Three sub-prime crisis deepening stage of development.

<P> First stage: the problem surfaced </ P> <P> It http://finance. News, 2 at the end of 2007, the global stock market decline in the phenomenon of synchronization. .Because in time, just by Shanghai, China Shanghai Composite Index fell the beginning of that was attributed to the "China shock" (China Shock), but the sharp market soon discovered that the root of the problem is that the U.S. sub- .grade bond market. .The three largest U.S. banks to meet potential subprime losses, a substantial increase in provision for bad debts, caused uneasiness in the market. .Public statistics, subprime loan delinquencies are on the rise, a substantial decline in the stock of residential lending institutions. .March, the U.S. Congress held hearings on the subprime, subprime loans is recognized up to 1.3 trillion subprime loan products with exceptional, has now entered the high repayment period of about one million are expected .American families may be unable to repay the loan. .April 2, the second largest U.S. subprime lender, "New Century Financial Corporation," filed for bankruptcy protection. .</ P> <P> However, when the market generally believed that the impact is local and does not affect preferential loans, but does not affect other sectors, such as Federal Reserve Chairman Ben Bernanke was also the case for this view. .Shortly thereafter, the country's economy rise, the stock market temporarily return to calm, and continue to rise. .</ P> <P> second stage: the crisis </ P> <P> 2007 summer, the market once again began to worry that the securitization of subprime-based products. .In mid-June, a large investment bank Bear Stearns's two hedge funds invested heavily in subprime-based CDO, significant loss of trapped bankruptcy. .In mid-July, the three major rating company cut more than a thousand home loan MBS ratings, investors do not generally feel the sharp rise in credit risk, the largest U.S. home lender Countrywide Financial loan losses and performance deterioration of outgoing messages. .</ P> <P> in Europe, the outbreak of the subprime crisis began. .The end of July, the German Development Bank (IKB) announced significant losses associated with the subordinated debt. .August 9, the French BNP Paribas announced that due to difficulties in asset valuation, asset freeze its three funds. .Affected by this, the euro area short-term shortage of financial market liquidity, short-term market interest rates rose sharply. .</ P> <P> 9 mid-May, the British Northern Rock (Northern Rock) appeared for the first time the British nearly 140 years, "runs on." .The bank held directly with the U.S. subprime-related financial products, not to the total assets of 1%, but because of its structure, assets and liabilities does not match the duration of the problem exists, mainly relies on short-term market funding sources, when the U.S. subprime mortgage crisis spread to Europe, short-term .capital markets, causing liquidity shortages, financial difficulties Northern Rock, causing runs on. .</ P> <P> to prevent the market into a liquidity crisis, central banks in Europe and America actively intervened. .European Central Bank on August 9 last year, the market has injected 94.8 billion euros, the Federal Reserve on August 10 injected 24 billion U.S. dollars to the market. .August 17, the Fed reduced the discount rate 0.5% (down from 6.25% to 5.75%), and further relaxation of the discount loan terms, through the absorption of MBS and related securities, making the three major banks (Citigroup, Merrill Lynch and JP Morgan Chase) .to provide for themselves, a subsidiary of 25 billion U.S. dollars credit. .September 18, the Fed FOMC decision to the federal funds rate down from 5.25% to 4.75%, discount rate cut from 5.75% to 5.25%, a large number of central banks join forces to provide liquidity. .Market optimism, the misconception that subprime crisis is over, stock up again. .</ P> <P> third stage: the crisis deepened and developed </ P> <P> to late October 2007, major financial institutions in Europe and America have been released third quarter financial situation, huge financial losses far beyond the previous notice ., also exceeded expectations, the market began to panic. .Together again, the central bank intervention. .</ P> <P> into 2008, the U.S. major financial institutions to publish a new quarterly loss than expected once again. .Among them, Merrill Lynch, Citigroup, UBS and other big losses; to Nomura Securities, Mizuho Group, as the representative of Japanese financial institutions had a total of more than 60 million loss. .Subprime credit crunch caused by the impact on the real economy beginning to show, the U.S. annual economic growth rate in the fourth quarter of 2007 had fallen to 0.6%. .In addition, the unemployment rate in early 2008, retail commodity indices and other major economic indicators began to deteriorate; IMF in early February 2008 the annual economic growth forecast will be cut by 0.5 percentage points. .</ P>.