As the film said, the film did invite a lot of heavyweights to conduct a lot of interviews. However, the editing of the film reorganized what most people said, and deleted many interviews. The film is like inviting a few people to talk about the international situation. The U.S. Empire stayed with ambitions. Those who disagreed with this statement were repeatedly deleted from the interview, leaving some situations where the host was unable to answer the questions asked by the host. . Many people are wise not to accept interviews. Accepting such interviews will only humiliate themselves, and they will not be able to express their opinions. If the entire content of the interview is made public in this film, it should be beneficial to people a lot, but how can NO NO NO artists make such a film, literature and art should have a standpoint, and literature and art should expose the greed of Wall Street and the control of Wall Street. The U.S. government should expose the views of those scholars on economic liberalization. First, start with the real estate market. For the U.S. housing market, the most important event occurred during the Great Depression. The Roosevelt administration established Fannie Mae. As part of its New Deal, it provides mortgage loans for low-income families. From this time on, the US government indirectly influenced the real estate market through Fannie Mae and the subsequent establishment of Freddie Mac. Williams (WE Professor Williams) once wrote: Since the "Community Reconstruction Act" of 1977, Congress has begun to threaten banks and other financial institutions, asking them to extend more loans to high-risk housing buyers and companies. These loans are called subordinated loans. Grade loans. The sweetness of these banks and financial institutions is that "government-sponsored enterprises" Fannie Mae and Freddie Mac will buy these high-risk bonds. Anyone with a brain weighing more than an ounce can understand that this is a recipe for brewing disaster, but Congress denies it unanimously. 70 years after the founding of Fannie Mae, Fannie Mae and Freddie Mae became the two largest home mortgage companies in the United States, holding housing loans for nearly 31 million households in the United States, totaling approximately US$5.4 trillion, accounting for approximately US$5.4 trillion. Half of the U.S. housing mortgage. In the 70 years after the Great Depression, the U.S. real estate market has experienced a decline in real estate prices except for a small area. In general, the housing market has been singing triumphs and has not fallen. However, in contrast to other countries in the world, Western European countries have seen them during this period. The real estate market has experienced a cyclical phenomenon, and the real estate market has experienced downturns and declines; Asian countries, Japan, have experienced a real estate bubble burst in the 1990s, the real estate market is down, and Hong Kong has experienced several ups and downs, with some adjustments. Even as high as 30%, mainland China has been open for 30 years, and real estate prices have fallen sharply. Shenzhen's property market has fallen by more than 60%. Most of them were built when the mainland's real estate was booming in the early 1990s, and Shenzhen real estate companies were below 40%. After Zhu Rongji took advantage of the economy, the real estate bubble burst. The ups and downs of the real estate market are normal, because the market is always looking for "equilibrium", sometimes supply exceeds demand, sometimes supply exceeds demand. The market mechanism is used to adjust supply and demand. In some years, the supply of houses is too much, and house prices fall. In some years, housing demand has increased and housing prices have risen. However, like the US government, these mortgage companies intervene in the housing market and require banks and other financial institutions to provide high-risk loans, so that buyers of high-risk houses can buy houses. Mortgage loans The market has also become very loose. This is tantamount to the government continuously injecting a large amount of funds into the real estate market through two-room connection, which promotes a super bull market in the real estate market. Such a real estate market boom is unsustainable and fragile. If there is no tightening of interest rate policy and the Bush administration’s economic policy mistakes, it will break down for other reasons. In the 21st century, the U.S. housing market is actually hard to return due to long-term government intervention. Next, let's talk about the financial derivatives market. Most of the problems occurred this time in the housing mortgage securities (RMBS), a large part of which came from Fannie Mae Before the subprime mortgage crisis, most of the securities issued by Freddie Mac received AAA ratings from large rating agencies such as Standard & Poor's. Mortgage securities considered to be "safe" are put together with other mortgage securities into a portfolio to form a mortgage-backed bond (CMO) and then this portfolio is combined with other mortgage loans (such as student loans, etc.) to form The new portfolio debt mortgage bond CDO. CDO and CDO can be combined to form CDO2. Insurance companies like AIG are involved in the financial crisis. The main reason is that they are involved in a certificate of indebtedness (CDO). The annual income of one dollar is only 0.02 cents. But if 0. 