A series of sudden "changes" such as Lehman Brothers' filing for bankruptcy protection, Merrill Lynch's "commitment" to Bank of America, and AIG's crisis have shocked countries around the world from the U.S. financial crisis. Wall Street's "abuse" of financial derivatives and its underestimation of the subprime mortgage crisis ultimately led to bitter consequences.
In fact, as early as April 2007, the bankruptcy of New Century Financial Corporation, the second largest subprime mortgage company in the United States, exposed the risks of subprime mortgage bonds; starting from August 2007, The Federal Reserve responded by injecting liquidity into the financial system to increase market confidence, and the U.S. stock market was able to maintain a high level. The situation did not seem to be very bad. However, in August 2008, the stock prices of Fannie Mae and Freddie Mac, the two giants in U.S. mortgage loans, plummeted, and financial institutions holding the bonds of Fannie Mae and Freddie Mac suffered widespread losses. The U.S. Treasury Department and the Federal Reserve were forced to take over Fannie and Freddie to demonstrate the government's determination to deal with the crisis. But what followed was: Lehman Brothers and Merrill Lynch, the world's two top investment banks with total assets of up to 1.5 trillion US dollars, successively encountered problems. The former was forced to file for bankruptcy protection, and the latter was acquired by Bank of America; the total assets were as high as 1 trillion. American International Group (AIG), the world's largest insurer of the U.S. dollar, is also struggling to survive; while the U.S. government chose to take over AIG to stabilize the market, it was "helpless" to other financial institutions.
If the above phenomena are just concentrated outbreaks of contradictions, then the root of the problem lies in the following three aspects:
First, the U.S. government’s inappropriate real estate and financial policies laid the groundwork for the crisis. Foreshadowing. Home ownership was once part of the American dream. During the Great Depression of the 1930s, domestic demand in the United States was sluggish. One of Roosevelt's New Deal decisions was to establish Fannie Mae to provide housing financing to the people, help people buy houses, and stimulate domestic demand. In 1970, the United States established Freddie Mac, which was comparable in size to Fannie Mae. Although Fannie and Freddie are privately held companies, they enjoy the privilege of implicit government guarantees, so the bonds they issue have the same rating as U.S. Treasury bonds. Since the end of the last century, with loose monetary policy, asset securitization, and innovation in financial derivatives accelerating, the scale of implicit guarantees by Fannie and Freddie has expanded rapidly. The mortgage loans and mortgage-based loans it directly holds and guarantees have Securities backed by collateral exploded from US$740 billion in 1990 to US$4.9 trillion at the end of 2007. In the process of rapid business development, Fannie and Freddie ignored asset quality, which became a "hotbed" for the outbreak of the subprime mortgage crisis.
Second, the "abuse" of financial derivatives has lengthened the financial transaction chain and encouraged speculation. Fannie and Freddie purchase illiquid loans from commercial banks and mortgage companies, convert them into bonds through asset securitization and sell them on the market, attracting investment banks and other financial institutions to purchase them. Investment banks use "superior" financial engineering technology , then divide, package, combine and sell them. In this process, the initial loan of one yuan can be enlarged into financial derivatives of several yuan or even more than ten yuan, thus lengthening the chain of financial transactions. In the end, no one cares about the true basic value of these financial products. This further encourages short-term speculation. But speculation is only the appearance, greed is the essence. Take Lehman Brothers as an example. Its research capabilities and financial innovation capabilities are world-class. No one understands the meaning of risk better than them. However, it cannot escape the fate of collapse. The reason is that the management of Lehman Brothers Employees and employees hold about 1/3 of the company's stocks, and they only know how to speculate crazily to make money, while paying less attention to the interests of other shareholders.
Third, U.S. monetary policy is adding fuel to the flames. In response to the bursting of the dot-com bubble around 2000, the Federal Reserve lowered the federal funds rate 13 times from January 2001 to June 2003. The interest rate dropped from 6.5% to a record low of 1% and stayed at the 1% level. for a year. Low interest rates have prompted American people to invest their savings in assets and banks to issue excessive loans, which directly contributed to the continued expansion of the U.S. real estate bubble. Moreover, the Fed's monetary policy also "induced" the market to form an expectation: as long as the market is in a downturn, the government will definitely rescue the market, so the entire Wall Street is filled with speculation. However, when monetary policy was tightened continuously, the real estate bubble began to burst, and the default rate of the low-credit class first increased. The resulting default frenzy began to sweep all financial institutions eager to make money and ambitious.
