America's No. 1 financial conglomerate

Chapter 471 The Subprime Crisis?

After changing into sportswear and hiking boots, Ernst got into his luxury car.

The sea was too rough today, and a new hurricane is said to be forming in the waters around California, so sea fishing turned into mountain climbing.

"Boss, should we find a place to prepare some supplies?" Muller asked, turning around with a hint of caution on his face.

Ernst leaned back in his chair, his fingers lightly tapping the armrest, a faint smile playing on his lips. "No need. How long do you think these rich people can climb? Can they spend the night on the mountain like they're at sea? I reckon we'll be home before the sun even sets."

In his view, the so-called outdoor sports of those pampered rich people are nothing more than enjoying themselves in a different place, and they don't pose any real challenge at all.

"Is it really that bad?" Muller asked with some skepticism.

In the United States, many wealthy people enjoy outdoor sports. Due to workplace pressure, many even enjoy some thrilling activities, such as skydiving and deep-sea diving.

Last year, Wall Street financier David Koch even went to Alaska to participate in a polar trek, which took a full seven days.

Ernst understood Muller's meaning and countered with, "Do you think Louis Astor is possible?"

Muller recalled the other person's physique. Although he was not obese and had a well-proportioned figure, he did not look like someone who had undergone long-term high-intensity training.

"So, we might not have had enough before the journey ends at any time?" Muller touched the dagger at his waist, a specially treated military dagger with an extremely sharp blade and his name engraved on the hilt.

In addition, his backpack also contained a wilderness survival manual, emergency lighting equipment, and supplies such as compressed biscuits and chocolate. Now it seems that these things are really unnecessary.

The car slowly drove out of the villa and headed towards its destination along the winding road.

The place Louis Astaire was called Black Eagle Valley, a name Ernst had never heard of before.

This is quite normal, though. Los Angeles is located on the foothills of the Rocky Mountains, with numerous mountains and a total area of ​​over 5,000 square kilometers. Most of these areas are undeveloped, with only a few scenic spots and well-maintained trails frequented by hiking enthusiasts, such as the Santa Monica Mountains and Griffith Park.

"Black Hawk Down is located in northeast Los Angeles, about 80 kilometers from the city center. The altitude there is between 1,500 and 2,000 meters. The mountains are mainly covered with coniferous forests and there are a few seasonal streams," Mueller introduced the information he had researched in advance.

Ernst nodded slightly, said nothing, and simply watched the scenery rushing past the window.

The trees along the road gradually changed from tall palm trees to straight pine trees, and the air became increasingly fresh. About an hour later, the car entered a narrow mountain road, and the road surface turned into gravel, which ordinary vehicles could not pass through.

When Ernst arrived, Louis was already there and waiting for him.

Looking at the seven or eight luxury SUVs parked there, Ernst's brow furrowed slightly before relaxing instantly.

Muller, however, lowered his voice and quipped, "No wonder they're from a big family, they really know how to put on airs. Is climbing a mountain really that big of a show? Anyone who didn't know better would think they were hunting cougars in the mountains."

Ernst laughed and said, "They are the number one noble family in America. The Astor family's history is longer than the history of the United States."

After saying that, he opened the car door, straightened his tracksuit collar, and then walked towards Louis Astor.

His face instantly donned a fake expression, neither overly enthusiastic nor aloof. He gave Louis Astor a warm hug and patted him on the back. His enthusiasm made it impossible to tell that this was their second meeting and that they had exchanged no more than ten words.

"Ernst, it's good to see you again. You're still in great spirits." Louis Astor released his grip, took off his sunglasses, revealing a pair of deep eyes. "It seems the busyness of the internet industry hasn't affected your quality of life."

Look at Steve Jobs, then look at Jeff Bezos; the internet is a notoriously hair-loss-inducing industry.

"In my opinion, life is far more important than making money," Ernst replied with a smile. "But what brings you here today?"

