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Even in mid-2008, Rector Morgan still felt that this was just a subprime mortgage crisis and would not turn into a crisis across the United States or even the whole world.

Because in the United States, people who buy houses with loans still only occupy a small number of the population, and most of them still do not have mortgages. Therefore, no matter how dangerous the subprime mortgage crisis is, its ability and scope should be limited, and it cannot cause huge risks that affect the entire United States.

But even the most powerful, Rector Morgan, ignored one problem, that is, this is actually not a subprime mortgage crisis, but a financial crisis. Because the financial geniuses on Wall Street invented financial innovations and invented various Russian doll funds, they have affected financial companies and the Internet across the country.

In early 2008, with the bankruptcy of three related companies, housing prices in 286 major cities including New York fell, with a drop of more than 30%.

Especially with the launch of Guazi Second-hand Housing Network, an online platform for renting and buying and selling second-hand houses, real estate transactions across the United States will be registered on Guazi Second-hand Housing Network. As a result, countless people discovered that almost overnight, there were a large number of properties waiting to be sold in all cities and all plots.

These properties have one characteristic, that is, the mortgage has not been completed, and the purchaser needs to continue to pay the mortgage.

At this time, the houses that were no longer the most trashy homeless people gave up repaying their loans and threw them directly to the bank.

Instead, most secondary users with certain repayment ability also escaped.

Their original idea of ​​buying a house was to grit their teeth and buy a house. After a few years, the house price would rise by two or three times, and they would sell the house, which would instantly achieve financial freedom.

But if housing prices not only do not rise but start to plummet, then these people's mentality will naturally explode. At the beginning, they insisted that housing prices may not be done well and just technical adjustments.

However, when housing prices fell for half a year, especially when various real estate transaction websites have batches of housing listings on the shelves every day, and a buyer is snatched by dozens of home sellers, these secondary users suddenly discovered a terrible fact.

That is, they originally thought that a house worth $1.5 million would be worth $1.5 million, but after the house payment was paid, there might be less than 500,000 left. However, the repayment they had to pay within 10 years was as high as 1.2 million US dollars. If they honestly paid the mortgage, they would lose $700,000. These people made the most correct decision, which was to directly lose the house in their hands. Even if they had paid the loan for several years, they still gave up without hesitation and returned it to the bank.

Well, this wise move is called a hero cutting off his arm.

This became the last straw that crushed the entire subprime mortgage crisis.

But like Rector Morgan, the Federal Reserve believes that this is just a subprime mortgage crisis, so the way to deal with it is to acquire bankrupt companies, sort out their non-performing assets, and then reinvest capital to stabilize the mentality of investors. However, they did not consider the troubles of various financial companies and banks that provide nesting doll funds.

When a large number of subscribers choose to give up the house and don’t want it, these banks can only take back the property and then conduct auctions. They originally thought that this would not be a big loss.

However, when these properties also appeared in the second-hand housing market through judicial auctions, the real estate prices plummeted by about 30% again, and these banks were frightened to find out.

Those houses that originally borrowed $1 million but thought they could be worth $1.5 million in the future are now only $500,000 left, and they are destined to pay $500,000.

But when the bank thinks about it, it doesn’t seem to be panicked. They have packaged these things into funds and sold them to various financial companies!

In other words, although they have to bear part of these losses, the vast majority of them are borne by investment banks that have purchased funds. It’s so wonderful!

These banks were very happy, but all the investors who bought Russian doll funds were in a bad mood. In September 2008, the largest bank in the subprime mortgage crisis and the fourth largest investment bank in the United States, Lehman Brothers Bank announced that due to the subprime mortgage crisis, they had debts of more than US$600 billion, and all of these dollars would not be repaid. Lehman Brothers Bank declared bankruptcy protection.

The next day, Merrill Lynch, the third largest bank, also announced that if it cannot receive emergency loan support of at least $80 billion, Merrill Lynch will also go bankrupt.

Then in the next few days, investment banks across the United States announced one after another that the problems of Russian doll funds caused by the subprime mortgage crisis were severely damaged and could not cope with it, so they could only announce bankruptcy.

These scenes scared all American investors... no, all Americans.

They estimated that the basic base of the entire subprime mortgage crisis was about one trillion US dollars, and the assets of investment banks across the United States exceeded five trillion US dollars. How could it be that all of them collapsed because of such a subprime mortgage crisis?

Little did they know that the financial innovation of the Americans and Russian dolls doubled the subprime mortgage crisis, which was originally only 1 trillion US dollars in basic terms, to about 5 trillion US dollars, which is equivalent to the assets of all investment banks. These investment banks have been drained of all their blood and went bankrupt directly.

At this time, even Rector Morgan was sweating profusely because Morgan Bank, a subsidiary of the Morgan consortium, is the largest investment bank in all countries. In subprime mortgages, Morgan Bank's related businesses exceeded US$800 billion. If all of these US$800 billion were stormed, then Morgan Bank might also seek bankruptcy protection.

For a moment, Rector Morgan didn't care about the problem of lace power, and the entire Morgan consortium began to run around to save Morgan Bank.

However, even if Rector Morgan is a talented person, he can't think of how to deal with the huge deficit of $800 billion. This is simply impossible to operate in business. The only thing Rector Morgan can do seems to be digging a better pit for himself and making Morgan Bank feel more comfortable.

Although Morgan Bank is gone, it will not be a waste of the Morgan consortium, but the position of Rector Morgan's chairman and patriarch cannot be imagined.

On the other hand, Goldman Sachs Investment Bank, controlled by Rockefeller Consortium, actually faces the same problem. When the old friends of the two consortiums sat together, they finally came up with a good idea, which was to turn the operating nature of Goldman Sachs and Morgan Bank from an investment bank to a commercial bank, so that the two banks can directly absorb deposits from the public. With the public's deposits, the $800 billion loophole can be filled.

This idea is so great. For example, Morgan Bank was originally a businessman who made a fortune by doing business, but doing business is risky, and the businessman is about to face a bankruptcy crisis!

So the merchant decided to transform himself. I rebelled and I would not be a businessman. I wanted to be an emperor. I wanted to form a government and then directly collect taxes from the people and rely on taxes to pay back the money.

What a guy, he's so talented.