How does the U.S. monetary emergency ( duplicate )

rss_w (bailout money, had to trillion alternatively more, or do not penetrate why the crisis brain? There is one story pointed out that the basis of the crisis of financial creations a Credit Default Swap, CDS). Then, the sub-prime, leveraged, and what is the relationship among CDS? between them by what variety of interaction of today's financial crisis? analysis of the financial crisis in many articles, has not peruse on these issues to the easy explanation. This periodical tries to know their own to invest an reply to these answers, for understandable reasons, we use several hypothetical samples. has not proper to argue the Department saluted commentary.
one. lever. At present, many investment banks to earn profits, with 20-30 times leverage, assuming that A's own assets, a bank of 30 million, 30 times the leverage is 900 billion. In additional words, the banks 30 billion of assets A 900 billion as parallel to lend funds for investment, if the investment earnings of 5%, then A to get 4.5 billion profit, likened to A's own assets, which is 150% of the profits. Conversely,Women's Supra TK Society, if the investment losses of 5% , then the Bank lost A light all the assets of their 1.5 billion owed.
II. CDS contract. as leverage high-risk, in accordance with the regular, the Bank does not sprint for such a menacing operation. So some people think One direction to obtain leverage to do A on B, said the loans do you assist me how to default insurance, the premium I pay you 5 million per annual for 10 years, a total of 500 million, whether my investment does not default, then this insurance you took the pearly If breach of contract, you must repay for me. A thought, if you do not default, I can make 4.5 billion, which takes out 500 million secondhand for insurance, I could net 40 billion. If there is default, anyway, there insurance to amends. So in terms of A This is a commerce, earn, instead of losing. B is a intelligent male, did not immediately promised A's invitation, yet go behind and do a statistical analysis of the location of non-compliance of fewer than 1%. If you do a hundred schools of affair, you can get 50 billion total insurance bonus, whether one of breach of contract, wage up to but 50 million, even if the two breach of contract, they tin acquire 40 billion. A, B both sides deem that this marketing to their vantage, it immediately closed the transaction, the satisfaction of all.
3. CDS market. B do this after the insurance business, C in the next envious. C B to go over there that you sell these 100 CDS Leave me how to give you 200 million for every contract, a total of 200 billion. B think my 40 billion to 10 years to get, there is now a 200 billion changed hands,Supra Pilot Shoes, and there is no risk, why not, so B and C immediately handle. As a result, CDS stream as the financial markets like stocks above can be traded and trading. In truth, after C got these CDS, does not ambition to wait another 10 years to receive 200 billion, but put it up for sale, priced at 22 billion; D see the production, forget about the 40 billion minus 22 billion, and earn 18 billion, which is the . a resale, C earned 20 billion. Since then, the CDS to reiterated speculation in the market, the market value of CDS now has a $ 62,000,000,000,000 Scoop.
IV. the sub-prime. above the A, B, C, D, E, F ... ... are production huge profits, then in the end from where the money came out of it? Basically, the money is similar to A from A and with the investor's profit. and most of their earnings from the U.S. sub-prime loans. People say that the subprime crisis is due to lend money to the penniless. I disagree on this expression. I think that the sub-prime chiefly to the mean American real estate investors. These people would have the economy strength enough to buy their own apartment, but saw fast mushrooms in house prices, moving from the motif of ​​real estate speculation. They mortgaged their house,Supra Skytop II Shoes, borrowed money to purchase investment housing. Interest on such loans to more than 8% -9% , with tough to deal with their own proceeds, but they can continue to pledge the house to the bank, borrow money to pay interest, sleight of hand tricks. A very merry at this time, his investment for his money; B is also very pleased with the market low default rates, the insurance business can persist to do so; back C, D, E, F,Women's Supra Skytop II, etc., forward with money.
five. the sub-prime crisis. prices rose to a definite amplitude to heave not up, nothing answered the back plate. At this point, like real possession speculators were anxious feline on hot bricks. sell the house, to keep paying lofty amuse rates, and eventually to a desperate daytime, the house exercising and readiness Bank. At this time of default happened. At this point A was a track of apologize, big profits are vain, but likewise wastage not there, anyway, there is B for insurance. B do not worry about, anyway, the insurance has been sold to C. So immediately this Where does the insurance CDS were in the G hand. G F just spent 300 billion to buy the hands of 100 CDS, have not had time to change hands, suddenly received the news, these CDS were downgraded, including breach of contract 20 , greatly surpassing the original estimate of 1% to 2% default rate. every breach of contract to pay 50 billion of insurance money, a total disbursement of 1,000 billion. and acquisition costs 300 billion CDS, G's losses totaled 130 billion. While the G is the name of the nation's top 10 massive institutions, can not resist such a big loss. So G verge of collapse.
VI. the monetary crisis. If the closure of G, then A price of 500 million U.S. dollars to buy warranty above the bubble of the soup, even aggravate,Kids' Supra TK Society, leverage investment, according to the preceding inquiry, A lose it always of the assets is not enough debt. So the risk of A bankruptcy immediately. In addition to A,Cheap Supra Shoes, there is A2, A3, ... ... A20, be prepared to near down always . Therefore G, A, A2, ... ... A20 came together in front of the United States Treasury Secretary, a nostril a tear hall, G must not fail, it is a failure all over. Minister of Finance, a soft heart, put the G to nationalized, then A, ... ... A20 of the assurance money totaling 100 billion U.S. dollars all paid along U.S. taxpayers.
VII. dollar emergency. 100 CDS said on the mall price is 300 million. The absolute CDS market amount is 62 trillion, assuming namely 10% of the gap of compact, breach of contract then there is 6 trillion CDS. This figure is 300 million 200 periods. If the U.S. administration 300 billion of gain value later the sum of the 100 billion CDS. then for the rest of those who default CDS, the U.S. government apt bear the consequences of a 20 trillion. If you do no disburse, we have to see by A20, A21, A22, and so one after dissimilar breakdown. No material what amounts the U.S. USD devaluation was inevitable .
the speculations used in the enumeration above and the number of discrepancies with the tangible situation, but the U.S. can not underestimate the seriousness of the financial crisis.