bold fashion jewelry wholesale What does the financial crisis mean

wholesale gems for jewelry making Very vivid explanation ha
First of all, the economy is an overall concept.
Formula: Economy = Finance Finance N Finance: Together of Currency and Credit So the financial crisis is much smaller than the economic crisis.
(Only one economic crisis occurs in the world, do you know which time it is?)
The explanation: National revenue and expenditure:
The taxes and expenditures in countries
The expenditure includes: welfare, public, etc. (If there is a problem with the state's income and expenditure, the people's life means bankruptcy)
So the economic crisis = financial crisis fiscal crisis
(Many scholars now also believe that the financial crisis = Economic crisis, but I oppose this view. Because they think that the current financial crisis generally causes the economic crisis. For example, the "Black Friday" incident does cause the economic crisis in many countries. n but the world financial crisis has happened more than once.)
The know how serious the US financial crisis is? (I copy it, it is wonderful)
The question, however, the total loan is only hundreds of billions, and the US government's rescue funds have already reached more than trillion. Why can't the crisis be seen?
The source of articles pointed out that the root cause of the crisis is that financial institutions use "leverage" transactions; other experts point out that behind the financial crisis is 6.2 trillion Credit Default Swap (CDS). So, what is the relationship between subprime loans, leverage and CDS? What kind of interaction between them has today's financial crisis?
is easy to understand. We have used several imaginary examples. There are inappropriateness, welcome to criticize and discuss.

. Leverage:
At present, many investment banks use 20-30 times leveraged operation in order to earn huge profits. Essence In other words, this bank A uses 3 billion assets as a mortgage to borrow 90 billion yuan for investment. If the investment profit is 5 %, then A will get 4.5 billion yuan in profit. Compared with A's own asset, this is 150 % Mobility. Conversely, if the investment loss is 5 %, then the bank A pays out all the assets of its own assets still owed 1.5 billion.

. CDS contract:
because of high risk of leverage operation, according to normal regulations, banks do not perform such adventure operations. So some people come up with a way to take leverage investment to "insurance". This insurance is called CDS.
For example, bank A found institution B in order to avoid the risk of leverage. Institution B may be another bank or insurance company, so on.
a said to B, how about your loan for my loan? I pay your insurance premiums 50 million yuan each year, for 10 consecutive years, a total of 500 million. If my investment has no breach of contract, then you will have this insurance premium you. Just took it in vain, if you breach contract, you have to compensate me.
a, if I do n’t violate the contract, I can earn 4.5 billion, which is 500 million for insurance, and I can still earn 4 billion. If there is a breach of contract, there is insurance to pay anyway. So for A, this is a business that only earns or not.
b is a savvy person. He did not immediately agree to A's invitation. Instead, he went back to make a statistical analysis and found that the breach of contract was less than 1 %. If you do a hundred businesses, you can get a total of 50 billion insurance benefits. If one of them defaults, the compensation amount is up to 5 billion. Even if two defaults, you can earn 40 billion yuan.
a, both of B, both think that this sale is good for himself, so he immediately made a big joy.

three, CDS market:
b After doing this insurance business, C was jealous next to it. C ran to B and said, how do you sell these 100 CDS to me, each contract gives you 200 million, a total of 20 billion. B thought, my 40 billion yuan can only be obtained in 10 years. Now there are 20 billion in the turn, and there is no risk.
This, CDS flows to the financial market like stocks, and can be traded and traded. In fact, after C got this CDS, I did not want to wait for the last 10 years to collect 20 billion, but listed it for sale, the price of 22 billion; D saw this product, calculate, 40 billion yuan reduced to 22 billion, and it also went to 22 billion yuan, and it also went to 22 billion yuan. There are 18 billion to make money. This is a "original stock". It is not expensive and bought it immediately. As soon as he turned his hand, C made 2 billion. Since then, these CDSs have been repeatedly copied in the market, and the total market value of CDS has now been copied to $ 62 trillion.

. 4, subprime loans:
above A, B, C, D, E, F .... Are you making a lot of money, so what about these money came from there? Fundamentally, these money comes from the profit of investors similar to A and A. And most of their profits come from secondary loans in the United States. It is said that the subprime crisis is due to lending money to the poor.
This I don't care about this statement. The author believes that the subprime loan is mainly for ordinary US real estate investors. The economic strength of these people was only enough to buy their own houses, but saw that house prices rose rapidly, and they moved the idea of ​​property speculation. They mortgaged their houses and bought investment houses in loans. This type of loan interest is more than 8 % -9 %, and it is difficult to deal with their own income, but they can continue to mortgage the house to the bank, borrow money to pay interest, and empty glove white wolves.
I at this time A is very happy, his investment is making money for him; B ​​is also very happy, the market breach rate is very low, and insurance business can continue; later C, D, E, F, etc. are all profitable.

. The secondary loan crisis:
The house prices will not rise to a certain extent, no one will pick up later. At this time, the speculators of the property were anxious like an ant on the hot pot. The house could not be sold, and the high interest would be paid. Finally, it was a day when there was no way, and the house was thrown to the bank. At this time, the breach of contract happened.
I at this time a feels a little regret and can't make a lot of money, but it can't be there. Anyway, there is B for insurance. B is not worried, anyway, insurance has been sold to C.
So there is now this CDS insurance, in G's hands. G just bought 100 billion CDS from F, and had not had time to change hands, and suddenly received the news. These CDS were relegated, of which 20 defaults were greatly exceeded, which greatly exceeded the original estimate of 1 % to 2 % of the original estimate of 1 % to 2 % of the original estimated 1 % to 2 %. Bobbing rate. Each breach of contract pays 5 billion yuan in insurance, with a total expenditure of 100 billion. Coupled with the 30 billion CDS acquisition fee, G's losses have a total of 130 billion yuan. Although G is the top 10 large institutions in the United States, it cannot withstand such a huge loss. So G is on the verge of closure.

. Financial crisis:
If G fails, then A spends $ 500 million in insurance to make soup. What's worse, because A uses the principle of leverage, according to the previous one, according to the previous one According to the analysis, all the assets of A La Lang are not enough to repay the debt. Therefore, A immediately face the risk of bankruptcy. In addition to A, there are A2, A3, ..., A20, all of them are ready to go closed. Therefore, G, A, A2, ..., A20 came to the US Treasury Minister together, a snot and tears lobbying, G must not be closed, and everyone is finished. As soon as the Minister of Finance was soft, G gave G to the nationalization. Since then, A, ..., A20's insurance premiums have been paid by the US taxpayer for total $ 100 billion.

. The crisis of the dollar:
The market price of 100 CDS mentioned above is 30 billion. The total value of the CDS market is 6.2 trillion. Assuming that there are 10 % of the breach of contract, then there is a 6 trillion default CDS. This number is 200 times more than 30 billion. If the U.S. government acquires a CDS worth 30 billion yuan, it will lose 100 billion yuan. So for the remaining default CDS, the US government will lose 20 trillion yuan. If you don't pay, you must watch A20, A21, A22, etc. No matter what measures are taken, the US dollar depreciation is inevitable.
The assumptions and numbers used in calculations will be different in the same situation, but the severity of the US financial crisis cannot be underestimated

wholesale steampunk jewelry The financial crisis, also known as the financial turmoil, refers to the sharpness, short -term, and super -periodic deterioration of all or most or most or most or more countries and regions in one country or country and regions.
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wholesale gold jewelry los angeles The financial crisis caused by the secondary loan causes the global economic crisis.