The current financial crisis is caused by the bubble of American real estate market. In some ways, this financial crisis is similar to other crises that broke out every four years after the end of World War II 10.
However, there are essential differences between financial crises. The current crisis marks the end of the era of credit expansion with the US dollar as the global reserve currency. Other cyclical crises are part of a larger boom-bust process. The current financial crisis is the peak of the super boom cycle that lasted for more than 60 years.
The boom-bust cycle usually revolves around the credit situation and always contains a prejudice or misunderstanding. This is usually a failure to realize that there is a reflexive and circular relationship between the willingness to lend and the value of collateral. If credit is easy to obtain, it will bring demand, which will push up the value of real estate; In turn, this situation increases the amount of available credit. Bubbles occur when people buy real estate and expect to benefit from mortgage refinancing. In recent years, the prosperity of American housing market is a proof. The super boom that lasted for 60 years is a more complicated example.
Whenever the credit expansion is in trouble, the financial authorities take intervention measures to inject liquidity into the market and find other ways to stimulate economic growth. This forms an asymmetric incentive system, the so-called moral hazard, which promotes the increasingly strong expansion of credit. This system was so successful that people began to believe in former US President Ronald? Ronald Reagan called it "the magic of the market"-I called it "market fundamentalism". Fundamentalists believe that the market will tend to be balanced and let market participants pursue their own interests, which is most beneficial to the interests of the same group of people. This is obviously a misunderstanding, because it is not the market itself that keeps the financial market from collapsing, but the intervention of the authorities. However, market fundamentalism began to become the dominant way of thinking in the 1980s, when the financial market was just beginning to globalize and the current account deficit began to appear in the United States.
Globalization has enabled the United States to absorb savings from other parts of the world and consume more than its own output. In 2006, the US current account deficit reached 6.2% of its gross domestic product (GDP). By introducing increasingly complex products and more generous terms, financial markets encourage consumers to borrow. Whenever the global financial system is in danger, the financial authorities will intervene and play a role in fueling the situation. Since 1980, the supervision has been relaxed, even to the point of name only.
Editing this new financial crisis
There is a global financial crisis.
The subprime mortgage crisis made financial institutions in developed countries re-evaluate risks and allocate assets. In the next two years, funds from developed countries will reverse the influx trend and strengthen the stability of local financial institutions. As a result, the stock market prices of emerging market countries will be greatly reduced, the local currencies will depreciate, the investment scale will be reduced, and the economic growth will slow down or even decline. The Baltic countries and India are the most vulnerable. The new financial crisis will bring pressure to China's economic growth, but China capital is also facing a good opportunity to "go global" and integrate the corresponding enterprises.
The dark clouds of the global financial crisis are gathering, and in the next two years, there will be a new financial crisis around the world. The biggest victims of this financial crisis will be some emerging market countries, which brings challenges and new opportunities to China's economic development.
The reversal of capital flow will lead to financial crisis in emerging market countries.
Why will there be a new financial crisis in the future? This should start with the basic pattern of financial development in developed economies and emerging market economies in the past decade.
Developed economies, represented by the United States and Britain, have benefited from the general trend of globalization in the past decade, and their economies have continued to prosper, but the foundation of this prosperity is actually relatively fragile. These economies have relatively insufficient self-savings, increasing consumption and strengthening the trend of economic financialization. Its concentrated performance is that families use existing financial assets, especially real estate, as collateral to borrow money from banks to support their rising consumption. The inevitable result of the development of this pattern is the rupture of the consumer credit chain, and the concentrated expression is the subprime mortgage crisis in the United States. The subprime mortgage crisis made American financial institutions reevaluate the cost of financial risks and forced them to redistribute assets to reduce risks.
On the other hand, emerging market economies have attracted a lot of capital from developed countries in the past decade. Take Mexico, Russia, India, Brazil and other countries as examples, more than half of the funds in their securities markets come from abroad. Rising overseas funds not only promote the soaring local asset prices, but also promote the prosperity of the local economy, and at the same time bring about the continuous appreciation of the real exchange rate of the local currency. This series of processes has laid the groundwork for the financial crisis of these economies, among which two regions are the most prominent: First, the three Baltic countries-Estonia, Lithuania and Latvia, where not only the current account deficit exceeds 10% of GDP, but also the fiscal deficit is getting bigger and bigger, and the rising trend of domestic prices is getting worse. Moreover, these countries have also implemented a linked exchange rate system linked to the euro, which undoubtedly wrote down the best chemical reaction formula that led to the financial crisis.
Another very fragile economy is India. Although India's economy has maintained an average annual growth rate of more than 8% in the past three years, its macroeconomic situation is not optimistic: for a long time, India's current account has been in deficit, more than half of the funds in the securities market have come from overseas, the inflation rate has been rising, and the central government has been in deficit for a long time.
Considering the economic situation of developed countries and emerging market countries comprehensively, we can easily draw a conclusion: in the next two years, the world economy is likely to see a reversal of capital flow, that is, the funds that poured into emerging market countries from developed economies in pursuit of high risks and high returns a few years ago will flow back to developed countries in reverse, and the stability of financial institutions in developed countries will be strengthened. The formation of this trend will undoubtedly have a direct impact on developing countries and eventually lead to the formation of financial crisis in emerging market countries.
Financial crisis refers to the sharp, short-term and super-cycle deterioration of all or most financial indicators (such as short-term interest rates, monetary assets, securities, real estate, land (price), the number of commercial bankruptcies and the number of financial institutions) in a country or several countries and regions.
