Chapter 1717: Severe situation

When the global financial market was severely oscillated, stocks, futures, bonds and so on fell, but many people found that the prices of crude oil and gold fluctuated constantly, and even said that they did not fall at all, but rose slightly.
First of all, the hot money that fled from the bond and stock markets has entered the futures market. The futures are also goods, which can be regarded as physical.
Originally, they could also realize what the bonds were realized and what they saved into dollars. But the dollar is depreciating, and they are also losing money.
The decline in the stock market, coupled with the emergence of various bad news, caused a large number of investors to flee. Of course, there are also some investment funds that take the opportunity to short the stock market and reverse the profit.
It is a pity that this can't be done very quickly. It's not that political ax is not allowed, but no financial company is willing to lend you stock.
Everyone knows that the stock market has fallen seriously, so why lend you a stock?
In the past, the leverage ratio of many investment companies has been rising, from five times to ten times, to thirty times, and even some companies have created fifty times the ultra-high multiple leverage.
Don't think that these investment companies are stupid, and that the leverage of such a high multiple is to find death. They can buy insurance, a type of credit default swap insurance.
Banks can't use these high-powered leverages, but what about the fund companies, they invest with high leverage, what is the risk?
Buy insurance. Of course, this is not insurance in the traditional sense, but the actual effect is the same as insurance.
The fund company is looking for a bank and said that the investment risk here is very high. How about you doing loan default insurance for me? In ten years, I pay you a hundred million yuan a year, which is ten billion dollars.
If I didn't default, then you will get this premium, and if you take my premium investment, you can definitely make another profit.
If I breach the contract, then you have to help me lose money.
What Party A wants is that I use leverage to invest, the profit itself is several times, and I have to buy out one billion yuan to buy insurance. I still have profits.
After analysis, Party B believes that Party A’s risk of default is extremely low, and may be one percent. Then this insurance can be done and the profit is not low.
If there is only one, then the profit is not particularly large, but if you can pull the same 100 customers? Wouldn't it be worth 100 billion yuan?
So even if one of them is really unlucky to lose money, I can afford it. Paying insurance premiums with the premiums of other policyholders is in itself a normal means of operation for insurance companies.
Therefore, the bank sells the credit default swap insurance contract to major fund companies, and collects more company premiums, so they are safe.
But this profit will take ten years to get it completely, too slow, right?
So they talked to a third party. I have a contract worth $100 billion, but it will take ten years to get it. Now I will sell you $50 billion. Do you want it?
After bargaining, the third party bought the $100 billion contract at a price of 40 billion U.S. dollars, and Party B directly sold a profit of 40 billion U.S. dollars.
The third party also feels that there are too many ten years, so he also listed the price after listing, forty-five billion dollars, to attract the fourth party to buy, and once they changed hands, they easily lost $5 billion in profits.
After such a layer of change, coupled with the appeal of this model, the market for such insurance contracts has become extremely large, totaling more than sixty trillion US dollars.
All of the above-mentioned financial institutions have made money. They are basically profitable from the initial loan-operated subprime bonds of the company, and these loans are ultimately on the credit institutions and lenders. .
So only credit institutions and lenders are losing money, and everyone else can make money. It is said that the bank will not lose anything, but the bank is also a credit institution, and even the fund companies under the bank also invest in subprime bonds.
When the lender defaults, the company that holds the insurance contract pays.
Then the last one is unlucky, they have to pay for this insurance. If only one or two defaults don't matter, they can afford it. But they couldn't think of it, and the default rate would be so high.
From a few percent to a hundred percent, the insurance premiums are so high, not to mention that they are still changing hands.
The last one can't help but go bankrupt, it will spread upwards, and then step by step spread the entire chain.
At this time, everyone started looking for a political axe. We are going bankrupt, do we have a political axe?
But you think about it, how much insurance was collected at the beginning, but the money paid for it was more than a hundred times or more higher than the insurance premium.
Mi Guozheng axe does not have so much money to do, simple, they have a giant of the two-room group, so the two-room group was forced to swallow this bad contract.
The political axe shot, then those fund companies that could not hold back, more began to declare bankruptcy. Originally, some of their parent companies belonged to some big consortia, and these losses were not untenable.
But now that the political axe has taken over, it is better to throw the baggage directly. Their consortiums are still taking care of their own interests first.
As a result, bankruptcy has become more and more serious, corporate bankruptcy, and personal bankruptcy. This number is soaring.
It was also at this time that Oba announced a series of measures aimed at the poor, which attracted too many people to vote for him.
He also claimed that it was a mistake for the country to launch a war against Afghanistan. If it is as fast as they expected, the battle will be solved quickly, but it has dragged on for so long and directly dragged down the economy of the country.
Anyway, Xiaobu 10 is going to step down. At this time, what is the scorpion, it is buckled on his head. Many policies are decided by the country, and the power of Xiaobu 10 is far less.
The people of the Xiaobu 10 family are also working hard behind them, trying to hold back desperately, at least let Xiaobu ten down safely, and then trouble to the successor to prevent their family from appearing again. Take it out and attack.
The economic situation in the country is getting more and more serious, and the European side has also been seriously affected. Even UBS has lost money.
At this time, many funds simply escaped from the rice market and turned to the European market. In fact, this is also the reason why the European side has greatly rescued the market, attracting these hot money to join and make their economy better.
The economic situation in the country is very good, and it is also related to their ability to attract the most foreign investment in the world.
Those funds have arrived in Europe, and as Feng Yu expected, they joined the futures market, and the most invested are crude oil and gold.
After Feng Yu saw these news, they all relaxed a lot. It seems that crude oil has risen to about one hundred dollars, which is no problem!
When Feng Yule was huh, the business of Feng Yu’s important partner had serious problems.
... (to be continued.)