Chapter 2210 Picking stones from the manure pit
Oha just made jokes, avoided the important points and ignored the light points. Anyway, he just didn't talk about the important points.
There was no way, he couldn't respond directly to this topic, no matter how he talked about it, it would be wrong!
When Chen Mo saw this, he was too lazy to talk nonsense anymore and asked directly:
"Have you ever rated MBS or CDO bonds lower than 3A?"
Oha Gang's expression changed, and it was obvious to the naked eye that he was a little impatient: "Mr. Chen, this is the internal data of our evaluation agency. I have no right to tell you."
Chen Mo responded: "Okay, then you answer another simple question for me. Give us the name of a real estate bond that was rated lower than 3A last year."
"Any one is fine. Isn't this illegal?"
Oha just took a deep breath, turned his head and glanced at Roque Quant, who had a gloomy expression next to him. In desperation, he finally told the truth:
"Ok, ok. No! No, that's alright!"
"All bonds are rated 3A, and there are no bonds rated lower than 3A! Not only real estate bonds, but other types of bonds are all rated 3A, right?"
Roque Quandt was beyond shocked: "Last year, there wasn't a single bond below 3A? So what grade are you rating?
Wouldn’t it be better to just send 3A in batches? "
Oha Gang said helplessly: "If we don't rate it like this, people will go to Muti next door to rate it.
If we don't cooperate with others, then our opponents will steal our customers' money.
This is the money that rating agencies make. When people pay us for ratings, isn’t it just to give them a good rating? If people spend money and we give them a B grade, who will come back in the future? "
"Mr. Quandt, this is how the rules work. What can we do? As a company with a market value of several trillion, we have to have something to eat, right?"
Roque Quant was immediately silenced by O'Hagan's rhetorical question.
Good guy!
It turns out that the business of the most powerful rating agency in the world is to collect money to do things!
It turns out that ratings are also sold through bidding!
"Mu Di, are Huiyu the same as your S&P?" Chen Mo continued to ask.
“In this circle, anyone who dares to go against the trend will end up being squeezed out or going bankrupt.
No one cares what the real ratings of those bonds are, all we care about is how much money we make. "Oha Gang said confidently.
Chen Mo was so angry that he laughed at his confident attitude.
Many companies invested by Moyuan Capital have been shorted by these three rating agencies.
Chen Mo thought it was the foundation's instruction before, but now that he thinks about it...
It turns out that I didn’t pay enough protection fee! ! !
Oha just said it, so he didn't care anymore. Anyway, these are not secrets in the circle.
"Mr. Chen, I guess your coming to investigate this is related to the fact that you have purchased a lot of CDS products before, right?"
"For the sake of Mr. Quant's face, I can tell you that banks are now selling a new type of CDO product - synthetic CDO."
Oha just drank his coffee and smiled unhurriedly.
After the emergence of subprime loans, MBS classified them into three grades: good, medium and poor based on the credit scores of different borrowers.
Good ones have low default risk and are very easy to sell.
The risk of bad investment is high, but the interest rate is also high, so it will be favored by investors who pursue high returns.
Only those at the middle level are neither above nor below, and are the most difficult to take action.
The emergence of CDO is exactly solving this problem.
Investment banks buy mid-level MBS and package them into CDO products, and then classify these MBS into three grades: good, medium, and poor based on the level of default risk, and then sell them again.
In this way, the mid-range MBS that was originally difficult to sell is renamed CDO, and at least two-thirds of the products (good grade and poor grade) can be easily sold.
As for the remaining mid-level CDO products, they are just continuing to play the matryoshka trick, continuing to divide them into three levels: good, medium, and poor, and then continue to sell them under different names.
Of course, this would not be possible without the help of this group of rating agencies.
Their matryoshka product is a synthetic CDO product.
These products, after being rated, are all 3A-rated bonds (financial management products).
Going back to the origin, even MBS, the ancestor of CDO, is already a highly correlated product such as subprime mortgages that cannot withstand risks.
So what are the mid-range products that are separated from MBS, and the products that are extended to the nesting dolls?
reply!
Roque Quant covered his face: "They are crazy, they are selling shit as gold!"
Oha just laughed: "Now you understand. In fact, the root cause is not with our rating agency. Even without us, with their packaging method, we will most likely give it a 3A rating."
"The entire bond market is in shambles. 99% of bonds are defaults. Are you asking our rating agencies to give them all B or even C ratings?"
“In other words, we are just picking rocks from a cesspool.
The 3A's we selected are indeed 3A's compared to those who defended them. "
Hearing this, Roque Quant completely understood.
A mortgage-backed bond is a match, a CDO is a kerosene-soaked rag, and a synthetic CDO is a nuclear bomb! ! !
The officials of the Overlord have put their hands on the launch button. If they accidentally touch it, the entire real estate industry will be blown up!
It’s not just the financial system that’s going to collapse, but also the entire hegemon’s economy!
On the way back, Roque Quandt felt heavier than any of his allies.
Because he is the one who knows the most detailed and careful things among all the people.
"Mr. Chen, you are right, I have joined!"
Roque Quandt extended a helping hand.
On that day, Chen Mo gathered all his allies together to discuss short selling.
During this period, everyone was very excited and praised Chen Mo for helping them see the "truth" and allowing them to avoid the risks caused by a financial crisis.
"If we do well this time, not only can we avoid risks, but we can also make a lot of money!"
"Our family or chaebol level may be able to move up several levels, and we may even reach the top!!!"
"Woohoo, we must celebrate hard today!!!"
"That's right, we all happen to be together. I'm treating you to a treat. Let's all have a good celebration!!!"
"..."
As they talked, these people all became excited, as if they had seen the amazing benefits brought by the successful short selling of Baguo's real estate.
"enough!"
However, at this time, Trevor Robert burst out in anger: "Celebrating what? Celebrating the economic collapse of the future hegemon?"
