259: Chapter 259 The Ranch - Life has its own way of flourishing; you and I are but a speck of dust in history.

Zhu Suosuo rolled her eyes directly.

Jiang Nansun smiled, feeling a little smug, "Hey, do you want me to ask my aunt to ask Ye Jinyan to find out what kind of reputation that Mr. Ma has?"

Zhu Suosuo waved her hand, "Forget it, forget it. You're talking about Company Name, such a big company. If you go to the boss to ask about an employee's dating life outside, it's very embarrassing."

"He is from Company Name, driving the group's car... surely he wouldn't lie to me... right?"

Having said that, Zhu Suosuo actually had some doubts in her heart.

"The two students at the back who are chatting so heatedly, you two answer my question just now."

Chen Cheng's voice exploded in the air, the classroom immediately went quiet, and many students turned their heads to look at the two.

Jiang Nansun and Zhu Suosuo immediately felt like they were on pins and needles, slowly standing up very awkwardly.

Chen Cheng was in the middle of a spirited lecture when he looked up and noticed the two whispering.

Taking a closer look, they were actually familiar faces.

One clear and natural, the other bright and hot.

Jiang Nansun felt very embarrassed, bit the bullet, and said, "Sorry, Professor Chen, we are not students of the School of Economics and Management."

Chen Cheng looked at Jiang Nansun, who was wearing a dress and had an elegant temperament, with a smile on his lips, "Then which department are you from?"

Jiang Nansun said softly, "School of Architecture."

Chen Cheng smiled, not intending to let her off, "So you came here for Professor Ouyang too?"

Zhu Suosuo, standing to the side, smiled and replied without hesitation, "No, we are here to see a Handsome guy."

"Boom~"

As soon as Zhu Suosuo said this, a burst of laughter erupted in the classroom.

Jiang Nansun turned her head and glared at Zhu Suosuo, her face as red as a red apple.

Chen Cheng turned to look at Zhu Suosuo, who was wearing a blue crop top and jeans, looking passionate and hot.

"Where did you see one?"

Zhu Suosuo smiled brightly and nodded quickly, "Hmm~ I saw one."

Chen Cheng laughed helplessly, "Alright, sit down."

Jiang Nansun let out a long sigh of relief, sat down, and gave Zhu Suosuo a reproachful look.

Zhu Suosuo raised her eyebrows proudly.

Chen Cheng continued, "From 2004 to 2006, the Federal Reserve raised interest rates 17 consecutive times, totaling 425 basis points, finally reaching 5.25%."

"In a high-interest rate environment, a wave of mortgage defaults among low-income earners began to emerge, the rate of mortgage bad debts increased significantly, and the value of MBS collapsed like dominoes."

"It directly burst the real estate bubble."

"Bear Stearns, which held a large amount of MBS, was the first to be rumored to be on the verge of bankruptcy, triggering a bank run, with clients withdrawing $17 billion in one day."

"Bear Stearns fell into a liquidity crisis."

"After the news broke, the Dow Jones Industrial Average plummeted by over 300 points at one point."

"To avoid a systemic collapse, the Fed was forced to intervene, brokering an acquisition by JP at a fire-sale price."

"In the end, Bear Stearns was taken over for a total price of $236 million, a price that had shrunk by 98% compared to its market value a year ago."

"Now, everyone here is experienced, and everyone knows that the crisis is clearly not over yet."

"In modern finance, banks and banks, banks and funds, assets and rating agencies, the same asset, all are deeply interconnected between different categories of A, B, and C."

"It is a huge web."

"This structure determines that a modern financial crisis will inevitably spread across asset classes on a global scale."

"..."

Chen Cheng stood on the podium, speaking eloquently.

Zhu Suosuo rested her chin on her hand, not caring whether she understood or not, watching Chen Cheng, who was holding court on stage, without blinking.

She murmured in her heart, "Handsome, good job, good figure, if only he had some money..."

Jiang Nansun, on the other hand, was listening very carefully.

Her father, Jiang Pengfei, was like this every day, talking big and pointing out the landscape.

But this person was different; it wasn't just empty talk. He could list detailed data and draw charts.

He explained the logic behind the actions of all parties to her, an outsider.

This is not a simple ability.

Such a person is simply a born teacher.

Or rather, a born leader; his words make people believe in him.

"After talking about the subprime mortgage crisis, let us go back and summarize the lessons that the fall of Bear Stearns left for the market and for us as individuals."

Just as he was about to turn around to write on the blackboard, Chen Cheng looked at Jiang Nansun who raised her hand, "That student, you speak."

Jiang Nansun let out a breath, "Since the Fed could provide follow-up liquidity support for Bear Stearns, why not save Lehman?"

Chen Cheng smiled. No matter how much Jiang Nansun disliked her father's stock trading, she would still subconsciously pay attention to this news due to constant exposure.

Chen Cheng shook his head, "It's not that they didn't want to save it, but that they didn't have the ability."

"Bear Stearns' liquidity crisis was on the scale of tens of billions, while Lehman's bomb was in the hundreds of billions, and Fannie Mae and Freddie Mac were even trillion-dollar giants."

"So it's not that they didn't want to save it, but they couldn't."

"You can imagine the financial system as a huge forest pasture."

"And these giants are the big trees in it. As the pasture owner, when the first tree has a problem and gets sick, you might make every effort to save this big tree that has already matured."

"But what if the second, bigger tree has a problem and gets sick?"

"You might start to wonder if there are more trees that have problems, but the problems just haven't been exposed yet."

"And in fact, in the process of discovering the second tree's problem, you have already spent a lot of energy and effort saving many small trees."

"Now the choice is in front of you. Save it or not? If you save it, is it worth it? Do I have that much money?"

"Unfortunately, in the process of your consideration, the tree did not hold out until the moment you acted and collapsed with a bang."

"Because this tree is big enough, its fall is like a domino, quickly affecting the surrounding small trees."

"Until the entire system fully absorbed the pressure generated by the collapse of this big tree."

"Of course, if a tree dies, it will grow again."

"Life will always find its way to flourish."

"The economic system is the same. Lehman has fallen, but in the future, there will be Li-man and Zhang-man standing up."

Chen Cheng looked at Jiang Nansun with a smile, "Do you understand what I mean?"

Jiang Nansun's mouth twitched. She couldn't understand how he could talk so lightly about something that affected the lives and livelihoods of thousands of people.

Jiang Nansun still nodded.

Jiang Nansun studied architecture and was half an artist.

She was also a spoiled princess who had been pampered since childhood, with a bit of an idealist's temperament.

Chen Cheng smiled and wrote five lessons on the blackboard.

[First, leverage is a double-edged sword: it can amplify gains a hundredfold, but it can also make losses instantly fatal.

Second, liquidity determines life and death: "asset value" on paper may be worthless in a crisis; cash (physical assets) is the ultimate moat.

Third, the illusion that risk cannot be diversified: when the entire system bets on the same asset (such as real estate), so-called diversified investment is just self-deception.

Fourth, honesty is more important than face: trying to cover up problems will only accelerate the collapse of trust.

Fifth, there is no "too big to fail": no matter how glorious the history, it cannot withstand a single fatal decision.]

--

I'm numb; I clocked in for yesterday. Please urge for more updates and send small gifts.

I've been writing a bit tiredly lately. My savings are running out, and there was a fat-finger error. I want to cry.

Wuwuwuwu~