(Note: There are many articles of various kinds of "America is decaying", and some of the analysis is a statement of facts and logical self-consistency; however, some judgments may be biased (such as a series of articles by a "financial big V" who was recently arrested for illegal deposits). It just so happens that Mr. Pang Zhongjia and I co-authored "Why the United States" (published in 2012), which I co-authored 10 years ago, introduced the economy, science and technology, military, education, business, and people's livelihood in the United States, which seems to be outdated. Then from April 2nd, we will excerpt some of the content and share it with you... ）
A strong American facet: the "corporate republic" is full of dangers
5-2-4 Rating agencies play the role of tiger
In the view of the American economist Krugman, rating corruption has a long history and is a deep-rooted tumor in Wall Street's rating culture.
"Rating agencies and investment banks may be more of a complicity, with the common goal of selling financial instruments or collateral assets better through higher ratings, and the true composition of packaged assets is no longer important."
In 1975, the U.S. Securities and Exchange Commission established the "Nationally Recognized Statistical Rating Organization", and three rating agencies, Standard & Poor's, Moody's and Fitch, became the first members. Since then, only these three institutions have flourished in the protected market, and the assessment agencies that have been lucky enough to join have been absorbed and swallowed by them, and the other credit rating agencies have not been approved by the SEC at all. It can be said that the privileges of the three major rating agencies are given by the US government. They have always been the power of the American capital market and the power of the United States, so that their market power has been greatly inflated, and even almost acted as a master of regulation of the international financial market; however, the international community lacks an institution to supervise these rating agencies, and their misjudgments are passed on to investors unchanged. Germany's Der Spiegel magazine described the US rating agency as if it were a wizard holding a "magic needle" and investors were only looking ahead, which was another tool of power in the United States after the Cold War. In recent years, various circles in the United States have also repeatedly called for reform of the three major rating agencies, strengthening supervision, and introducing new competitors, but government regulators have not taken due measures against them. Obviously, serious misleading crimes committed by the three major rating agencies should be pursued and liquidated;
Figure 5-2-6 Executives of the three major rating agencies attend the congressional hearing on October 22, 2008
Cox, chairman of the Securities and Exchange Commission, went on to point out that the computer system in the financial system brings far more than just this bad data. He told congressional committees that Wall Street rating agencies give the highest AAA ratings to those mortgage bonds, which are actually not worth that price at all. Cox said in a written testimony: "These evaluations not only give investors the wrong information, but also mislead the computer risk management system and mislead the computer about the calculation process of capital management requirements." ”
Allen, who served as Fed Chairman for 18 years and 5 months. Alan Greenspan (1926) made an unforgivable mistake,
Should be one of the worst central bankers, to be recorded in history.
Greenspan was appointed chairman of the Federal Reserve Board by President Reagan in August 1987 and served five consecutive terms until his retirement in January 2006. For two decades, under his leadership, with the support of several U.S. governments and the aggressive impetus of the strong financial industry, the Fed has deregulated and relied on the self-regulation of financial institutions to remove key protective measures in financial markets; not only has it relied on low interest rates for growth for a long time, but even encouraged people to choose lower adjustable-rate mortgages when mortgage fixed rates are approaching their 50-year low, which has infinitely contributed to the formation of housing bubbles.
After the current financial crisis, he repeatedly defended his responsibilities. He claimed that if steps had been taken to slow the growth of homeownership, the catalyst for the bubble, it would have met with strong opposition from Congress.
In 2005, Greenspan was highly positive about the use of computer models in the financial industry, believing that risks in financial markets could be effectively controlled; in particular, credit providers must use computer technology analysis tools and risk assessment models when providing loans to subprime mortgage borrowers. But at a hearing before the House Reform and Oversight Committee on October 24, 2008, he declared, "The results are all computer disasters, and the data in the computers used in the financial system is garbage." ”
Greenspan said the financial services institution's decision was based on careful analysis by mathematicians and financial experts and backed by computer and communications technologies. But the entire glittering financial edifice collapsed last summer because the data fed into the risk management system was from the past two decades. As we all know, the financial services business has been developing at a high speed in the past two decades, without encountering major crises, and it is a crazy era with only success and no experience of failure. Greenspan also said that if the risk management system included data from past financial crises, credit institutions would be much more demanding of borrowers' mortgaged property, and the financial services industry as a whole would not be as miserable as it is today.
Instead of letting Ge Lao say that the computer caused the disaster, it is better to say that the Chinese superstitious preference for the word "hair" (8) caused the disaster. It is said that a key basic data for entering computer calculation models is the annual increase in house prices by 8%. If this is a "constant" that never falls, then many related financial derivatives will also maintain the 3A crown forever, and increase in value indefinitely without risk. On the contrary, once this annual growth rate is not guaranteed, or even becomes a negative number, it will fall to the dust and be completely finished. Today, it seems that believing that house prices can be divorced from reality and grow indefinitely is actually an absurd and ugly view that violates at least common sense; what is strange is that at that time, how many industry experts were authoritative, and the political circles were shy and public, happy and forgetful, as if intoxicated, as if deaf and dumb, and did not know that great difficulties were coming.
However, before the sharp decline in US housing prices in 2006, there were warnings. Robert Shiller, an economist at Yale University, said in the New York Times in October 2008 that a few years ago in Miami, a taxi driver pointed to the ubiquitous construction site and told him that there were houses being built everywhere, that the market was oversupplied, and that sooner or later there would be a catastrophe.
Therefore, economic masters and rating agencies are not as good as taxi drivers.
Written in December 2011 on the Hudson River in New York
(Sijin Note: Except for the author, all articles are original by Sijin.) 【Disclaimer】This article only represents the personal exposition and views of the original author, and readers are kindly requested to judge for their own judgment. The content or data is for informational purposes only and does not constitute any specific investment advice, is not used for any commercial purpose, and is not responsible for its authenticity. Investors operate accordingly at their own risk. ）