The Son of Finance of the Great Age

  Chapter 556 Lifeline Project (Part 2)

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   "How's the superfund going?"

   Gently knocked on the table, Paulson's brows furrowed even tighter. He can naturally hear Bernanke's off-topic remarks. Although the Fed is doing its best, it seems that the Treasury Department may not be able to do anything now. Although the United States claims to be a market economy country, many classical economists strongly advocate that the government should not intervene in the operation of the market itself, but at this time, how can the Ministry of Finance really stay out of it?

  It seems that the "super fund" he is talking about now is led by the U.S. Department of the Treasury, and the top Wall Street institutions have invested in the establishment of a fund worth 100 billion US dollars to buy mortgage bonds in distress. Of course, in order to avoid the pressure of public opinion, there is no direct funding from the Ministry of Finance.

Upon hearing this, the faces of the CEOs of Citigroup, Bank of America and **** suddenly changed. As the giants of commercial banks, they are mainly responsible for these matters, which means that they have to take real money out of their pockets. Come silver. For commercial bank giants, these funds are not much, and it is not a problem for each bank to share equally, but the problem is that now that the crisis is intensifying, no one knows when it will end, so it is best to reserve more cash as insurance. The best policy.

Seeing the presence of the other two CEO gods, Kenneth Lewis had no choice but to stand up and said: "Mr. The cooperation intention of 100 million U.S. dollars, I believe it will enter the corresponding account in a short time." Speaking of this, he showed a look of embarrassment in cooperation, "However, Mr. Minister, what we can do is really very limited. These I'm afraid money can't buy mortgage bonds in the market. If you rely on these funds, I'm afraid..."

"I understand what you mean!" Paulson waved his hand impatiently, and stopped him, "Frankly speaking, of course I understand your difficulties. But because the Ministry of Finance is not convenient to make a move, I borrowed your name to intervene Market. In addition, I can tell you that Mr. President and the Secretary of State are discussing a large-scale tax rebate stimulus economic policy, the total scale will reach as much as 100 billion U.S. dollars. And this plan will be submitted to Congress soon, I believe it will not There will be too much resistance."

  The so-called tax rebate policy, as the name suggests, is to refund taxes to enterprises and ordinary people, so as to stimulate consumption and increase employment. According to the principle of the Laffer curve in economics, when the tax rate exceeds a fixed value, the fiscal revenue obtained through taxation will decrease at this time, because the excessive tax burden suppresses the vitality of the economy, resulting in a smaller social and economic aggregate . But now the president and his team of economic advisers clearly believe that the previous tax burden may be too heavy, so they want to stimulate the economy in this way.

  Since the tax rebate, the large enterprises that pay the most tax are naturally the ones that make the most profits. The faces of the CEOs or chairman of the board are all happy, which is indeed very good news for them.

"However, Mr. Minister, even if the president implements a large-scale tax reduction, it is still a drop in the bucket for individuals." At this moment, David Moffett, CEO of Freddie Mac, stood up and looked at him solemnly. "Even a $200 billion tax rebate, spread to only a few thousand dollars per household, is not going to do anything for mortgages, let alone do anything real for the housing market right now," Paulson said. Sexual impact. So for our real estate market, we need more policy support.”

"David is right!" Daniel Mulder also stood up and said at the right time, "We should give those who want to finance the house but have no ability a chance, let them have a buffer time, let the lending institutions and They re-signed a repayment agreement, rather than simply repossessing the house and putting it up for auction."

As he spoke, Daniel Mulder took out a stack of thick documents from his briefcase and handed them to Paulson, and then continued: "Of course, we don't intend to do this to all house owners. .Only those with an annual income of more than 50,000 US dollars and a good credit history can get the benefits of our policy. And those who are home owners who are overdue for repayment for more than 90 days or more, after contacting the home loan company , to give a certain buffer time."

   "It's ruthless!" Everyone present was smart, and they immediately understood that this was a self-rescue measure for large real estate companies to divest subprime housing mortgage loans. Because for those earning more than a certain level, they are fully able to afford the repayment, and now in addition to giving them time, there is also the possibility of renegotiating the price, so that the chances of them ditching the property are likely. With the continuous supply of housing suppliers, housing mortgage loans, corresponding bonds and derivatives are fully guaranteed.

  But there is an obvious problem with such a policy, that is, those who do not meet this policy are easily excluded, and the houses they stop supplying have no second choice except to take them to auction. And often such people are the middle and lower classes who have difficulty getting a fixed income, and the mortgage loans formed are also the kind with a high default rate, that is, what people call "subprime mortgage loans". In this case, the situation is divided into two types, the subprime mortgage market completely collapsed, and the strong real estate companies kept the higher-rated loan recovery and customers.

   Artificially cutting the entire market apart, this has to be said to be a way to save yourself at a critical time. One arm is rotten and can only be discarded, but if it is kept forcibly, it may endanger other intact parts of the body and even life.

  Paulsen's eyes flickered, and he couldn't make up his mind after pondering for a long time. He is well aware of the pros and cons. If this is a self-rescue measure among real estate companies, then what they gave up is by no means as simple as a subprime housing mortgage loan market, including the subprime housing mortgage bond market and the corresponding credit defaults. The swap market will also be abandoned by them, and this will involve the corresponding insurance market.

  For a while, Paulson couldn't make up his mind at all, the interests involved were too huge.

"Mr. Minister, you should make up your mind!" This time it was none other than Henry Paulson's old opponent John Mark, who said slowly, "Even if you are worried about other forces, don't do these things. If things happen, they will still face a loss situation. So instead of dragging everyone to die together, it is better to abandon part of it and let the whole market survive."

"This plan is like a lifeline. Although it can only save some people, it is better than letting everyone die. We should give the chance to escape to those who work hard and have the ability to live a better life. As for The others can only give up!" After pausing for a moment and giving Henry Paulson some time to digest, John Mark continued.

As soon as John Mark opened his mouth, Henry Paulson immediately understood that no matter whether the other party admitted or denied, Stanley Company was deeply involved in this so-called "lifeline" plan, but he didn't know that his old company had Not involved. Thinking of their secret energy, Henry Paulson smiled wryly. It seemed that several real estate companies took the lead, and the plan might have been designed by an investment bank, but these giants of commercial banks were in disbelief when they heard similar plans. Changing the color, it is obvious that he has known the relevant situation for a long time. Paulson even suspected that they were just telling him to go through the motions. Even if he didn't agree, they might find a higher-ranking official to approve the plan.

"That's good!" When Paulson thought of this, he simply stopped thinking and closed the document with a "snap", "I personally agree with this project called 'Lifeline' in principle, but I still It needs to be reported to Mr. President. Gentlemen, please wait patiently." (The novel "The Son of Finance of the Great Era" will have more fresh content on the official WeChat platform, and there will also be a 100% lucky draw gift for everyone! Now Open WeChat, click the "+" sign on the top right "add friend", search the official account "qdread" and pay attention, hurry up!)

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  (end of this chapter)