Fortunately, due to the relatively cautious pace of my country's participation in globalization, it has largely avoided the direct impact of the U.S. financial crisis; but unfortunately, there have also been several outbreaks of the U.S. financial crisis in our country. The "cause" of the disease deserves our deep reflection.
First of all, although the reform of my country's large state-owned financial institutions has made great progress, in view of my country's special national conditions, we may not be able to solve the problem of the government's implicit guarantees for large financial institutions, but we must continue to strengthen state-owned financial institutions. The degree of transparency in the operations of financial institutions can effectively prevent excessive behaviors of financial institutions, such as excessive relaxation of credit standards and involvement in international speculative activities.
Second, financial derivatives are a double-edged sword. They can play the role of active transactions and transfer risks, and they can also make financial waves with the leverage effect.
Therefore, financial derivatives must be launched in a timely manner within the scope of regulatory capabilities, and must not become a tool for speculators to cause trouble.
Third, monetary policy must take into account asset price fluctuations. In the process of macro-control, the central bank often expresses its resolute implementation of a certain policy, such as anti-inflation, in order to stabilize expectations. However, the "paranoia" of monetary policy will inevitably lead to violent fluctuations in the stock market and housing market prices. The Japanese economic crisis at the end of the last century, the Asian financial crisis and the current US financial crisis were all caused by the sharp bursting of asset price bubbles. Therefore, monetary policy should take into account asset price fluctuations, and the government must take a multi-pronged approach to eliminate the institutional sources of instability.
[Edit this paragraph] The impact of the U.S. financial crisis on the Chinese economy
As we all know, the recent intensifying financial crisis has seriously affected the healthy development of the global economy. From Wall Street to the whole world, From the financial world to the real economy, governments around the world are facing serious economic crises. So what can we see from this crisis? How has our economy and Chinese companies been affected? For us, do Chinese companies have big opportunities or big challenges?
On October 14, a large number of websites specially planned the first issue of the "View the World" event - "The Impact of the US Financial Crisis on the Chinese Economy" and discussed the above issues with industry experts.
First of all, regarding the root cause of this financial crisis, Hou Yucheng, deputy director of the Financial Technology Research Center of the University of International Business and Economics, said that the financial turmoil in the United States eventually turned into a crisis, which was caused by price bubbles. Price bubbles Mainly reflected in the real estate market. The United States is confusing concepts by shifting the problem to financial derivatives. The fundamental problem is that the real estate bubble overexpands, eventually leading to an uncontrollable situation.
In recent years, technological progress and productivity improvements in the United States have led to rapid economic development. However, at a certain stage of its economic development, prices continue to rise to support its overall economic development. It is precisely because of this subtle difference that once a problem occurs in a certain area, the entire price system will collapse.
Dr. Shi Huihong, a researcher at the Financial Policy Research Center of Capital University of Economics and Business, believes that the root cause of the financial crisis lies in the financial mechanism of the United States, that is, credit derivatives. The principal and benefits of ordinary bonds can be expected. , after derivation, the principal changes and the interest rate also changes. For example, interest rates can be linked to exchange rates, and interest rates can be linked to many factors, which further magnifies risks. Especially for futures, when the interest rate is high, the number of losses becomes astronomical, which divides the entire economy into two poles, with huge profits on one side and huge losses on the other, and the economic system cannot be balanced.
Faced with this situation, governments around the world are currently trying their best to reverse the financial crisis, but how effective is it? Hou Yucheng said that including all current capital injections in Europe and the United States, including the establishment of various funds, the purpose is mainly to stabilize the market. On the whole, no substantive action has been taken. The purpose is to unite central banks of various countries to give market confidence, and first let the The financial system is stable and allows the real economy to operate normally.
Talking about the current impact of the financial crisis on China's economy, Hou Yucheng believes that its main negative impact is on my country's foreign trade exports and financial fields, but from another perspective, whether it is the macroeconomic aspect or the development of small and medium-sized enterprises , this crisis may be a huge opportunity - forcing my country's export structure to upgrade, which requires macro decision-making to provide buffer opportunities for my country's small and medium-sized enterprises and large exporters.
Lian Jie, investment manager of the investment management headquarters of China Galaxy Investment Management Co., Ltd., said that in China's current environment where independent motivation is insufficient, the living environment is becoming increasingly harsh, and it can only be born in the process of industrial upgrading and industry integration. Create a stronger enterprise. On another level, industries supported by rigid domestic demand are very worthy of attention. Our current domestic demand is not growing fast, but this growth is basically rigid and will not suddenly turn into negative growth, such as agriculture and fast-moving consumer goods. These are very good. investment opportunities.
