The richest man starts with a blind box

Chapter 1165 It's All KPI's Fault
Why does Wall Street engage in subprime loans, and desperately pull poor people who have no ability to repay to borrow money to buy houses?
Any bank can clearly see the risks inside, but why can these things continue until the entire crisis erupts?
Could it be that the collective intelligence of Americans has been reduced to a negative number?

A reporter from later generations conducted a special investigation on some people in the industry, and finally came to a rather outrageous conclusion, saying that the crisis this time was completely caused by performance appraisal, that is, KPI.

Through the investigation of these reporters, it was found that the instructions issued by the top management of various organizations are actually to require the following to absorb as many repayable users as possible, and never said that the assessment indicators should be relaxed.

But it should never be done. These institutions should not design KPI indicators that require each employee to complete an odd number of loans per month.

As I said before, there are only so many people who can pay back, and the employees were able to complete the KPI indicators at the beginning.But after a year or two, it became impossible to meet the quota, but the company didn't care about it, because the subprime loan market became more and more hot, and the profits that could be obtained were getting higher and higher.

Therefore, these companies completely ignore the actual market conditions, but continue to increase their work expectations for the next quarter. As a result, the middle management in each region continues to increase the KPI indicators of their subordinate employees.

If you fail to meet the quota, not only will you not even have a salary, but you may be kicked out directly.

These employees don't know how much effort they have had to work in these large banks, and they are willing to leave like this, so these employees naturally focus on those customers who have no repayment ability at all, and try to discover these customers. Customer loans, then become one of your own KPIs.

At the beginning, this job was not easy, not to mention how to cheat various qualification reviews, those customers who are unable to repay the loan are also very clear that they have no ability to repay the loan, so they are not willing to give themselves a mortgage Such a big pot.

The work of these grassroots staff is very difficult, but the pressure of KPI is always on their heads.What's more terrible is that because KPI indicators are top-down, those institutions responsible for supervision also need to bear the huge pressure of KPI.

In the end, a genius came up with a set of ways to attract borrowers who have no ability to repay the loan: it is called housing loans.

This routine is probably like this. First of all, it is to encourage those who have no repayment ability to borrow money. If these people refuse, it means that as long as the loan is approved, the house will be obtained.

They can help to contact another lending institution, mortgage the newly bought house to this lending institution, and borrow another sum of money from this lending institution.

If the house purchase price was originally 100 million US dollars, then another mortgage can be exchanged for about 50 US dollars.

And the $50 is a one-time payment to these lenders, which means that as long as this operation is done, these lenders who are originally penniless can have a huge sum of $50 in their hands.

And with such a huge sum of money, it is impossible to spend all of it in a short period of time. Regardless of whether the person intends to start a business or continue to indulge in luxury, this sum of money can last for two or three years anyway. time.

In this way, within two or three years, this person will be able to repay the monthly mortgage payment.

In this way, the borrower can obtain a huge amount of money in a short period of time, the bank that provides the mortgage can obtain a stable monthly payment within a few years, and the institution that takes the house mortgage can buy a house of high value, while These workers are able to complete their own KPI indicators.

This is four wins, it's just a win.

So once this routine was launched, it immediately received unanimous praise from almost all bottom-level salesmen, and the regulatory agency, for the sake of KPI, turned a blind eye to it.As long as you can provide all the documents that you need to provide, these institutions will never go into the authenticity of these documents.

And what about those lenders?
Naturally they came in droves, even though they knew they might be in huge debts of millions of dollars.

But it doesn't matter, anyway, they are already the scum of the world, the garbage in this world and society, and they will not have more than $100 in cash on them.

As long as you can get a huge sum of money now, who cares how much debt you will recover in the future? Anyway, I don’t have any money in my hand. Even if you take away all my property, and boil your flesh and blood like this, then There are only less than a few hundred dollars in assets, so don't think about blowing up a penny more.

And I can still receive relief funds from the federal government every month, or simply receive food stamps for food, whatever you want to collect money, it is your ability to blow up a penny from me.

People are not afraid of going to jail, and there is a free lunch in prison, let alone death. If people live like this, there is a high probability that they will not have much motivation to live, so you can do whatever you want.

It is precisely with this kind of thinking that these people without money start to borrow money to buy houses crazily, and then live a happy life of having houses and money and consuming crazily in an instant.

And this has also led to the rapid economic growth of the entire United States in the past few years.

