term of housing loans is basically relatively long, the minimum is 10 years, and 20 or even 30 years are also normal. Unfriendly, so this insurance company will resell this CDS contract for $4.5 million or $4 million-the bank can sell this CDS contract to me, and I can also sell this CDS contract Selling the contract to the second insurance company is equivalent to the first insurance company finding the second insurance company and buying another insurance policy for the policy underwritten by itself. Sometimes, you don't have to pay for it yourself, but another insurance company will bear the responsibility for paying the compensation.

Of course, the second insurance company is not stupid. After they settled the accounts, they found that 100 million of the 1.5 billion is not enough. Yes, so the second insurance company signed another CDS contract with the first insurance company.

Then the second insurance company followed suit and signed a CDS contract with the third insurance company at a slightly lower price, bought an insurance policy for itself, and transferred the risk of compensation to the third insurance company at the same time. Insurance company; the third insurance company continues to follow suit..."

Hearing this, Tang Changhao couldn't bear it anymore: "Isn't this just a Russian nesting doll?"

"Isn't it just a Russian matryoshka?" Zhang Qihang nodded with a smile: "I sorted out the data previously released by relevant US agencies and found that the size of CDS in the entire United States is about US$50 trillion to US$60 trillion. Once there is a default, even if it is only 10%, it will be a loss of US$5 trillion to US$6 trillion!"

"Five or six trillion dollars in losses?"

As soon as this number came out, Tang Changhao and Song Yuehua were taken aback at the same time, and their expressions became extremely ugly in an instant: As senior cadres, they clearly remembered that in 2006, the total GDP of Huaxia was only 2.75 trillion dollars!How does this compare?
"It's not enough," Zhang Qihang continued: "Since last year, the default rate of mortgage loans and subprime mortgage loans in the United States has been rising. The bankruptcy of New Century Finance has already sent a very bad signal, combined with the previous sharp drop in the American stock market and Fannie Mae. The huge losses of the two giants of Freddie Mac..."

Speaking of this, Zhang Qihang took a deep breath and said, "I think all of this points in the same direction: a large-scale economic crisis that started in the subprime mortgage market in the United States and spread to all financial sectors in the United States. It has already begun, and given the proportion of the American economy in the global economy, this economy will inevitably spread to every corner of the world, even Africa without electricity is no exception. As a country, it is hard to overestimate the impact of this economic crisis on us.”

"..."

After Zhang Qihang finished speaking, Tang Changhao and Song Yuehua didn't speak, but both of them frowned fiercely.