02 cents multiplied by billions of times is a very substantial source of income, especially if there is no need for reserves to cover risks. These securities portfolios are very complex, and it is more difficult to calculate their value and risk. When the CDO's JPMorgan Chase team's integration model was originally created, they needed both prosperity and recession data, but they could not find the real estate market recession. These data are very important. If you want to estimate the correlation between securities in CDO and their risks, you must rely on these data. If these securities are not correlated, they are relatively safe. If these securities are highly correlated, the result will be catastrophic. This made the JPMorgan Chase team the last step in larger-scale transactions. Other financial institutions think they have seen business opportunities and are actively participating in this transaction. In fact, they have also not found enough data and have not been able to predict potential risks. The behavior of traders in the market is not necessarily right, but the market mechanism can punish those who make mistakes. As Friedman said, the market is a place that does not require confession but punishes mistakes. When participants in the financial market make mistakes, Wall Street traders' valuations of financial derivatives such as CDO are wrong, and holders of toxic assets must pay for their misjudgments. The US government's rescue of toxic assets, the more toxic assets can get government funding, which means that the more wrong people can get compensation. The mistakes in the financial derivatives market are based on distortions in the real estate market. If there is no distortion of the real estate market, the packaged bonds will not become toxic assets. Excluding these bonds, there may be deviations in the pricing of financial derivatives, but such serious consequences will not occur. I think the panic after the financial market comes from the uncertainty of government policies. At the beginning of 2008, the government rescued the Bear Stearns Group based on the principle of being too big to fail, but the principle of too big to fail does not clearly define what kind of financial enterprise is too big to fail. What kind of scale can go bankrupt? After saving Bear Stearns, the sixth largest investment bank in the United States, Paulson announced that he would not save Lehman Brothers, the fourth largest investment bank. What’s more, the US government did not explain why. Saved Bear Stearns instead of Lehman Brothers. This uncertainty in the rules led to panic in the financial market. People did not know who would go bankrupt next, who the government would save or give up. Perhaps not publishing the rescue plan will give Paulson more room to operate, but this move puts everyone at risk in the financial market and tries to protect themselves. The importance of this matter can be seen from one aspect, that is, After the aforementioned collapse of Lehman Brothers, domestic media, which had not paid much attention to the US financial market, began to report the financial crisis on a large scale. It seemed that the financial crisis broke out overnight. The government's intervention in the market will definitely cause problems, but in what way will these problems manifest themselves, or when they will manifest themselves. It may be a long-term waste of resources, or it may be a financial tsunami. The main cause of the financial crisis believed in the film is "ineffective supervision". However, as long as we flip through almost all economic crises, many people will attribute it to "ineffective supervision". But there is a question of what is effective supervision? President Hoover was once thought to have allowed the economy to be too free and led to the financial crisis of the 1930s, but Rothbard pointed out that Hoover was not a liberal but was as keen on the government's management of the economy as his successor Roosevelt. Hoover hated selling. Shorts actively hit the short US stock market. Later, when the economic crisis broke out, Hoover stepped down. Roosevelt’s series of policies all advocated government management, but did Roosevelt’s New Deal succeed? No, the Great Depression lasted at least until World War II. Roosevelt’s New Deal had a series of impacts on the United States. The impact in the financial industry was the split. Roosevelt separated the bank’s investment department and prohibited banks from engaging in investment banking business. "That's how JP Morgan and Morgan Stanley were separated at the time. The impact of this bill is far-reaching, and investment banks have indeed been doing business "honestly" for a long time. Tell me more stories when you have time. PS Answered that the financial derivatives promoted by the housing bubble government are expanding. Some people think that financial derivatives are completely useless, such as the asset securitization mentioned in the film. Suppose that a bank loan of 1 million goes out, and then the loan is divided into 1 million and sold at 1 yuan each. The purchaser gets the income from the loan, and the bank gets liquidity. If no one wants the income from the bank loan, How can anyone buy it? This is the benefit of asset securitization. Some people like liquidity, while others like fixed income. On the other hand, the purchaser has to bear the risk of the loan. If the bank sells it, it will naturally benefit, but not all of it can be sold, and the proceeds of the loan will be higher than the securitization sale. Financial derivatives now seem to be the target of public criticism, and if you want to deal with them quickly, it is better to start the reform of the reserve system and the rules that are too large to fail in order to eliminate the asymmetry of bank risk and return. It’s not that the government’s bailout is unfavorable, but that the bailout rules are vague. Such an important rule does not have a clear scale. It is the decision made by a few important leaders, which exposes the market to huge policy uncertainties. The salary of executives includes two parts and part of the salary. More importantly, bonuses are equivalent to performance. If you do well this year, you can get how much but not immediately. Of course, the system set up by the board of directors is really unreasonable (not only the executive bonuses of other industries in the financial industry) because when you get your hand to resign, you can almost get it when the company resigns Generous bonuses. Of course, it is very unreasonable to see that these executives can still get so much money after they close down and leave. But