THE “MORTGAGE CRISIS” HOW CURENT CREDIT WOES “次贷危机”是当前信用危机

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M A Y2010After the crisis: Refining Germany’seconomic modelA McKinsey report argues that the country should exit the recessionby building on its strengths.Philipp Koch, Frank Mattern, and Stefan NiemeierThe global financial and economic crisis has hit Germany especially hard, leading to the most severe economic decline in the history of the Federal Republic—one moredrastic than its counterpart in any other large European country or the United States. The impact of the crisis on Germany’s manufacturing sector has been especially dramatic as a result of the country’s strong focus on exports (exhibit).Some argue that Germany must reduce its emphasis on them and concentrate more on domestic demand. But the country’s answer to the crisis cannot be a departure from a successful export orientation and an above-average level of industrialization. Given these strengths, radically redefining the current economic model is not the solution. Instead, Germany will need to develop and refine its economic model further. According to a new report from McKinsey & Company—Welcome to the volatile world: Challenges for the German economy emerging from fundamental market changes —Europe’s largest economy must pursue three strategies to prepare for increased economic volatility in the coming years:• R einforcing growth. An economic structure characterized by a high-performing industrial core, with its strong export orientation, reflects Germany’s strengths and therefore offers unrivalled prerequisites for future growth. A trade surplus drove almost 60 percent of GDP growth over the past decade.ExhibitA focus on exportsContribution to GDP growth in Germany, 2000–09, %Net exports Private and govern-ment consumption, investments1 Share of net exports in total growth contributions from both net exports and domestic components (private consumption, governmentconsumption, investments); 2002 example: sum of absolute value of growth contributions = 4.0, resulting in a net exports share of 50%.Source: Volkswirtschaftliche Gesamtrechnungen (VGR), German Federal Statistics Office, Feb 2010; McKinsey analysis3.23.2Related thinking“Five forces reshaping the global economy: McKinsey Global Survey results”“What executives think about the economy: 2004 to now”“The looming deleveraging challenge” • B uilding resilience. Exports alone will not prove sufficient to induce the growth required, at least for the next two years. A larger and more dynamic service sector, particularlyif it offered additional support to German manufacturers, shows greater promise than higher private consumption—as welcome as that would be—and could compensate for fluctuations in the industrial sector.• D riving renewal. Germany needs a high-quality talent base, a superior infrastructure, and the other drivers of lasting growth. Comprehensive educational reform is also required, as well as a willingness, by businesses and German society as a whole, to put renewal ahead of conserving the status quo at almost any price.The report looks in detail at the challenges and opportunities facing the country’s key sectors: automotive, banking, chemicals, energy, health care, insurance, investment goods, steel, and transport and logistics. Achieving a combination of growth, resilience, and readiness for renewal will prove decisive for them.Download an executive summary of the report at the McKinsey Web site or order the complete 140-page study (in German) at mckinsey.de.Philipp Koch is a principal in McKinsey’s Hamburg office; Frank Mattern is a director in the Frankfurt office,where Stefan Niemeier is a principal. Copyright © 2010 McKinsey & Company. All rights reserved. Copyright © 2010 McKinsey & Company. All rights reserved.。