1. The financial crisis originated in America. Causes of financial crisis: The credit expansion caused by fictitious economy and the bursting of economic bubble are the main causes of financial crisis. The subprime mortgage crisis is the fuse. Sub-prime bonds are actually only $600 billion, which caused such a big financial crisis because of following the trend, that is, people's psychological expectations. Herd effect refers to the situation that investors have not formed their own expectations or obtained first-hand information in the market. Theoretically speaking, herding behavior will aggravate market fluctuation and become the key to the success of leaders' behavior. In the following situations, sesame seed cake is the leader. In the real economy, subprime mortgage is the leader.
2. From the subprime mortgage crisis to the financial crisis, here is an original case: two people sell baked wheat cakes, each selling 20 cakes a day (because the demand for baked wheat cakes is only 40), and the output value of one yuan per day is 40 yuan. Later, they discussed and bought 100(A bought it from B and B 100 bought it from A 100).
If the price of sesame cakes traded with each other is 5 yuan, the daily transaction amount is 1040 yuan. At this time, A and B will raise the market biscuits to 2 yuan. Some people heard that sesame seed cakes 1 were sold in 5 yuan, but when they saw that there was only 2 yuan in the market, they quickly bought them. -The bubble economy came into being.
Baked sesame seeds can't be cooked at once, so buy forward cakes. A, Otsuichi increased the number of baked wheat cakes (up to 100 per day), on the other hand, it sold forward baked wheat cakes, and at the same time began to issue baked wheat cakes bonds. Buyers use cash and mortgages to buy. -Financing, financial intervention.
Some people want to buy it, and they have neither cash nor collateral, so A and B issue subordinated biscuit bonds to buy insurance from insurance institutions-subprime bonds have planted seeds for the subprime mortgage crisis.
One day, I found that I couldn't eat the biscuits I bought. If it is stored in one place and moldy, I will sell it soon, even if the price is lower. The bubble burst.
This is how the financial crisis broke out. Cookie shop layoffs (as long as 40 cookies a day)-unemployment; Sesame cake bonds become waste paper-subprime mortgage crisis
Mortgage loan (collateral is worthless) can not be recovered, the liquidity crisis of the lending bank, the bankruptcy of the insurance company and so on. -Financial crisis
3. In the process from subprime mortgage crisis to financial crisis, the financial leverage of financial institutions and the issuance and circulation of financial derivatives have played an amplification role.
4. deeper level
(1) Long-term accumulation of early consumption. In the United States, early consumption has been popular for a long time, encouraging people to buy houses, cars and high-end consumer goods. In order to pursue high profits, banks issue credit cards to residents to encourage consumption in advance. Enjoy today with tomorrow's money "Let your dreams come early and make them come true." Being able to earn and spend is the pride of the times. " To put it bluntly, this kind of advanced consumption has also brought temporary prosperity for several years. However, this kind of advanced purchasing power in the future, after all, is "unable to make ends meet", with bubbles, temporary prosperity and illusory colors. Once the economy is depressed, a large number of unemployed people will not pay their debts, and consumers' ability to pay will drop sharply. American subprime debts will be highlighted in front of the world, banks will have piles of bad debts, and some investment banks will face bankruptcy.
(2) American banks bear high salaries. The American banking industry has been pampered for a long time and seems to be a "favored son of heaven." High-level leaders are well paid, with millions of annual salaries everywhere and hundreds of thousands of middle-level white-collar workers. For a long time, the banking industry has covered up the contradiction because of the huge amount of loans and rich profits. Although the salary is high every year, it can get by. Once the debtor is unable to pay his debts, a batch of bad debts will appear, forming a triangular debt. At first, the bank was in trouble, and then it suffered huge losses. So a lot of layoffs. If we seriously reflect, high salary is an excessive enjoyment of economic achievements and contains exploitation factors. Or it is a foolish act of "fishing with exhausted resources" and "killing the goose to get the egg".
(3) The United States currently lacks emerging industries. Over the years, emerging industries in the United States have often led the world trend. Such as expressway, automobile industry, aviation industry and electronic communication industry. For example, the software and hardware of computers and mobile phones are far ahead. When many countries were still in infancy, the United States had formed an industry on a large scale. However, in the past ten years, these leading industries in the United States have been hovering, while many countries in the world are catching up quickly. The electronic industries such as computers and mobile phones have developed rapidly, and the advantages of the United States have weakened relatively, or gradually lost their advantages.
Rome was not built in a day. The financial crisis in the United States is a long-term accumulation, which inspires people to learn from it. We should proceed from our own reality and do a good job in China. This is also a good way to resolve the impact of the US financial crisis on China.
5. The financial crisis has spread all over the world, affecting China. Part of the country's foreign exchange reserves are lost, making it difficult to export. Economic growth slows down, unemployment increases, people's income declines, consumption decreases, and the market is depressed. If it is serious, it will cause political instability. Compared with European countries (such as Detroit Motor City), the financial crisis has little impact on China, because China's economy is separated from the international economy to some extent. China's RMB is strictly managed under the capital account, and the impact of international hot money is not great. Now, with more than 70 banks in the United States tending to close down, China's financial system is running well and its economy is growing at a certain speed. At the same time, the state is also taking measures such as expanding finance, reducing the deposit reserve ratio and stimulating domestic demand of 4 trillion yuan. Now, the RMB exchange rate has been lowered. If all macroeconomic measures are effectively implemented, China needs about 1 year.