The entire cds, cdo market, and aig underwriting contracts are extremely large.

Among them, after realizing the risks, Freddie Mac and Fannie Mac wanted to hedge the risks. Most of the large number of CDS and CDO contracts purchased were basically underwriting by Aig.

Nowadays, AIG has risks, which means these cdo and cds contracts used for risk hedging.

There will be redemption risks in all.

This means that their purpose of hedging market risks through these contracts will not only fail to achieve, but will instead lead them to greater losses.

Fannie Mae, who is already deeply trapped in the vortex of the "sub-prime mortgage" and suffers serious losses.

When facing greater losses and a more terrifying market crisis, questions arise in the minds of all investors.

"There is a capital risk within Aig, which is enough to show that the funds they have been eroded by the derivative trading market have reached an extremely terrifying level." Su Yue said, "This also shows that their large-scale expansion of the cdo and cds business in the early stage has become a heavy rock that has crushed them with the continuous surge in mortgage default rates."

With years of accumulation, under the surging tide of asset securitization.

The cdo and cds market derived from mortgage loans has become extremely large, far exceeding the scale of mortgage loans itself, and has entangled almost all financial institutions.

Before the ‘subprime mortgage crisis’ broke out, cdo and cds related contract underwriting business.

Let Aig make enough profits and taste enough sweetness.

Therefore, in the end, this business continued to expand within Aig, and the proportion of capital investment increased until it became uncontrollable.

Nowadays, the default rate of mortgage loans has exploded in an all-round way and continues to rise.

Once the contractual debt defaults, the risks of the contractual debts it insured are completely passed on to it. It must compensate for the losses of the default debts to repay the losses of the debt parties, that is, usually major lending financial institutions.

As the "sub-loan" becomes more and more intense, the default rate of related underwriting contracts is getting higher and higher.

The compensation they made was getting bigger and bigger, and now... is finally overwhelmed.

If they collapse, all risks in the CDO and CDS market will completely and directly fall on banks and various loan financial institutions. At the same time, investors, banks, and depositors of financial institutions in this market will also instantly run and withdraw funds, causing the entire market and financial system to collapse.

For the financial market, which is in turmoil and in crisis at this moment.

Aig's internal risk problems are exposed, which is a blockbuster nuclear bomb that will directly impact all financial institutions related to the entire CDO and CDS market.

There will also be trillions of new risk assets, or even tens of trillions of dollars.

"Keep paying close attention to the next movement of the three giants Aig, Freddie Mac and Freddie Mac." Su Yue continued, "The foundation of the entire cdo and cds market will inevitably fall, and the most violent storm is coming. All financial giants on Wall Street should not be able to avoid being attacked by the storm."

Cui Xianshi responded and quickly assigned a new task and inquire about new news.

Su Yue pondered for a moment and said to Chen Yuhe of the New York branch: "Manager Chen, increase efforts to short the stock market and all financial targets. The storm has arrived, and it is time to make full use of huge profits."

"The short positions of the Dow, Nasdaq, and S&P Futures Index have reached the maximum limit," Chen Yuhe said. "All financial stocks, energy and resource stocks that can be shorted have totaled more than 130. Our department has gradually increased its positions. It can be said that... At present, we are the largest short sellers in the huge US stock market."

"Okay!" Su Yue nodded, "Since that's the case, I don't need to say more."

"Chairman..." Hearing Su Yue issued a comprehensive short selling order to the New York branch, Luo Yunfeng couldn't help but ask, "Our department's funds have extremely sufficient profits in WTI crude oil futures, and there are enough profitable funds that can be used for other investments. Chairman... what tasks do we have?"

When Su Yue heard Luo Yunfeng's words, he couldn't help but look at the overall holding data on the main control computer.

After more than half a month of continuous decline in oil prices, the overall profit of the Hong Kong City branch in WTI crude oil futures has approached US$18 billion. Including the funds originally deposited in the account, more than 100 trading accounts and funds have accumulated, it has reached about US$26 billion.

"Exit $9 billion of funds and return them to the Far East Bank." Su Yue said, "A comprehensive credit crisis breaks out and a storm hits, and they will also be hit by a considerable impact."

"The remaining $17 billion profit is left with enough $10 billion to ensure the safety of our holdings in WTI crude oil futures and ensure that each trading account has a sufficient margin ratio so that it will not be fluctuated by the violent fluctuations in oil prices."

"There is only $7 billion left..."

Su Yue paused and continued: "Splitting a trading group, using this part of the funds, quickly establishing short positions in the euro and pounds, and making profits in the foreign exchange market."

"Euro, pound short order?" Luo Yunfeng was stunned.

"Under the comprehensive financial crisis, funds are safe-haven, and all non-US currencies will plummet, while Europe cannot avoid being hit by financial crisis. In addition, their economy is the weakest, investors have the worst expectations for the European economy. The central bank will inevitably cut interest rates continuously and significantly in order to cope with the crisis." Su Yue said, "The existing surplus funds will naturally be put into the places with the most profitable places, the pound and the euro, and then... will inevitably become the hardest hit areas for the exchange rate collapse."

As Su Yue said, he asked someone to pull out the exchange rate trend of the pound and euro.

After the continuous deterioration of European economic fundamentals and the continuous in-depth attack of the "subprime mortgage", the pound exchange rate has dropped from around 1.9 a month ago to around 1.75, and the euro has dropped from around 1.55 a month ago to around 1.45 now.

The overall deterioration of fundamentals has led to a comprehensive short-selling trend in the technical aspects of the two major currencies.

Luo Yunfeng immediately followed Su Yue's instructions. After Su Yue ordered Luo Yunfeng, he began to inquire about the situation of the London branch and made new arrangements immediately.

"Chairman, according to market news, Fortis Bank Group's internal crisis has also begun to appear." Ma Fujun reported, "If this financial giant breaks out, the blow to the European market will be very serious. A comprehensive run storm and credit crisis storm may be quickly detonated."

"Fortis Bank Group!" Su Yue whispered, "The famous European financial group across Belgium, the Netherlands and Luxembourg. His crisis broke out in full swing. It was indeed a strong earthquake for the European financial market. Pay close attention to this giant and use its news to further stimulate the market."

"Okay, Chairman." Ma Fujun nodded.

"Miss Dana Yunis..." After explaining to Ma Fujun, Su Yue turned his target to the trading position issue of the London branch. "How is your overall position profitability?"

Dana Yunis replied: "The fund's position in commodities has already made a large profit, and the profit in the stock market has reached US$7.5 billion."

"It's more than doubled." Su Yue nodded slightly, "With ensuring that the current holding account is safe enough, how much surplus funds can be available?"

"About $4.5 billion." Dana Yunice pondered for a moment and replied.

"Okay!" Su Yue said, "put this 4.5 billion on short orders in pounds and euros, and take advantage of the crisis effect to further amplify profits."
Chapter completed!