什么是欧洲主权债务违约风险-税收,CDS利差和市场定价风险

This article appeared in a journal published by Elsevier.The attached copy is furnished to the author for internal non-commercial research and education use,including for instruction at the authors institutionand sharing with colleagues.Other uses,including reproduction and distribution,or selling or licensing copies,or posting to personal,institutional or third partywebsites are prohibited.In most cases authors are permitted to post their version of thearticle(e.g.in Word or Tex form)to their personal website orinstitutional repository.Authors requiring further informationregarding Elsevier’s archiving and manuscript policies areencouraged to visit:/copyrightAuthor's personal copyWhat is the risk of European sovereign debt defaults?Fiscal space,CDS spreads and market pricing of risk qJoshua Aizenman a ,*,Michael Hutchison b ,Yothin Jinjarak caRobert R.and Katheryn A.Dockson Chair in Economics and International Relations,USC,Los Angeles,CA 90089,USA bDepartment of Economics,UC Santa Cruz,Santa Cruz,CA 95064,USA cDeFiMS,SOAS,University of London,London WC1H0XG,UKJEL classi ﬁcations:E43F30G01H631Keywords:CDS spreads Sovereign risk Fiscal space Default risk Eurozonea b s t r a c tWe estimate the pricing of sovereign risk for ﬁfty countries based on ﬁscal space (debt/tax;de ﬁcits/tax)and other economic funda-mentals over 2005–10.We focus in particular on ﬁve countries in the South-West Eurozone Periphery,Greece,Ireland,Italy,Portugal and Spain.Dynamic panel estimates show that ﬁscal space and other macroeconomic factors are statistically and economically important determinants of sovereign risk.However,risk-pricing of the Eurozone Periphery countries is not predicted accurately either in-sample or out-of-sample:unpredicted high spreads are evident during global crisis period,especially in 2010when the sovereign debt crisis swept over the periphery area.We match the periphery group with ﬁve middle income countries outside Europe that were closest in terms of ﬁscal space during the European ﬁscal crisis.Eurozone Periphery default risk is priced much higher than the matched countries in 2010,even allowing for differences in fundamentals.One interpretation is that these economies switched to a “pessimistic ”self-ful ﬁlling expectational equilibrium.An alternative interpretation is that the market prices not on currentq We thank seminar participants at the Bank for International Settlements,Danmarks Nationalbank,the Bank of Canada,Columbia –Tsinghua international economics workshop,Chulalongkorn University (Sasin),Association for Public Economic Theory 2011Conference,and the National Institute for Public Finance and Policy 9th Research Meeting (New Delhi,India,2012)for very helpful comments.We also thank participants at the conference “The European Sovereign Debt Crisis:Background and Perspectives ”(Bank of Denmark,Copenhagen,April 3–4,2012),and especially our discussant,Marcus Miller,for helpful comments.*Corresponding author.E-mail address:aizenman@ (J.Aizenman).Contents lists available at SciVerse ScienceDirectJournal of International Moneyand Financejournal homepage :www.else /locate/jimf0261-5606/$–see front matter Ó2012Elsevier Ltd.All rights reserved./10.1016/j.jimon ﬁn.2012.11.011Journal of International Money and Finance 34(2013)37–59Author's personal copybut future fundamentals,expecting adjustment challenges in the Eurozone periphery to be more dif ﬁcult for than the matched group of middle-income countries because of exchange rate and monetary constraints.Ó2012Elsevier Ltd.All rights reserved.1.IntroductionDuring 2000–2006,the OECD and most emerging markets experienced a remarkable decline in macroeconomic volatility and the price of risk.This period turned out to be the tail-end of the Great Moderation ,a precursor of the turbulences leading to the global ﬁnancial crisis of 2008–09,the consequent increase in risk premia,and the focus on ﬁscal challenges and the importance of ﬁscal space in navigating future economic challenges.The latter stages of the crisis,unfolding in 2010,focused attention on the heterogeneity of the Euro block,and the unique challenges facing the ﬁve South-West Eurozone Periphery countries,or SWEAP group (Greece,Ireland,Italy,Portugal,and Spain),in adjusting to ﬁscal fragility in the context of a ten-year old currency union.1This paper investigates the pricing of risk associated with the sovereign debt crisis that escalated during 2010in several European countries,and culminating in the selective default on Greek sovereign debt in early 2012.Our objective is to determine whether the perception of relatively high sovereign default risk of the ﬁscally distressed Euro area countries,as seen in market pricing of credit default swap (CDS)spreads,may be explained by existing past or current fundamentals of debt and de ﬁcits relative to tax revenues –which we term de facto ﬁscal space –and other economic determinants.2Our analysis allows us to address several questions.Does ﬁscal space help systematically explain the evolution of the market pricing of risk beyond that embedded in other macroeconomic indicators?Was risk in some markets (e.g.SWEAP)“overpriced ”in 2010judging by model predictions using the pre-vailing values of ﬁscal space other macro variables?Our objectives for the empirical work are three-fold.Firstly,we determine whether CDS spreads (in a panel regression setting)are related to ﬁscal space measures and other economic determinants.Secondly,we address whether there is an identi ﬁable dynamic pattern to CDS spreads during the crisis period.Thirdly,we investigate pricing differentials of CDS spreads in the Euro area,and the SWEAP in particular,compared to other countries.We seek to answer the question of whether Euro area and SWEAP CDS spreads follow the same pattern as the rest of the world or may they considered “mis-priced ”in some sense,especially during the 2010European debt crisis.To this end,we develop a pricing model of sovereign risk for a large number of countries (50)within and outside of Europe,before and after the global ﬁnancial crisis,based on ﬁscal space and other economic fundamentals including the foreign interest rate,external debt,trade openness,nominal depreciation,in ﬂation,GDP/Capita and economic growth.We use this dynamic panel model to explain CDS spreads and determine whether the market pricing of risk is comparable in the affected European countries and elsewhere in the world.By this methodology,and using in-sample and out-of-sample predictions,we can determine whether there are systematically large prediction errors for the CDS spreads during the global ﬁnancial crisis and in 2010when the sovereign debt crisis in Europe intensi ﬁed.Systematically large prediction errors may be due to mispricing of risk or may be attrib-utable to expectations of a future decline in fundamentals that lead to higher default risk.We also “match,”on the basis of similar ﬁscal space,each SWEAP country with a corresponding Middle Income country.This provides additional information on the market pricing of risk between SWEAP and countries with similar ﬁscal conditions but,unlike SWEAP,with histories of debt restructuring.1The SWEAP acronym for these ﬁve countries is used in Buiter and Rahbari (2010).2Our measure of ﬁscal space is from Aizenman and Jinjarak (2010).They propose a stock and ﬂow measure of de facto ﬁscal space.The stock variable is de ﬁned as the inverse of the tax-years it would take to repay the public debt.In this paper,ﬁscal space is measured both as outstanding government debt and government de ﬁcits,relative to the de facto tax base.The de ﬁcits measure is the realized tax collection,averaged across several years to smooth for business cycle ﬂuctuations.J.Aizenman et al./Journal of International Money and Finance 34(2013)37–5938Author's personal copyJ.Aizenman et al./Journal of International Money and Finance34(2013)37–5939 Our investigation reveals a complex and time-varying environment in the market for sovereign default risk.Speciﬁcally,weﬁnd empirically a key role ofﬁscal space in pricing sovereign risk, controlling for other relevant macro variables.The link is economically and statistically strong,and robust to the time dimension of the CDS premium,sample period,included control variables and estimation technique.Weﬁnd that risk of default in the SWEAP group appeared to be somewhat “underpriced”relative to international norms in the period prior to the globalﬁnancial crisis and substantially“overpriced”countries during and after the crisis,especially in2010,with actual CDS values much higher than the model would predict given fundamentals.In addition,compared to the matched group,controlling forﬁscal space and macroeconomic conditions,all of the SWEAP countries have much higher default risk assessments measured by CDS premiums.One potential explanation for the switch from under-to over-pricing of default risk is that markets were forward looking,not pricing entirely on current fundamentals but on expected further deterioration in future SWEAP fundamentals, especially in the realm ofﬁscal space.Alternatively,the results are consistent with multiple equilib-rium with an abrupt switch from a“good”(optimistic)expectations equilibrium in the Euro Area–with low expected default rates and low interest rates whereﬁscal positions are sustainable–to a“bad”(pessimistic)expectations equilibrium in these same countries–with high expected default rates and high interest rates whereﬁscal positions are not sustainable.The next section discusses the data.The third section provides a preliminary statistical analysis.The fourth section presents the empirical results.We close the paper with a discussion on possible inter-pretation of the emerging SWEAP risk premia,including the handicapping effect of being a member of a currency union,which reduces the country’s scope of adjustment via exchange rate and monetary policy.2.CDS spreads as a measure of sovereign default risk2.1.CDS spreads on sovereign bondsWe measure the market perception of sovereign default risk by the spreads on sovereign credit default swaps(CDS)at various maturities(tenors).3CDS instruments are mainly transacted in over-the-counter(OTC)derivative markets.The spreads represent the quarterly payments that must be paid by the buyer of CDS to the seller for the contingent claim in the case of a credit event,in this case non-payment(or forced