Volume 8 Final Chapter Chapter 1238 Leverage Game (Part 1)
In the first month of the year, as in previous years, we are still busy paying New Year's greetings.
As his network of contacts grew day by day, the number of people who wanted to pay him New Year's greetings also increased day by day. This year, the New Year's greetings finally stopped on the twelfth day of the first lunar month. Just when he wanted to take a break and catch his breath, Wang Jiansen called and said he was coming to pay him New Year's greetings.
It was a new thing for Wang Jiansen to come to the old villa to pay New Year's greetings. In previous years, they would gather together at Lai Biao's place on a day when everyone was free, and they would greet each other at the dinner table. What happened this year?
No matter what, since people are coming, we have to make arrangements.
Take out the dried fruit snacks that have been put away, put them on plates, and soak the ingredients that need to be soaked in advance.
Busy with work.
At 3:30 in the afternoon, Wang Jiansen came over. He was not alone, but also accompanied by his son Wang Dali.
In 2015, the stock market was booming, with the Shanghai Composite Index hitting a new high of 5,178 points. Myths about how the stock market can make you rich spread in offices, restaurants, squares, and even mobile phone film stalls. They offered 15 yuan to attract customers to apply film, and then passed the job to other companies for 10 yuan each, leaving them free to continue talking about the stock market with the blind fortune teller at the stall next door.
At that time, the enthusiasm of the whole nation for stock trading was pushed to a climax, and myths were spread everywhere. The brother of my wife's colleague made more than 800,000 yuan in the stock market, a friend of mine bought some stocks and saw them increase three times, and my neighbor...
People always seek profit and avoid harm, but they also have to have some dignity. When making up stories, they always extend from the people close to them and choose a protagonist who is neither too far nor too close. If the protagonist is too far away, it is just hearsay, and if the protagonist is too close, there will be interests involved, which can easily bring disaster upon oneself.
In short, all kinds of true or false, somewhat false, or half-true and half-false wealth stories are spreading, making those who have traded stocks or not feel itchy. Even those who once dominated the stock market but are now living in seclusion are also being aroused.
The bargain-hunting king who hides in the bathroom to rub people's backs; the short-term stock god who wanders between various trash cans, while others laugh at him for being too crazy; the number one trader who has been a live-in son-in-law and has been frustrated for more than ten years; the Overlord Zhuang who had a misunderstanding with the economic investigation and went to another country to settle the matter peacefully, etc.
The heroes of the past are back, and the stock market is about to be turbulent again.
The A-share market is a land of heroes and heroes, a land of wind and clouds, and a field of chives where you can make money as long as you bend down. This is the consensus of people with Alzheimer's disease, middle-aged dementia, and young dementia. They eat fried chives with eggs, chives boxes, and roasted chives, borrowing the power of superstition and fantasy, staring at the K-line on the screen with burning eyes, and having nightmares during the day, dreaming that they are forced to work and have to complete the harvest of hundreds of acres of chives.
This was a carnival for stock investors and a feast for capital. Both on- and off-exchange margin trading was going on with great pleasure. A large amount of leveraged funds poured into the stock market, with leverage ranging from 1:1 to 1:8. It was rumored that the margin trading amounted to 5 trillion yuan at the time, accounting for one-tenth of the total market value of the stock market.
The sources of funds include funds obtained from banks through umbrella trusts, private capital allocation, and even worse, borrowing from P2P platforms. The prosperity of the stock market at that time also led to the prosperity of P2P.
Many small investors who understand the simple truth that “if you don’t manage your money, your money won’t manage you” find that they can make more than 10% profit a month by trading stocks, and they believe that P2P platforms with “inside information” should be able to make more money. Therefore, they are very confident in putting part of their money on the platform, under the euphemism of not putting all their eggs in one basket.
The ox and the bear have always been inseparable. Wherever there is a cow, there will definitely be a bear, and vice versa. The only difference is that when the cow goes out, the bear will not follow immediately, but will go to the cow's home to visit her sister-in-law first.
