Fannie and Freddie are already heavily in debt. Lehman Brothers' quarterly loss of several billion USD is already very high, but compared to Fannie and Freddie, it is nothing.
Fannie and Freddie's losses in July exceeded 70 billion USD. Such a high loss in one month has not been included. He hadn't even included the previous losses, otherwise, it would be even more terrifying.
At the beginning of July, Fannie and Freddie raised 5.5 billion USD and 6 billion USD respectively by issuing additional shares, hoping to tide over the crisis.
In the end, not only did they not tide over the crisis, but it also increased the burden on the companies.
Originally, the Federal Reserve wanted the USD to appreciate, and then it can attract deposits, let the banks have more cash, and reduce cashing, so that the banks have more funds to operate.
Fannie and Freddie also thought so, so they borrowed a huge amount of money and invested it in USD interest rate swaps, hoping to make a lot of money through this operation and tide over the crisis.
But they did not expect that even though the Federal Reserve raised interest rates again, there are still not many people saving. Frankly speaking, everyone no longer trusts the banks.
Feng Yu, Kirilenko, and others still took the lead to dump USD, continuing to suppress the USD exchange rate, causing the USD exchange rate to continue to fall.
At this time, the European banks also joined in, and they also saw the profits.
For example, Barclays, UBS, Royal Bank of Scotland, Deutsche Bank, Credit Suisse, Rabobank, etc., and even Citibank, Morgan Chase, Bank of America, and other US commercial banks also joined in.
In the eyes of these capitalists, only profits are real, and they do not care about other companies' survival.
With these banks with huge assets joining in, the USD exchange rate cannot be pulled up at all. Feng Yu and the rest mainly dumped USD through these commercial banks in Europe.
At that time, many of these banks also speculated on crude oil. They thought that if the USD falls, crude oil will continue to rise. So dumping USD is in their best interest, and they think this can stimulate the stock market and other financial markets.
As a result, Fannie and Freddie's investment suffered losses again, and the losses are very large.
During this period, insurance companies and financial companies continue to go bankrupt, causing Fannie and Freddie's debt to continue to increase, and the value of their securities continues to fall. Their losses are getting bigger and bigger, and they will soon lose money.
The European commercial banks once again played a ruthless trick, which was to raise the interbank offered rate, which was the interest between banks and other financial institutions.
This made the lending interest of Fannie and Freddie Group rise sharply, making their losses bigger.
Of course, as the interbank rates increased, Feng Yu's losses from selling USD also increased. However, Feng Yu did not care.
These losses can be recovered by investing in other markets. For example, short selling in the US stock market can help them recover these losses.
Moreover, Feng Yu's most profitable investment was crude oil futures.
At this time, crude oil futures are still falling, and Feng Yu and his team can see profits rising almost every day.
When a company loses too much money, its stock price will naturally fall.
Last year, Fannie and Freddie Group's share prices were more than 60 USD, and it started to fall at the beginning of this year. At that time, Feng Yu is also leading the short selling.
After the stock price was pushed down to about 20 US dollars, the US government began to inject capital and pulled up the price a little. However, as Fannie and Freddie continued to lose money, their operating losses increased, and the market continued to fall, so their stock price naturally fell, and now it was only a little more than one US dollar.
That means the market value of these two companies had shrunk to 1/60th, and their wealth had decreased by more than 98%.
Bank of Merrill Lynch and Lehman Brothers had also gone bankrupt, but Fannie and Freddie Group are still holding on. This is because they are the biggest sponsor of the US government.
The huge losses of listed companies will have a huge impact on their share prices. If their share prices fall below 1 USD for 30 consecutive trading days, they will be forced to delist, and it will be hard for them to recover.
At this time, Fannie and Freddie Group chose the same path as WorldCom, Enron, and other companies, which is to falsify their financial reports. Fabricating profits and concealing losses so that investors would not completely lose confidence in them.
A few years ago, Fannie and Freddie Group had a financial fraud scandal. But at that time, Fannie and Freddie Group had concealed their profits, which is accepted by investors. This proves that Fannie and Freddie Group are very profitable, and they just want to share less with the investors. In fact, the profits that Fannie and Freddie Group reported are not their direct income.
But this time, it is different. This time, Fannie and Freddie Group had concealed their losses, and they do not want investors to withdraw their investments.
So, the giants of Fannie and Freddie Group hired someone to falsify their accounts, increase their profits by 10 to 20 billion USD, and conceal some losses. This way, their financial reports will look better.
This will let investors think that Fannie and Freddie Group are only in trouble temporarily, and they will get out of it soon.
Unfortunately, Feng Yu had known about this in his previous life, and in this life, he had gotten someone to investigate and found concrete evidence.
Then, the next step will be simple. He will expose this scandal, and Fannie and Freddie Group's share prices will plummet again.
[Fannie and Freddie Group hid their losses together. Will history repeat itself for Enron and WorldCom?]
[Fannie and Freddie Group falsely reported their profits, and investors were cheated by them!]
[Fannie and Freddie Group are on the verge of bankruptcy. Will mortgage interest rates rise sharply again?]
[The bankruptcy of Fannie and Freddie Group will trigger a financial storm, and the US economy will suffer the heaviest blow!]
Many pieces of news were reported on the Internet, newspapers, and TV, and quickly spread throughout the US and the world.
For a while, this news even overshadowed Hua Xia's Olympic Games. During the Olympic Games, the Olympic Games are the media's favorite. But this time, it is different.
Bush, who was being interviewed by the media, was still smiling and telling the reporters that this time, the US athletes will continue their past achievements and break many Olympic records and even many world records.
He was very fond of an athlete, and he hoped that when the athlete triumphed, he could have dinner with him or something.
But at this time, he saw the people in his office waving at him from behind the reporters. This meant that something urgent had happened.
Someone stopped the reporters and interrupted the interview. Bush walked over and asked, "What's the matter?"
His face was full of displeasure. Today, an American athlete had broken the world record. It was rare for something to make him happy during this period of time. He was happy.
"Mr. President, take a look. Fannie and Freddie Group have a major scandal!"
…
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