Next wave crisis or will detonate

This newspaper reporter Yangchangkai February 2008, the U.S. state-owned 10.3% of the total of about 8.8 million households in the mortgage exposure to negative equity risk, the figure is more than a year ago, the value of negative equity mortgages amounted to about 2.6 trillion dollars. In the context of continued interest rate hike, housing prices fell, real estate mortgage refinancing channels blocked, high interest rate of subprime mortgage users because they can not afford to increase interest and began to go bankrupt.　　The bankruptcy of the new century Financial company, the second largest subprime mortgage company in the United States, was the trigger for the crisis, which was eventually detonated. As for the root of the global financial crisis, Dr. Zhu Min, deputy governor of the People's Bank of China, said: "One, global liquidity surplus; second, economic finance and securitization; third, the rapid growth of foreign exchange market and exchange rate fluctuations; iv. The dollar became a super financial hegemony; seven, the wealth is highly concentrated; viii. global economic and financial imbalances. "The crisis is spreading from January 2001 to 2004, the benchmark U.S. interest rate dropped from 5.98% to 1%, the real estate market began to expand rapidly, the subprime mortgage market is unprecedentedly hot." The size of Fannie Mae and Freddie Mac reached its peak in 2003, and commercial banks began to adopt a more relaxed vetting process for competitive pressures.　　In order to obtain liquidity and diversify the risk, the loan bank will securitization the mortgage loan, sell it to the investor, and obtain the fee income and the securities premium income. 2002-2005 in the low interest rate environment, the real estate market is very hot, temporarily cover the root causes of the crisis, because the housing appreciation, low repayment pressure.　　When the Fed's interest rate rose to around 5% in 2006, house prices began to fall, mortgage-backed mortgages fell, and borrowers ' repayment pressures increased and they could not afford to default, a risk that began to come to light, as the late-payment rate for US subprime mortgages increased markedly after the crisis erupted. After the financial crisis began, all the governments of the world began to mobilize urgently, aware of the dangers and began to bail out. Dr. Zhu summed up the policies of the world's governments into 10. The first is to cut interest rates, which began two years ago; second, the flow of liquidity to the market, the central banks of various countries to open the window, so that national commercial institutions directly to the central bank to borrow money, and from limited to unlimited, there are mortgages to unsecured, recycling, trillions of of dollars have entered; third, to curb short-selling and prevent the stock market from falling; (a) direct injection of capital into financial institutions; the government buys "toxic" assets, seven, helps mortgage lenders, eighth, finances and guarantees to small and medium-sized enterprises; and Nineth, a massive fiscal-deficit programme;　　Through the International Monetary Fund to some affected areas, such as Hungary, Ukraine, Iceland and other regions to help prevent the spread of the financial crisis. After the government issued these 10 measures, Dr. Zhu said that the following problems have been solved. First, becauseFor the Government to guarantee unlimited housing mortgage loans, so as to avoid a run of things happen. A bank is a confidence industry, and once a run has a serious effect. In the 2008, the subprime crisis in the United States, the Bank of England has not happened in the past 158 years of run events, caused a huge political crisis in the country, in Hong Kong, also occurred in the Bank of East Asia runs, are very nervous, so the government immediately out of the face of the bank guarantee, Whether the bank goes bust or not, the bank's money is in the government, and the financial crisis is mostly about turning from a financial crisis into a social crisis to a political crisis; If big banks are constantly failing and bankrupt, live every day in the credit risk, the market will be out of control, because liquidity risk and market risk is controllable, for Chinese enterprises, there is no liquidity problem, but if credit risk is included, and all the world's enterprises, institutions generate countless borrowing, derivative products, Bond holdings and so on, everyone wakes up early to worry about who will be the next failing bank, and the market will collapse.　　Because of the massive injection of capital, now the world's major banks will not be closed down, credit risk is not, it is vital that only deal with market risk and liquidity risk, which will be much better third, liquidity problems eased and some small countries to resolve the debt. It is also important to have problems that have not been resolved. Dr. Zhu talked about his point of view. 3.2 Trillion of the losses have not been written off, 12 trillion U.S. dollars PPIP programme implementation difficulties, 2.8-4 trillion U.S. debt, the source of the bailout funds. Whether raising taxes, issuing money or issuing Treasuries to raise bailout funds, the government cannot get out of the dilemma　　4.2 Trillion of deleveraging affects corporate finance; the decline of real estate; Europe's banks are more vulnerable, the real economy is slipping, all the major economies in the US and Europe are in recession, growth in emerging economies is slowing, the global economy is in recession in 2009, and a possible currency crisis in Eastern Europe. The stability of the market, the rebound in equities and the easing of liquidity do not mean the crisis is over, says Dr Zhu. According to Prof Roubini, a New York University professor, the financial crisis could cost about 3.2 trillion dollars. So far, the world's financial institutions to write off the bad assets is only 1.42 trillion U.S. dollars, and 2 trillion of dollars of non-performing assets pending write-off. 1.4 trillion of dollars of bad assets write-off, has made the global financial industry so rattled, if the write-off of 2 trillion of dollars, the world who still have money?　　This is a fundamental problem. Dr Zhu said that the most fundamental problem of the financial crisis was the bank's non-performing loans, which could only be revived if the banks ' non-performing assets were all written off.　　He stressed that in the context of the 2 trillion dollar non-performing assets still to be written off, further volatility in world financial markets would be unavoidable. The crisis changes the future Dr Zhu said: "The first is the change in the financial sector." After the crisis, global stock markets in the financial sector fell 60%, and financial firmsThe market value of the industry has fallen by more than 60%. The entire financial sector is shrinking, and the Golden Age is past. In the miniature of scale, a series of changes have been made, such as change of regulation, change of investment bank model, change of commercial bank model, and second, change of global monetary system. This crisis has made us realize that a single dollar global monetary system and floating exchange rate system are challenged, but at the same time recognize that the dollar is not replaced, which is one of the biggest puzzles of the global monetary system today, the biggest problem of the global monetary system is to see the problem without solution, So the global monetary system will still be very bumpy and very volatile in the future, because the exchange rate is determined by the market, so the fluctuation of exchange rate will be very large; third, global economic growth and economic structure change. GDP growth in the world is around 1.1 this year, and China can sustain growth of 7 to 8 per cent, and the contribution of China's GDP growth to world GDP growth could reach 50% to 60% this year. This is the first time that China has become the world's only growth country since 1945. "In the past 10-15 years, the growth of the financial industry has led and driven the growth of the global economy." But it is also the source of the subprime crisis and bubbles. Today, global equities are down 60%, and financial firms have lost more than 60% of their market capitalisation. The entire financial sector is shrinking, and the golden Age of finance is over. What is the next leading economic and financial industry? Dr. Zhu said that the broad green industry, including alternative energy and clean energy, the development of existing energy technologies and new materials, including nanotechnology and various ceramic materials, chemical raw materials, and so on, climate change and environmental protection, water resources and protection of water, water-saving related products, will become an important aspect of production and management in the next period. 　　Traditional consumption and traditional products will also be an important driving force for the next global economic growth. "In the broad sense of green industry investment in the field, China's space is huge, it can be said to be infinitely broad, this is the direction of future development." 2009 will be the world's most turbulent economy and a year of risk and opportunity. "said Dr. Zhu.