"I thought we were friends already," Louis smiled, then said to Ernst, "Let's walk and talk; the scenery here is quite nice."

After a brief greeting, everyone set off.

Although Black Hawk Valley isn't a famous hiking spot, the path underfoot shows that quite a few hikers have been here. There are obvious footprints on the ground, forming a narrow but clear path, and the weeds on both sides of the path have been cleared.

"Ernst, have you ever thought about developing a career in real estate?" Louis suddenly asked, his steps slow and his tone casual, as if he were just having a casual chat.

Ernst paused for a moment, then shook his head. "I'm not cut out for this industry. The internet industry is highly competitive, but at least the rules are relatively transparent. The real estate industry is too murky; I'm afraid I might easily get caught up in it."

"Actually, this industry is very simple: buy land, build houses, and sell them. It's that simple," Louis said casually.

Ernst scoffed inwardly, "That's easy for you to say."

In any country, real estate and government departments are the most closely intertwined industries. To gain a foothold in this industry, it is simply impossible without a strong background and connections.

Even in a cosmopolitan metropolis like New York, not all properties are selling like hotcakes.

Luxury apartments on Manhattan Island are indeed in high demand and incredibly expensive, but how many unfinished buildings are still sitting there in Brooklyn and Queens?

Some of those unfinished buildings were abandoned because their funding chains broke down, while others were abandoned because they did not obtain government approval.

It doesn't matter, I want to buy those good plots of land?

That's simply a fantasy.

Those plots of land located in the city center with convenient transportation and complete supporting facilities have long been targeted by major giants. Outsiders without connections cannot even receive an invitation to the auction, let alone qualify to buy the land.

"We're looking for ways to lower mortgage borrowing costs. Would you be interested in joining us?"

Ernst paused as he tried to climb further, which made him think of the subprime mortgage crisis. Could these people be the ones who fueled the subprime mortgage crisis?

The excessive expansion and abnormal prosperity of the real estate market was a major contributing factor to the subprime mortgage crisis.

Logically speaking, major economic crises caused by the real estate market usually only occur in developing countries, such as Southeast Asia, which recently triggered the Asian financial crisis.

Because real estate is the best economic stimulus for developing countries, it can drive too many upstream and downstream industrial chains, from basic industries such as steel, cement and building materials, to downstream industries such as decoration, furniture and home appliances, and then to supporting industries such as property management and intermediary services, covering almost all areas of the economy.

Moreover, the real estate industry has relatively low technological content and does not require a lot of R&D investment. As long as there is capital and land, projects can be launched quickly, making it the preferred industry for many developing countries to drive economic growth.

Industries like the automotive industry and the technology industry are highly technological, requiring long-term R&D investment and technological accumulation, as well as the support of a complete industrial chain. They cannot be developed simply by developing countries.

Developed countries, on the other hand, already have their own strengths in industries such as technology, automobiles, and financial services. These industries are high in technology and value-added, and can provide sustained impetus for economic growth.

For these developed countries, the pursuit is more about steady and orderly growth.

Their economic development has entered a mature stage, and they no longer need to rely on large-scale real estate development to drive economic growth. Instead, they focus more on optimizing and upgrading their economic structure to improve the quality and efficiency of economic development.

Therefore, under normal circumstances, governments in developed countries will strictly regulate the real estate market to prevent excessive expansion and bubbles.

Clearly, their proposal would not pass with the American upper echelons.

The U.S. government has always attached great importance to the stability of the real estate market and has formulated a series of policies to regulate the real estate market, such as increasing the down payment ratio for mortgages, strengthening the supervision of banks, and controlling the financing channels of real estate developers.

Unless there are special circumstances, the US government will not easily change these policies.

The other party's intention in trying to recruit him is quite clear: they want to leverage his influence among the younger generation to put pressure on the US government and increase their bargaining power.

If it weren't for the dot-com bubble burst, leading to the collapse of numerous internet companies, a stock market crash, rising unemployment, and a slowdown in economic growth...