The phenomenon of high leverage in economic development has long been taken seriously by the top leaders. The problem of high capital allocation in the stock market has not escaped the keen eyes this time. An action has been quietly launched to notify major securities firms to strictly investigate off-exchange capital allocation and suspend new off-exchange capital allocation ports.
This action did not go unnoticed by the big capital stirring up trouble in the stock market. At the slightest sign of trouble, profit-making funds from all walks of life fled frantically, the bull market came to an abrupt end, and the index plummeted.
After this lesson, the top leaders realized that deleveraging could no longer be done quietly, but should be carried out in a high-profile manner. Therefore, in May of the following year, the top leaders clarified the key financial tasks for the next few years - three cuts, one reduction and one supplement: cutting overcapacity, reducing inventory, deleveraging, reducing costs and filling in the gaps.
As one of the key points, destocking is the biggest industry with high inventory, which is real estate. The real estate industry itself is a highly leveraged and high-debt industry, just as Xu Ma Shi said, "One dollar of steel is used to do ten dollars of work."
High inventory means that real estate companies have insufficient liquidity assets and excessive liquidity leverage, which are essentially the two sides of high leverage. At that time, my country's real estate inventory was mainly concentrated in third- and fourth-tier cities. The inventory problem in first- and second-tier cities was not serious due to their developed economies and continuous net inflow of population.
As the pillar of the national economy and an industry that affects hundreds of upstream and downstream industries, the real estate industry has high inventory, which is a sword of Damocles hanging over the national economy.
How to defuse the bomb, so that people can have their own houses and enjoy the benefits of rising housing prices, depends on the trick of destocking. Under the continuous stimulation of policies such as interest rate cuts and reserve requirement ratio cuts, relaxation of purchase and loan restrictions, and monetization of shantytown renovation, cities across the country, especially third- and fourth-tier cities, have destocked more than expected, and the grand scene of people queuing up to buy and scramble for houses has appeared again.
Of course, the increase in housing prices is also very beautiful. The cumulative increase from 2016 to 2017 was over 60%. The real estate industry has finally completed an astonishing inventory liquidation process, and this leverage has been transferred to the residents.
The guidance given to real estate companies by the top leaders is to deleverage, reduce high debt ratios, and reduce inventory. Some people listen to this advice, while others go against the wind. House prices have risen so much, wouldn't it be foolish not to take this opportunity to start more projects?
Instead of removing leverage, they are trying to find ways to raise more funds. Since they can't get new land in prosperous areas, they go to remote places where the sky is high and the emperor is far away, and set up projects for this city and that resort bay. They have lofty ambitions and do not consider whether the local area can absorb it. They only set their sights on the whole country and even abroad. Swish, swish, swish, as soon as the design drawings are out, they perform their magical skills of cooking without rice all over the world.
The real estate company was like a gangster with explosives tied all over his body, standing in the vast crowd, with his index finger bent and shaking gently, shouting, "Come here!"
Who dares to go up?
If there is a real explosion, the main responsibility will not be borne by the bandits. Although the political system determines that every citizen is a spiritual shareholder of the country, everyone has a share in good things and naturally has to bear the consequences of bad things, but there are some things that can be done quietly, but it would be bad to say them in public.
However, no matter how cautious you are, the problem still needs to be solved. The beating will come sooner or later. There is a lot of knowledge involved in beating. One can be beaten with fifty lashes and still be alive and well, or one can be beaten with three lashes and die. "Kidnapping" will not solve the problem at all, it will only delay some time.
Some people are stubborn, while others will take advantage of the situation and actively solve the problem.
Take Wang Jiansen for example. In the past few years, he was full of vigor and ambition. He set his sights on the world and joined the wave of real estate developers going global. Through domestic guarantees and foreign loans, he bought properties all over the world, making the domestic rich people's lavish spending spirit known all over the world. Countless "Old Money" in Europe and the United States exclaimed: "Boss, real boss, please accept my respects."
