Subprime loans have pushed up Americans' excessive spending power. Due to excessive consumption, the US government has become the largest indebted institution, and the US financial system has also become the largest indebted financial institution. Four or five million American families have become indebted families. If it continues, it will definitely lead to the crisis of the US dollar and the deterioration of the US economy. The final outcome can only be the complete collapse of the American debt system, the complete loss of excessive consumption power and the real return of real consumption power.

The financial crisis broke out in the United States, and the bursting of the property market bubble has always been regarded as the culprit. However, GaveKal, an investment consulting company, believes that there are five reasons for this financial tsunami: the loss of credit rating agencies' credibility, the slow response of the Federal Reserve, the failure of US Treasury Secretary Paulson's rescue measures, the stupid bank accounting system and the lax supervision of investment banks' leverage, which are even more critical than the decline of the property market.

GaveKal's latest Special Review pointed out that the first factor that caused the current crisis was that market participants lost confidence in rating agencies such as Standard & Poor's and Fitch, just as investors lost trust in accounting companies after Enron scandal. The credit rating of rating agencies is the main indicator of this product pricing. After the subprime mortgage crisis broke out last year, rating agencies were accused of misjudgment, giving high ratings to high-risk subprime mortgage assets, and being slow to respond to the crisis before downgrading the rating after the accident. GaveKal pointed out that the loss of credibility of credit rating made investors unwilling to take risks in the credit market.

The credit rating is lost and the reserve bank is slow to respond.

The Fed system realized the seriousness of the problem too late, which is the second factor that caused the current predicament. Until the financial tsunami broke out in an all-round way last month, the Federal Reserve kept curbing inflation as its primary goal. However, GaveKal believes that the so-called "inflation" faced by the United States a while ago is actually "fake inflation", which is only caused by China's hoarding of goods to meet the production needs in the coming year.

The third "culprit" of the American financial crisis is the accounting system that requires financial institutions to calculate the market value of assets. GaveKal described this method of calculating the price of securities or portfolios based on market value as the "stupidest" system.

Stupid accounting system brought down financial institutions.

GaveKal pointed out that the core operation mode of the banking industry is to convert short-term deposits into long-term debts, which are difficult to value. In the face of the financial crisis, many institutions were forced to sell their assets at low prices for financing, but as a result, all financial institutions were required to book at low prices, which led to huge losses in all financial institutions quarter after quarter, and their share prices naturally fell sharply. In this way, almost all financial institutions have to raise funds from outside to fill the shortage of funds. But when the stock price plummets, who wants to invest in stocks? Eventually, it evolved into an abyss in which one financial institution after another was on the verge of bankruptcy.

The capital level of the five major investment banks has been loosened.

GaveKal believes that the US Securities and Exchange Commission (SEC) relaxed the restrictions on the capital level of the five major investment banks on Wall Street in 2004, which also laid a curse for the financial crisis. That year, the SEC raised the net capital requirements of large investment banks, allowing them to increase the ratio of liabilities to net capital. After the liberalization of investment banks, operating leverage soared from 10 times to dozens of times before the explosion, much higher than ordinary commercial banks. But at the same time, the authorities did not provide investment banks with capital flow channels. Before the explosion of Bear Stearns in March this year, investment banks that did not accept the supervision of the Federal Reserve could not borrow from the Federal Reserve through the discount window like commercial banks, but only relied on issuing commercial paper to the market for financing. When people are timid, the commercial paper market naturally comes to a standstill, which makes investment banks cut off water.

Paulson's bad market is at a loss.

GaveKal pointed out that the fifth major cause of the financial tsunami was the poor performance of US Treasury Secretary Henry Merritt Paulson. Anatole Kaletsky, chief economist of GaveKal, believes that many of Paulson's decisions not only did not alleviate the crisis, but made the problem worse. Kaletsky believes that Paulson's takeover of Fannie Mae and Freddie Mac sent the wrong message to the market. On the one hand, long-term investors who invested $20 billion in Fannie and Freddie in the past 12 months lost their blood, while others who are interested in investing in American financial institutions stopped; On the other hand, the speculators who attacked Fannie Mae and Freddie Mac succeeded, making people think that as long as they can shake the American financial market and force the government to take action, they can make huge profits. Later, when Paulson refused to lend a helping hand to Lehman Brothers, the market felt even more at a loss, not knowing which institutions would be saved and which would go bankrupt.

GaveKal described Paulson as "kneeling on one knee" to Speaker of the House of Representatives Pelosi in order to save the bailout plan, and the sluggish consumer confidence in the United States may force him to kneel on the other foot.

GaveKal concluded that the clumsy rescue action of the US Treasury Department aggravated the crisis facing the banking industry. Past experience shows that whenever there is a banking crisis, deflation follows. As banks are an integral part of the credit market, the banking crisis has plunged the credit market into chaos and filled it with opportunities. However, GaveKal believes that under the current situation, it is feasible for investment to become a gamble of government policies, such as the US plan to rescue financial institutions. Has the European Central Bank finally realized the seriousness of the European economic slowdown? Will China policymakers loosen monetary policy to prevent the real estate market from further declining? These are unpredictable things.