Chapter 661 The Subprime Mortgage Crisis Officially Erupted

Chapter 661 The Subprime Mortgage Crisis Officially Erupted

It's just for shooting a show, and collecting materials is not worth spending too much time on.

It took half a day to finish the event and give out all the prize money. In the afternoon, Fan Wumian bought a lot of toys and personally took Britney and Daddario to a children's welfare home for a visit, and handed over part of the promised donation funds to them.

There are also materials in the "Easter Egg" section.

In the afternoon, Fan Wumian took the two of them to inspect the Bandit King Fund and Tudou.com. During the visit, he flexed his muscles to foreign audiences and indirectly advertised for the Hong Kong City Bandit King Fund, Paulson Hedge Fund and WM-Rogers Hedge Fund. He also specifically mentioned that "Silicon Valley should also incubate video website projects" and was willing to cooperate with some capable people.

There is no doubt that these actions are obviously intended to fish for bait.

The purpose of visiting an asset management company is to attract investors to spend money. If a Hollywood film and television giant, or an Internet video rental giant like Netflix, pays attention to Tudou's technology and takes the lead in proposing cooperation with it, then Fan Wumian will have the opportunity to take the initiative and obtain a large amount of original equity at a lower cost.

In developing countries where copyright protection is not so strict, the process of doing digital content service business is really difficult to describe. Whether it is online novels, online videos or online music platforms, they all face serious infringement problems and it is difficult to enter a virtuous circle.

Most of the time, as soon as Tudou.com puts a TV series that has been digitally restored with great difficulty, it is quickly stolen by other copycat video sites, which move the resources to their own sites. Some sites even place their servers abroad, making it difficult to track them down and block them.

Compared with Tudou.com, which has no hope of turning a profit in the short term, Fan Wumian would rather invest in an American company to first capture the more profitable European and American markets, and use the profits earned from outside to support Tudou.com, so as to avoid having to pay out of pocket for a long time.

As the number of users increases and the price of purchasing online copyrights soars, Tudou's losses are increasing. Although it has a very high market share in the mainland, it is likely to lose billions of RMB in the process of turning losses into profits, and it needs to find ways to fill the holes from other places.

Daddario didn't understand what was going on and thought he was just visiting Fan Wumian's company.

Parting is imminent.

That night she had a barbecue and stayed up late with Fan Wumian, so much so that when she went to the bathroom to wash up, she could clearly see her thigh muscles twitching slightly due to soreness.

The prejudice in people's hearts is a mountain.

One thinks Asian men are not that bad, and the other thinks white girls are not as strong as rumored.

They fell asleep in each other's arms, and the next morning Fan Wumian gave Daddario a ride. Then the girl was satisfied and accompanied Britney Spears to the airport to board the flight back to Los Angeles.

Completely free.

After staying in Shanghai for two more days to discuss the renovation details of Tangong No. 9, Fan Wumian personally negotiated with the authorities to acquire a residential land near Zhangjiang Hi-Tech Park, still through the method of land transfer agreement, with an average floor price of only RMB 3750 per square meter.

He had just been to Shanghai last time. If there was anything, he could discuss it over the phone or hold a video conference. He did not stay long and flew to Yanjing again. This time he moved directly into a new house of more than 3000 square meters that had been completely renovated.

After meeting Zhuang Muxi, we went to the "Running Man" crew together the next day and played games in Gubei Water Town.

I had a very happy day and that night I met Wu Jing who came to visit the set after hearing the news. Before he became famous with Wolf Warrior, The Wandering Earth and The Battle at Lake Changjin, he went to Hong Kong to develop his career and filmed SPL two years ago. He was still pursuing the route of a martial arts action actor and became well-known for The Flying Dagger of Li in 1999.

He was indeed short of male action stars and also needed to cater to official demands and invest in shooting some mainstream TV dramas. During the dinner, Fan Wumian discussed the cooperation with Wu Jing and planned to sign him to produce several new military and detective-themed works.

I can only say that sometimes surprises come so suddenly.

Wu Jing was overjoyed to find a buyer, and Fan Wumian was also ecstatic that night, because New Century Financial Corporation, the second largest subprime mortgage lender in the United States, suddenly announced that it had filed for bankruptcy protection, citing a high default rate among homebuyers. The company's stock price had plummeted recently, and it plummeted even more after the announcement, with the over-the-counter stock price falling by 14%.

