Giant of the times - Chapter 508

c499 The subprime mortgage crisis breaks out!

One trillion US dollars is a lot, and it is difficult to digest in the global financial market.

Li Zetian had no choice but to use the few months before the subprime mortgage crisis completely broke out to boil the frog in warm water and take his time. However, Li Zetian believes that even if the financial crisis breaks out, they cannot see the seriousness of the situation and there will still be many gamblers.

The plan to short stock index futures proceeds slowly.

Li Zetian lived a very comfortable life in Hangzhou, raising flowers and watering them, and was content every day.

More than four months have passed in the blink of an eye.

On August 2, 2007, Deutsche Bank announced a profit warning, and later estimated a loss of 8.2 billion euros, because its “Rhineland Fund” with a scale of 12.7 billion euros and the bank itself participated in a small amount in the U.S. real estate subprime mortgage market business and suffered huge losses. The Bundesbank has convened banks across the country to discuss a package to rescue Deutsche Bank.

After Li Zetian heard the news, he smiled and said, “Don’t be afraid of Germany. Japanese banks are the ones losing money!”

The original Wells Fargo Bank of the United States was also engaged in the U.S. real estate subprime mortgage market, but later, Li Zetian ordered the entire business to be sold to a Japanese bank. In other words, Japanese banks have acted as takeovers, so it is certain that Japanese banks will suffer huge losses.

Right now, even Deutsche Bank has announced a profit warning. It seems that the real estate industry in the United States has completely collapsed, and the subprime mortgage crisis has begun to spread around the world!

Just a few days later, news came again from the United States that the American Home Mortgage Investment Company officially filed for bankruptcy protection with the court on August 6, becoming another large mortgage lender in the United States to file for bankruptcy after New Century Financial Corporation. .

As soon as this news came out, it caused a huge shock in the United States, and the U.S. stock market plummeted!

The very next day, Bear Stearns, the fifth largest investment bank in the United States, announced the collapse of two of its funds. The reason was also due to the subprime mortgage crisis.

At this time, the U.S. stock market plummeted across the board, and stockholders across the United States collectively panicked!

“It’s over. I bought so many funds and stocks and now I’m losing a lot!”

“Oh, God, the real estate bubble burst and the subprime mortgage crisis came. Didn’t all my previous investments go down the drain?! I was going to become a pauper overnight!”

“It’s over, I’m completely over it. I owe so much debt, how can I pay it off?”

Many people fell to the ground after hearing the bad news.

This is not the most desperate time, bad news is coming one after another! ! !

On the third day, BNP Paribas, France’s largest bank, announced the freeze of three of its funds, also because they suffered huge losses from investing in U.S. subprime mortgage bonds. This move could not help but cause European stock markets to plummet, and most stock indexes around the world fell! Metal crude oil futures and spot gold prices plunge sharply!

Central banks around the world injected more than US$500 billion in 48 hours to rescue the market, and the Federal Reserve injected US$60 billion into banks three times a day to stabilize the stock market.

This rescue effort is not insignificant, but unfortunately, it does not play a role in rescuing the market.

A few days later, Japanese and Korean banks also suffered losses due to the U.S. subprime mortgage crisis. Among them, twelve banks, including Mizuho Bank, Japan’s second largest bank, lost more than US$25 billion. In addition, five Korean banks, including Woori, invested a total of US$5 billion in secured debt obligations (CDOs) and also suffered heavy losses!

The next day, the three major central banks of the United States, Europe, and Japan once again injected more than $100 billion to rescue the market.

Central banks in Asia and the Pacific are also once again injecting money into the banking system.

However, the subprime mortgage crisis still cannot be contained.

On August 16, the stock price of the largest commercial mortgage company in the United States plummeted and it faced bankruptcy! The U.S. subprime debt crisis worsened, and Asia-Pacific stock markets suffered the worst decline since 9/11!

Li Zetian was watching the fire from across the bank in Hangzhou and looking at the flowers in a leisurely manner, and he had to say, “It’s wonderful.”

However, it is not so easy to rescue the subprime mortgage crisis this time, not to mention that he has shorted so many stock index futures… especially in Japan!

Li Zetian had a sneer on his face.

Japan is indeed very miserable, and it is almost being played to death by Li Zetian.

On August 20, the Bank of Japan injected another 1.6 trillion yen into the banking system.

The next day, the Japanese stock market crisis was still unresolved, and the Bank of Japan had to inject another 1 trillion yen into the banking system.