Hou Yucheng believes that under the current economic situation, we can strengthen attention to domestic demand on the basis of stabilizing or minimizing the impact of exports. From the recently held Party Congress, we can find that the start of domestic demand, or the Manufacturing may become the major economic policy direction of our country in the next stage. As for agriculture and even the overall fields related to agriculture, it may be a point for my country to strengthen the development of domestic demand in the future. In the next step, our country is likely to provide appropriate support and promotion in the science and technology industry. On the one hand, we will develop the scientific and technological foundation, and on the other hand, we will try to create new consumption hot spots in this field.
What kind of industries can develop well in this crisis, and how can companies survive this crisis? Experts made suggestions for small and medium-sized enterprises:
Hou Yucheng: Small and medium-sized enterprises must make major changes and improvements in their ideas for future development. This year and even in the future, the simple intensive and low-cost production model in the past will gradually encounter development bottlenecks. This requires the future development of my country's small and medium-sized enterprises to prepare for two aspects. First, first, the technology of small and medium-sized enterprises needs to be improved and Prepare. Secondly, the future development of my country's small and medium-sized enterprises, especially export-oriented small and medium-sized enterprises, needs to be equipped with talents who are familiar with the economic and financial fields.
Lian Jie: When talking about the development of small and medium-sized enterprises, there is one point that needs to be mentioned, which is China’s financial environment. As China's financial environment overall lags behind the development of the real economy, there are opportunities for the financial industry. The financial industry will also produce many types of small businesses in the future, and they may live a good life. When investment companies select companies, they consider several factors in practice. The first is industry space. Even if it ranks first, there is only one million room for growth in the industry, so it will not be considered; the second is industry barriers, which restricts competition. Factors and design barriers prevent the latter from catching up or even easily entering this field to compete, which is very valuable.
Regarding the issue of transformation of small and medium-sized enterprises, Shi Huihong believes that on the one hand, they can rely on their own strength, and on the other hand, they need to rely on external forces. Some governments should take responsibility for external forces. Whether it is foreign or domestic, the development of small and medium-sized enterprises often requires The government must provide corresponding policies, otherwise small and medium-sized enterprises will be very passive in competing with large enterprises. Hou Yucheng believes that small and medium-sized enterprises must start from their own development and cannot pin their development hopes entirely on the country. Whether it is China or internationally, the survival of the fittest is a normal phenomenon.
Finally, when the three experts talked about when Chinese companies will break through the financial crisis, they said: Under the current situation, small and medium-sized enterprises must actively expand other markets outside the United States, including the African market and the European market. , and even the Asian market, through crisis training, will improve its competitiveness with international companies and its ability to develop international markets. It will continue to improve its own strength. The pace of progress cannot be stopped. Opportunities will eventually come.
[Edit this paragraph] Global response to the financial crisis
Recently, the European Union introduced a large-scale economic stimulus plan totaling 200 billion euros, which includes expanded public spending, Three major measures to boost the real economy include tax cuts and interest rate cuts.
This is just one of the many economic stimulus policies recently introduced by the world's major economies in response to the spread of the financial crisis to the real economy. In November, as the impact of the international financial crisis on the real economy gradually emerged, the response goals of the world's major economies also shifted from focusing on the financial market to rescuing the real economy, and launched a thrilling rescue operation.
Countries are working hard to protect the real economy
Data released in November show that after Japan admitted that its economy has fallen into recession after two consecutive quarters of decline, the euro zone has entered its birth. This is the first recession period in history, and many economic indicators in the United States have deteriorated to the worst extent in 30 years. They are also on the verge of recession. The slowdown in economic growth in emerging markets has become a fact.
From North America to Europe to the Asia-Pacific region, in the past month, a series of global economic stimulus measures have been introduced in response to the financial crisis. These rescue measures are another round of rescue measures taken by various countries to target the real economy after rescuing the virtual economy.
On October 30, the Japanese government announced an economic stimulus package totaling 26.9 trillion yen (approximately US$273 billion) to prevent the global financial crisis from causing further negative impact on the Japanese economy; 11 On March 25, the U.S. Federal Reserve announced that it would invest US$800 billion to thaw the consumer credit market, housing mortgage credit, and small business credit markets...
