In fact, as early as the second quarter of 2005, the US real estate market had already shown unusual performance. In this quarter, the originally popular real estate market began to cool down. The most direct manifestation is the stagnation of housing prices, and even housing prices in some states have shown a faint momentum of correction.

Once house prices really start to fall, home buyers will inevitably find it difficult to sell their houses or obtain financing through mortgages. If this phenomenon continues, many borrowers in the subprime mortgage market will not be able to repay their loans on time, and the subprime mortgage market will inevitably have a crisis.

However, the hot US real estate market in the early stage blinded almost everyone's eyes. At this point in time, no one would think that the US real estate market would collapse. These people almost included executives of all large multinational banks, investment banks, insurance and securities companies around the world.

However, the market collapse was not driven by someone's will. Although the superficial prosperity made these large investment institutions still insist on investing large amounts of funds into those financial derivatives to make profits, a undercurrent has begun to appear faintly.

First of all, there was a series of strange financial events on Wall Street. Although no one realized that this series of strange financial events would be linked to the collapse of US real estate, this series of strange financial events is a sign of the collapse of the US real estate market!

As the saying goes, "When a country is about to perish, there will be evil spirits!" This is just as common in the US real estate market.

If the US real estate market is regarded as a huge financial empire, then when this huge financial empire collapses, there will inevitably be some incredible "monsters".

The first monster that popped up was the Amaranth Fund, known as the "Unwithered Flower".

Amaranth is from Greek, and its original meaning is "the never-withering flower".

In September 2000, Nicholas Maunis, a trader on Wall Street who is proficient in convertible bond trading, established the "Flowers of No Falling" Consultant Responsibility Co., Ltd., an Amaranth Fund, in the small town of Greenwich, Connecticut, USA.

When this fund was founded, it only had $600 million in starting funds. It started with convertible bond arbitrage transactions and also involved in other derivative transactions. It is a multi-strategy hedge fund.

By the end of 2005, the size of the Amaranth fund grew to US$7.24 billion.

There is a "star" natural gas futures trader in the Amaranth Fund. The star trader from Canada is named Brian Hunter. He jumped from Deutsche Bank to Amaranth Fund in 2004. He worked for Deutsche Bank for three years and worked in natural gas futures trading.

Mr. Hunter has rich experience in natural gas futures trading, a calm and persistent trading style. In September 2005, he successfully seized the long opportunity of US natural gas prices soaring sharply due to Hurricane Caterina hit the US Gulf of Mexico, making more than $1 billion for the Amaranth Fund, and thus received a year-end reward of about $75 million to $100 million.

But success is Hunter, defeat is Hunter.

Because I tasted the sweetness in natural gas futures trading, and the profits of convertible bond arbitrage trading were small, after entering 2006, Amaranth Fund continued to increase its investment in natural gas futures and spent about half of its assets on natural gas futures trading.

In the first four months of 2006, Brian Hunter made $2 billion for the Amaranth Fund. Although he lost 1 billion in May, Hunter made another $1 billion between June and August. At the end of July, Hunter said in an interview with "great" prospects for the profit returns of speculative natural gas futures: "The volatility cycle of the crude oil futures market generally takes several years, while the volatility cycle of the natural gas futures market is only a few months!"

However, it is hard to calculate as if it were the sky, and the market has no "every-winning general"! In mid-September 2006, Hunter "bet" that the price of natural gas futures would rise and established a huge shoulder arbitrage position of "buy NYMEX natural gas futures 0703 contract and sell 0704 contract at the same time", which did not develop in the direction Hunter judged, but fell sharply. Therefore, Hunter's "heavy bet" suffered major losses!

On September 18, 2006, Nicholas Maunis, the founder of Amaranth Fund, suddenly sent a letter to its investors, informing them that Amaranth Fund suffered significant losses in its energy investment due to the "unexpected" drop in natural gas prices. Since Amaranth Fund is a "big player" known to the NYMEX natural gas futures market, the news of Amaranth Fund's losses quickly spread throughout the Wall Street financial market that day, causing a lot of shock and speculation in the market. On September 19, the New York Times disclosed that Amaranth Fund speculative natural gas futures lost more than 3 billion US dollars!

After the news of the sudden huge losses of Amaranth Fund spread, its investors, lending banks and partners asked it to refund the loan and margin, and Amaranth was forced to close its losses at a discounted price.

However, due to its excessive holdings in natural gas futures and a large number of closed positions poured into the market, the accelerated decline in futures prices further aggravated the loss of its original positions. By the end of September 2006, the loss of Amaranth Fund expanded to US$6.6 billion, accounting for more than 70% of its total assets.

