After hearing the news, Xiaobu Shi didn't have the energy to accept an interview. He hurriedly asked someone to beat the reporters, and then immediately summoned their think tank. Nature's Novel WWW. ⒉3TXT. COM
The people in the think tank also knew the news, and they were all shocked. In fact, they don't even know about the issue of false accounts.
They have analyzed that from a technical perspective, Fannie and Freddie are on the verge of bankruptcy, but they are not irreversible. After all, Fannie and Freddie have gone bankrupt before, haven't they risen again
Even those banking institutions believe that Fannie and Freddie will not go bankrupt because the United States cannot afford it and neither can other countries.
Once Fannie and Freddie go bankrupt, the bonds they guarantee will depreciate significantly, and many of them will even become junk bonds. Then investors and financial institutions holding these bonds will be hit hard.
This includes many financial institutions in the European Union, many Asian countries, and many commercial banks. They cannot watch Fannie and Freddie go bankrupt.
Moreover, once Fannie and Freddie go bankrupt, mortgage interest rates will inevitably soar again, and the subprime mortgage crisis that has just been suppressed will explode again violently, even unstoppably, causing a serious financial crisis.
The influence of these two companies is too great, and the US government must not let them go bankrupt. And those financial investment institutions cannot let them go bankrupt, and they will also suffer heavy losses.
For example, the national debt of the United States at this time is 1.5 trillion US dollars, but the bonds of Fannie and Freddie Group exceed 5 trillion US dollars!
The foreign exchange reserves of many countries will be seriously affected by this. Therefore, those countries cannot let the two companies go bankrupt and must help save them.
If Fannie and Freddie goes bankrupt, not only will these bonds have major problems, but a financial crisis in the United States will inevitably break out. Then those countries that purchase U.S. government bonds will also suffer losses.
For example, although China has polished off the bonds of Fannie and Freddie Group, it still holds some US treasury bonds. Although China is different from its previous life and is no longer the largest creditor of the United States, it still ranks very high.
The main thing is foreign exchange reserve investment, which is the investment method that all countries will choose. There are also many countries that have invested in Huaxia Bank’s treasury bonds.
The countries that currently hold the largest number of U.S. Treasury bonds and Fannie and Freddie Group bonds are island countries, followed by the European Union, Canada, Australia, etc. There are also many.
The United States suddenly discovered that no wonder China is so stubborn and refuses to assist the United States. It turns out that the U.S. national debt they hold is only tens of billions of dollars.
Tens of billions of dollars are still national debts, and they will definitely not become waste paper. Even if there is a small loss, it will not be big. After all, national debts also have interest.
Xiaobu Shi once made people analyze that these two groups can survive the difficulties. As long as the banks from the European Union and Asia provide assistance, they will indeed have to provide a large amount of cash.
But unexpectedly, Fannie and Freddie Group actually falsified their financials, causing serious deviations in their analysis!
Fannie and Freddie Group have been raising more cash through bond financing for more than a year in the hope of turning around. But if you want bond financing, you must give investors a high return.
Therefore, Fannie and Freddie Group continue to increase their yields, that is, issue bonds at higher interest rates for financing, making them more and more indebted.
The rise in interest rates has also placed an increasing burden on them. The value of the bonds they have issued will continue to decline, and their stock prices will continue to decline. This is a vicious cycle.
Of course, if they could earn enough profits with the money raised from financing, none of this would be a problem. Unfortunately, not only did they fail to earn profits, but they suffered continuous investment losses.
Fannie and Freddie themselves believe that once their budget exceeds US$77 billion, the government will have to intervene. Just like the political ax helped sell Bear Stearns, there will definitely be concerns that the bankruptcy of Fannie and Freddie will drag down the entire U.S. financial market.
For example, when Bear Stearns, Lehman Brothers, Merrill Lynch, etc. went bankrupt, many shareholders lost everything and they were all cheated.
But the people who really stood behind the scenes managed to escape. Through entrusted investment and other methods, when the capital is withdrawn, these behind-the-scenes bosses are the first to withdraw their capital, ensuring that their property is not damaged, or that they do not suffer too much loss.
Many people are saying that the coercive measures adopted by the US government are clearly a shareholder trap, trapping investors like them.
But these people who were cheated had little influence. The influential people have successfully escaped. This is the investment environment in the United States.
Seeing the current situation, Xiaobu Shi felt that it was impossible not to help Fannie and Freddie Group. He must provide them with sufficient funds and stabilize their stock price to prevent it from falling wildly.
So Bush contacted the Federal Reserve and the U.S. Securities and Exchange Commission, asking them to take effective measures to rescue the two housing groups.
Feng Yu originally planned to borrow some shares of Fannie and Freddie Group, and then take advantage of the scandal to make a fortune when the stock price plummeted to make up for his losses in the U.S. dollar trading market. However, he found that no financial company was willing to lend it to them. The shares of Fannie and Freddie Group.
To put it bluntly, all financial companies are no longer optimistic that the stock price of Fannie and Freddie Group will rebound. The more they borrow, the more they will lose.
Although there is no way to make a profit from short-selling the shares of Fannie and Freddie, the U.S. stock index will definitely fall accordingly. Short-selling stock index futures can also allow Feng Yu and the others to make up for their losses and even make a small profit.
When the stock market started the next day, the shares of Fannie and Freddie Group ushered in a selling trend. During concentrated selling, many transactions could not be completed at all, but the stock prices were still falling crazily.
The share price of Fannie and Freddie Group quickly fell below the one-dollar line and turned into a complete high-risk junk stock.
At this time, the Federal Reserve and the U.S. Securities and Exchange Commission took action. They waived some interest payments to Fannie and Freddie Group and once again provided an interest-free loan to allow Fannie and Freddie Group to have sufficient cash flow. The trading of stocks was restricted, thus halting the plunge in stock prices.
Even so, the shares of Fannie and Freddie Group still fell by more than 20%.
Affected by the scandal of Fannie and Freddie and the decline in stock prices, investors no longer trust many companies in the United States. Big Macs like Fannie and Freddie will commit financial fraud, but will other companies not do the same
If other companies also commit financial fraud, wouldn't it be very dangerous and could collapse at any time
So on this day, the entire U.S. stock market fell. The New York Stock Exchange and Nasdaq indexes both fell by more than 5%. It can be said to be another plunge.
Feng Yu looked at the returns on the stock index futures and thought that the matter was not over yet!
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ps: I wish everyone a happy Valentine’s Day, and everyone can have fun playing happily with their loved ones today (serious face). Please give me a little reward so that I can buy a rose. Thank you~~