"Dad... I went to school. ”

"Dude... I went to practice, and that... Give some pocket money, my mother killed me. ”

"Seriously... I went to the supermarket with your dad, breakfast is on the table, remember to eat it when you wake up, ah... By the way, you can deliver the share of the minibus. ”

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This was originally a very dull day, but when Li Zhengyan sat down at the table for breakfast, a piece of Jingbei news caught Li Zhengyan's attention.

This news is very simple, the owner of a community jumped from the 24th floor of the top floor of his community, but the reason for this jump has attracted Li Zhengyan's attention, what is the reason?

The stock investment failed, and then the family went bankrupt, and finally had no choice but to go to the rooftop.

And this incident suddenly made Li Zhengyan want a terrible thing, if this thing happened, then there would be countless people in Xia Kingdom who would go to the rooftop.

This is the global financial crisis.

In Li Zhengyan's memory, the trigger for the global financial crisis was the bankruptcy of Citibank.

Citibank is a full-service, diversified investment bank in the United States that serves the financial needs of corporations, institutions, governments and investors around the world.

The Bank's financial strength underpins its leadership position in the areas in which it operates, and it is one of the world's leading underwriters and dealers of equities and bonds. At the same time, the company also serves as an important financial advisor to many multinational companies and governments around the world, and has a number of internationally recognized best analysts in the industry. The company prides itself on the long-term, mutually beneficial relationships it has built with its clients in helping them succeed, some dating back nearly a century.

But it was one such bank that fell into a subprime mortgage crisis.

What is the subprime mortgage crisis, in fact, this explanation is very complicated, and then to put it simply, the United States many years ago, brokers began to weaken, and then the Federal Reserve lowered the federal benchmark interest rate (interest rate cuts) many times in order to reduce unemployment and boost the economy.

Traditional fixed-income products such as bonds have low yields after lower interest rates, and equities are experiencing a post-crash downturn. There was nowhere to invest the money in everyone's hands, so they turned to real estate, which had been in the doldrums for a long time. This is the beginning of the story when house prices start to rise.

All the money was invested by the wealthy into real estate developers, and then the banks launched a mortgage-backed bond that was a product of mortgage securitization. Now the bank holds a number of mortgage loan contracts, which will regularly bring a certain amount of cash flow to the bank, that is, the repayment of the loan to the buyer.

Everyone saw that mortgage-backed bonds had high yields and were stable (relative to other products), so they rushed to buy mortgage-backed bonds, and the banks' products sold out quickly. The federal funds rate is very low, and there is a lot of liquidity in the bank, so the bank decided to issue more loans, and the sub-prime customers who did not issue loans (such as Wang, who just worked in a convenience store for half a year), can now get loans to buy houses.

In the beginning, the story was beautiful, the bank made intermediate fees, management fees and interest rate differentials, the rich investors got a stable investment income, and the poor took out loans to buy houses. Occasionally, a few people don't repay their loans, because housing prices have been rising, and the bank just takes the house back for auction, and the bank feels that there is no risk.

As a result, banks are getting bolder and bolder, and interest rates have been falling, so anyone can get a loan to buy a house. The original down payment was 30%, and proof of income was required, but now the down payment is 5% or even 0 down payment, and you can get a loan by standing on the street and taking a photo. The house bought with a loan can also be mortgaged and refinanced to buy a second home. Mortgage-backed bond products have also always been selling well, and banks have further developed CDOs, aka, collateralized debt obligation, based on mortgage-backed bonds. A real estate bubble arose against the backdrop of excess liquidity.

But suddenly one day, the Fed felt that the housing bubble was too big, and at this time, the American economy was basically recovering, so the Fed began to raise interest rates continuously to curb inflation and economic overheating. When interest rates rise to a certain level, those subprime lenders will not be able to repay their loans, partly because of increased repayment pressures, and partly because of tighter monetary policy, which has reduced employment and rising wages. The market is starting to sour, and in the beginning, it's just that more and more subprime loans are defaulting. At this time, housing prices were already very expensive, and no one was willing to take over, and the bank held a large number of houses in their hands to go to auction, but the market suddenly oversupplied, and housing prices plummeted. As the house price falls, what should you do as a landlord?

Speaking of customers with high solvency, they took out a loan of 1 million dollars to buy a suite, and then just repaid the loan for a year, the house price suddenly dropped by 25%, and the original 100w house is now only worth 75w and it looks like it will continue to fall by 50% next year. Anyone with a normal brain will feel that they have lost money. So they voluntarily defaulted, demanding that the bank take back the house and refuse to continue to repay the loan, even if I was able to repay the loan, that is, forcibly defaulted. Now the banks have more houses, and house prices have fallen even more.

At this time, the mortgage loan contract on which the mortgage-backed bond is relied on has defaulted on a large scale, and now the bank can't get the money at all, only a batch of rotten houses in their hands, and the customer who buys the MBS subordinated product first loses money, then the sub-optimal grade, and even the least risky superior grade can't get the principal in the end. Mortgage-backed bond crash. The plate was so big that I thought it was a dinner plate that fell but it turned out to be a grinding plate... If you can't catch it with the strength of one country, you can only finish it all over the world.

Banks that issue loans, people who deposit money with banks, institutions and individuals who buy mortgage-backed bonds, and institutions and individuals who invest in mortgage-backed bond derivatives suddenly don't get money. As a result, New Century Finance went bankrupt, Hongqi Bank went bankrupt, Besden went bankrupt, and the two houses applied for bankruptcy protection.

Institutions and individuals who handed over the money to Hongqi Bank and Liangfang for investment panicked, and their principal was gone. The market panicked, the market's risk tolerance plummeted, everyone began to demand to recover the funds, repay the loan early, and the whole market was stagnant.

This is the subprime mortgage crisis....!

Don't think that this happened in the United States and therefore has no impact on Xia, on the contrary, the subprime mortgage crisis will soon form a global financial turmoil, and Xia will face the dual pressure of slowing economic growth and severe employment situation.

The real economy, especially industry, is under tremendous pressure. The closure of a large number of small and medium-sized processing enterprises has also exacerbated the grim situation of unemployment.

Finally, the subprime mortgage crisis will increase the exchange rate risk and capital market risk in Xia.

This financial turmoil will lead to countless Xia people on the rooftop, this is the bitter fruit of the dog's day of the United States, they have long prevailed in advanced consumption, encouraging people to buy houses, buy cars, buy high-end consumer goods, banks in pursuit of high profits, to residents such and such credit cards, encourage advanced consumption. "Enjoy today with tomorrow's money". "Let the dream come early, let the dream come true. "Being able to earn and spend is the pride of the times." To put it bluntly, this kind of advanced consumption has also brought temporary prosperity for several years. However, this kind of behavior of advancing future purchasing power is, after all, "eating more than we eat", there is a bubble, a temporary prosperity, and it has an illusory color. Once the economy is in a recession, there are a large number of unemployed, the arrears are not paid, the ability of consumers to pay drops sharply, and the subordinated debt of the United States is highlighted in front of the world, and finally a terrible financial storm is formed!

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