The chief, after being excited for a while, said to Su Nuan.
"Comrade Xiao Su, feel free to do it. I fully support you."
"Thank you, Chief. I estimated that the return rate of this project is not bad. Would you like to participate?"
"Hahaha, how much have you invested so far?"
"A total of 80 billion US dollars"
"How about the government contributing $20 billion to make up the total of $100 billion?"
"That's great! The more money we have, the more we can do."
"Okay, I'll wait for your good news."
"Yes, Chief."
After getting the support of the leader, Su Nuan quickly mobilized funds and raised them as quickly as possible. The team previously assigned to Ji Mo had not been withdrawn yet, and now they could be responsible for the business of the lending finance company.
After Su Nuan and Ji Mo had done the distribution of shares and detailed the execution of the planned shopping, the three companies' 100 billion US dollars were transferred to the new financial company's account.
After Su Nuan had arranged everything, she waited for news from Country A.
The reason why Su Nuan did this was because in her previous life, Country A had indeed experienced a financial crisis due to the subprime mortgage crisis.
By doing this, she only brought forward the subprime mortgage crisis that Country A experienced by a few years.
After a while, Su Nuan received a call from Ji Mo, and he spoke excitedly on the phone.
"Ms. Su, you're truly astute. To prevent Fannie Mae from monopolizing the market and driving up housing costs for the public, Country A approved the separation of Fannie Mae as a private enterprise and actively encouraged the purchase of second homes. At the same time, to curb inflation, Federal Reserve Chairman Paul Volcker implemented radical economic policies, controlling interest rates to curb inflation."
After hearing this news, Su Nuan felt much more at ease and couldn't help but applaud Volker's decision.
Because of Volcker's economic policies, Country A accelerated the decline in people's purchasing power, and the two housing agencies were once on the verge of bankruptcy.
"Ji Mo, you keep an eye on it. Once the two houses show signs of bankruptcy, you can arrange the next steps?"
"You mean to say you bought the mortgage contracts held by Fannie and Freddie, packaged them into bonds and put them on the market?"
"That's right."
"But will anyone believe me if I do this?"
"Ji Mo, listen to me. Find a connection and set up a company with state-backed assets. Then, buy the mortgage contracts for the two mortgages from the lenders."
"Based on the borrower's credit and asset status, these mortgage bonds are divided into five levels: 'AAA', 'AA', 'A', 'BBB' and 'BB'."
"Based on the principle that the higher the risk, the greater the return, the company can set a corresponding rate of return on investment. Not only that, it can also have the two housing agencies guarantee these bonds."
“Although the two housing agencies have been privatized, the public still believes that our company is state-backed.
Therefore, when the company releases these packaged bonds to the market, people will definitely rush to buy them.”
After listening to this, Ji Mo paused for a while before speaking.
"Ms. Su, you are a financial genius. You can think of such things."
Su Nuan smiled without saying anything. She was not a genius. She was just reenacting what Country A had experienced in her previous life.
"Ji Mo, do as I say. Contact me if you have any questions."
"Okay, Miss Su."
Ji Mo quickly followed Su Nuan's instructions and made all the necessary preparations. Not long after, the two houses showed signs of bankruptcy, just as Su Nuan had predicted.
The market was in a state of panic, with investors dumping shares of Fannie Mae and Freddie Mac. Ji Mo's company seized the opportunity, acquiring a large number of Fannie Mae and Freddie Mac's mortgage contracts and packaging them into bonds.
These bonds, backed by the government and guaranteed by Fannie Mae and Freddie Mac, quickly attracted the attention of numerous investors, who rushed to buy them, sending bond prices soaring.
As bond prices rose, Su Nuan and other investors reaped huge profits, while Country A's financial markets fell into chaos and the economic situation became increasingly severe.
Su Nuan has been keeping in touch with Ji Mo to keep abreast of the developments in Country A. As expected, the proud and complacent government of Country A did not inform the people of Country A of the grim economic facts.
In order to avoid public panic and save the economy, the Federal Reserve began to cut interest rates 13 times in a row, and the federal funds rate dropped from 6.5% to 1%.
At the same time, in order to create a relaxed business environment, the government of Country A also introduced a tax reduction bill.
In such an environment, the real estate market ushered in a short golden period of growth. The government encouraged people to buy more houses, and the Federal Reserve even lifted restrictions on refinancing.
That is to say, someone pays a down payment for a house, and when the house price goes up, he can use the house as collateral to get a loan from a financial institution to buy a second house.
As housing prices continue to rise, many people in Country A have bought multiple houses through refinancing.
In order to take care of low-income groups, real estate developers have introduced zero down payment models.
Country A's economy also continued to rise with the real estate boom. It seemed that everyone became a winner in this feast of capital.
The seemingly prosperous development actually contains a huge storm. In the near future, they will not only lose the present, but also the future.
However, they would never have imagined at that time that for the people of Country A today, they can live a wealthy life just by buying a house.
Even if it is a homeless person on the street, as long as he wants to buy a house, there will be loan intermediaries to provide packaging services, such as forging work certificates, personal asset information, etc.
People have also become accustomed to living on credit, and everyone firmly believes that housing prices will continue to rise and everyone will have a bright future.
As time went by, the subprime mortgage market in Country A began to fluctuate. House prices fell, loan defaults rose, and the entire financial system began to crumble.
Su Nuan asked Ji Mo to package the mortgage into bonds and then put them into the market based on the credit rating.
In this way, the risk of mortgage defaults is transferred to investors, who can obtain stable and substantial profits without having to pay anything.
So, will homebuyers stop paying their mortgages?
Before the mortgage default wave occurred, no one would think so. After all, once the mortgage is defaulted, the bank will take away your house.
But in fact, when Su Nuan was manipulating this capital game, he dug a big pit for home buyers from the very beginning.
In order to make home buyers more willing to choose them, financial institutions use low interest rates as a gimmick.
But in fact, the so-called low interest rate is only for a period of time, after which it will turn into a floating interest rate. The average monthly interest rate is actually very high.
At least for a large number of low-income people at that time, many people were unable to pay the subsequent mortgage interest after paying off their mortgage for a period of time.
As the number of mortgage defaults increases, smart people have already sensed the signs of an impending storm.
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