What is a financial crisis? Please talk about the current situation of the 2008 financial crisis, its pros and cons and your views on it.

Financial crisis, also known as financial crisis, refers to all or most of the financial indicators (such as: short-term interest rates, monetary assets, securities, real estate, land prices, number of commercial bankruptcies) in a country or several countries and regions. and financial institution failures). The types of financial crises can be divided into currency crises, debt crises, banking crises and other types. Financial crises in recent years have increasingly taken on some form of hybrid crisis. The global financial crisis in 2008-2009 was mainly caused by the real estate bubble in the United States and the leverage of financial derivatives. The reasons are as follows: 1. The Federal Reserve’s long-term low interest rate policy caused a bubble in fixed asset investment and false economic prosperity. ; 2. Inadequate financial supervision of derivatives and credit ratings in the United States has led to the reappearance of an economy similar to the Internet bubble, which has deeply affected countries around the world; 3. The United States underestimated the harm of the subprime mortgage crisis and failed to correct it in an early stage and provide necessary political support, resulting in a situation that is now difficult to deal with; the current financial crisis was caused by the bubble in the U.S. housing market. In some ways, this financial crisis is similar to other crises that occurred every four to 10 years after the end of World War II. However, there are fundamental differences between financial crises. The current crisis marks the end of an era of credit expansion that was based on the dollar as the global reserve currency. Other cyclical crises are part of larger boom-bust processes. The current financial crisis is the culmination of a super-boom cycle that has lasted for more than 60 years. Boom-bust cycles often revolve around credit conditions, and there is always a bias or misunderstanding involved. This is often a failure to recognize that there is a reflexive, circular relationship between willingness to lend and the value of collateral. When credit is easily available, it creates demand, and this demand drives up property values; this, in turn, increases the amount of credit available. Bubbles occur when people buy properties with the expectation of profiting from refinancing their mortgages. The boom in the U.S. housing market in recent years is evidence of this. The super-prosperity that lasted for 60 years is a more complicated example. Whenever credit expansion runs into trouble, financial authorities intervene to inject liquidity (into the market) and find other ways to stimulate economic growth. This creates an asymmetric incentive system, also known as moral hazard, which drives increasingly strong credit expansion. The system was so successful that people began to believe in what former U.S. President Ronald Reagan called “the magic of the market”—what I call “market fundamentalism.” fundamentalism). Fundamentalists believe that the market will tend to balance and that allowing market participants to pursue their own interests will best serve the interests of the community. This is clearly a misunderstanding, since it was not the markets themselves that saved financial markets from collapse, but rather the intervention of the authorities. However, market fundamentalism became the dominant way of thinking in the 1980s, when financial markets first began to globalize and the United States began running current account deficits. Globalization allows the United States to absorb the savings of the rest of the world and consume more than it produces. In 2006, the U.S. current account deficit reached 6.7% of its gross domestic product (GDP). Financial markets encourage consumers to borrow by introducing increasingly sophisticated products and more generous terms. Whenever the global financial system faces danger, financial authorities intervene and contribute to the situation. Since 1980, regulation has been relaxed, even to the point where it exists in name only. The subprime mortgage crisis has caused financial institutions in developed countries to re-evaluate risks and allocate assets. In the next two years, funds in developed countries will reverse their flow and return to strengthen the stability of local financial institutions.

This will lead to a sharp decline in securities market prices, depreciation of local currencies, decline in investment scale, slowdown in economic growth and even recession in emerging market countries. Among them, the three Baltic countries and India are the most vulnerable. The new financial crisis will put pressure on China's economic growth, but Chinese funds also face a good opportunity to "go out", bargain hunting, integrate and acquire corresponding companies