What was the subprime mortgage crisis in the United States in 07

How did the United States respond to the subprime mortgage crisis in 2007?

The U.S. subprime mortgage crisis began in 2006, erupted in 2017, and did not stop until 2009. The subprime mortgage crisis generally refers to the subprime mortgage crisis in the United States, which refers to the financial turmoil in the United States caused by the bankruptcy of subprime mortgage institutions, the forced closure of investments, and the drastic.

Extended Material: Causes of the Subprime Mortgage Crisis.

1. It is mainly caused by the lack of a financial regulatory system and the loopholes of Wall Street speculators who take advantage of the loopholes in the system to deceive and deceive the public. One of the root causes of the crisis lies in the neoliberal economic policies that the United States has accelerated over the past three decades.

2. The so-called neoliberalism is a set of trends of thought that takes the revival of traditional liberal ideals and the reduction of economic and social intervention as the main economic policy goals. The neoliberal economic policy of the United States began in the early 80s of the 20th century, and its background was the economic stagflationary crisis of the 70s of the 20th century. Its contents mainly include:

Reduce intervention in the financial and labor markets, crack down on trade unions, and implement economic policies that promote consumption and promote high growth with high consumption. First, in order to promote economic growth, we should encourage people to make ends meet and spend like crazy.

3. Liberal economic theory has always attached importance to promoting production and economic development through consumption. Adam Smith said that "consumption is the sole end and purpose of all production." Schumpeter argued that the capitalist mode of production and consumption "stems from a high degree of secularization characterized by urban hedonistic life," i.e., they believe that extravagant consumption ostensibly promotes production.

Second, there is a serious imbalance in the social distribution relationship, and the income of the middle class has fallen instead of rising. Over the past 30 years, a strange phenomenon has emerged in American society. On the one hand, the American people are spending ahead of their time, and on the other hand, the income of the average person has been declining.

According to statistics, after adjusting for inflation, the average hourly wage in the United States is only the same as it was 35 years ago, and men in their 30s earn 12% less than their peers 30 years ago. More of the fruits of economic development are flowing into the pockets of the rich. Statistics show that the income gap between rich and poor in the United States has been widening in recent decades.

The rapid development of the US economy, but the lack of an increase in income, is closely related to the neoliberal policies of Ronald Reagan since he came to power in the early 80s of the 20th century. Third, there is a serious lack of supervision in the financial industry, which induces ordinary people to consume in advance and speculate in the market through borrowing.

4. An important part of liberalism is deregulation, including financial regulation. Since Ronald Reagan came to power in the early 80s of the 20th century, the United States has been relaxing restrictions on the financial sector by enacting and amending laws to promote financial liberalization and so-called financial innovation. For example, in 1982, the U.S. Congress passed the Gahn-Saint-Germain Savings Institutions Act, which gave savings institutions a similar scope of operations to banks, but were not regulated by the Federal Reserve.

Under this law, thrifts can buy commercial paper and corporate bonds, issue commercial mortgages and consumer loans, and even buy junk bonds.

The subprime mortgage crisis in the United States was 2006. The U.S. subprime mortgage crisis began to manifest itself in 2006, began to erupt in 2017, and did not stop until 2009. The subprime mortgage crisis in the United States is also known as the subprime mortgage crisis, which is also translated as the subprime crisis.

The U.S. subprime mortgage crisis refers to a financial turmoil that occurred in the United States due to the bankruptcy of subprime mortgage lenders and the forced closure of investments. <

The subprime mortgage crisis in the United States was 2006. The U.S. subprime mortgage crisis began to manifest itself in 2006, began to erupt in 2017, and did not stop until 2009. The subprime mortgage crisis in the United States is also known as the subprime mortgage crisis, which is also translated as the subprime crisis.

The U.S. subprime mortgage crisis refers to a financial turmoil that occurred in the United States due to the bankruptcy of subprime mortgage lenders and the forced closure of investments.

The time of the subprime mortgage crisis in the United States was 2007. In an era of rapid development of financial markets, the development of capitalism meets the economic cycle. Therefore, capitalism will enter a period of recession after a certain period.

Just like the subprime mortgage crisis in the United States in 2007. The subprime mortgage crisis refers to the fact that in 2007, the New Economy Finance Corporation in the United States issued a profit warning for the fourth year of 2006.

This news led to a sharp drop on the day, which led to a series of serious consequences, such as the bankruptcy of companies, the failure of banks, the loss of more than half of the people, and so on. This led to the subprime mortgage crisis, which had a great impact on the U.S. financial market.

Effect. Since the outbreak of the subprime mortgage crisis in August 2007, it has had a great impact on and damaged the international financial order, resulting in a strong credit tightening effect in the financial market and exposing the systemic financial risks accumulated in the international financial system for a long time. The financial crisis caused by the subprime mortgage crisis was the most serious financial crisis in the United States since the "Great Depression" in the 30s of the 20th century.

The subprime mortgage crisis, which originated in the United States, is spreading around the world, and the global financial system has been significantly affected, and the crisis has hit the real economy. China has also been affected by the subprime mortgage crisis.

Excessive innovation in financial instruments, distorted interests of credit rating agencies, and deregulation of monetary policy are the main causes of the subprime mortgage crisis in the United States. Although the response measures taken by the United States**, such as large capital injections, continuous interest rate cuts and direct intervention, have achieved certain results, they have not fundamentally solved the problem.

The enlightenment brought to us is that financial regulation and control policies must conform to the economic situation and the law of cyclical fluctuations; It is necessary to promote the innovation of financial products and their systems on the basis of strengthening financial supervision and improving risk prevention mechanisms; We should seize the favorable opportunity to encourage mergers and acquisitions of overseas assets, optimize the structure of overseas assets, and diversify the risks of overseas assets.

Clause. 1. The subprime mortgage crisis mainly affected China's exports.

The impact of the subprime mortgage crisis on the Chinese economy cannot be ignored due to the slowdown in the US economy and global economic growth, and the impact on exports is the most important. In 2007, due to weak import demand from the United States and Europe, China's monthly export growth rate has declined from February 2007 to December.

Clause. Second, China 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 China's exchange rate risk and capital market risk.

In response to the negative impact of the subprime mortgage crisis, the United States adopted an accommodative monetary policy and a weak dollar exchange rate policy. The sharp depreciation of the US dollar poses significant exchange rate risks to China.

The difference between a subprime mortgage crisis and a credit crisis is as follows:

1. Different definitions: The subprime mortgage crisis refers to the panic and crisis in the international financial market that began in the summer of 2007 caused by the sharp increase in defaults and credit crunch in the subprime mortgage industry in the United States. The Noya Shed credit crisis is that the person who takes a loan in the subprime credit market can take the opportunity of rising housing prices to fill his credit, but the difference in the price is in between, so the lender has a credit crisis.

2. The basis is different: the credit crisis is based on the assumption that housing prices are constantly **. When the housing market is hot, banks can take advantage of this to obtain high interest income without worrying about risks; The subprime mortgage crisis was the 17th consecutive rate hike by the US Federal Reserve, raising the federal ** interest rate from 1% to 5 25%.

Interest rates have risen sharply, increasing the burden of repayment for home buyers.

3. Different harms: The subprime mortgage crisis has caused great impact and damage to the international financial order, resulting in a strong credit tightening effect in the financial market, and exposing the long-term accumulation of systemic financial risks in the international financial system. The credit crisis had little impact on China's economy and had some impact on the global economy, causing global turmoil as domestic U.S. banks passed on the subprime lending risk to foreign investment banks, leading to a decline.