The first thing to increase is real estate. After all, the number of people buying houses has exploded rapidly, but the supply of houses has not increased, so the housing prices will definitely skyrocket.

The skyrocketing housing prices have further promoted the desire of the poor to buy houses, because buying a house does not require money, and it is all borrowed money from banks. The higher the house price rises, the more funds they can obtain through mortgages. This, on the contrary, can further encourage the poor to buy houses.

In the same way, because of the rise in housing prices, the income of subprime loans that appear in the stock market every year, as well as the total amount of funds, are also constantly rising, which makes subprime loans the highest quality investment products in the world.

If it weren't for the sudden appearance of such a pervert as the Western Mustang Fund, then subprime loans would undoubtedly become the most profitable in the world, and at the same time, it would still be a financial collection with no loss.

On the other hand, because many poor people have money, they start to consume retaliatoryly, and these consumptions will promote the growth of the market, which in turn will drive the growth of various entities.

The growth of real companies can also drive the growth of the entire stock market. The stock market has risen, and Wall Street institutions and banks are naturally bullish. Therefore, the entire economy has been prosperous during this period, and the entire US economy has been affected by subprime loans. The promotion effect, the so-called sun shines on the earth, the whole market is not too good, everyone shouts that the big era is coming.

Then, the KPIs of the bottom-level business personnel of those mortgage companies have increased again, and they need to do everything possible to let more poor people who have no ability to repay their loans borrow to buy houses.

As a result, more mortgages that could not be repaid at all were poured into the fund pools of various banks, and points were almost deducted from the fund pools of each bank.

Do these low-level salesmen know how dangerous what they are doing?

Of course they know that after all, those who can work in these financial institutions and banks, even the lowest-level salespersons, at least require a bachelor's degree. They clearly know how huge bombs these things they do can cause in the future.

But the KPI is placed there, and the promotion and salary increase are placed there. Should they give up their promotion and salary increase and KPI for the future of the company?
Can't!

And everyone is doing it like this, and I'm just following the trend. When something goes wrong, it's not my fault. Is there something wrong with me wanting to make money?
And then those middle-level people?Don't they see the danger in it?

Of course, it can be seen, but they also have KPIs, and they also need to be promoted and raised, and they also have more desires and needs than the bottom staff.

Besides, everyone does this. If I don’t do it, I’m not following the mass line.

As for what to do if mines explode in the future... Well, since mines may explode at any time in the future, we should take advantage of the present to make as much money as possible.

In this way, after the real thunderstorm in the future, I will hold the deposit, pat my ass and leave.Anyway, I am paid by myself, and the company will not be able to repay the debt in the future.

Finally, there are the high-level executives of various organizations, can't they see clearly?

They were probably kept in the dark at the beginning. After all, the larger the company, the more rigid the system, and the more difficult it is to understand the situation at the grassroots level. Maybe in the first year, these big bosses really didn't know what the bottom line did for performance. What kind of nonsense happened.

But they know that the company's performance is increasing year by year, the company's profits are constantly increasing, the company's stock price is also skyrocketing, or the entire world economy is skyrocketing all the way, this is a great situation.

But by the second year, no matter how closed the news, the company should have noticed some problems at the grassroots level, and then there are two choices before the company's senior management.

The first option is to deal with these problems urgently, cut off all these non-performing assets, and at the same time carry out training for the grassroots, and resolutely not allow this kind of lending to credit junk to happen again.

This choice does not seem wrong, but if these non-performing assets are cut, it will be a huge loss of tens of billions, or even hundreds of billions of dollars.If these are included in the financial report, do we still need the company's stock price and the shareholders' dividends?
And all the industries are doing this, and then the profits of other colleagues have skyrocketed, but their own situation has fallen. In this case, it is only natural to be directly slapped into pieces by the wave of the general trend.

And the second choice is to pretend not to know about these situations, and let these things continue to develop. Anyway, it will take at least several years for the mine to explode. Maybe at that time, I will no longer be in charge of this company, and the problem will not fall on me. on the head.

And even if a problem does arise, it’s fine to think of a solution when the time comes, anyway, let’s talk about it when the time comes!
And now, five years have passed since the first wave of unrepayable loans. During this period, there are countless bad and bad debts that cannot be repaid at all.

And these secrets and the logic behind them hidden in the depths of the world were all exposed by various media under the deliberate indulgence of certain organizations, and appeared on almost all pages, making all Americans, almost I realized overnight what kind of outrageous things happened to my family.

(End of this chapter)