"Send someone to see if we can invite Feng Yu to the White House." Bush said.
"Mr. President, this is not a good idea. Feng Yu is Hua Xia's man. If we do this, people will think that we are going to strengthen our trade relations with Hua Xia. "
Hearing this, Bush did not say anything. This is not something he can decide alone, although he does not think there is anything wrong with it. It might seem like a good position, but every word and action would be greatly restricted.
"Then think of a way to let me meet Feng Yu. You know what to do, right?"
Feng Yu does not know that Bush had decided to meet him, and he is still looking at the stock market.
New Century Financial's share prices had fallen by 15% for the past two days, and it will continue to fall as long as they cannot explain the media.
Some smaller real estate companies' share prices had fallen by more than 18%. Two companies had even announced that they will file for bankruptcy.
This bankruptcy filing was like adding snow to snow, making investors even more distrustful of companies in the real estate industry.
"Boss, these companies' share prices had fallen. We should make a lot of money by short-selling their shares."
Wind & Rain Consulting had borrowed a lot of these real estate companies' shares from some financial institutions and dumped them. With the help of the news, these companies' share prices plunged, and Wind & Rain Consulting can make a lot of money.
Selling the shares was a loss on paper, but short selling could make more money.
"Actually, we did not make a lot of money. These companies' shares are not our main investment direction."
Although these companies' share prices had fallen by a lot, the market is too small, and the number of shares they can borrow is not much. Also, Feng Yu had only asked Wind and Rain Consulting to operate New Century Financial Company and only a small portion of the rest.
These are just experiments, and Feng Yu and Fannie Mae will be the main targets.
"Boss, why do you think these companies will not go bankrupt? From the looks of it, these companies are definitely done for, right? "Ralph humbly asked for advice.
"Because the US government, or rather, George W. Bush, will definitely not let these companies go bankrupt. They will definitely find a way to save them."
"What do you think they will do?" Feng Yu asked with a smile.
Ralph thought for a moment. "Should we look for other companies to take over?"
"Correct!" Feng Yu snapped his fingers. "For now, they can only look for other companies to take over. By taking over the businesses of these companies, I will also take over their debts! "
"But this is far from enough. These companies would cause a large number of people to lose their jobs, which was not a small problem. At the same time, what's more serious is that too many companies have gone bankrupt. This is something they can't imagine! "
If only one or two companies went bankrupt, it would be a small matter. Anyway, the current bankrupt companies, including New Century Financial Corporation, had a market value of less than 3 billion USD.
With the size of Fannie and Freddie, losing three billion USD a month might not be a big deal. Of course, it would be different if he were to lose so much money every month.
In Feng Yu's eyes, Fannie and Freddie were simply two people who were going to take the blame!
In Feng Yu's previous life, Fannie and Freddie filed for bankruptcy, which led to the real crash of the US stock market. Before that, Fannie and Freddie could still be saved.
The main reason why Fannie and Freddie Group went bankrupt was that they became the buyers and eventually became the unlucky scapegoat.
In fact, the last mortgage crisis was mainly caused by these small real estate finance companies, and Fannie and Freddie were the ones who took the blame. But in the end, everyone generally thought that it was Fannie and Freddie who caused the crisis.
Of course, the collapse of Fannie and Freddie was also the reason why the crisis became more serious.
Fannie and Freddie mainly packaged these loans, issued bonds, and sold the bonds to investors. Under normal circumstances, the risk of these bonds is very low because the people who can get the loans are very trustworthy and have the ability to repay the loans.
That's why the bonds issued by Fannie and Freddie are sought after by many investors, including Hua Xia in Feng Yu's previous life. To a certain extent, some people even think of these bonds as US Treasury bonds and completely forget that these are two private companies.
Fannie and Freddie had completed the process of asset securitization.
At that time, Fannie and Freddie were very strict with the mortgage loans they bought, and they did not buy those subprime loans at all.
But later, more and more financial companies do subprime loans, and Fannie and Freddie also started to buy these risky subprime loans under the request of George W. Bush's government.
After that, adjustable interest rate mortgages became rampant, and Fannie and Freddie used low interest rates to entice people to buy houses. Many people with ordinary incomes also live in big and good houses. But after the interest rates were adjusted, the loans they had to repay were recalculated, and many families who could repay the loans could not afford it anymore.
These were all done by those small companies. Fannie and Freddie did not do this at first, and they do not need to do so. After their high-quality loans are turned into bonds, they can make money.
But now, those small companies are finished, and George W. Bush asked Fannie and Freddie for help.
No matter how much help they get, they will still buy the mortgages of those small companies and sell them in the form of bonds.
At this time, Fannie and Freddie's bonds will start to deteriorate. From a low-risk, low-yield bond to a high-risk, high-yield bond, this is completely different from the original intention of many people's investment.
Everyone is used to Fannie and Freddie's bonds are low-risk, and this is an impression. When these high-risk bonds were issued, many people would buy them without hesitation. Then, it would be equivalent to boarding the ship, and it would be extremely difficult to get off the ship!
These small financial companies are burdened by those who did not repay the loans, and they have to repay the loans to banks and other institutions. That's why they can only borrow money.
That's right, many properties are mortgaged to these companies, but these properties are not easy to cash, and their value has depreciated. These companies can only borrow money and rob Peter to pay Paul.
As a result, the leverage of some financial companies has become extremely high. Many products that are only 10 times leverage can be 20 times, 25 times, or even 30 times leverage in these companies.
What does this mean? This means they are using a small amount of margin to manipulate a large amount of funds. How high is the risk? How fragile is the capital structure?
At this time, these companies still do not know what to do, and they can only hide some information and even do some financial tricks.
When Feng Yu got his men to expose this, their companies had no choice but to go bankrupt. To prevent the situation from worsening, Fannie and Freddie become the scapegoat!
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