Chapter 87： Roller coaster coming to the top

When William Chen woke up, it was still six in the morning.

He gently pulled away Ivanta's arm, picked up his mobile phone, and saw an account information on it. The funds of 300 million US dollars had reached his personal account.

Therefore, he entered the [Account] interface of the future bank and chose to repay.

After a few minutes, he found that his borrowable limit was still $300 million. Thinking of the 300 million US dollars that I had lent before, I invested it in the No. 1 Fund. Because the subprime mortgage crisis has not yet erupted, the No. 1 Fund did not make a profit, but lost a lot.

So from this point of view, if the money lent from the future bank does not make a profit in the investment, even if it is a loss, at most, the amount will remain unchanged after it is paid off, and it will not decrease.

For example, this time, after the repayment, the amount has not changed, it is still 300 million US dollars.

In this way, it will prevent meaningless borrowing from the future bank, then repaying it, and brushing the limit.

Next, William Chen changed the bound partner to Nozomi Sasaki, and then showed that the amount was being evaluated.

Five minutes later, the limit showed that it was 200 million US dollars.

In this way, Nozomi Sasaki's system rating is slightly higher than Erica's and lower than Paris.

In terms of personal ability, Erica should be higher than Nozomi Sasaki, and Nozomi Sasaki is much more famous than Erica. After all, she is now a popular star of RB, so in the evaluation of the two of them, Nozomi Sasaki Hope's popularity should be a plus.

And if Nozomi Sasaki and Paris were compared, the rating would be lower, then I am afraid that her personal ability and popularity may be suppressed by her, only in terms of appearance, Chen William seems to be higher than Paris.

After roughly drawing these judgments, William Chen changed his bound partner to Ivanka.

After the five-minute quota assessment, the loanable quota displayed surprised William Chen for a while, it was as high as 500 million US dollars!

If Ivanta is compared with Paris, the family background should not be much different, and the popularity can't be said to be higher, and it will not be very different. In terms of personal ability, Ivanta has done a good job in the family business, but her personal career In terms of appearance, Paris seems to be more handy in the fashion field, and Ivanta is slightly better in terms of appearance and figure.

But it shouldn't be that much worse, one can borrow 300 million, the other is 500 million...

William Chen was puzzled. Could there be other factors that he didn't know about?

At this moment, a vibration sounded, it was William Chen's cell phone, and he would set it to vibrate before going to bed at night.

Picking up the phone and seeing John Paulson's name on the screen, William Chen's expression changed, because John Moores seldom called himself, and most of the communication was done by email. When he suddenly saw his call, Chen William couldn't help thinking, could it be that the stock market he invested in had changed?

Thinking of New York at this time, it should be after six o'clock in the afternoon, so William Chen immediately answered the phone and heard John Paulson's voice.

"There is one thing I feel I should tell you, boss."

"Can you wait for me for five minutes? I'll get up and go to another room to talk." William Chen glanced at Ivanta beside him, found his home T-shirt and shorts to put on, then picked up his phone and walked out of the room bedroom.

"Okay, what's the matter? Mr. John, tell me."

William Chen walked downstairs, sat on the sofa in the living room, and said to John Paulson.

"According to my carefully adjusted model, I found that the current bank loan interest rate has reached the warning value..."

It turns out that from the very beginning, John Paulson established a model for subprime loan bonds to observe the impact of the variables on the entire real estate and related bond market prices.

After his last failed run at the fund, John Paulson tweaked the model again to make it more accurate. This model mainly includes the influence of the bank's loan interest rate and the increase in housing prices on the willingness of home buyers to buy real estate.

To put it simply, when house prices continue to grow, buyers' willingness to buy will definitely increase, because they will have the fear of running out of space. Can't afford a room.

Moreover, as house prices rise, the house you buy will be sold after a period of time, and you will be able to make a profit. This is also the reason why more and more investors are pouring into the real estate market.

