However, this high return has a great premise, that is, American housing prices are rising. How can I put it? House prices are rising and the real estate market is hot. Although the default rate of these subprime mortgages is relatively high (this is easy to understand, because those people's credit status is very poor, there is no proof of income, and other debts are heavy, so it is easy to fail to repay the mortgage loans), even if the lending institutions cannot recover the loans, they can recover the mortgaged houses, and if they are sold again, they can make a profit, because the property market is very hot and house prices are rising.
So, how did the crisis happen? It was in 2006 that the American real estate market began to improve and house prices began to fall, making it difficult for buyers to sell their houses or obtain financing through mortgages. Even if the lender can't get the money back, it will sell the mortgaged house again (it is hard to say whether it can be sold because the real estate market is shrinking and there is no market), and it will certainly not make up for the loss of the loan. Then, the bonds issued from it are worthless, because the related loans cannot be recovered. Didn't the institutions that bought these bonds lose money? Many investment banks and hedge funds bought these bonds or their portfolios, so they suffered heavy losses. For example, a series of events include:
-13 On February 3, 2007, New Century Finance issued a profit warning for the fourth quarter of 2006.
-HSBC Holdings has increased its bad debt reserve of US$ 6,543.8+US$ 800 million for its subprime mortgage business in the United States.
-Facing the debt of $654.38+07.4 billion from Wall Street, New Century Financial Company, the second largest subprime mortgage company in the United States, announced on April 2 that it filed for bankruptcy protection and laid off 54% of its employees.
-On August 2nd, the Industrial Bank of Germany issued a profit warning, and later estimated a loss of 8.2 billion euros (this figure is really huge), because its "Rhineland Fund" with a scale of 65.438+0.27 billion euros and the bank itself participated in the US real estate subprime mortgage market a little, and suffered huge losses. The Bundesbank convened banks from all over the world to discuss a package plan to save the German Industrial Bank.
-American Mortgage Investment Corporation, the tenth largest mortgage institution in the United States, formally filed for bankruptcy protection with the court on August 6, becoming another large mortgage institution in the United States after New Century Finance Corporation.
On August 8, Bear Stearns, the fifth largest investment bank in the United States, announced the closure of its two funds for the same reason as the subprime mortgage crisis.
-On August 9th, BNP Paribas, France's largest bank, announced the freezing of its three funds, which also suffered huge losses due to their investment in American subprime bonds. This move led to a sharp drop in European stock markets.
-1On March 8th, Mizuho Group, the parent company of Mizuho Bank, Japan's second largest bank, announced that the losses related to American subprime loans were 600 million yen. Japanese and Korean banks suffered losses due to the US subprime mortgage crisis. According to the estimation of UBS Securities Japan, the nine major banks in Japan hold more than one trillion yen of US subprime mortgage-backed securities. In addition, five Korean banks, including Woori, invested 565 million dollars in CDO. Investors are worried that the subprime mortgage problem in the United States will have a strong impact on the global financial market. However, Japanese analysts are convinced that most collateralized debt obligation invested by Japanese banks have the highest credit rating, and the impact of the subprime mortgage crisis is limited.
-Later, Blossom Group also announced that the losses caused by subprime loans reached 700 million US dollars in July, but this is only a small amount for a financial group with an annual profit of 20 billion US dollars.
However, the crisis triggered by the subprime mortgage crisis has seriously affected the liquidity of various countries. To put it simply, in the case of uncertain subprime mortgage prospects, banks naturally tightened credit and avoided lending, which led to a sharp rise in short-term interbank lending rates. In other words, everyone doesn't want to put money out, because it's not clear how much the loss of subprime mortgage will be and how the financial situation will be, so other banks have raised the interbank dismantling rate. On the other hand, the interbank lending rate is very high, which greatly increases the cost of raising funds, so even banks themselves are reluctant to borrow money from other banks. Therefore, the liquidity of funds is greatly reduced, which is very dangerous and has a great impact on the fund raising needed for the development of all walks of life in China. Federal Reserve, European Central Bank, Bank of Japan, etc. Seeing the current liquidity suddenly tightening, they injected huge amounts of money into the market urgently. Central banks have injected more than 300 billion dollars into the market in a few days, announcing that they will provide unlimited loans to major banks that are lower than the market interbank lending rate, so that the interbank lending rate can be reduced. However, such a move will further show the financial market the seriousness of the subprime mortgage crisis. For example, the Federal Reserve and the European Central Bank injected huge amounts of money into the market to maintain liquidity, which was the first time since the September 9 1 1 terrorist attacks.
Whether the crisis will expand further depends on the losses of banks in sub-prime loans.
Generally speaking, subprime mortgage has little impact on China, because China's capital market is almost isolated from the outside world. China's top five banks have very little investment in American subprime loans. At present, it is estimated that their total loss is only about 5 billion RMB, so the theoretical impact on China is very small. However, it should still be noted that if the subprime mortgage has a huge impact on a global scale, even if China's own direct losses are small, the external environment will lead to huge fluctuations in the value and liquidity of the US dollar, and its impact on China should not be underestimated.
Hualien ~ July 23, 2008 at 20: 58