Unfortunately, New Century Financial's market cap is too small. Its peak market value in December 2004 was over 12 billion US dollars, but now it is only a few hundred million US dollars. It is already shaky and it is impossible to build a large short position.

WM-Rogers Hedge Fund and Fan Wumian personally have been busy shorting Fannie Mae and Freddie Mac, two of the largest mortgage financing companies in the United States. Due to the huge negative impact of New Century Financial Corporation's bankruptcy, the stock prices of these two giants have also plummeted.

Fan Wumian stayed up all night and stayed awake until after 1 a.m. His short positions, which had originally experienced little fluctuation in ups and downs, helped him earn a total of $1.28 million tonight, not including the profits from WM-Rogers Hedge Fund and Paulson Hedge Fund.

Perhaps out of fear of causing too much of an impact, the international mainstream media still chose to help throw smoke bombs, trying to tell people that New Century Financial Corporation went bankrupt because of its own problems, rather than because the US housing market or subprime mortgage market had collapsed completely.

This did affect some people, injecting confidence into the market and attracting a large number of investors who were eager to buy the stocks of Fannie Mae, Freddie Mac, Citigroup, Goldman Sachs, Lehman Brothers and other companies.

As a result, with the market rising at the end of the trading day, Fan Wumian's paper profit increased from 1.28 million US dollars to more than 9100 million US dollars. After waking up and learning about the latest situation, he was depressed and could only comfort himself by saying "it's already very good."

There are too many real and fake smoke bombs in the market, and all kinds of monsters have emerged. The bankruptcy of a small company with a market value of hundreds of millions of dollars is not enough to completely set off a financial tsunami.

But in Fan Wumian's opinion, the negative impact caused by the bankruptcy of New Century Financial Corporation is more serious than the bad debts announced by Huifeng Bank, which shows that the default rate of subprime products has become quite serious, and it seems to indicate that the subprime crisis has finally officially begun to break out.

In addition to the second largest New Century Financial Corporation, the largest subprime mortgage lender in the United States, it has also laid off 50% of its employees during this period in an attempt to save itself. Now that the second largest company has fallen, the decline of the largest company is probably not far away.

Because the U.S. housing sales data for the first quarter of this year will be released this month, Fan Wumian only adjusted his short positions and had no intention of cashing out. Instead, he planned to increase the leverage from 7 times to about 10 times, and also only take out % of the funds for the layout to avoid being unable to pay the margin in time when encountering unexpected accidents.

This time he didn't have to wait long.

New Century Financial Corporation went bankrupt on April 4, and American Financial Services Corporation followed suit on April 2 and suddenly announced that it had officially filed for bankruptcy protection.

The collapse of one company might just be an accident, but the collapse of two companies in succession caused such a huge sensation that Fan Wumian's personal investment short position once again made a crazy profit of US$1.41 million, mainly from shorting the US financial services companies, Fannie Mae and Freddie Mac.

Wall Street and US officials always have an excuse to cover up.

As soon as the US financial services companies collapsed, Wall Street began to shout that the shoe had dropped, and opportunities to buy at the bottom and wait for a rebound had emerged recently. Washington also leaked that it was studying how to resolve the crisis and was discussing with the Federal Reserve to accelerate the pace of interest rate cuts, etc.

This combination of punches actually stabilized the financial market, stimulating the stock prices of many companies to rebound, and forcing Fan Wumian to reduce part of his holdings to avoid spitting out the meat in his mouth.

On the other hand, the A-share market continued to sing and dance after a few days of waiting, and ushered in a new round of sharp rise due to the good news that the Federal Reserve is about to cut interest rates.

Although we know that a sharp drop is the inevitable trend, the market can still go up and down during the decline, and we can easily fall into a trap if we are not careful, which is very torturous.

On April 4, Zoven Rogers had just told Fan Wumian that the company had helped clients earn more than 5 million US dollars in three days. The next day, he called with a helpless tone and said that he had lost nearly 6 million US dollars.

Fan Wumian was also helpless, as if the water was too deep and it was difficult to grasp it accurately.

Behind this is nothing more than a game between longs and shorts. It is clear that the subprime mortgage crisis is already very serious, but institutions led by large Wall Street companies are desperately trying to cover it up and save themselves. (End of this chapter)