restructuring)of sovereign debt,and is therefore an excellent proxy for market-based default risk pricing.4The total CDS market grew from about10trillion USD in2004,when statistics wereﬁrst systematically reported,to a peak prior to the globalﬁnancial crisis of almost60 trillion USD in mid-2008,and then fell sharply.The estimated gross(net)notional amount of sovereign CDS outstanding was2447(233)billion USD in2010,compared to about2196billion USD in government-issued international debt securities(BIS,2010).Fig.1shows the outstanding notional amounts of CDS instruments on sovereign bonds across countries in late February2011.Italy has the largest outstanding CDS notional amounts,at almost USD300billion,followed by Brazil,Spain and Turkey with notional amounts outstanding of over USD150billion.Sovereign CDS provide a market-based realtime indicator of sovereign credit quality and default risk.We consider sovereign CDS spreads at several maturities d three,ﬁve and ten-year maturities, across industrial countries and emerging markets.Despite the low probability of a credit event in most advanced economies,CDS markets are still active in most markets as buyers can use the sovereign CDS3See Packer and Suthiphongchai(2003)and Fontana and Scheicher(2010)for discussions of sovereign CDS markets.4An alternative proxy for default risk is the interest rate spread of sovereign debt.From an empirical standpoint,there are three main advantages of using CDS spreads rather than interest rate spreads.Firstly,CDS statistics provide timelier market-based pricing with larger coverage of industrial and developing countries than sources for national bond market rates. Secondly,using CDS spreads avoids the difﬁculty in dealing with time to maturity as in the case of using interest rate spreads(of which the zero yields would be preferred).Recent estimates from the Bank for International Settlements suggest that the average original and the remaining maturities of government debt instruments vary markedly across countries(BIS,2010). Thirdly,interest rate spreads embed inﬂation expectations and demand/supply for credit conditions as well as default risk.We are only interested in default risk.Author's personal copyas a hedge and for mark-to-market response.5Buyers of the sovereign CDS may or may not own the underlying government bonds.The latter case is termed ‘naked ’sovereign CDS,and frequently labeled as a speculation.CDS prices in our study are taken from CMA Datavision,a platform that is based on quotes collected from a consortium of over thirty independent swap market participants.CMA aggregates the most recent quotes and delivers the data intraday.The quoting convention for CDSs is the annual premium payment as a percentage of the notional amount of the reference obligation.The sovereign CDS spreads are reported in basis points,with a basis point equals to $1000to insure $10million of debt.6CDS spreads are London closing values.While CMA is not the sole provider of CDS prices,Mayordomo et al.(2010)ﬁnd that,in a comparison of six major providers,CMA quotes are most consistent with a price discovery process.The majority of sovereign CDS in the market are denominated in the US dollar;in our sample,about one-third of the CDS is Euro-denominated.The CMA data set provides a broad coverage of CDS pricing over countries and years.Appendix A provides data sources and Appendix B a list of countries in the entire sample,the subset of countries included in the empirical estimation,and means of 3,5and 10-year CDS spreads (in basis points),ﬁscal space and other macroeconomic indicators during the sample (2005–10).2.2.Empirical studies on CDS spreadsEmpirical studies of CDS (corporate and sovereign)are relatively new and usually deal with market microstructure issues.Our study,by contrast,is in line with the macro/international ﬁnance literature which considers macroeconomic determinants of country risk assessments and ﬁnancial crises.Several ﬁndings are particularly relevant to our analysis.As noted by Packer and Suthiphongchai (2003)and others,the CDS premium should in principle be approximately equal to the credit spread10020030A R G c d s A U S c d s A U T c d sB E L c d s B G R c d s B R A c d sC H L c d s C H N c d s C O L c d s C Z E c d sDE U c d s D N K c d s E S P c d s E S T c d sF I N c d s F R A c d sG B R c d s G R C c d sH R V c d s H U N c d sI D N c d s I R L c d s I S L c d s I S R c d s I T A c d sJ P N c d sK A Z c d s K O R c d sL B N c d s L T U c d s L V A c d sM E X c d s M Y S c d sN L D c d s NO R c d s N Z L c d sP A N c d s P E R c d s P H L c d s P O L c d s P R T c d sQ A T c d sR O M c d s R US c d s S V K c d s S V N c d s S W E c d sT H A c d s TU N c d s T U R c d s U K R c d s U S A c d sV E N c d s V N M c d s Z A F c d sFig.1.Global sovereign CDS positions in early 2011.This ﬁgure provides the gross notional amount of outstanding sovereign CDS positions (billion US$)as of February 25,2011.Source:Depository Trust &Clearing Corporation (DTCC).5Sovereign CDS can also be used to supplement corporate CDS to hedge for country risk.6For example,if the spread is 197basis points,meaning 197,000USD to insure against 10,000,000in sovereign debt for 10years;1.97%of notional amount needs to be paid each year,so 0.0197Â10million ¼$197,000per year.J.Aizenman et al./Journal of International Money and Finance 34(2013)37–5940Author's personal copyJ.Aizenman et al./Journal of International Money and Finance34(2013)37–5941 of the reference bond of the same maturity under certain conditions.However,Fontana and Scheicher (2010)demonstrate that the“basis”,i.e.difference between CDS spreads and the spreads on the underlying government bonds,was not zero in Eurozone CDS markets during late2010.They suggest that sizable deviations are attributable to limits to arbitrage and slow moving capital.Secondly,at high frequency(intraday),differences in credit quality(measured by CDS prices)are found to explain sovereign yield spreads of the Euro area governments(Beber et al.,2009).7Fontana and Scheicher (2010)argue that high CDS premium in late2010during the Eurozone debt crisis may be partly attributable to a decline in the appetite for credit-risky instruments and falling market liquidity rather than entirely due concerns about principle losses on outstanding sovereign debt.In addition,empirical researchﬁnds that daily sovereign interest spreads are more likely to lead sovereign CDS spreads in emerging markets(Ammer and Cai,2007).8Taken together,both studies suggest that sovereign interest rates and CDS spreads have common underlying causes,rather than one driving the other.This is consistent with other work where some studies indicate that price discoveryﬁrst occurs in the CDS market and follows in the bond market,and vice versa.9There is evidence that CDS spreads may be driven by macroeconomic conditions.Amato(2005) decomposes CDS spreads into risk premium and risk aversion andﬁnds that both are inﬂuenced by macroeconomic conditions.Packer and Zhu(2005)ﬁnd that contractual terms inﬂuence CDS spreads, but that signiﬁcant“regional effects”(differential pricing across regions)is also evident.Micu et al. (2006)alsoﬁnd that credit rating announcements have a large inﬂuence on CDS spreads.In explain-ing recent developments,Berndt and Obreja(2010)suggest that“economic catastrophe risk”rose sharply in2007–08pushing up CDS spreads.Cecchetti et al.(2010)plot severalﬁscal indicators against CDS spreads for advanced economies.Theyﬁnd correlations across countries with substantial hetero-geneity.10Longstaff et al.(2011)study sovereign CDS of several emerging markets from October2000to January2010.They found that the sovereign spreads are more associated with global factors(US stock, treasury,and high yield markets)than local factors(stock return,exchange rate,and foreign reserve). Dooley and Hutchison(2009)ﬁnd thatﬁnancial,economic and regulatory“news”emanating from the U.S.during the globalﬁnancial crisis quickly impacted sovereign CDS spreads in emerging markets.Concerns about price determination,systemic risk to theﬁnancial system,and the general opacity of the over-the-counter markets(where CDS is now traded)have led to calls more government regulation and for CDS to be traded on organized exchanges.Presently CDSs are not traded on an exchange and there is no required reporting of transactions to a government agency.One reason for the traditionally limited government oversight is that OTC markets are considered wholesale markets for professional participants,rather than retail investors.However,the recentﬁnancial turmoil has shown that OTC derivative markets can negatively affect other functioningﬁnancial markets and can be a serious risk to the health of the banking system.These observations have led to increasing calls for the regulation and oversight CDS markets.For example,in the event that regulatory reforms require that CDS be traded and settled via a central exchange/clearing house,there would no longer be‘counter-party risk’,as the risk of the counterparty will be held with the central exchange/clearing house.113.Statistical contoursMonthly5-year CDS spreads from2005to2011are plotted for the SWEAP and other selected countries(countries which are matched with the SWEAP group,discussed below)in Fig.2.Judging by7Beber et al.study microstructure data of bond quotes and transactions from the interdealer markets,covering Austria, Belgium,Finland,France Germany Greece,Italy,Netherlands,Portugal and Spain.Their sample period is April2003–December 2004.8Ammer and Cai examine daily data from February2001to March2005,covering Brazil,China,Colombia,Mexico, Philippines,Turkey,and Uruguay.On interest rates,CDS spreads,and speculation,see also the discussion ofﬁndings from the European Commission(Tait and Oakley,2010),which suggests no strong causality between the two.9See Carboni(2011)for a recent review of the empirical literature on this point.10For example,they plot the forecast level of general government debt/GDP against January2010CDS spreads for21 advanced economies andﬁnd a positive correlation.11Kiff et al.