Chapter 2205 They are all liars

"The default of the bottom layer will cause a chain reaction, causing the upper layer bonds to gradually collapse."

"When the default bonds of the bottom layer reach a certain value, the whole building will collapse instantly!"

Chen Mo said, and took out two bottom layer blocks again.

At this time, the whole building lost the support of the bottom layer, and instantly fell to the ground, and the blocks scattered all over the ground!

Rexel pursed his lips and remained silent.

"Do you think the collapse is a gradual process?"

"Then you are wrong!"

"The current default rate of real estate bonds has reached 4%, which means that for every 100 borrowers, 4 will no longer repay the loan."

"Once the default rate reaches 8%, mortgage bonds will be worthless!"

Chen Mo's words were like a loud bell, shocking everyone on the scene!

Before, those who were engaged in finance only had a numerical concept of the default rate.

Whether the default rate was 4% or 8%, in their minds, it seemed to be a very insignificant number.

Because common sense tells them that only when the default rate is as high as several tens of percent will the bond collapse.

Unexpectedly, the default rate of real estate bonds only needs 8 points to collapse as a whole!

Rexel pondered for a long time and pointed out the key point directly: "The group of investment banks in the hegemonic country are so smart, don't they know that the risk of MBS is very high? They know that subprime loan bonds are unreliable, why do they continue to buy them?"

Chen Mo just spit out three letters lightly: "CDO."

Rexel frowned: "CDO? What CDO?"

Chen Mo explained: "CDO is also a bond, or a financial product."

"Investment banks and financial institutions that bought MBS repackaged a bunch of unsaleable junk bonds together and asked rating agencies to give them a 3A rating."

"You will be surprised to find that this pile of junk bonds that were not even C-level, It was put back on the shelves with a new name, and became a 3A product that the public can buy. "

"And the public and Wall Street elites don't care what kind of garbage is contained in the CDO. After all, the economy is growing, housing prices are growing, and CDOs are also increasing in value. They are making money like crazy."

"Why are 65% of the bonds or wealth management products found in the market 3A-rated? Because these so-called 3A-rated products are 95% of the garbage composed of subprime mortgages!"

"So, when I said that 8% will cause a big collapse, it was still a high estimate!"

The ratings of the bonds or wealth management products of the hegemony are as follows:

aaa, aa+, aa, aa-, a+, a- and so on to the D level.

However, the yield rate of wealth management products at the D level is negative 90%. From the emergence of the rating to the present, no wealth management product or bond can reach the D level.

The lowest is C-.

Chen Mo's conclusion made the people present think about it with great fear.

Especially Lexel, who couldn't help but take a breath.

If what Chen Mo said was true, it means that at this moment, all the possible links in the financial chain, such as the banks, investment banks, officials, and rating agencies of the Hegemony, are racing with their eyes closed!

The passengers don't know, and they still think that the driver is driving fast and steady, and can take them to the wealthy destination earlier.

Little do they know that after the speed reaches a certain level, let alone a crash, even turning a corner may cause the car to be destroyed and people to die!

"Mr. Chen, what you mean is that the banks of the Hegemony are cheating, the investment banks are cheating, the officials are cheating, and the rating agencies are also cheating.

They are colluding with each other and deceiving the people of the Hegemony, right?"

Lexel asked.

"Isn't it?" Chen Mo asked back with a smile.

Lexel fell into silence.

After all, he is a chaebol, and he knows what the financial world and officials of the Hegemony are like better than Chen Mo, a Daxia person

Chapter 2205 All liars.

"Mr. Kefu, the building is about to collapse! Once the subprime mortgage crisis occurs, do you think your industry will not be affected?"

"I'm afraid that a 50% reduction in assets will be considered light at that time! It's possible that you may even go bankrupt!"

"But now, there is an opportunity that can not only allow you to avoid risks, but also allow you to make a lot of money, allowing you to rise from the sixth-ranked chaebol to the fifth, fourth, or even the first!"

"You only need to follow me to buy CDs to short MBS and reap the entire real estate market!"

"The collapse has begun! The profit is as high as dozens of times! You have no other way to avoid the risks brought by the subprime mortgage crisis except to follow up and short!"

Chen Mo's words, like a devil, made everyone present excited!

Especially the ordinary staff present!

In fact, they all hate the banks of the hegemony country.

Their ** annual interest rate is as high as a terrifying 25%, and they are still paying off their school loans.

If the subprime mortgage crisis really happens, ordinary people will have no way to get out. Most people may have to tighten their belts and their quality of life will drop several levels!

This may seem like nothing, but think about it. You have meat for every meal now. If you go down several levels, you will eat stale steamed buns for every meal, or even only eat stale steamed buns once a day. Can you bear this change?

Now, suddenly someone says that the officials and banks of the hegemonic country were stupid the day before, and we should use their stupidity to hedge against risks, or even make a lot of money!

Who wouldn't be moved? !

"Huh~~~~"

After a long time, Rexel spoke: "I have to admit, Mr. Chen, your eloquence is so good! If you were to do pyramid schemes, I would be able to defraud you of a large amount of money today."

"It's not that I'm eloquent, it's just that the facts are too cruel." Chen Mo said lightly.

"What you said is just a theory. As far as I know, the subprime mortgage problem has been around since 2006, but to this day, the subprime mortgage crisis has still not broken out."

"Finance and economics are very complex group issues. I think since it has not exploded, it shows that the hegemonic official has the ability to solve it, or at least delay it, and finally allow this issue to land softly."

Rexel said.

"Mr. Kefu, you are deceiving yourself. What kind of group do you think the Overlord officials are? You should know better than me, right?"

Chen Mo counterattacked.

Rexel pursed his lips and remained silent for a long time before sighing and saying: "Okay, I admit, I am convinced by your theory.

However, the Kraft Consortium is not my responsibility. This consortium is jointly controlled by three major families. "

"I know the officials of Baguo and the financial world of Baguo, but the other two major families don't."

Chen Mo: "If you have something to say, just say it."

Rexel: "Today I can ask the spokespersons of the other two major families to come forward. You need to prove your theory with practical actions to convince the spokespersons of the two major families."

Chapter 2205 They are all liars.