Chapter 15: This Kid is So Talented

Although Gu Wanzhou was a businesswoman, she often found herself trapped in an information bubble. Hearing Li Zhiyan's analysis left her feeling somewhat ignorant and profoundly impressed.

This young man seemed to know so much.

As he helped her pick vegetables, Li Zhiyan continued, "The top five U.S. investment banks included Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers, and Bear Stearns."

He noticed her puzzled expression and explained, "You might not be familiar with investment banks, Auntie Gu, but think of it like Hong Kong's HSBC bank, which offers a ten percent interest rate on deposits here. These investment banks held a similar status in the U.S., reaching into every corner of people's lives."

"But when the subprime crisis triggered a global financial tsunami, nearly all of them collapsed within a year. Merrill Lynch was acquired by Bank of America in 2008, Lehman Brothers went bankrupt, and Bear Stearns also disappeared from the scene. Now, only Goldman Sachs and Morgan Stanley remain."

Zhiyan was slightly amazed at how clearly he remembered all of this. Perhaps it was due to the sharpened memory he'd gained since his rebirth.

"I see…" Wanzhou nodded slowly. "So, these big investment banks took the money, invested it, but went under when the crisis hit. But how does all this connect to rising real estate prices here?"

Her admiration for him grew. If only this talented young man were her son. What a brilliant and gifted child.

"Subprime loans—meaning 'substandard' or 'poor credit'—were the heart of it. Think of it like our domestic credit scores. Anyone without a stable income would be marked with low credit and find it nearly impossible to get a loan from a bank," he explained, noticing her thoughtful expression.

"In the U.S., loans are incredibly common, especially for expensive things like houses. Most people have long-term mortgages. But those with low or unstable incomes were defined as subprime borrowers and found it hard to get regular loans, so investment banks created subprime mortgages with high interest rates."

"The returns in the subprime mortgage market were much higher than regular loans," he added, drawing a parallel. "It was like a high-interest loan, similar to the ones HSBC sometimes offers."

Wanzhou recalled when she had considered a loan from HSBC, with its daunting thirty-percent annual interest—basically legalized usury.

"Since real estate prices were rising rapidly, even subprime borrowers jumped in, taking out loans to buy homes," Zhiyan continued. "Up until 2006, the U.S. real estate market was thriving."

She nodded, listening attentively. For a moment, it felt as though she were a student learning from an expert.

"But when the economy slowed down and adjustable interest rates spiked, these subprime borrowers couldn't keep up with their payments and began defaulting in large numbers. The banks repossessed the homes but found no buyers, creating a vicious cycle that led to a financial storm in 2007 and fully erupted in 2008."

"Meanwhile, the U.S. government had to print money endlessly to save their market," he explained. "This money flowed worldwide, as the post-World War II Bretton Woods system had created a structure that essentially forced the world to foot the bill for America's economic issues."

The truth was, Zhiyan only had a vague understanding of these concepts. But with his knowledge of the future, he could predict how trends would unfold, making him sound like a prophet.

As he spoke about the crisis with such casual expertise, Wanzhou's heart began to race. This kid…he was surprisingly captivating. Talented men, it seemed, had their own special allure.

"So, with the U.S. printing money so liberally in 2008, it led to a wave of inflation here, too. The money entered the market but mostly got trapped in real estate. That's how property prices became the catchment area for all this extra money, keeping inflation from spreading elsewhere."

Admittedly, Zhiyan didn't fully understand all the technicalities himself, but he knew the result would be accurate. So, he confidently delivered his explanation, leaving her in awe.

"Because of that, I predict property prices will continue to rise in the coming years. Buying a house now would be a wise investment."

As he spoke, picking vegetables at her side, Wanzhou found her heartbeat quickening. Her hormones seemed to have a mind of their own.

Could this be… heart flutter?

Reflecting on his thorough analysis, she felt an unfamiliar warmth in her chest.

"Little Yan, I'm amazed by how much you know!" she said, genuinely impressed. "What you said makes perfect sense. I've decided I'll buy another property."

She reached over to gently pat his head and then added, "By the way, I was thinking, would you be willing to be my godson? I'd care for you like my own child."

Zhiyan couldn't help but chuckle. Reborn once more, he'd somehow managed to attract the motherly affections of both Si Si's and Liu Zifeng's mothers. Truly, life had taken a strange turn.

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