(2009)discuss systemic risk and calls and government regulation policy options in the CDS market.Author's personal copythese spreads,ﬁnancial stress in global markets emerged in early 2008but became dramatic and widespread in late 2008.The turbulence subsided by mid-2009in most countries,with the notable exception of the SWEAP group:Greece,Ireland,Italy,Portugal,and Spain.For Greece,the unraveling of its ﬁscal condition in late 2009resulted in a manifold increase in sovereign CDS spreads.For Ireland,the sovereign CDS spreads have widen sharply twice,in early 2009and in late 2010.By 2010,spreads of the SWEAP group were already much higher than those of most emerging market countries (e.g.above the spreads of South Africa,Mexico,Panama,Malaysia and Colombia in Fig.2).On the other hand,sovereign spreads of Germany and the US remained very low throughout the period (not shown).Table 1reports the annual mean values (standard deviation in parentheses)of sovereign CDS spreads (5-year tenor),ﬁscal space and macroeconomic fundamentals for SWEAP and other country groupings.The table shows average values for the period before crisis (2005–07)and during the crisis (2008–10and individual years).The fall of 2008was the height of the global ﬁnancial crisis,while the latter part of 2009was a recovery period as ﬁnancial panic and the liquidity crisis subsided for most countries.However,the SWEAP sovereign debt crisis manifested mainly in 2010and later.Prior to the crisis,SWEAP CDS values were quite low,ranging from 8to 17basis points on average,which are somewhat but not markedly higher than the mean of other Euro countries (11basis points)and lower than the non-Euro OECD group (35basis points).During the early months into the global ﬁnancial crisis,2008–09,sovereign CDS spreads rose in virtually every country.However,spreads dropped very substantially in all regions by 2010except for the Euro area excluding SWEAP,where it remained roughly unchanged,and SWEAP,where it rose dramatically.SWEAP CDS average values in 2010ranged from 238basis points in Italy to 1027basis points in Greece.By contrast,in 2010,OECD countries (non-Euro members)had an average CDS spread of 118basis points and non-SWEAP Euro members had an average spread of 101basis points.As our main objective is to investigate the link between ﬁscal space and the pricing of default risk,we also track the adjustment of ﬁscal capacity across countries.Table 1shows the ﬁscal balance to tax base ratio and the public debt to tax base ratio.OECD (excluding the Euro countries)and non-SWEAP Euro countries experienced an increase in debt/tax ratios by 0.2percent and 0.3percent,respectively,100200300400ESP100200300400ZAF02000400060008000GRC100200300400PAN0200400600800IRL050100150200250MYS0100200300400500ITA 0100200300400MEX500100015002005q42006q42007q42008q42009q42010q42011q4PRT1002003004002005q42006q42007q42008q42009q42010q42011q4COLFig.2.Evolution of sovereign CDS prices.This ﬁgure plots CDS 5-year tenor (basis points)for selected middle-income countries and Eurozone members.J.Aizenman et al./Journal of International Money and Finance 34(2013)37–5942Author's personal copyT a b l e 1S u m m a r y s t a t i s t i c s o f s o v e r e i g n C D S v a l u e s a n d f u n d a m e n t a l s .C o u n t r y S o v e r e i g n CD S 5-y r t e n o r (b a s i s p o i n t s )F i s c a l b a l a n c e /t a x b a s eP u b l i c d e b t /t a x b a s e05–0708091008–1005–0708091008–1005–0708091008–10S p a i n 16.7100.7113.5347.7187.30.05À0.12À0.31À0.27À0.231.11.11.51.71.4G r e e c e 15.0232.1283.41026.5514.0À0.18À0.29À0.48À0.33À0.373.23.54.04.54.0I r e l a n d 8.6181.0158.0619.2319.40.05À0.24À0.47À1.08À0.600.91.52.23.22.3I t a l y 13.4156.9109.2238.0168.0À0.07À0.07À0.13À0.11À0.102.52.52.82.82.7P o r t u g a l 10.496.391.7497.3228.4À0.13À0.11À0.30À0.27À0.221.91.92.22.42.2M i d d l e -i n c o m e g r o u p 124.2(102.8)829.9(1069.4)295.2(331.3)233.2(221.5)452.8(540.7)À0.06(0.2)À0.08(0.2)À0.22(0.2)À0.19(0.1)À0.16(0.2)2.7(2.6)2.2(2.1)2.3(1.9)2.3(1.9)2.3(2.0)H i g h -i n c o m e (n o n O E C D )32.1(13.9)330.7(158.9)164.0(90.5)172.3(118.4)222.3(122.6)0.13(0.4)0.24(0.5)0.10(0.4)0.16(0.5)0.17(0.5)1.2(0.8)1.0(0.6)1.7(0.1)1.4(0.8)1.4(0.5)O E C D (n o n E u r o )34.8(41.5)260.3(238.8)120.3(103.5)117.8(96.4)166.2(146.2)0.04(0.2)0.01(0.2)À0.12(0.1)À0.08(0.1)À0.06(0.1)1.7(1.7)1.7(1.7)1.9(1.8)1.9(1.8)1.8(1.8)E u r o (e x c l u d i n g S W E A P )11.0(13.3)95.1(40.2)54.2(24.6)101.3(55.2)83.5(40.0)À0.03(0.0)À0.02(0.0)À0.15(0.1)À0.14(0.1)À0.10(0.1)1.4(0.5)1.4(0.5)1.6(0.5)1.7(0.4)1.6(0.5)T r a d e /G D P I n ﬂa t i o n (%)E x t e r n a l d e b t /G D P05–0708091008–1005–0708091008–1005–0708091008–10S p a i n 0.60.60.50.50.53.551.400.802.781.661.41.51.71.51.6G r e e c e 0.60.60.50.50.53.322.642.9717.347.651.31.41.81.71.7I r e l a n d 1.51.61.60.91.43.754.05À4.481.300.297.88.910.711.010.2I t a l y 0.60.60.50.60.52.302.261.022.101.791.11.01.21.11.1P o r t u g a l 0.70.80.60.70.72.600.710.002.521.081.91.92.32.42.2M i d d l e -i n c o m e g r o u p 0.9(0.5)0.9(0.5)0.8(0.4)0.9(0.5)0.9(0.4)6.74(4.7)9.73(6.8)5.24(5.9)6.61(5.4)7.19(6.0)0.5(0.3)0.4(0.3)0.4(0.3)0.4(0.2)0.4(0.3)H i g h -i n c o m e (n o n O E C D )0.9(0.0)0.9(0.1)0.8(0.0)0.8(0.0)0.8(0.0)8.20(6.2)8.02(7.3)À0.90(3.9)1.37(0.7)2.83(4.0)0.6(0.2)0.7(0.2)0.9(0.2)0.8(0.2)0.8(0.2)O E C D (n o n E u r o )0.8(0.3)0.9(0.4)0.8(0.3)0.8(0.4)0.8(0.4)3.38(2.3)4.60(3.4)3.02(3.5)3.08(1.4)3.57(2.8)1.0(1.1)1.3(2.0)1.5(2.5)1.5(2.4)1.4(2.3)E u r o (e x c l u d i n g S W E A P )1.2(0.4)1.3(0.4)1.2(0.5)1.2(0.4)1.2(0.4)2.56(1.0)2.13(1.1)0.94(0.5)2.05(0.6)1.71(0.7)1.8(1.0)1.8(0.9)2.0(0.9)1.9(0.9)1.9(0.9)T h i s t a b l e r e p o r t s m e a n a n d s t a n d a r d d e v i a t i o n (i n p a r e n t h e s i s )o f s o v e r e i g n C D S s p r e a d s (b a s i s p o i n t s )a n d m a c r o f u n d a m e n t a l s .T a x b a s e i s a n a v e r a g e t a x /G D P o v e r a p e r i o d o f p r e v i o u s 5y e a r s .A p p e n d i x A p r o v i d e s d a t a s o u r c e s a n d A p p e n d i x B d e t a i l s t h e c o u n t r y g r o u p s .J.Aizenman et al./Journal of International Money and Finance 34(2013)37–5943Author's personal copybetween 2005and 07and 2010.For Ireland and Greece,the deterioration in ﬁscal circumstances was much more drastic:the government debt of Ireland climbed from 25%of GDP in 2007to almost 100%of GDP in 2010,while the government debt of Greece grew from 95%to over 140%.As a result,the debt/tax ratio of Ireland jumped from 0.9to 3.2and that of Greece from 3.2to 4.5,leaving both countries with a much less room for a ﬂexible policy response on the ﬁscal side.The large increase of debt/tax ratios in both countries captures a high degree of distress in their economic fundamentals,including the government assumption of banking sector liabilities in the case of Ireland.Similarly large deteriora-tions in ﬁscal space for these countries are also evident in the fall in ﬁscal balance to tax ratios.We illustrate further the 2005–07ﬁscal preconditions,as measured by debt/tax (and debt/gdp)and de ﬁcit/tax (de ﬁcit/gdp),in the two panels of Fig.3by country group.Lower pre-crisis government debt and lower ﬁscal de ﬁcits relative to the tax base imply greater ﬁscal capacity.The ﬁgure shows that ﬁscal space was weakest (highest levels of debt and de ﬁcits relative to the tax base)in the middle-incomecountries,although the average debt to gdp ratio was lower than the other groups.This re ﬂectsgenerally lower tax bases in the middle income countries.Generally,the SWEAP had more limited ﬁscal space during the tranquil period than other high-income groups –higher average debt and de ﬁcits to the relative to the tax base (despite a signi ﬁcant budget surplus in Ireland during this period),and a higher level of debt to GDP.4.Methodology and empirical results 4.1.MethodologyThe dependent variables in our formal empirical work are sovereign CDS spreads of 5year maturity (regressions with 3and 10-year maturities are shown in the appendix table),12estimated in a panelregression,y it ¼a i þl t þq D y it À1þX 0it b þ3it ;where y is the CDS spread,i stands for country and t foryear;X is a vector of controls.The sample covers a panel of 50countries from 2005to 2010.The vector X includes ﬁscal space (government debt/tax and ﬁscal de ﬁcit/tax)d the focus of our work d as well as several other variables that frequently employed in the literature to explain country risk.These variables are the TED spread,external debt (total foreign liabilities/GDP),trade openness (trade/GDP)and in ﬂation.As the conditions for consistent estimation in the dynamic panel are known to be demanding,our solution is to work with both a simple ﬁxed-effects model and other estimation speci ﬁcations,including clustered standard errors and the Arellano-Bond dynamic panel estimator.Arellano-Bond is a GMM estimator with instruments (exogenous and lagged values),well suited to the problem at hand,with a substantially larger number of cross-section units (50countries),but requires many period of data as the instruments to account for the correlation of lagged dependent variable and the unobserved error terms.We consider ﬁxed effects,clustered standard errors,and GMM in several variants of the model as bounding the causal effects of interest.The sovereign spreads are estimated in level.We also consider for GMM the dependent variable in log multiplied by a hundred,allowing the coef ﬁcients to be interpreted in terms of a percentage change of sovereign default risks (this terminology also aligns with standard practice in the ﬁnancial sector that discusses the percentage change of CDS spreads).4.2.Dynamics of CDS spreads and Euro/SWEAP pricing differentialsTable 2considers the dynamics and structure of CDS pricing over the 2005–10sample period.Differential pricing for the SWEAP and other Eurozone countries (non-SWEAP)is investigated.To focus on CDS pricing dynamics during the global and European ﬁnancial turmoil,we include time dummy variables (t 2008–t 2010)for three crisis years:2008is identi ﬁed as the central part of the global ﬁnancial crisis,2009is identi ﬁed as a partial recovery period,and 2010is identi ﬁed with the SWEAP12Our CDS data set contains 1–10year maturities.We focus on the 5-year maturity since this is the deepest and most actively traded CDS market.While there is no precise international account of government debt maturity,recent statistics suggest that the average original maturity of central government debts is around 10years for both emerging markets and industrial countries (BIS,2010).Hence,we also report results for 10-year maturities in the appendix,as well as 3-year maturities for a robustness test.J.Aizenman et al./Journal of International Money and Finance 34(2013)37–5944。

