美国次贷危机（英文）课件.ppt

1、U.S.Subprime Mortgage CrisisPresented to Professor Castillo-Ponce2023-5-12Subprime Mortgage CrisisSharp rise in home foreclosures in late 2006 Only 9%in 1996,13%in 1999,20%in 2006$1.3 Trillion subprime mortgage as of March 2007The delinquency rate had risen to 21%by 2008Subprime BorrowerslFor poor c

2、redit historylLimited incomeSubprime LenderslGreater riskslHigh returnsNew Model of Mortgage LendingSource:BBC NewsCauses of the CrisisThe Housing DownturnlExcess supply of home inventorylSales volume of new homes droppedlReduced market prices(10.4%12/06-12/07)lIncreasing foreclosure ratesBorrowersl

3、Difficulties in re-financinglBegin to default on loanslWalk away from propertieslFraudulent misrepresentationsCauses of the CrisisFinancial InstitutionslAttraction from high returnslOffered high-risk loan and incentiveslBelieves that will pass on the risk to othersSecuritizationlMortgage backed secu

4、ritieslRisk readily transferred to other investorslFrom 54%in 2001 to 75%in 2006Causes of the CrisisGovernment and RegulatorslCommunity Reinvestment Act,encourages the development of the subprime debaclelGlass-Steagall Act contributes to the subprime crisis(FDIC back up)Central bankslLess concerned

5、with avoiding asset bubbleslReact after bubbles burst to minimize the impactlNo determination on monetary policylInstitutions risk more because of Feds rescueDirect Impacts of the CrisisStock Marketl08/15/07 Dow Jones had dropped below 13,000 from Julys 14000lFirst 3 weeks of 08,the Dow Jones Indust

6、rial Average fell 9%l1/18/08 Dow Jones/0.5%,S&P 500/0.6%,and NASDAQ/0.3%l01/21/08(black Monday)the worlds biggest falls since Sept.11,2001Direct Impacts of the CrisisFinancial Institutions BankruptcylNew Century Financial(USA)Apr.2,2007lAmerican Home Mortgage(USA)Aug.6,2007lSentinel management Group

7、(USA)Aug.17,2007lAmeriquest(USA)Aug.31,2007lNetBank(USA)Sept.30,2007lTerra Securities(Norway)Nov.28,2007lAmerican Freedom Mortgage Inc.(USA)Jan.30,2007Direct Impacts of the CrisisFinancial Institutions Write-DownslCitigroup(USA)-$24.1 blnlMerrill Lynch(USA)-$22.5 blnlUBS AG(Switzerland)-$16.7 blnlMo

8、rgan Stanley(USA)-$10.3lCredit Agricole(France)-$4.8 blnlHSBC(United Kingdom)-$3.4 blnlBank of America(USA)-$5.28 blnlCIBC(Canada)3.2 blnlDeutsche Bank(Germany)-$3.1 blnBy 02/19/08 losses or write-downs U.S.$150 blnBe expected exceeding$200-$400 blnDomestic Impacts of the CrisisHome OwnerslHousing p

9、rices down 10.4%in Dec.07 vs.year-agolSales of new homes dropped by 26.4%in 07 vs.06lBy Jan.2008,the inventory of unsold new homes stood at 9.8 months,the highest level since 1981.lTwo million families will be evicted from their homesMinoritieslDisproportionate level of foreclosures in minority l46%

10、Hispanics,55%blacks got higher cost loans Domestic Impacts of the CrisisEconomy ConditionlRecessionlLow GDP growth ratelBusiness close out or lose money(banks,builders etc.)lWeak financial marketlLow consumer spendinglLose jobsOther credit marketslCredit card lCar loan Global Impacts of the CrisisIn

11、vestors will be very cautious to actlLack confidence in stock/bound marketConsumer spending will slowdownlLack of cash or unwilling to spendWorld economy may slip into recession lU.S.economy condition will affect global economyGDP growth will be lowlLose businesseslLose jobslEconomy slow downGlobal

12、Impacts of the CrisisFinancial market lMay take long time to recoverUnemployment rate may be highlSlow economy increase unemployment rateExports will decrease in China,Korea,Taiwan lGDP growth heavily depends on export Government and Central Banks Actions08/2007,President Bush announced Hope New All

13、iance02/13/08,President signed a tax rebates of$168 bln 09/18/07,the Fed dropped rate point10/31/07,point cut by Fed12/11/07,point cut by Fed01/22/08 the Fed slashed the rate by 3/4 points to 3.5%01/30/08 another cut of 1/2 points to 3%Central Banks have pumped billions of dollars to banksCentral Banks of the world have done the same thingThank You!