The King of Soft Rice in Chinese Entertainment

Chapter 454 More Solutions

"In the end, I still put in the most effort," Angela sighed.

“It’s just that we need your help at the beginning. Once the snowball starts rolling, all we need to do is supervise them.” Xu Jiuyang’s tone was relaxed. “With your abilities, supervising them shouldn’t be a problem.”

After those words were spoken, the women frowned and quickly exchanged glances.

Liu Qianqian then raised her hand and asked, "Why must the site be cleared out by the end of 06 at the latest?"

“It’s very simple. As I’ve said before, this is a scene of frenzied growth. After the peak comes the decline. And given the current situation in the US, where housing prices have quadrupled in four years while average wages have barely changed, it’s possible that their housing market will collapse tomorrow,” Xu Jiuyang said. “Two years is already a long time. I’d rather stop as soon as I reach my expected returns. Ultimately, this is a gamble. Once you’ve got the first million, you should leave. If you continue, you might not only have to give back what you’ve gained, but you might even have to pay out a lot more.”

"That sounds... a bit exaggerated," Liu Qianqian said, forced to speak when no one responded.

"That's about it. You guys discuss it first, I'll wait for you outside." Xu Jiuyang shrugged and prepared to leave.

Gao Yuanyuan suddenly spoke up: "I have no objection."

Since she had already expressed her opinion, Fan Bingbing naturally followed suit: "I have no objection either."

So Liu Qianqian, after being nudged twice by Yang Mi, also spoke up to express her support: "Mi Mi and I have no problem either."

Li Yunxin didn't speak, but her eyes were on Angela, who shrugged helplessly: "It's a good idea, but I need compensation."

She emphasized, "You promised."

“I know,” Xu Jiuyang did not deny it. “Then, let’s find another place and I will talk to you and Yunxin about the compensation plan.”

"Objection!" This time, it was Fan Bingbing who jumped out.

“We are one, and Angie and the others know that, so we should know it too!” she said.

"Oh?" Xu Jiuyang raised an eyebrow, looked at Angela, and then at Li Yunxin. Neither of them uttered a word of rebuttal.

“Okay, if you all agree, I’ll say it here,” he shrugged nonchalantly. “However, I must first emphasize that while it’s feasible, it requires extreme caution in practice. Also, these methods are easier to implement for people like Yunxin and Anji, whose funds are mostly overseas. For others, even if they transfer their funds out and make a profit, it’s still a very troublesome thing to transfer them back from the United States.”

After pausing for a moment, and seeing that no one interrupted, Xu Jiuyang continued: "First, there's the advanced version of real estate: securities. It's better to have connections with banks; otherwise, you need to have connections within them. You can link it with real estate, acquiring properties while simultaneously selling them through banks. Then, you can package these mortgage contracts into MBS and sell them. Repeat this process until you reach a certain point, and then sell the real estate companies along with them."

Liu Qianqian's eyes darted around, and she instinctively wanted to ask something, but before she could open her mouth, Yang Mi nudged her with her elbow.

Although she glared at him angrily, she ultimately didn't say anything and continued to listen obediently.

“Going a step further, we need private equity funds involved,” Xu Jiuyang paused for a moment before continuing, “The materials I gave you include information on MBS, GDO, and CDS. As I just mentioned, after the peak comes the decline; a collapse of the US real estate market is inevitable. That’s why I’ve repeatedly emphasized that if you’re involved in real estate and securities, you need to liquidate by the end of 06 at the latest. If you can predict that timeframe, you can work with investment banks in advance to create specialized CDS for insurance. If there’s a large-scale default on mortgage-backed securities, you’ll have to pay out. The more of this insurance you buy, the higher the compensation will be after the collapse.” “That’s easier to do,” Angela commented.

"As for the last one, it's very simple. After determining the time of the collapse, short the subprime mortgages. The method is similar to CDS, but CDOs are used to amplify the leverage. If you're lucky..." Xu Jiuyang paused for a moment, "it's possible to make tens of billions in profit."

This time, not only Fan Bingbing, but also Li Yunxin was a little confused, and Angela even frowned.

“But I don’t recommend you do that,” Xu Jiuyang said, looking at Angela and Li Yunxin. “If you really find that time, a profit of two or three billion would be enough. Otherwise, the White House and Wall Street will definitely have their eyes on you. You’re not exactly old money.”

At this point, he spread his hands and shrugged, indicating that he was finished speaking.

“That sounds plausible,” Angela said calmly. “However, I’m curious, where did you learn all this financial knowledge?”

“I have no choice,” Xu Jiuyang sighed. “If I want to find ways for you to make money, I can only look for information and data everywhere and make full use of my little bit of cleverness.”

This is why it cannot be stated directly: the financial crisis brought about by the subprime mortgage crisis began in early 07, and by 08 it could no longer be concealed, ultimately resulting in a major explosion.

After all, he couldn't explain where his information came from, especially since Angela really did have connections and private equity funds on Wall Street.

The trigger point of a financial crisis is never so precise, which is why short selling is more difficult than going long. When faced with problems, the first choice for any person or company is often to cover them up, until they can no longer be covered up and are exposed.

This can lead to a lot of uncertainty about the outcome, making it difficult to determine the specific situation until the very last moment, thus affecting people's judgment.

The most typical example is Lehman Brothers. Before filing for bankruptcy, it had countless opportunities to escape, but its leader, Fuld, always felt that the Treasury would not stand by and watch it go bankrupt, and that Lehman Brothers was a long-established company, so it eventually went under.

It's like that joke: a Christian climbed onto the roof during a flood, convinced that God would save him. A boat came to rescue him, but he wouldn't leave; then a bed came to rescue him, but he still wouldn't leave; eventually, he was submerged by the flood.

After he died, he met God and asked Him with a sense of grievance why God would not save him when he was so devout in his faith.
God said, "I'm helpless too. I sent several ships to rescue you, but you just won't get on board. What can I do?"
Of course, that wasn't the worst part. The worst part was that just two days after Lehman Brothers declared bankruptcy, the U.S. Treasury announced a capital injection into AIG to save the market.

American International Group (AIG) is the largest financial and insurance institution in the United States. If AIG were to declare bankruptcy, the American economy would truly be finished. This is a true example of "too big to fail".

So, going back to the original topic, if Xu Jiuyang really made a prediction based on the information from his previous life, even if he managed to deal with Angela, what if the butterfly effect caused it to happen earlier or later?
It would be better to give them a little hint and let them gather information and make their own judgments. I can just stand by and offer some suggestions on key points.

Isn't this how he always interacts with them?
Since they are all so capable, they might be able to accurately predict when the subprime mortgage crisis will occur. Once they make their own judgment, they will be very proactive and will arrange everything perfectly without needing him to push them along.

Of course, that specifically refers to Angela and Li Yunxin. Fan Bingbing and the others should just stick to real estate.

(End of this chapter)