次贷危机(SubprimeMortgage

markets
The impact(影响) of Subprime mortgage crisis
Short term effects
1.Most of the Investment banking(投资银行) go broke
2.The equity market is downwards ;
次级抵押贷款危机是由房价大幅下跌引发的，导致抵押贷款违约和丧失抵押品赎回权和住宅相关证券贬值
Dominoes effect多米诺骨牌效应
Introduce some companies
雷曼兄弟公司
+
+ 雷曼兄弟公司是为全球公司、机构、政府和投资者的金融需求提供服务的一家全方位、多元
化投资银行。雷曼兄弟公司雄厚的财务实力支持其在所从事的业务领域的领导地位，并且是全球最具实力的股票和债券承销和交易商之一。同时，公司还担任全球多家跨国公司和政府的重要财务顾问，并拥有多名业
+ 2008年10月11日：美国财政部长保尔森表示，政资金投入银行是一个优先事项，因为金融市场将继续动荡。
+ Oct. 12, 2008: European leaders agree to guarantee bank borrowing and use government money to prevent big lenders from going under, trying to stop the financial hemorrhage and stave off a recession.
Investment banks may lose $100 because they must pay off loans for borrowers.

CURRENT FINANCIAL CRISIS

CURRENT FINANCIAL CRISIS – CAUSES AND CONSEQUENCES In our opinion, the deep crisis that the global financial markets and the banking sector have been confronted with for more than a year has three main causes (Anton, 2009). First, the USA has been blocked in one of the worst real-estate recessions in its history. What is occasionally seen as the crisis of modern financial instruments has a real economic background. The massive boom on the real estate market in the USA, accompanied by the doubling of prices between 2000 and 2006, is now followed by a significant decrease. Thus, in August 2008, housing prices were 15% under the level of prices in the previous year. At present, price stabilisation is not foreseeable and one should not exclude the hypothesis that prices will continue to fall in the same proportion. At the same time, a significant number of debtors cannot pay back their interests and mortgage instalments. The total volume of subprime and Alt-A mortgages that have been affected by the crisis amounts up to $ 2.000 billion. Second, financial innovations of the last two decades facilitate the transfer of risks associated with mortgage credits. A significant part of risks associated with mortgages have been transferred via securitisation and sold to investors at global level. In principle, the broader spread of ri sks stabilizes the system, because in opposition with previous crises, banks no longer need to bear the ensuing losses alone. The broad spread of risks, however, changes the dynamics of the market. While a few years ago credit risks were evaluated only by a small number of experts, nowadays the market analyses them through thousands of participants. Doubts concerning rating quality and price formation caused, in the summer of 2007, the abrupt exit of investors from the market, massive price falls and the total loss of liquidity of the market. Owing to the ensuing uncertainty, the crisis has seized other segments of the market as well, such as the segment of commercial buildings or of credits to finance acquisitions. Because transaction positions are reported as fair value or net recovery value, many banks have registered huge losses. It was only through the decisive intervention of central banks that tensions could be kept under control.Third, the development of risk management could not evolve at the same pace as financial innovation. For years, the financial and banking sector has striven to implement the Basel II Agreement. Yet the latter refers to assets from the investment portfolio. Innovative structured products affected by the crisis are highlighted in the transaction portfolio, sinc e they were intended for re sale. Due to the decreasing demand for these products and the corresponding decrease in prices, risk management in many banks was caught totally unprepared by the crisis. Banks that did not have credit derivatives in their transaction portfolio found themselves, all of a sudden, confronted with the necessity to correct their value in the balance sheet.Turmoil on financial markets has spread, since many big banks and brokering societies did not have an effective risk ma nagement. Some firms invested in assets or sold credits to special investment vehicles, even though they were not bond by contract to do so. Few companies have anticipated the liquidity deficit at the level of the balance sheet. Issuers of Collaterized Debt Obligations, whose reference is securitised financial instruments (ABS CDO), have preserved the least riskypositions (senior or super-senior) and ha ve registered losses in the market marking process under the circumstances of deepened subprime credit crisis. The complexity of the positions of these instruments has led to difficulties in their evaluation when market liquidity decreased markedly and correlati on risk was materialised on the Collaterized Debt Obligations market as concentrated exposure to subprime credit risk.LESSONS FROM THE CURRENT FINANCIAL CRISISThe implications of current financial crisis on the international financial markets are mu ltiple. We know that the final lessons of the crisis can’t be drawn now because we need more information and analysis. The current financial crisis has brought home a number of half lessons from the risk management point of view.One is that financial innovations can held unknown risks. For example, theuse of credit derivatives for hedging or speculative purpose implies numerous risks, such as: credit risk, counterparty risk, model risk, rating agency risk, and settlement risk (Gibson, 2007). The process of financial innovation on the financial markets has determined a reduction of transparency and an increase of the markets interconnectivity.Furthermore, the complexity of financial innovation has generated a separation between money offer and demand. Due to the lack of transparency on the markets for financial innovations and to the complexity of these instruments, investors couldn’t identify and asses properly the risks implied by their investments. As a consequence, the negative perception of risks has expanded on other financial instruments, the risk level has been reappraise d and the liquidity has fallen (National Bank of Romania, 2008). Furthermore, the evolution of price and risk associated to the financial innovation (CDOs) is very hard to predict during financial turmoil. Another important lesson is that stan dard quantitative models for risk management evaluation/assessment and the users of these models (analysts) underestimated the systematic nature of risks . One should notice that the banks have too similar risk management strategies, which could amplify systematic risk. Using the same models (Value-at-Risk) the investors came to the same conclusion at the same time, adopted similar decision, there by increasing systematic risk. In order to address this shortage, the financial institutions should use more stress testing and scenario analysis to help measure and manage risks.A wide variety of approaches to manage risk would help reduce the chances of a common reaction and, at the same time, such measures will be either flexible or sophisticated enough to fully capture the range of possible outcomes.。