In an effort to stimulate economic recovery, and given that the real estate market is a crucial component of the economy, their focus on real estate is absolutely unacceptable.

"I'd rather not. I'm more interested in the tech industry," Ernst declined.

He will definitely participate in the subprime crisis triggered by the real estate bubble, but that doesn't mean he will form an alliance with the other party, because he doesn't have a good opinion of them.

This crisis, which may have been triggered by these people, could very well destroy them as well.

Remember that Waldorf Astoria sold part of its shares less than two years after the subprime mortgage crisis?

The Waldorf Astoria is one of the Astor family's iconic properties. The sale of its stake in the Waldorf Astoria is likely due to the huge losses suffered during the subprime mortgage crisis, resulting in a broken cash flow and forcing them to sell assets to alleviate financial pressure.

This also shows that the Astor family was affected by the subprime crisis, and the impact was not small.

The other party seemed to have anticipated Ernst's refusal, and showed no disappointment on his face. He simply smiled, quickened his pace, and headed towards the top of the mountain.

The group continued their ascent to the summit, with Louis's bodyguards clearing the way and constantly removing branches and weeds from the path.

Ernst's bodyguards stayed behind to keep a close watch on the surroundings and prevent any unexpected situations.

Ernst and Louis chatted idly along the way, discussing everything from economics and entertainment to sports.

They discussed the future development trends of the US economy and the monetary policies that the Federal Reserve might adopt.

They talked about the latest Hollywood movies and the recently concluded NBA Finals.

"Jordan has retired, and I think the Knicks have a chance next year." As a New Yorker, Louis is naturally a Knicks fan.

If we're talking about the most amazing team this year, it has to be the Knicks.

Although they were eliminated in the semifinals, they fought the Pacers to a Game 7, ultimately losing by a mere three points.

With this newly formed youth team, the Knicks brought a youth storm.

They also have a lot of draft picks this year, so the Knicks will be even stronger next year.

"Hopefully, if the Knicks make it to the Finals next year, I'll definitely treat all the Knicks' loyal fans to a game for free."

The two walked and stopped frequently, admiring the surrounding scenery, just like they were on a sightseeing tour.

The other party didn't explain his purpose, and Ernst wasn't in a hurry. He didn't ask any questions and just wanted to see what tricks the other party was up to.

Before we knew it, it was almost noon. The sun had risen to the top of the sky, the sunlight was getting stronger and stronger, and the temperature was rising accordingly.

Louis stopped, took a few deep breaths, put his hands on his hips, and tried to regulate his breathing, his forehead covered with beads of sweat.

Ernst also stopped, took two bottles of water from Muller, and handed one to Louis. "Have some water and take a rest."

Louis took the bottle of mineral water, unscrewed the cap, took a few big gulps, and then nodded.

He looked around and found a huge rock not far away, with a babbling brook flowing beside it, so he walked towards the rock.

"Should we turn back?" Ernst suggested, noticing that he looked tired.

"We haven't even had lunch yet, how can we go back?" Louis replied with a smile.

lunch?

Ernst was immediately filled with doubt. They were traveling light, carrying only some medical kits, water, and energy-boosting items like chocolate, but no food, not even a piece of bread.

He couldn't help but wonder what exactly Louis meant by lunch.

Just as Ernst was wondering, Louis suddenly exclaimed, "Ha, it looks like our lunch will be ready soon!"

He pointed to the mountaintop not far away, and Ernst looked in the direction he was pointing and saw layers of smoke rising from there.

Ernst immediately understood; it seemed that Louis Astor wasn't the only one who had invited him today, but others as well.

Moreover, judging from the fact that the other party had started a fire in advance to prepare lunch, this mountain climb was probably not a casual outdoor recreation.

I wonder who it will be that can get the Astor family to act as an intermediary?

(Two chapters today, I have to cook for an elder's birthday tonight)