In the end, the Amaranth fund surrendered and surrendered, and went bankrupt and liquidated. The never-withered flowers on Wall Street slowly fell in the cold wind.

Among the investors who invest in Amaranth funds, Goldman Sachs, Morgan Stanley, 3M Pension Fund, San Diego National Pension Fund Association, etc., these investors ended up suffering serious losses without exception.

The second monster is the famous American alternative asset management and financial consulting services "Blackstone Group", which is commonly known as the Beston Group.

When it comes to this matter, it has a certain relationship with China.

In 2007, the newly established China Investment Corporation began its first foreign investment. At that time, China Investment Corporation bought 9.4% of Blackstone's equity for US$3 billion.

At this time, Blackstone acquired with a leverage of US$39 billion and took over EOP Real Estate, which owns commercial properties in many prime locations in major cities from Sam Zell, known as "real estate Buffett".

At the same time, Sam Zell acquired its forum media group that owns the Chicago Tribune and the Los Angeles Times for $8.3 billion.

These serial transactions seem flawless, but no one expected that Sam Zell had just taken over the Forum Group and went bankrupt due to poor management. Blackstone took over the pinnacle of American real estate, so Zhong's investment in Blackstone ended with a loss of US$2.4 billion!

The emergence of the two monsters, Amaranth Fund and Blackstone Group, seems to have no necessary connection on the surface, but don’t forget that the main investors of Amaranth Fund were seriously damaged after Amaranth Fund announced bankruptcy!

Take a look at the main investors of Amaranth Fund, Goldman Sachs, Morgan Stanley, 3M Pension Fund, San Diego National Pension Fund Association... These investment institutions not only invested in Amaranth Fund, but also invested heavily in the US real estate market. There is also Blackstone Group, which also invested heavily in the US real estate market at that time!

These investment institutions that invest heavily in speculation in the US real estate market will inevitably affect their investment in the US real estate market after suffering significant losses in other aspects. Therefore, with a huge hit, these seemingly unrelated investment failures have led to the beginning of the collapse of the US real estate market.

Starting from the second half of 2006, the US real estate market began to cool down rapidly, and the danger of the subprime mortgage crisis being detonated is getting greater and greater. By the beginning of 2007, the subprime mortgage crisis finally could not be held back and was completely detonated!

In February 2007, New Century Finance, the second largest subprime mortgage company in the United States, issued a profit warning for the fourth quarter of last year. On April 2, New Century Finance declared bankruptcy because it was unable to repay debts of up to $17.4 billion.

In March 2007, HSBC Holdings announced its performance and increased its additional reserves for subprime housing credit in the United States to US$7 billion, a total of US$10.573 billion, an increase of 33.6%. As soon as the news came out, the stock market plummeted that day, with the Hang Seng Index falling 777 points, a decrease of 4%.

On August 2, 2007, German Industrial Bank announced a profit warning, and later estimated a loss of 8.2 billion euros, because one of its subsidiaries was 12.7 billion euros, which was a "Rhineland Fund" and the bank itself participated in the US real estate subprime mortgage market business and suffered huge losses. The German Central Bank convened a national banking industry to discuss a package of plans to save German Industrial Bank.

The tenth largest mortgage lender in the United States, the United States Housing Mortgage Investment Company, officially filed for bankruptcy protection in the court on August 6, 2007, becoming another large mortgage lender in the United States to file for bankruptcy after New Century Financial Company.

On August 8, 2007, Bear Stearns, the fifth largest investment bank in the United States, announced the collapse of two of its funds, because of the subprime mortgage crisis.

On August 9, 2007, BNP Paribas, the largest bank in France, announced the freeze of three of its funds, which also suffered huge losses due to investing in US subprime mortgage bonds. This move caused a heavy blow to European stock markets.

On August 13, 2007, the parent company of the second largest bank in Japan, Mizuho Bank, announced that losses related to the US subprime mortgage were 600 million yen. Japan and South Korean banks have already suffered losses due to the US subprime mortgage storm. According to estimates by UBS Securities, nine major Japanese banks have held US subprime mortgage guarantee securities for more than one trillion yen.

Later, Citigroup also announced that the losses caused by the subprime mortgage crisis in July 2007 reached US$700 million, and eventually triggered the share price of Citibank to fall from US$23 per share to US$3 per share in just half a year, with a market value shrinking by 90%...

A series of negative news has stunned the United States and the entire world, and the US subprime mortgage crisis inevitably turns into a financial crisis that has affected the world.

Two houses in the United States were entrusted by the US government, Bear Stearns, the fifth largest investment bank in the United States, was acquired by **** for US$236 million, Merrill Lynch was acquired by Bank of America, and Lehman Brothers died completely...
Chapter completed!