When Li Zetian saw that the Bank of Japan had injected capital into the banking system again, he couldn’t help but be surprised and said: “Hey, the Japanese government is awesome, it is so rich! Isn’t my brother not ruthless enough?!”

Li Zetian suddenly complained about himself.

The Japanese government is exhausted both physically and mentally and is suffering terribly. The government’s financial reserves are almost wiped out. The entire country’s economy is in a mess. Companies are bankrupt, workers are laid off, and stockholders are in mourning. The economy seems to have regressed for many years.

In the United States, the Federal Reserve injects a large amount of money into the financial system almost every day. This made Li Zetian couldn’t help but sigh, the Federal Reserve is indeed a wealthy owner, he is the rich boss, I am not.

There is no way, the Federal Reserve prints money, it can be called the “world’s largest money printing machine.” One prints money and the other makes money. The two are not on the same level.

More than two months later, the subprime mortgage crisis is still not over.

The Federal Reserve and the US government were helpless. President Bush suddenly called Li Zetian.

“Chronos, hello!”

“Hello, Mr. President, what’s the matter?” Li Zetian asked, but he knew what was going on.

Although he is not in the United States, he is the first to know what is happening in the United States. At this time, the U.S. government is encouraging banks and wealthy individuals to contribute money to help the U.S. market get out of the subprime mortgage crisis.

In fact, Li Zetian wanted to say in his heart, you are so numb!

However, if you do this, it will be true. Others will say, look, look, the world’s richest man is unkind because he is rich. Others are paying for it, but he doesn’t donate. How stingy he is!

Bush’s attitude towards asking for help was sincere and humble. He smiled and said, “Oh, that’s right. The subprime mortgage crisis has spread across the world and the U.S. economy has been hit hard. A few days ago, the U.S. Department of the Treasury helped major financial institutions establish a A $100 billion super fund to buy distressed mortgage-backed securities. However, the money is still not enough, so I hope you, Chronos Li, can donate generously to help the market get out of trouble!”

“Don’t worry, Your Excellency, President. I have no obligation to shirk this matter! In fact, I don’t need to take the initiative to bring it up, Your Excellency, the President.” As he spoke, Li Zetian changed the subject and continued, “However, Your Excellency, I think you also know , many companies under my name suffered heavy losses in this subprime mortgage crisis… so my ability to help others is limited.”

Li Zetian will give President Bush a vaccination first. Don’t even think about me paying too much. I will also suffer heavy losses, okay?

President Bush nodded and said: “Oh oh oh, yes, yes, I understand. However, it is good if you can contribute. The American government and the American people will thank you!” President Bush made a small calculation in his mind. Secretly, you just need to stand up, and you have the nerve to only give a little money?

Li Zetian curled his lips, not knowing what President Bush was thinking.

At this time, Li Zetian was mentally calculating how much money he should donate.

“What companies are willing to pay now?” Li Zetian asked.

“Several banks, including Bank of America, Citibank, and Morgan Stanley, have stated that they have agreed to spend at least US$75 billion to help the market get out of the subprime mortgage crisis.”

“75 billion U.S. dollars? Okay, in that case, I will make up the remaining 25 billion U.S. dollars and make up 100 billion U.S. dollars!” Li Zetian just finished speaking, and suddenly felt like a 250-year-old. He was so reluctant to pay, and it was very awkward.

25 billion US dollars is an astronomical sum for many people!

25 billion US dollars can create one of the top ten richest people in the world!

How many companies can $25 billion buy?

Why doesn’t it make people feel bad?

Mala next door, fortunately, I have made hundreds of billions of dollars from the United States alone. I think the $25 billion is what I sent to the beggars and rewarded to the U.S. government!

When Bush heard this, he was very happy and kept expressing his gratitude to Li Zetian. He also said that he planned to award Li Zetian an award, the Presidential Medal of Freedom or the Congressional Gold Medal. Li Zetian said in his heart, I am shorting the US stock market, you are so damn funny, and you even gave me an award, eh, very good, I like it!

After the call with President Bush, Li Zetian immediately ordered Cronos Bank to contact Bank of America, Citibank, Morgan Stanley and other banks to jointly raise funds for the super fund.

Of course, if you do good deeds, you must publicize it, otherwise, the US$25 billion in money will not be wasted.

Soon, newspapers, TV, and the Internet were all reporting on Li Zetian’s generous donation of US$25 billion to rescue the market.

This wave of goodwill was so overwhelming that people all over the world couldn’t help but give Li Zetian a thumbs up.

“As long as the U.S. subprime mortgage crisis is solved, the financial crises in other countries will also be solved. There are not many people in the world who are as generous as Chronos Li!”