外刊每日精读 GP crisis

外刊每日精读 | GP crisis文章脉络【1】一项新计划：药房为病人开药方以应对全科医生危机。

【2】该计划受到卫生领导人的广泛欢迎。

【3】该计划并不是灵丹妙药，存在一些问题。

【4】该项计划带来的好处。

【5】首相里什•苏纳克和阿曼达·普里查德阐释该计划的好处。

【6】贝西•贝尔德警告称，“并非所有药店都能提供这些服务。

【7】卡米拉•霍桑这些计划和采取的“积极措施”并不能解决根本问题。

【8】英国完全合格的全职全科医生和药店的数量有所下降。

【9】黛西·库珀表示需要严肃的计划来招募国家医疗服务体系所需要的药剂师和全科医生。

【10】韦斯·斯特里特表示不能指望保守党解决全科医生危机。

经济学人原文Pharmacies to prescribe drugs to patients in bid to tackle GP crisis【1】Millions of patients in England will be able to get prescriptions for seven common conditions, plus more blood pressure checks and the contraceptive pill, directly from pharmacies under proposals to tackle the crisis in GP surgeries.Those suffering from earache,a sore throat , sinusitis, impetigo, shingles, infected insect bites and uncomplicated urinary tract infections （UTIs） in women are set to be prescribed medicine by pharmacists without seeing a doctor or nurse for the first time .【2】The reforms, to be set out by the government and NHS England in a primary care plan today, are designed to free up 15m GP appointments over the next two years. In the past five months, 24m consultations took place more thana fortnight after being requested by the patient– almost 5m each month on average, data shows.The blueprint was broadly welcomed by health leaders, with Thorrun Gov ind, chair of the Royal Pharmaceutical Society in England, calling it a “realgame-changer” for patients.【3】But experts warned that not all pharmacies would be able to offer all or any of the new services, meaning the shake-up could result in frustrated patients being “bumped from pillar to post, only to end up back at the GP”.There are also concerns that patients may not be able to recognise the seriousness of some conditions, including whether a UTI can be classed as “uncomplicated”.The country’s senior family doctor said the plan was not the “silver bullet”urgently neededto retain and recruit the thousands of GPs required to keep the NHS afloat.【4】The proposals, which follow measures announced yesterday to make it easierto get GP appointments with online tools, are being backed by £645m over two years. Ministers hope the reforms will launch this winter after a consultation with the industry.The number of people able to access blood pressure checksin pharmacies will be more than doubled to 2.5 million a year, from 900,000 last year. Half a million women will no longer need to speak to a practice nurse or GP to access oral contraception and can instead attend a pharmacy for it, NHS England said.Self-referrals will also be increased for access to services suchas physiotherapy, hearing tests and podiatry without the requirement to see a GP first.【5】Rishi Sunak, the prime minister, will hail the plan as evidence of actionto slash NHS waiting times, as he seeks to bounce back from the Conservatives’dire performance in the local elections, in which they lostabout 1,000council seats.NHS chief executive, Amanda Pritchard, said the “ambitious package” would help transform how care is provided within the healthservice.“This blueprint will help us to free up millions of appointments for those who need them most, as well as supporting staff so that they can do less admin and spend more time with patients,” she said.【6】But Beccy Baird, a senior fellow at the King’s Fund , a health thinktank, warned that “not all pharmacies will be able to offer these services”,causing frustrations and delays which could mean “patients[being] bumped from pillar to post, only to end up back at the GP”.She added: “Local areas will need to think very carefully about how the y communicate which services are available where and to whom.”【7】There are also concerns that not all pharmacies in England have the space to provide separate privacy areas for patients seeking prescriptions for sensitive conditions.Prof Kamila Hawthorne, the chair of the Royal College of GPs , said the plans included “positive steps” but none that were the “silver bullet” needed “to address the intense workload and workforce pressures GPs and their teams are working under”.【8】Ministers have repeatedly promised to increase the number of GPs. But the number of fully qualified, full-time equivalent GPs in England has dropped since 2015. GP shortages now top 4,200 and will double to 8,800 by 2031, according to the Health Foundation. Meanwhile, the number of pharmacies in England has reduced slightlyin the past two years, according to BBC analysis of figures from the NHS Business Services Authority, down by 160 to 11,026community chemists.【9】The Liberal Democrat health and social care spokesperson, Daisy Cooper , said: “Without a serious plan to recruit the pharmacists and GPs that our NHS needs, this could be yet another Conservative health pledge not worth the paper it’s written on.”【10】expecting the Conservatives to fix the GP crisis was“like expecting an arsonist to put out the fire they started”, said the Labourhealth spokesman, Wes Streeting. Sunak“has no plan to address the shortage of GPs, or to reverse the cut in the number of doctors trained every year,” he added .。

subprime+crisis次贷危机

• Bank corporations: Companies value their mortgageassets (receivables) based on estimates of collections from panies record expe nses in the current period to adjust this valuation,increasi ng their bad debt reserves and reducing earnings. Rapid or unexpectedchanges in mortgage asset valuation can lead to volatility in earnings and stock prices. The ability of lenders to predict future collections is a complex task subjectto a multitude of variables .
Investors: Stocks or bonds of the entities above are affected by the lower earningsand uncertainty regarding the valuation of mortgage assets and related paymentcollection. Many investors and corporations purchased MB S or CDO asinvestments and incurred related losses
Policies of central banks
• Central banks manage monetary policy and may target the rate of inflation. They have some authority over commercial banks and possibly other financial institutions. They are less concerned with avoiding et price bubbles, such as the housing bubble and dotcom bubble.