the money can be said to be the salary that they did not pay during their tenure, but after the person left, they put the money in their pockets. I did not praise this kind of system. I also think this kind of system is unreasonable. It is not only in the financial industry, but also in other industries. The salary system is similar. I also think that this kind of salary system needs to be improved significantly. But at the same time, I think that if it is not a government-funded or equity-funded enterprise, the government should not set the salary of the enterprise. The right to set the salary should belong to the shareholders, and the shareholders are the owners of the enterprise. Investment banks are not the winners of the financial crisis. On the contrary, the biggest losers are investment banks. The 5 largest US investment banks 1 Goldman Sachs (currently the only company among the 5 largest US investment banks that is still profitable) 2 Morgan Stanley (the stock price falls) 3 Merrill Lynch ( Has been acquired by Bank of America) 4 Lehman Brothers (insolvent) 5 Bear Stearns (acquired by JP Morgan Chase) The two parties referred to in the film are Goldman Sachs. The SEC lawsuit is because Goldman Sachs is selling the mortgage securities that it sells. It was not disclosed that John Paulson, another client hedge fund manager, was betting that these securities would collapse. Can you see the problem? The two opposing transactions. Afterwards, Zhuge Liang can of course say that this is intolerable, but beforehand, Wall Street is almost unanimously optimistic about these products, and all kinds of hedging transactions on Wall Street have always existed, investment banks’ Successive bankruptcies and low sales are also unexpected risks. The only difference between Goldman Sachs and other investment banks is that he bought more insurance, that is, the CDS sold by AIG in the film, 0. 02 cents guarantees one dollar. You don’t need to hold a CDO, you can also buy a CDS to prevent risks. The chief risk officer of Goldman Sachs is not a virtual reality like many companies, but has certain real power. Most people see prosperity, a small number of people see risks, and some people both see risks and insure against them. The moral torture of Goldman Sachs can continue, but it is difficult to stop. Almost all funds in mainland China are only profitable by going long. Securities companies are selling fund products to you. These fund products cannot be profitable unless the stock market rises. On the other hand, the proprietary business of securities companies can be short on stock index futures. Such a securities company sells funds to you and its self-operated business is short-selling, can you sue it for fraud? Financial executives do have wrong market judgments, the company is too risky, executives’ salaries are unreasonable and even morally problematic (Hollywood gangsters are definitely no better than these executives’ sexual behavior and drug use), but for financial executives Unfavorable supervision. Executives are too greedy. It is indeed not the main reason. Supervision has never been unfavorable because it is impossible for him to fully understand the various situations of both parties. If he can understand that the supervisor can arrange the transaction plan, the system will not fail. Executives are greedy. Executives seem to be greedy since there were executives, and not only the executives, but many others are also greedy. Did I mention ounces? GS conspiracy theory Lang Xianping also said, I have nothing to say, remove some boring and convulsive comments, and then answer and add. Many people mainly have a lot of opinions about the fact that the executives get so much money after they leave. Not only the financial industry, many industries have gold Parachute clauses I think these clauses are problematic. I have said it before, and I will emphasize it again. Some people think that as long as they are financial executives, they can master information and control everything. No, people can’t make perfect guesses that can master all information. Executives are also humans, and executives’ judgments about the future will be wrong. Risks are OK. Make predictions, but whether the prediction results are accurate or not depends on market verification. Black swan always exists. Some people may think that the U.S. rescue is to give away money to these financial companies, and that taxpayers’ money is all for nothing, but if you check how the U.S. rescues the market, you can find that most of the U.S. government has done guarantees to ensure market liquidity and facilitate acquisitions. The purchase of preferred stocks and other measures, the US 700 billion bailout is not all 700 billion, in fact, the vast majority of the 700 billion has been recovered. The actual cost is only 25 billion U.S. dollars (this is how the capitalist country rescues the market ==). Someone pointed out that the original profession is a politician. It can also be changed to finance in the eyes of politicians. PS I am generally disgusted with politicians. I did not mention A specific financial system modification plan. The modern financial system is very complicated. Perhaps it is really necessary to start with the most basic currency reform and capital system, but I can always say that I do not agree with the film’s point of view. If any of you really have a new financial system reform plan, welcome The investment bank in the traditional sense of soybean oil no longer exists, and Goldman Sachs and Morgan Stanley are now under the supervision of the Federal Reserve. The Ministry of Finance has also strengthened the supervision of over-the-counter derivatives and adopted measures such as enhancing transparency. Can the financial crisis be avoided in this way? = = The film review has a reply to remind it is really annoying. Basically, it reminds me that I was scolded again, so I don’t want to see it. Thank you Chen for helping to explain some of the problems.
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