Greenspan said, "This is a once-in-a-century crisis." So, is the outbreak of this century-old crisis accidental or inevitable? From the microscopic point of view, it is the financial innovation of Wall Street that triggered this crisis. Financial innovation itself is not a bad thing. For more than 65,438+000 years, it has been the source of vitality of Wall Street. However, excessive innovation can turn into a disaster. There is a classic saying on Wall Street: As long as an asset can generate cash flow, it can be securitized. The assets of this securitization are subordinated debts, or more precisely, subprime mortgages. Bond was originally an investment product with extremely low risk, but when it was linked with low-income people with extremely low credit and traded by highly leveraged hedge funds, the risk was infinitely magnified. The causes of the subprime mortgage crisis have been discussed countless times, but most of the discussions focused on the technical level, while the institutional level was ignored. For example, looking back at the subprime mortgage crisis now, many people can easily see the huge risks involved, which does not require too advanced professional knowledge. However, this tragedy was finally triggered and involved in such a wide range. A very important reason is that at the top of the subprime mortgage chain, there are insurance giants such as American International Group (AIG) and quasi-American "state-owned enterprises" such as Fannie Mae and Freddie Mac. Downstream of the chain, there are countless companies that benefit the most. Risk and income are not equal, and such a structure is doomed to huge moral hazard. In the eyes of many people, although there are huge risks in subprime loans, these risks will eventually be digested by insurance giants and American "state-owned enterprises". Even if they can't digest it, the Federal Reserve and the US Treasury will act as lenders of last resort. Therefore, in the face of huge profit temptation, investors at all levels in the subprime mortgage chain will go forward bravely. When the crisis really broke out, as most people expected, the Federal Reserve and the US Treasury stepped forward and rescued many institutions such as Fannie Mae, Freddie Mac and AIG. As this once-in-a-century crisis intensifies, perhaps people should remember Hyman P Minsky who died a few years ago. As early as 30 years ago, he put forward the hypothesis of financial instability, arguing that the capitalist financial system was inherently unstable, but it did not attract the attention of orthodox economic schools. It was not until the Asian financial crisis broke out in the 1990s that people began to pay more and more attention to Minsky's theory, and reached a Minsky moment, that is, at a certain critical point, the cash flow generated by investors' assets was not enough to pay off debts, and the loss of speculative assets prompted lenders to recover loans, which led to the collapse of asset values. Today's Wall Street crisis is actually Minsky's moment. Hyman Minsky divides the financial actors in the market into three categories according to the cash flow, among which the most risky ones are highly leveraged banks and government departments with high deficits. Hyman Minsky believes that the nature of capitalist economy chasing profits and the natural short-term behavior of financial capitalists lead to the instability of capitalist financial industry, which cannot be eradicated. As long as there is a business cycle, the inherent instability of the financial industry will inevitably evolve into a financial crisis, and further pull the overall economy into the abyss of the great crisis. In the rising stage of the business cycle, the internal crisis will be covered up by economic growth, but once the economy enters a cycle of stagnation or even recession, contradictions will intensify rapidly, and high-risk financial entities will sell their assets to repay their debts, which is the Minsky moment summarized by scholars later. Western developed countries, represented by the United States, have always been idols in many people's minds. Under the impact of the crisis, the fragility of idols is beyond most people's expectation. Did the Federal Reserve and other government agencies only play the role of rescuers in the subprime mortgage crisis? Obviously not. In the final analysis, it is these government agencies that have created a hotbed for subprime loans. Back to about 10 years ago, the IT bubble burst and the "9 1 1" incident hit hard. The American economy needs new economic growth points, and finally chooses the housing market as the engine of economic growth. The continuous interest rate cuts by the Federal Reserve have created unprecedented opportunities for real estate development. The rapid rise in housing prices not only created a huge bubble in the subprime mortgage crisis, but also stimulated the American economy to a considerable extent. The United States is a country that drives economic growth with consumption. The prosperity of the real estate market not only stimulates housing consumption, but also brings real cash flow to buyers with the rise of housing prices, which greatly stimulates consumption in other fields. The prosperity of American economy in the past few years is based on the rise of housing prices, and when housing prices inevitably fall, the hidden crisis will naturally erupt violently. Former Federal Reserve Chairman Ben alan greenspan has always been regarded as a mythical figure in American economic history. Now it seems that his biggest myth is that he left behind all the honors of American economic growth and left his legacy to his successor Bernanke. After 30 years of primitive accumulation, China has now reached the crossroads of transformation. What kind of transformation path to choose not only determines the future development of China, but also determines the economic trend of the United States and even the world to a certain extent. This statement does not exaggerate China's economic influence. The trend of Japanese economy is a very convincing example. Japan's economy reached its peak in the 1980s, then entered the "lost decade" in the 1990s, and has been in zero growth. Since the beginning of this century, the Japanese economy has finally got rid of the "lost decade" and showed signs of recovery. The reason is that the China factor has become the main driving force of Japanese economic recovery. On the one hand, it is because Japanese companies have a rich return on investment in China, and on the other hand, it is because Japan's exports to China have grown strongly, which has boosted Japan's domestic GDP growth. Unlike the huge trade deficit between Europe and America, Japan's trade with China has been a surplus since 2004. After the impact of the US subprime mortgage crisis, domestic consumption and investment will shrink sharply, and the driving force for future recovery will come from exports. The unexpected GDP growth of the United States in the second quarter of this year has already shown this sign, and how long the momentum of American exports can be maintained depends, to some extent, on the demand of China. So after the Wall Street storm, people will see such an interesting picture, that is, China and the United States are turning around at the same time, the United States is beginning to transform into an exporter, and China is transforming into domestic demand.