"Judging from the global rescue measures in November, countries are currently The treatment of the crisis has moved from the stage of injecting liquidity and improving the solvency of financial institutions to the third stage of stimulating the economy. "Huang Haizhou, a financial expert at CICC, believes that the treatment measures in the third stage are all based on encouraging investment. We should start from the aspects of stimulating the economy such as consumption and promoting employment to prevent the collapse of the real economy.
"At the beginning of the crisis, the rescue measures taken by various countries for the financial market could only 'rescue' and 'treat the symptoms', but not the 'root cause'." Sun Jie, researcher at the Institute of World Economics and Politics, Academy of Social Sciences Said, "With the impact of the current international financial crisis on the real economy difficult to estimate and the economic growth of various countries facing many uncertainties, it can be said that it is timely for governments to introduce more specific measures to promote the growth of the real economy."
In response to the crisis, China implemented vigorous and resolute regulation
As the international financial crisis continues to spread to the global real economy, China, which relies on foreign trade for more than 60%, is increasingly affected. Statistics show that China's economic growth has slowed down for five consecutive quarters, and this year's GDP growth has also dropped from 10.6% in the first quarter to 9.9% in the third quarter. Zhang Ping, director of the National Development and Reform Commission, recently admitted that some domestic economic indicators accelerated their decline in November.
"In order to curb the rapid decline of economic growth, we must take relatively strong and effective measures." Zhang Ping said.
In response to the adverse impact of the international financial crisis, the Chinese government has vigorously and intensively introduced large-scale regulatory measures since November, launching a race against time to overcome the adverse impact of the financial crisis. The whirlwind operation of the race sent a strong signal to the outside world to cope with challenges, overcome difficulties, and strive to maintain growth.
On November 9, the Chinese government announced the implementation of a moderately loose monetary policy and a proactive fiscal policy, and introduced ten major measures to expand domestic demand and promote growth with an investment scale of 4 trillion yuan; in November On the 12th, the State Council executive meeting decided to introduce four implementation measures to expand domestic demand and promote growth; on November 19, the State Council executive meeting studied and determined 6 policies and measures to promote the healthy development of the light textile industry, further increasing support and helping Textile enterprises overcame difficulties and weathered the storm; a week later, the People's Bank of China announced a substantial interest rate cut, the largest adjustment in 11 years; on November 28, the Political Bureau of the Central Committee of the Communist Party of China held a meeting and proposed to maintain economic stability. Rapid development will be the top priority for economic work next year.
People from all walks of life said that such a large-scale and efficient measure is not only a response to the international and domestic economic challenges faced by China, but also a concrete action to strengthen international cooperation and ensure world economic growth.
The international community also gave positive comments. Australian Prime Minister Kevin Rudd believes that China's economic promotion plan of approximately 4 trillion yuan is "extraordinary" and is "very good" news not only for the Chinese economy, but also for the East Asian economy and the world economy.
Strengthening cooperation with the global government to overcome the current difficulties
Leaders of various countries realize that global crises require a global response. While major economies have successively introduced measures to stimulate the economy and stabilize the market, the world has strengthened cooperation. It has gradually become the common sense of all countries to jointly resist the international financial crisis. A series of meetings have been held to seek dialogue and cooperation in response to the crisis. Held successively:
On November 8, the 2008 Annual Meeting of Finance Ministers and Central Bank Governors of the Group of 20 opened in Sao Paulo, Brazil; on November 15, the Group of 20 Leaders’ Financial Market and World Economic Summit Held in Washington; from November 22 to 23, the 16th Asia-Pacific Economic Cooperation (APEC) Leaders’ Informal Meeting was held in Lima, the capital of Peru.
In the declaration, the G20 Financial Summit once again emphasized the importance of "the participating countries are determined to strengthen cooperation and strive to restore global growth." The most important outcome of the meeting was that all parties involved reached an agreement on the next steps to respond to the financial crisis. The leaders of the Group of 20 promised to take joint actions and use monetary and fiscal policies to respond to global macroeconomic challenges.
The APEC meeting issued a joint statement in response to the financial crisis, promising to cooperate closely and take further comprehensive and coordinated actions to deal with the current financial crisis. It stated that it will take all necessary economic and financial actions to strive to overcome the financial crisis within 18 months.
“These meetings all emphasized that the world must strengthen cooperation and jointly resist the financial crisis.” Zhang Ming, an expert at the Institute of World Economics and Politics of the Academy of Social Sciences, believes that in today’s era of globalization, the impact of crises on the economy The impact of the epidemic is global, and the treatment of the crisis also requires global means.