Financial crisis, my "baked wheat cake"
1. Party A and Party B sell baked wheat cakes, and each person produces 20 baked wheat cakes every day at a price of one yuan. The daily output value is 40 yuan, with a profit of 20%, and each person earns 4 yuan every day;
Second, under the favorable sales trend, the company changed its stall into a storefront, with a loan of 20,000 yuan, its own funds of 1 10,000 yuan, and hired two workers to advertise, which greatly increased the output of scones. Each company produced 100 yuan every day, with a profit rate of 20%, and earned 20 yuan every day.
Third, in order to expand the market, but also for commercial competition, loans are introduced into the assembly line, and the price remains unchanged. The output of baked wheat cake has increased by 10 times, and each family produces 1000 yuan a day, with the same profit, and each person earns 200 yuan a day-with the help of financial capital.
Fourth, on the one hand, enhance the taste of sesame cakes and pay attention to the distribution of nutritional value, expand marketing and expand export markets. In order to achieve the purpose of listing or marketing, Party A and Party B buy from each other (Party B 65,438+00,000, Party B 65,438+00,000), and the output value of each company changes from 65,438+0000 to 65,438+0000, and then one biscuit is bought and sold from 5 yuan.
5. The selling price became 2 yuan. It's said that sesame seed cakes are sold in 5 yuan for 1 yuan. When I saw that the baked wheat cake was only 1 yuan in the market, I quickly bought it. When the price of baked wheat cake rose to 2 yuan, it was still in short supply-inflation and bubble economy came into being.
6. When consumers see the opportunity to increase the price of sesame cakes, they will flock to buy them-herding effect.
Seven, the spot biscuits are not enough, buy futures biscuits, and the cash is not enough to mortgage (using biscuits to mortgage)-general mortgage.
Eight, borrowers with poor credit and low income also want to do-subprime loans, credit expansion.
(Many investment banks use 20-30 times leverage in order to make huge profits. Suppose Bank A has its own assets of 3 billion, and its leverage of 30 times is 90 billion. In other words, this bank A uses 3 billion assets as collateral and borrows 90 billion for investment. If the investment gains 5%, then A will gain 4.5 billion yuan, which is 1.50% relative to A's own assets. On the other hand, if the investment loses 5%, then Bank A loses all its assets and still owes 654.38+0.5 billion. )
Nine, the sesame seed cake project has become a high-quality project, and banking institutions have issued bonds for financing. Bonds are divided into general bonds and subordinated bonds-leveraged investment.
10. To be on the safe side, guarantee bonds.
In order to avoid risks, some people have come up with a way to take leveraged investment as "insurance". This kind of insurance is called credit default swap (CDS). For example, in order to avoid leverage risk, Bank A found Institution B.. Institution b (it may be another bank, it may be an insurance company, and so on. A said to B, What about the default insurance on the loan you gave me? I'll pay you 50 million insurance premium every year, 10 years, totaling 500 million. If my investment doesn't default, you will get the insurance premium for nothing. If you break the contract, you have to compensate me. A thinks that if I don't default, I can earn 4.5 billion, of which 500 million is used for insurance, and I can make a net profit of 4 billion. If there is a breach of contract, there is insurance compensation anyway. So for A, it is a business that only makes money without losing money. B is a shrewd man. He did not immediately agree to A's invitation, but went back and made a statistical analysis, and found that the situation of breach of contract was less than 1%. You can get a total of 50 billion insurance money by doing 100 businesses. If one of them defaults, the compensation will not exceed 5 billion. Even if the two companies default, they can earn 40 billion. Both A and B thought the deal was good for them, so they made a decision immediately, and everyone was very happy. )-Financial innovation
After B did this insurance business, C became jealous. Ask B, how about you sell me this 100 CD, and give you 200 million for each contract, totaling * * * 20 billion. B thought it would take 10 years to get my 40 billion, but now I have 20 billion when I change hands, and there is no risk. Why not? So b and c will make a deal right away. CDS, like stocks, flow to financial markets and can be bought and sold. In fact, after C got this batch of CDs, he didn't want to wait 10 for another 20 billion, but put it on the market and sold it at a price of 22 billion. D saw this product, calculated that 40 billion MINUS 22 billion, and there was still 654.38+08 billion to earn. This is a "primitive stock". It's not expensive. I'll buy it right away. As soon as it changed hands, C made 2 billion. Since then, these CDs have been copied repeatedly in the market, and now the total market value of CDs has been copied to 62 trillion US dollars. -Copies of financial instruments
Xi。 Ding Bing ... saw that it was profitable to produce sesame cakes, and they all borrowed money to put them into production-herding effect.
One day, I found that I couldn't eat the baked wheat cake I bought. If it gets moldy in one place, I will sell it quickly, even if the price is lower-the bubble burst.
12. The loan of the lending institution can't be recovered, and the CDS has become waste paper (the baked wheat cake can't go up to a certain extent, and no one takes it. I can't sell the biscuits I bought, and I have to pay a lot of interest. Finally, at the end of the day, I left the baked wheat cake with the bank. At this point, the breach of contract occurred. At this time, A is a little regretful. He can't make a lot of money, but he can't lose there. Anyway, B has insurance. B is not worried, anyway, the insurance has been sold to C, so where is this CDS insurance now? G has. G just bought 65,438+000 CDs from F for 30 billion. Before it changed hands, it suddenly received news that these CDS were downgraded, and 20 of them defaulted, which greatly exceeded the original estimated default rate of 1% to 2%. Every time you break the contract, you have to pay 5 billion insurance premiums, and the total expenditure reaches 654.38+000 billion. Together with the 30 billion CDS acquisition fee, G's loss totals130 billion. Although G is one of the top universities in the United States 10, it can't afford such a huge loss. Therefore, G is on the verge of bankruptcy)-subprime mortgage crisis
Thirteen, sesame cakes can not be sold, the price is low, so we have to close down or lay off employees-individual industries or enterprises.
Fourteen, the herd effect makes the crisis of baked wheat cake industry turn into the crisis of other industries; Sesame cake mortgage crisis to financial crisis.
At the end of 2006, the subprime mortgage loan was only about $600 billion, not to mention that it could not be completely defaulted, which is by no means significant in the national economy of the United States (the GDP of the United States in 2006 was $65,438 +03.4 trillion). The reason why it can cause financial turmoil in the United States and even the world is mainly because the United States has over-developed financial products and packaged subprime loans into all aspects of the capital market. Once the subprime mortgage is found to contain "toxins",