"The subprime mortgage problem in the United States is the' culprit' that led to the collapse of the global market. What exactly is subprime mortgage? Will it affect China and Hongkong?
In the past ten years, the real estate market in the United States has been booming, which has created a group of owners who constantly mortgage their own properties and spend money with borrowed money.
In China and Hongkong, banks will limit the credit amount to 70% of the house price when approving mortgage loans. In the United States, in order to win business, some investment banks and hedge funds will provide mortgage loans to those who are not eligible for repayment at high interest rates or even zero down payment. Because of the poor quality of such loans, they are regarded as subprime mortgages. In order to share risks, financial institutions issue loans into bonds. Due to the high income, when the property market went up, it attracted many banks and fund managers to purchase goods, hoping to "earn both money and interest".
However, with the decline of American property market, the problem of subprime mortgage began to appear at the end of last year, and many financial institutions had to write off subprime mortgage bonds, which themselves would become waste paper at any time. Recently, this problem has spread to the southern hemisphere. Two hedge funds in Australia lost their hands because of investing in subprime mortgage bonds, and fund holders are not allowed to redeem the funds.
Scholars say that the investment of local funds and banks rarely involves subprime loans, but if the real estate in the United States falls, the global stock market will fall into crisis, and Hong Kong stocks will also be dragged down: "Due to the emergence of negative assets, banks are forced to repossess real estate, financial institutions have to sell real estate at a reduced price to protect their own interests, and some holders of subprime funds will also redeem their funds. In the face of redemption pressure, the fund can only transfer funds overseas to save the local market. When transferring funds, we will definitely consider the market that is easy to cash out. In Asia, of course, it refers to China, Hongkong and Singapore. 」
According to the Investment Fund Association, hedge funds hold more subprime bonds, so investors should be careful: "Some funds open to China mainland and Hongkong retail investors may not participate in the subprime market, but some private equity and hedge funds may participate in these markets to a greater extent. She suggested that when people buy funds, they should be clear about the types of funds and it is best to diversify their investments. " Reference: Reference * * *, ATV news website, column of Zeng Yuancang: The expansion of the partial pressure storm depends on the hands of the Federal Reserve Board of Directors on August 6, 2007.
US stocks have fallen again, so we should be more cautious. There has been a rebound after every plunge in the past two weeks, which has attracted many people to rebound. However, there is a phenomenon that the stock market is getting lower and lower, and the risk of rebound increases. On the contrary, it will reduce its holdings and rebound more reasonably.
The subprime mortgage in the United States has been expanding, and now some banks in the mainland are also involved, some of which have mortgage bonds, and these mortgages are subprime mortgages. In fact, it should be said that banks and funds all over the world will participate to a certain extent.
This whole problem should start with issuing bonds. Many years ago, anyone who wanted to buy a house and borrow money from a bank would carefully evaluate the borrower's background and whether he had a fixed job. How much do you earn every month? How can I pay back the money? Because of this, once the borrower is unable to pay back the money, the bank will face the risk of bad debts.
Later, some financial institutions realized the east and west of bond exposure. The method is to combine some bonds into "capital property" according to the disclosure contract. After the issuance and sale of bonds, financial institutions can push all risks to the people or institutions who buy bonds only by making a difference in profit rate. Bi Fang said that the average interest rate of these bonds was 7%, so the mortgage bonds were sold at the interest rate of 5% and earned 2%. After financial institutions earn a risk-free profit margin, they put the funds back and lend money to others to buy a house.
Due to the risk of selling bonds as collateral, financial institutions have become more and more "relaxed" in borrowing money, and no longer strictly examine the credit level and repayment ability of borrowers like Chuantong Bank. Anyone can borrow it at will, and the credit check may be conducted again, but this is only to set the profit rate. If the credit is poor, the profit rate is higher. If the profit rate is high and the credit rate is poor, it is called secondary disclosure. The financial services company sells these subprime mortgage packages as bonds. In fact, these bonds composed of subprime bonds should be junk bonds, but there are still people in this world who think it is worthwhile to try high-yield and high-risk because junk bonds have a market. If 1 10,000 bonds are sold to 1 10,000 people, the risk of each person is only one tenth of 1 10,000. However, if you buy one from a financial institution and then buy one from B, C and D ..., the number of junk bonds you can finally hold can be as high as 654.38+00,000. If all these bonds go wrong, the risk is not small.
