Facing his subordinates looking at his eyes, Feng Yiping thought for a while before saying, "Everyone's analysis just now was very accurate and correct, but I have to say that until now, everyone has not realized how bad the situation will be,"

Several major commercial banks are now facing huge risks, and at least one or two of the remaining four major investment banks are also facing huge risks, and private equity firms will have more and more difficult life... Isn't this bad enough?

"We all know that this subprime mortgage crisis started on Wall Street, so everyone is focusing their attention on Wall Street."

"Because, for example, the recent crisis that everyone has experienced, the Internet bubble that began in 2000, so many high-tech companies went bankrupt, but the most affected is mainly Silicon Valley."

"That incident actually had only indirect impact on the banking industry and the real economy. If the company went bankrupt and the shareholders lost all their losses, companies in other industries were still thriving,"

“We all know that in Silicon Valley, real estate was still appreciating,”

"But everyone, this crisis is completely different from the Internet bubble,"

"The essence of this crisis is the result of Wall Street's neglect of risk control, and they are full of wrong confidence in the real estate market, or they have no judgment at all, but they follow the crowd and regard housing prices as a fact," he said.

"And based on this wrong fact, in the actual operation process, blindly use high leverage to hedge..."

"But is the only one doing this?" Feng Yiping asked, "No, in fact, the entire US financial market has a tendency toward hedge funding,"

"Think about it, not only banks and investment banks, but also private equity firms, from people who borrow subprime loans to zhèngfu institutions that rely on related derivative products to reduce interest and increase income relatively... More and more market participants are all playing leveraged trading games in some form," he said.

“From the perspective of the entire national economy, we can even say that the United States is a huge hedge fund,”

This is the first time that everyone has heard of such a view, and because this view is quite bold, it caused a whisper.

“It is well known that overseas investors have a large amount of US assets, and the United States also has a large amount of investment overseas.”

"The difference is that about two-thirds of foreign investment in the United States are debt claims, such as US Treasury bonds held by China; while two-thirds of US investment in overseas investments are equity, such as GM, Ford, or Microsoft, Google... Most American companies' investments in China are equity,"

"That is, the United States has been using low-interest capital from other countries to develop its own businesses. Isn't this a hedge fund model?"

This can be said to be the place where Feng Yiping envies the United States the most.

Think about us, how difficult it was to use some foreign investment in the past few decades?

That is, the situation has improved slightly in recent years, so the country's foreign exchange control has been relaxed. However, as for the United States, as long as it prints some national debts, a large amount of funds will be sent to them immediately.

It seems that there are still a few returns, but just like when we have put money in the bank over the years, interest rates are always not up to inflation. How can the returns of the US Treasury bonds withstand the Fed's frequent wave of quantitative easing and quantitative easing?

Of course, the United States cannot take all good things. Just like more traditional banks, they are more stable when facing subprime mortgages, and more diversified banks are most panicked when facing subprime mortgages. When encountering such things now, the United States will also panic.

"And we know that the common weakness of all leveraged investments is that when liquidity is withdrawn, their capital chain will be affected at the same time, that is, the United States is very short of money now,"

"The essence of the subprime mortgage crisis is the creditor's crisis, and there is a problem with the repayment of those subprime loans. How big will this problem be?"

No one can answer this question, probably because they all think that the relevant data should be beyond their imagination.

"In the whole of the United States, the total amount of residential mortgages is around $10 trillion, and the value of the property used as mortgages generally does not exceed 130% of the loan amount at the peak of the previous year. Now housing prices have plummeted, repayment default rates have soared, and the potential credit losses of problematic mortgages," he said.

Feng Yiping paused, "It should have exceeded 1 trillion US dollars,"

He said it with ease, and many people present were sweating suddenly, 1 trillion US dollars?

John quickly estimated that the total market value of the five major investment banks on Wall Street, plus the major commercial banks, was only about one trillion US dollars.

Tsk!

But this is not over yet.

"Don't forget that the recession economy must have caused other credit losses," Feng Yiping added quietly.

"I expect that the holes accumulated in the entire US financial system are estimated to be as huge as trillions of dollars,"

"It's not enough to fill the entire Wall Street in such a huge loss. So, unlike the Internet bubble a few years ago, shareholders of some financial institutions are far from losing enough, and creditors are likely to suffer some losses,"

He waved his hand, "In the ending of Bear Stearns, stock investors almost lost all their money, and creditor investors were able to escape unscathed. Such a good thing, I think it would be difficult for such a good thing to happen again."

"The Fed can save one Bear Stearns, but it may not be able to save the second one, the third one, Wall Street," he shook his head, "Next, I guess it will be bloody."

"And this crisis will no longer be a subprime mortgage crisis, but will escalate into a financial crisis," Feng Yiping asserted again.

"So, what is the most needed to survive this crisis safely?" he asked everyone with a smile.

"Money!" more than one person shouted.

"Yes," Feng Yiping reached out and gestured to count money, "that is, money, lots of dollars,"

"And the good news is, hehe, we're not short of money,"

“We are not short of money, we have sufficient funds to find opportunities.”

Many people laughed, and some even applauded.

At this moment, this is really good news that will make everyone happy.

Speaking of which, like the situation in all high-tech parks in Silicon Valley, in the door park, their employees in commercial areas are usually inferior to those engineers.

But in the face of such an opportunity, those guys who are casually dressed, relatively unspeakable, but are actually very proud, have no place to use their skills, and this is a good opportunity for them to show their ability.

"So, in this case, we don't have to hurry and be more patient, because the more we get the better conditions in the end,"

"Make good use of the opportunities now and do more preparations. Believe me, we will definitely usher in a great harvest this fall."

"Yeah!" The crowd was in a state of excitement.

Feng Yiping felt that when he let some of them go out, they should all dare to run to any big shot on Wall Street and say, "Hey, is your company sold?"

…………

Feng Yiping left Cummins and John and asked straight to the point, "After listening to your analysis just now, if the situation deteriorates further in the future, will we encounter less resistance when we acquire Hilton?"

Although this acquisition will be initiated by Goldman Sachs and others in the future, it is just to make things smoother, and the main opinions must be taken by them.

Feng Yiping believes that Blackstone, who only got Hilton in July last year, would not be willing to change the deal so quickly.

He originally hoped that Goldman Sachs and the others would cooperate with the force, but if not, it would be the best. Goldman Sachs and their favors would not owe the best.

Cummins glanced at John, and John smiled and signaled him.

"I think there is such a possibility that Blackstone, which is in urgent need of cash, will be more welcome to resolve transactions that have brought them significant burdens to assets," Cummins said.

This means that confidence is still lacking.

It seems that he also knows that Blackstone will not easily transfer Hilton.

Seeing that he did not add anything, John said, "Feng, are our funds really sufficient?"

Feng Yiping thought about Li Ruiyuan and nodded, "Enough enough,"

"Since that's the case, I think we can do this. While acquiring Hilton, we also expressed our willingness to acquire some of the properties in EOP in Blackstone?"

"We know that the remaining eOP properties in Blackstone also occupied more than 10 billion dollars of their funds, and now, obviously no one is willing to buy the property,"

Feng Yiping's eyes lit up. This is an idea that should make Hei Shi excited and thus reduce the difficulty of acquisition.

The question is, will you lose money in the future if you buy those properties now?

And that is not a problem. After next year, the economy will warm up, and the office buildings held by EOP will naturally appreciate.
Chapter completed!