碩士 / 中國文化大學 / 政治學系 / 99 / Spring 2007 saw the collapse of “Subprime Mortgage” in the US. The aftermath that followed lead to the Global Financial Tsunami. Formal US Federal Reserve Chairman Alan Greenspan calls it the worst financial crisis in a hundred years. Almost every country around the world was affected and had to take the blow on some extent. In contrast, Mainland China was hit by a severe snowstorm at the beginning of 2008, followed by the most powerful and devastating earthquake in Chinese history which left Sichuan in rubbles. However in August of the same year, China hosted a successful Beijing Olympics and launched a manned space mission that shocked the world!
The highly paid CEOs of the financial investment banks on Wall Street, tempted by high profits, take even greater risks in pursuit of greater gain, exposing the human weakness called greed. The high leverage effect imposed on financial derivatives yielded a 25 to 30 times the profit for investment banks, In fact, high leverage financial operation is without doubt building a castle on the sand. When the market prospers the profit naturally multiples, however on the contrary, the loss could be devastating. As a matter of fact, this prosperity of the American economy is short-lived, triggering stagnation and eventually the bubble bursts. The scale of the losses caused by subprime mortgage and its derivative financial products was astronomical. Investors were the victims who suffers the most from this disaster, bankruptcy declarations were at a historical height.
In order to cope with the potential risks caused by deflation after Sept.11, 2001 terrorist attack and the burst of the World Wide Web bubble in 2000, America took to loosen its currency policy. From January. 2001 to June 2003 the interest rate was lowered 13 times. The rate went from 6.5% down to 1.0% during that period, leading to hyperactive currency circulation on the market, therefore turning the real estate market active. People with low income and those with bad credit records began to obtain funding for real estate purchase through the above mentioned products. However, from June 2004, this time fighting against inflation, America began raising the interest rate from 1.0% to 525% in June 2006, triggering discrepancies and eventually, the crisis. All this reveals the insecurity and instability in America’s financial system.
On the other hand, China was also victim to the financial tsunami but its resilience and recovering rate is simply astonishing, which establishes China’s place as an economic power on the global scope. Moreover, China’s vast rich resources combined with economic Glasnost and its people’s high saving percentage, made the country unshakable during the recession.
Investors would never forget that the first decade of the century was an extraordinary one! It will surely take its place in history as one of the worst decades involving economic and financial disaster.
Keywords: Economic Tsunami, Financial Crisis, Subprime Mortgage
| Identifer | oai:union.ndltd.org:TW/099PCCU1227008 |
| Date | January 2010 |
| Creators | Su,Jiunn-Chyi, 蘇俊琦 |
| Contributors | Tang,Yen-Po, 唐彥博 |
| Source Sets | National Digital Library of Theses and Dissertations in Taiwan |
| Language | zh-TW |
| Detected Language | English |
| Type | 學位論文 ; thesis |
| Format | 134 |
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