The subprime mortgage crisis refers to the outbreak of American real estate in the subprime mortgage crisis. The accurate explanation is that real estate in the United States was a bull market a few years ago. In order to gain a favorable position in real estate, big banks in the United States lend mortgage loans to people who don't have much credibility and repayment ability, such as people with annual household income of less than $20,000 and bad reputation, encourage them to buy houses and lend them loans. Finally, these people really can't pay their debts, and the crisis broke out! Loans to people with bad credit are called subprime loans.

Second, how did the subprime mortgage crisis in 2008 come into being? Why is there a crisis?

The subprime mortgage crisis refers to the shock, panic and crisis in the international financial market caused by the sharp increase in the default rate of the subprime mortgage industry in the United States in the summer of 2007 and the credit crunch.

Subprime mortgage refers to loans provided by some lending institutions to borrowers with poor credit and low income. In recent years, the United States and other countries have relaxed housing credit standards (no down payment, no proof of income, no concern about the quality of mortgage units, etc. ), forming a subprime mortgage market. Sub-prime housing credit is estimated, combined and packaged by lending institutions and Wall Street by financial engineering methods, and then sold in the secondary mortgage market in the form of bills or securities products, attracting other financial institutions and hedge funds to buy at high interest rates.

However, the good times did not last long. In 2006, the US real estate market began to deteriorate, and the interest rate of the US dollar increased many times, which led to the increase of credit default and bad debts of subprime loans, and the price of subprime products plummeted, which directly led to the financial crisis and even bankruptcy of many financial institutions in Europe, America and Australia, which affected the global credit contraction. In order to cope with the large-scale redemption tide of customers, it is no longer feasible for some funds to close their positions in yen and invest heavily. The only way is to sell cash, that is, the so-called yen carry trade to open positions, which has caused a series of domino effects and led to a sharp drop in global stock markets.

Fannie Mae and Freddie Mac, which originally occupied 70% of the subprime mortgage market in the United States, were led by government agencies, packaging loans into securities and promising investors to get principal and interest rates. With the scandals of these two companies, the government restricted their business growth, and the whole subprime mortgage market began to compete for the loans purchased by these two companies. In the whole process, new market participants excessively pursue high-risk loans for profit-seeking purposes. When Fannie Mae and Freddie Mac still dominate the mortgage market, they usually set clear loan standards and strictly stipulate what types of loans can be issued. Today, due to the intervention of thousands of hedge funds, pension funds and other fund investors with high risk preferences around the world, the original loan standard has become a dead letter in the face of high interest rates, and new market participants and Wall Street traders continue to encourage lending institutions to try different types of loans. Many lenders don't even require subprime borrowers to provide proof of financial qualifications, including tax bills. When evaluating the value of houses, lenders also rely more on mechanical computer programs than the conclusions of appraisers, and the potential risks are deeply buried in the subprime mortgage market.

Since the subprime mortgage crisis broke out in August 2007, it has caused great impact and destruction on the international financial order, produced a strong credit crunch effect in the financial market, and exposed the systematic financial risks accumulated in the international financial system for a long time. The financial crisis triggered by the subprime mortgage crisis is the most serious financial crisis in the United States since the Great Depression in the 1930s. The subprime mortgage crisis, which originated in the United States, is spreading around the world, and the global financial system has been greatly impacted, and the crisis has hit the real economy hard. China has also been affected by the subprime mortgage crisis.

Excessive innovation of financial instruments, distorted interests of credit rating agencies and relaxed supervision of monetary policy are the main reasons leading to the subprime mortgage crisis in the United States. The measures taken by the American government, such as massive capital injection, continuous interest rate cuts and direct intervention, have achieved some results, but they have not fundamentally solved the problem. The enlightenment from this is that financial regulation and control policies must conform to the economic situation and the law of periodic fluctuations; On the basis of strengthening financial supervision and perfecting risk prevention mechanism, promote the innovation of financial products and their systems; We should seize the favorable opportunity to encourage overseas asset mergers and acquisitions, optimize the structure of overseas assets, and spread the risks of overseas assets.