金融危机推荐书目

4.《抵押贷款崩溃：6个在糟糕时代赚钱的方法》（More Mortgage Meltdown: 6 Ways to Profit in These Bad Times）作者：Whitney Tilson和Glenn Tongue. 这本书其实是两本书的结合体，第一部分解释了房地产泡沫出现并破裂的原因，对各种类型的抵押贷款及其给金融系统带来的损失做出了详尽的介绍。第二部分介绍了价值投资，并分析了作者独到的六种不同投资策略。
本书是诺贝尔经济学奖得主席勒对于2008年金融危机的细致描述，解释了这场全球性金融危机如何爆发，并阐释了面对这样的危机应该如何应对的问题。
读懂金融危机必看的八本书
1. 《大空头》
• 作者：迈克尔•刘易斯（Michael Lewis）
本书展现的是一群智力超群、性格怪异的“终
结者”。他们之前仅仅是名不见经传的华尔街员工，
但他们是洞察次贷危机的“先知者”，一直对次级
房贷市场的盛行及金融工具的泛滥充满了质疑和不信任，洞见了美联储、财政部都不曾察觉的市场疯
5.《这一次有所不同：8个世纪的金融闹剧》（This Time is Different: Eight Centuries of Financial Folly ）作者：Kenneth S. Rogoff
这本书也详细记载了股市泡沫的来龙去脉。 6.《太大而不能倒》（Too Big to Fail: The Inside Stond Washington Fought to Save the Financial System—and Themselves ）作者：Andrew Ross Sorkin
狂，将赌注压在美国金融系统行将崩溃上。结果他
们赢了，华尔街输了。刘易斯以他一贯洞见烛微的笔法，再现了华尔街上演的市场传奇和诡谲道德剧，让人深思资本市场中的人性缺陷和金融体系的弊端。

THE “MORTGAGE CRISIS” HOW CURENT CREDIT WOES “次贷危机”是当前信用危机共37页PPT资料

Charlotte, NC
1
The Current Litigation Environment
New legislation
• Federal and state
Increased enforcement activity
• Federal and state • Civil and criminal penalties
Increased litigation
• By states’ Attorneys General and regulators • By local governments • By private plaintiffs
2
New Legislation
Federal
• Housing and Economic Recovery Act of 2019 (signed 7/30/08)
Servicers required to: (i) be licensed; (ii) act with “skill, care and diligence”; and (iii) file fee schedules with Commissioner of Banks
Expands list of “prohibited activities” Requires 45-day pre-foreclosure notice to borrowers and gives Office of
First time that mortgage servicing subject to NC regulations Unique language requires NC-specific procedures New pitfalls, short fuses and potential for liability Amended again in the short session of 2019 (H.B. 2188) (eff. 10/1/08) to ban yield

高级英语(第三版)第二册第十三课 The Mansion A Subprime Parable

●Poor lending and borrowing decisions
Financial Market
Mortgage Cash Flow
Declines
●Downward pressure on business investment
●Risk of increasing unemployment
And Foreclosure
●Home building
declines
Negative
Effects on
●Downward pressure on
Economy consumption as household源自wealth declines
●Housing bubble bursts
●Household wealth declines
Teaching objectives
1) To acquaint students with the historical background of the text.
2) To enable students to appreciate the style of Michele Lewis’s writing.
Bank Losses
●Harder to get loans
●Higher interest rates for loans
●Washington Mutual ●Loss on mortgages retained
●Wachovia
●High bank debt levels (leverage杠杆效率)
• 次级抵押贷款是指一些贷款机构向信用程度较差和收入不高的借款人提供的贷款。在前几年美国住房市场高度繁荣时，次级抵押贷款市场迅速发展。但随着美国住房市场大幅降温，加上利率上升，很多次级抵押贷款市场的借款人无法按期偿还借款，导致一些放贷机构遭受严重损失甚至破产。美国次级抵押贷款危机引发了投资者对美国整个金融市场健康状况和经济增长前景的担忧，导致近来股市出现剧烈震荡。

