Players Invade Cyberpunk

Chapter 1208 - 392: Come, Come, Make Money with Money (Part 3)

Getting the idle factory to start up again isn’t really a big deal, a lot of small and big bosses will embezzle some parts from the drug factory to sell, but now that the drug market is compressed, McCarthy can get it running because he has the skills.But once something is decided, he cannot stop it.

West Fire Grass frowned, his face gradually turning ugly.

"Trouble."

McCarthy leaned forward.

"You are omnipotent, is there... any other way?"

West Fire Grass looked at West Fire Grass several times, hesitated to speak, and remained silent.

Seeing there is hope, McCarthy hurriedly urged.

"Just say it, Ricardo can handle the biggest troubles, he’s one of the four ministers in Havana, no need to fear the sky falling."

As if annoyed by the urging, West Fire Grass thought long and hard before finally making up his mind, lowering his voice.

"I do have a way to make money, and big money, absolutely legal, more than ten times what you used to earn from selling drugs."

McCarthy’s eyes lit up.

"What’s the method?"

The two leaned in close, fearing a third person might overhear.

West Fire Grass spoke.

"Do you know what the world’s most profitable business is?"

Most profitable...

McCarthy responded.

"Arms trade?"

"No."

"Luxury goods?"

"No."

"Organic food?"

"No."

McCarthy was anxious.

"Please don’t play games with me!"

West Fire Grass slowly spoke.

"The most profitable business in the world is banking."

McCarthy was shocked.

"You want us to rob banks?"

West Fire Grass was frustrated.

"Legal! Legal! My business is legal!"

He took several heavy breaths, then slowly continued.

"In this world, the most profitable are always those who print money, every dollar in your hand is printed by the European Community Bank, the Orokin you treasure is merely paper to them, they can print as many as needed."

McCarthy was stunned; he had never thought about this.

But thinking carefully, West Fire Grass indeed made sense; what they desperately desired were just sheets of paper printed by the European banknotes machinery.

An absurd feeling arose in his heart, McCarthy solemnly asked.

"So what do you mean... playing stocks?"

"NO! NO! NO! Stocks are gambling, and gambling doesn’t make money."

West Fire Grass shook his head repeatedly.

"A tip for you, retail investors should never touch this stuff; in gambling at a casino, winning isn’t about luck or your skills, but rather how much capital you can afford to lose; in this market, big players generally win, the house takes a cut, while retail investors, out of a hundred, ninety-five will lose everything, it’s a slaughter game against retail investors, when they invest money into the stock market, that money is already in the hands of the big players."

McCarthy had heard numerous tales of getting rich in the stock market before, and had considered buying stocks himself, but since Cuba didn’t have a stock exchange, and he couldn’t reach big cities, he dropped the idea.

"So what do you mean..."

"Have you heard of... bonds?"

"Bonds? You mean Euro bonds? But they only yield three percent."

The world is still in an economic crisis; this bond yield is decent but obviously of little interest to drug dealers.

"Euro bonds are nothing."

West Fire Grass dismissed it.

"Have you ever flipped houses?"

McCarthy shook his head.

"Cuba doesn’t have houses to flip, though our minister flips houses in Europe and makes quite a lot, unfortunately, I don’t have that capital, European houses are too expensive, each square meter costs tens of thousands of Orokin."

"Have you heard of collective real estate speculation?"

West Fire Grass grabbed a handful of peanuts from the dish and stacked them together.

"Dozens of people, pooling money for the down payment, taking out loans from the bank to buy property, everyone earning from the rising house prices, this is called real estate securitization; but some people go further, they mortgage the house bought with loans to the bank, use the money received to pay the down payment for the next one, rent out the original house to collect rent and repay the mortgage, and repeat in cycles, they can buy ten times as many houses."

McCarthy widened his eyes.

"So it’s like buying ten houses with the money for one!"

"Exactly, as long as the house price rises by one-tenth, you’ve made the price of an entire house, don’t you find this return rate outrageous?"

McCarthy’s breathing suddenly became rapid.

Then West Fire Grass poured cold water over him.

"Forget about it; you’re not European, they won’t grant you the qualification to buy houses."

Europe, as the world’s financial center, is now focused on urban centralization, making it very difficult to acquire properties, McCarthy being an outsider could never qualify to buy a home.

Real estate speculation is for Europeans to engage in.

McCarthy was reeled back in by West Fire Grass.

"This won’t work, that won’t work, what do you really mean?"

Snap!

West Fire Grass snapped his fingers.

"We can’t earn from the houses, but we can earn from the mortgages."

"How do you make money from mortgages? Lending at high-interest rates to Europeans?"

McCarthy was completely puzzled.

"NO! NO! NO!"

West Fire Grass wagged his finger.

"The European Community Bank has a rating criterion for loans; when a borrower has a sufficiently stable job and income, with a repayment likelihood over 98%, it is rated as a ’AAA’ loan. Such loans usually have an interest rate of around ten percent, but the repayment period is typically thirty years."

He picked ten peanuts from the table and placed them between them, splitting five into two.

"Of course, for anyone, the faster money is returned, the better; banks are no exception. So, suppose we persuade the bank to securitize the loan, buy such a loan from the bank at five percent profit, we, as creditors, collect repayments from the debtor and earn the remaining five percent; what do you say?"

"Five percent..."

McCarthy’s mind started racing.

He, as an agent, naturally knew the methods of loan sharks, aware of how lucrative this business was.

Five percent doesn’t seem like much, but if it’s based on loans of millions of Orokin, that’s tens of thousands of profit, and like West Fire Grass said initially, infinite layering.

The money... how much would that be...

He faintly heard West Fire Grass’s voice.

"And ten percent interest is only for AAA-rated loans; the lower the rating, the higher the interest rate; I hear the highest can be thirty percent..."

30%!

McCarthy’s eyes turned red.