Chapter 2194 War begins! ! !
Chen Mo approached the central bank of the overlord to engage in CDS, and within one day more than half of the top investment banks in the overlord purchased more than 10 trillion CDS. The news soon reached the foundation.
There was no cover-up in Chen Mo's actions. Even many of the investment banks and financial institutions where he went to buy CDs were properties under the foundation's name!
There is no other reason. The outbreak of the subprime mortgage crisis is beyond the control of any country or organization.
It belongs to "the law cannot be violated"!
Shorting the real estate industry of Hegemony is Chen Mo’s usual conspiracy!
What will your foundation do if it knows about it?
The real estate industry is yours, the official banks are yours, the top investment banks are yours, and more than half of the big companies on Wall Street are yours.
These things, linked together, formed the mess that is now locked together.
If one link jumps, everyone must jump with it!
Therefore, Chen Mo performed these actions openly and without any cover-up.
Foundation headquarters.
Michelle reported nervously: "Boss, Chen Mo's recent actions are very strange!"
"He asked the most senior official bank of the overlord to create a financial tool for shorting real estate, and then invested almost all of his net worth into this tool!"
"Now, most of the top financial institutions in Hegemony, including the Central Bank of Hegemony, Gaosheng, and Lehman Brothers, have reached gambling agreements with Chen Mo."
"Boss, what should we do?"
After Solomon learned the news, he laughed angrily.
He hasn't caused trouble for Chen Mo yet, but Chen Mo has come to the foundation headquarters so blatantly to cause trouble for him and the foundation! !
Even as soon as he came up, he directly poked his heart, and actually wanted to short the most important source of income for the Rothschild family and the foundation - Overlord Real Estate!
"What's the real estate situation now?" Solomon asked.
“The mortgage default rate has increased, but it is basically within control, because housing prices are still rising and people’s expectations for the future are still there.
Moreover, both the government and various financial institutions are helping us promote the idea that housing prices will not stop rising. "
Michelle Hui reports.
After a pause, Michelle changed the topic: "But now the inflation in the overlord country has been ridiculously high, which has caused the floating interest rates on mortgage loans to rise sharply.
I'm worried that this will lead to further increases in mortgage default rates, which will have a knock-on effect. "
The so-called floating interest rate is actually a "welfare" provided by the banks of the dominant country in order to lend out their own subprime loans.
The definition of floating interest rate is an interest rate that can be adjusted periodically during the loan period.
For example, the loan period of a house loan is 30 years. In order to attract customers, banks usually set the interest rates in previous years very low.
For example, if the interest rate for the first three years is 2%, the interest that the borrower needs to repay in the first three years will be very, very low. Even taking a consumer loan can offset the mortgage loan.
After three years, entering the floating interest rate period, the loan interest rate will be composed of the basic interest rate and markup.
The basic interest rate is set based on the market conditions of the year, and the markup is agreed upon at the time of loan.
For example, after three years, the basic interest rate becomes 4%, and the mark-up agreed upon at the time of loan is 2%. Then, the interest that the borrower has to repay after three years will increase from 2% to 6%.
Relax and double your happiness.
The higher the floating interest rate, the more money the borrower has to repay each month, and the higher the loan default rate.
Generally speaking, if the default rate reaches a certain threshold, the loan product will fail.
"No need to worry, Hegemony is the most developed country in the world, and the world's top wealthy people will come here to buy real estate.
If real estate prices in any country in the world go up, housing prices will not go up either! "
“Taking a step back, even if the real estate market in Hegemony is really going to be off the market.
I am also confident that I can wait until the cds expire, drag Chen Mo to death, and then let him bounce!
At that time, the overbearing Federal Reserve will let loose and print money at will, passing the risk to the whole world. What do we have to be afraid of? "
Solomon said confidently.
Just like in the previous life, all real estate and financial practitioners in the hegemony were as confident as before the economic crisis.
At this moment, a subordinate ran over in panic:
"Sir Solomon, what's wrong, Chen Mo is now spreading the theory of the collapse of Hegemony's real estate all over the world! He even posted a high-profile announcement on his social networking site about his 10 trillion short-selling Hegemony real estate contract!!!"
Solomon's pupils shrank!
"What did the China Securities Regulatory Commission say? Is this suspected of violating regulations?" Solomon said angrily.
"But... CDS is an insurance product and does not involve the stock market at all. Chen Mo's actions are not suspected of manipulating stock prices. The China Securities Regulatory Commission cannot control it. At most, he will be given a verbal warning." The subordinate said helplessly: "But his move has made the real estate field The stock prices of all companies began to fall crazily!
In some cases, the price plummeted by 30% in an instant!
The panic among stock investors, property owners and mortgage lenders has been aroused.
In addition, the recent increase in floating interest rates has been a bit too fierce, I'm afraid..."
"What are you afraid of?"
"I'm afraid that the wave of supply cutoffs will come on a large scale, leading to an increase in subprime mortgage risks!"
Solomon felt like he had a lump in his throat for a moment!