But as house prices have risen, the business of home-buying loans has exploded—and a large proportion of them are subprime borrowers who don’t have enough assets and proof of repayment—and have contributed to a slow rise in interest rates on loans.

Risk and profit are directly proportional. Banks will definitely charge higher interest when lending money to users with low ratings. As high-rated users exhaust their potential to purchase houses, the proportion of stimulus loans is also increasing. Those original high-rated users who continue to buy real estate will also become users of subprime loans.

However, when the loan interest rate rises to a certain level, everyone will find that, compared with the rise in house prices, the more interest to be paid because the interest rate rises has already made them unprofitable, so at this time, the willingness to buy a house will decline or even completely lost.

The resulting chain reaction is an imbalance between the supply and demand of real estate, oversupply, housing prices stop rising, and even start to fall because real estate companies are eager to recover their funds.

The house price fell, the assets of the buyers shrank, they could not continue to obtain loans, and could not continue to repay the monthly payment, resulting in default. After the default, the house is repossessed by the bank. What is the use of the bank holding the house? Still want to continue to sell in the real estate market to recover losses?

So under the vicious circle, housing prices accelerated and continued to cause a chain reaction...

This is the fuse of the subprime mortgage crisis, and among them, the bank's loan interest rate is a very important indicator, so when John Paulson found that the loan interest rate had been raised to a warning point, he immediately notified William Chen .

It's like when you are on a roller coaster, starting slowly upwards, and when you reach the top, there is a "ding" sound. At this time, you should know that the process of accelerating the descent is coming.

Of course, now the "ding" is only the right time if John Paulson's model parameters are set correctly. If you take into account the transmission of market sentiment, people's delayed feelings, and other factors, according to John Paulson's prediction, the full-scale outbreak of the subprime mortgage crisis will be seen within three days at the earliest, and not at the latest. more than half a month.

His judgment was basically consistent with the information Chen William got in the eyes of the future, because he knew that the correct time was the end of September. And today is September 21st.

After hanging up the phone, William Chen looked at the $500 million borrowable limit on the Future Bank's [Account] interface and fell into thought.

The choice in front of him now is whether to continue lending funds from the future bank and go short.

From the beginning, he was trying to avoid the use of financial leverage.

The leverage here includes not only the low margin ratio in futures investment, the margin financing and securities lending in stock investment, but also the use of self-owned assets to obtain funds far beyond this for investment, such as mortgage assets for lending.

Yes, when you have a relatively high degree of certainty, you can get excess profits by using financial leverage.

But at the same time, it also means that your risk is also being amplified Any market has cycles, such as stocks. If you only invest with your own funds, then even if you encounter a crash, as long as you If you hold on to your teeth, after one or two years, or even five or ten years, there will be a day when you will get rid of it.

But once you use leverage, it will be different. If you double the leverage and fall by less than 50%, your assets will be wiped out, and there will never be a chance to turn over again.

In William Chen's experience and study, he saw that there are countless investment geniuses who once shined for a while, but who can still be enshrined as a **** after more than ten years like Buffett, how many?

Most people can't stand the temptation. Because of greed, they use financial leverage. You can win once, twice or even ten times, but you only need to lose once.

Some people may say that with the prediction of the future eye, there should be no risk.

Is it really like this? Chen William is also not sure that the prediction of the Eye of the Future can really be 100% accurate. The amount of funds he used before was not large in those financial fields.

Therefore, it is impossible to judge whether the points seen in the eyes of the future will be reproduced without any changes in reality, but he believes that when the amount of funds is sufficient, it will definitely have an impact on the market.

Then when his capital is large enough, coupled with financial leverage, it may not only affect the market price.

When the hidden wolves see a piece of fat, can you stop them from biting it?

William Chen didn't know what would happen when he was forced to transfer funds by the Future Bank and his assets were insufficient, but if he wanted to, he would definitely not be so optimistic.

Therefore, when Chen William saw the 500 million borrowable limit on the [Account] interface, he was uncertain for a while.