The upper Eocene wind and waves were very destructive.
I remember that in the early 1990s, there was a wave of junk bonds in the United States, and the prices of a large number of junk bonds depreciated sharply, causing the entire stock market to fall by as much as 20%. In the United States, a small town called Orange went bankrupt because it invested a lot of junk bonds in this town. The only way to solve the secondary crisis is to cut interest rates and see what the Fed will do.
The writer is the director of MBA program in City University. Reference: Zeng Yuancang's column, subprime mortgage has the characteristics of high return, which is a loan that financial institutions put in for buyers with bad credit records. Because the interest paid by buyers is higher than that of ordinary loans, huge profits have prompted financial institutions to increase their investment quotas.
In order to compete for the big cake of subprime mortgage in American real estate market, in recent years, investment banks have acquired large and medium-sized banks or mortgage companies. In 2003, HSBC Holdings acquired Household International (later renamed HSBC Financing), and last July, Deutsche Bank acquired Mortgage IT, all in order to quickly enter the US subprime mortgage market. Similar acquisitions include Morgan Stanley, Merrill Lynch and Saxony Capital's acquisition of Bear Stearns, First Franklin and Encore Credit respectively.
From 200 1 to 2005, the amount of subprime mortgage loans in the United States increased sharply year by year, reaching $625 billion in 2005, five times that of 200 1 year.
However, because the credit of subprime mortgage borrowers is difficult to guarantee, the loan contains quite high risk factors. In the past three years, the benchmark interest rate of the Federal Reserve has been raised by 17 times, and the contribution required for sub-prime mortgage loans has gradually increased, resulting in the inability of low-income borrowers to pay the repayment, and some housing loans have begun to turn into bad debts.
Take HSBC Holdings as an example. The customers of subprime mortgage loans are mainly Mexican immigrants with no credit history, and the approval of loans is also quite loose. The customer default of HSBC Holdings has obviously become more serious since last year.
In order to gain market share, HSBC financing, renamed from the acquired Household International, is very aggressive. The loan amount financed by HSBC reached US$ 288 billion, and the deposit was only US$ 654.38+04.7 billion without paying attention to "absorbing and storing". Last year, HSBC's financing only contributed 5% of the profits to HSBC Holdings, but HSBC Holdings will increase its provision by $654.38+08 billion from last year to next year, which is likely to erase nearly half of last year's net profit.
Poole, president of the Federal Reserve Bank of St. Louis, pointed out in his public speech that the number of mortgage loans issued to high-risk customers will increase. Many companies borrow too much and don't have enough documents to prove their repayment ability.
Both he and Fisher, president of the Dallas Reserve Bank, believe that the US Federal Reserve has room to raise interest rates. Sha Fei said that if inflation fails to fall, he will be very supportive of continuing to raise interest rates. But for now, he is still satisfied with the inflation prospect, especially the inflation rate may fall below 2%. Last year, the inflation rate in the United States was 2.2%.
The Mortgage Banking Association predicts that there will be 500-800 billion US dollars of adjustable rate mortgages this year. Some analysts pointed out that because the mortgage interest rate has risen a lot from historical lows in the past two or three years, the current level of interest rate adjustment will make many owners unable to cope, leading to widespread default. .
It is more difficult to add borrowers according to interest.
According to the data of Friedman Billings Ramsey Group, in the secondary mortgage market, the number of mortgages overdue for more than 90 days and repossessed by banks has reached the highest level in six years.
With the risk of construction loans greatly increased, financial institutions began to turn off the taps of low-income borrowers. According to the data of Nationwide, the construction company, the bank has reduced its lending to non-performing loans with bad credit records last month, and the lending amount has decreased by 800 million US dollars, or 2 1%, from 3.74 billion US dollars in June 5438+February.
According to the company's credit rating has also been lowered. Last Friday, Standard & Poor's downgraded China's second-largest subprime construction New Century Finance Company from BB to BB-. ,