The American Crisis by Thomas Paine 中英对照

The American Crisis by Thomas Paine :THESE are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands it now, deserves the love and thanks of man and woman. Tyranny, like hell, is not easily conquered; yet we have this consolation with us, that the harder the conflict, the more glorious the triumph. What we obtain too cheap, we esteem too lightly: it is dearness only that gives every thing its value. Heaven knows how to put a proper price upon its goods; and it would be strange indeed if so celestial an article as FREEDOM should not be highly rated. Britain, with an army to enforce her tyranny, has declared that she has a right (not only to TAX) but "to BIND us in ALL CASES WHA TSOEVER," and if being bound in that manner, is not slavery, then is there not such a thing as slavery upon earth. Even the expression is impious; for so unlimited a power can belong only to God. Whether the independence of the continent was declared too soon, or delayed too long, I will not now enter into as an argument; my own simple opinion is, that had it been eight months earlier, it would have been much better. We did not make a proper use of last winter, neither could we, while we were in a dependent state. However, the fault, if it were one, was all our own *(1) ; we have none to blame but ourselves. But no great deal is lost yet. All that Howe has been doing for this month past, is rather a ravage than a conquest, which the spirit of the Jerseys, a year ago, would have quickly repulsed, and which time and a little resolution will soon recover.I have as little superstition in me as any man living, but my secret opinion has ever been, and still is, that God Almighty will not give up a people to military destruction, or leave them unsupportedly to perish, who have so earnestly and so repeatedly sought to avoid the calamities of war, by every decent method which wisdom could invent. Neither have I so much of the infidel in me, as to suppose that He has relinquished the government of the world, and given us up to the care of devils; and as I do not, I cannot see on what grounds the king of Britain can look up to heaven for help against us: a common murderer, a highwayman, or a house-breaker, has as good a pretence as he.'Tis surprising to see how rapidly a panic will sometimes run through a country. All nations and ages have been subject to them. Britain has trembled like an ague at the report of a French fleet of flat-bottomed boats; and in the fourteenth [fifteenth] century the whole English army, after ravaging the kingdom of France, was driven back like men petrified with fear; and this brave exploit was performed by a few broken forces collected and headed by a woman, Joan of Arc. Would that heaven might inspire some Jersey maid to spirit up her countrymen, and save her fair fellow sufferers from ravage and ravishment! Yet panics, in some cases, have their uses; they produce as much good as hurt. Their duration is always short; the mind soon grows through them, and acquires a firmer habit than before. But their peculiar advantage is, that they are the touchstones of sincerity and hypocrisy, and bring things and men to light, which might otherwise have lain forever undiscovered. In fact, they have the same effect on secret traitors, which an imaginary apparition would have upon a private murderer. They sift out the hidden thoughts of man, and hold them up in public to the world. Many a disguised Tory has lately shown his head, that shall penitentially solemnize with curses the day on which Howe arrived upon the Delaware. As I was with the troops at Fort Lee, and marched with them to the edge of Pennsylvania, I am well acquainted with many circumstances, which those who live at a distance know but little or nothing of. Our situation there was exceedingly cramped, the place being a narrow neck of landbetween the North River and the Hackensack. Our force was inconsiderable, being not one-fourth so great as Howe could bring against us. We had no army at hand to have relieved the garrison, had we shut ourselves up and stood on our defence. Our ammunition, light artillery, and the best part of our stores, had been removed, on the apprehension that Howe would endeavor to penetrate the Jerseys, in which case Fort Lee could be of no use to us; for it must occur to every thinking man, whether in the army or not, that these kind of field forts are only for temporary purposes, and last in use no longer than the enemy directs his force against the particular object which such forts are raised to defend. Such was our situation and condition at Fort Lee on the morning of the 20th of November, when an officer arrived with information that the enemy with 200 boats had landed about seven miles above; Major General [Nathaniel] Green, who commanded the garrison, immediately ordered them under arms, and sent express to General Washington at the town of Hackensack, distant by the way of the ferry = six miles. Our first object was to secure the bridge over the Hackensack, which laid up the river between the enemy and us, about six miles from us, and three from them. General Washington arrived in about three-quarters of an hour, and marched at the head of the troops towards the bridge, which place I expected we should have a brush for; however, they did not choose to dispute it with us, and the greatest part of our troops went over the bridge, the rest over the ferry, except some which passed at a mill on a small creek, between the bridge and the ferry, and made their way through some marshy grounds up to the town of Hackensack, and there passed the river. We brought off as much baggage as the wagons could contain, the rest was lost. The simple object was to bring off the garrison, and march them on till they could be strengthened by the Jersey or Pennsylvania militia, so as to be enabled to make a stand. We staid four days at Newark, collected our out-posts with some of the Jersey militia, and marched out twice to meet the enemy, on being informed that they were advancing, though our numbers were greatly inferior to theirs. Howe, in my little opinion, committed a great error in generalship in not throwing a body of forces off from Staten Island through Amboy, by which means he might have seized all our stores at Brunswick, and intercepted our march into Pennsylvania; but if we believe the power of hell to be limited, we must likewise believe that their agents are under some providential control.I shall not now attempt to give all the particulars of our retreat to the Delaware; suffice it for the present to say, that both officers and men, though greatly harassed and fatigued, frequently without rest, covering, or provision, the inevitable consequences of a long retreat, bore it with a manly and martial spirit. All their wishes centred in one, which was, that the country would turn out and help them to drive the enemy back. V oltaire has remarked that King William never appeared to full advantage but in difficulties and in action; the same remark may be made on General Washington, for the character fits him. There is a natural firmness in some minds which cannot be unlocked by trifles, but which, when unlocked, discovers a cabinet of fortitude; and I reckon it among those kind of public blessings, which we do not immediately see, that God hath blessed him with uninterrupted health, and given him a mind that can even flourish upon care.I shall conclude this paper with some miscellaneous remarks on the state of our affairs; and shall begin with asking the following question, Why is it that the enemy have left the New England provinces, and made these middle ones the seat of war? The answer is easy: New England is not infested with Tories, and we are. I have been tender in raising the cry against these men, and used numberless arguments to show them their danger, but it will not do to sacrifice a world either to their folly or their baseness. The period is now arrived, in which either they or we must change oursentiments, or one or both must fall. And what is a Tory? Good God! what is he? I should not be afraid to go with a hundred Whigs against a thousand Tories, were they to attempt to get into arms. Every Tory is a coward; for servile, slavish, self-interested fear is the foundation of Toryism; and a man under such influence, though he may be cruel, never can be brave.But, before the line of irrecoverable separation be drawn between us, let us reason the matter together: Your conduct is an invitation to the enemy, yet not one in a thousand of you has heart enough to join him. Howe is as much deceived by you as the American cause is injured by you. He expects you will all take up arms, and flock to his standard, with muskets on your shoulders. Your opinions are of no use to him, unless you support him personally, for 'tis soldiers, and not Tories, that he wants.I once felt all that kind of anger, which a man ought to feel, against the mean principles that are held by the Tories: a noted one, who kept a tavern at Amboy, was standing at his door, with as pretty a child in his hand, about eight or nine years old, as I ever saw, and after speaking his mind as freely as he thought was prudent, finished with this unfatherly expression, "Well! give me peace in my day." Not a man lives on the continent but fully believes that a separation must some time or other finally take place, and a generous parent should have said, "If there must be trouble, let it be in my day, that my child may have peace;" and this single reflection, well applied, is sufficient to awaken every man to duty. Not a place upon earth might be so happy as America. Her situation is remote from all the wrangling world, and she has nothing to do but to trade with them. A man can distinguish himself between temper and principle, and I am as confident, as I am that God governs the world, that America will never be happy till she gets clear of foreign dominion. Wars, without ceasing, will break out till that period arrives, and the continent must in the end be conqueror; for though the flame of liberty may sometimes cease to shine, the coal can never expire.America did not, nor does not want force; but she wanted a proper application of that force. Wisdom is not the purchase of a day, and it is no wonder that we should err at the first setting off. From an excess of tenderness, we were unwilling to raise an army, and trusted our cause to the temporary defence of a well-meaning militia. A summer's experience has now taught us better; yet with those troops, while they were collected, we were able to set bounds to the progress of the enemy, and, thank God! they are again assembling. I always considered militia as the best troops in the world for a sudden exertion, but they will not do for a long campaign. Howe, it is probable, will make an attempt on this city [Philadelphia]; should he fail on this side the Delaware, he is ruined. If he succeeds, our cause is not ruined. He stakes all on his side against a part on ours; admitting he succeeds, the consequence will be, that armies from both ends of the continent will march to assist their suffering friends in the middle states; for he cannot go everywhere, it is impossible. I consider Howe as the greatest enemy the Tories have; he is bringing a war into their country, which, had it not been for him and partly for themselves, they had been clear of. Should he now be expelled, I wish with all the devotion of a Christian, that the names of Whig and Tory may never more be mentioned; but should the Tories give him encouragement to come, or assistance if he come, I as sincerely wish that our next year's arms may expel them from the continent, and the Congress appropriate their possessions to the relief of those who have suffered in well-doing. A single successful battle next year will settle the whole. America could carry on a two years' war by the confiscation of the property of disaffected persons, and be made happy by their expulsion. Say not that this is revenge, call it rather the soft resentment of a suffering people, who, having no object in view but the good of all, have staked their own all upon a seeminglydoubtful event. Yet it is folly to argue against determined hardness; eloquence may strike the ear, and the language of sorrow draw forth the tear of compassion, but nothing can reach the heart that is steeled with prejudice.Quitting this class of men, I turn with the warm ardor of a friend to those who have nobly stood, and are yet determined to stand the matter out: I call not upon a few, but upon all: not on this state or that state, but on every state: up and help us; lay your shoulders to the wheel; better have too much force than too little, when so great an object is at stake. Let it be told to the future world, that in the depth of winter, when nothing but hope and virtue could survive, that the city and the country, alarmed at one common danger, came forth to meet and to repulse it. Say not that thousands are gone, turn out your tens of thousands; throw not the burden of the day upon Providence, but "show your faith by your works," that God may bless you. It matters not where you live, or what rank of life you hold, the evil or the blessing will reach you all. The far and the near, the home counties and the back, the rich and the poor, will suffer or rejoice alike. The heart that feels not now is dead; the blood of his children will curse his cowardice, who shrinks back at a time when a little might have saved the whole, and made them happy. I love the man that can smile in trouble, that can gather strength from distress, and grow brave by reflection. 'Tis the business of little minds to shrink; but he whose heart is firm, and whose conscience approves his conduct, will pursue his principles unto death. My own line of reasoning is to myself as straight and clear as a ray of light. Not all the treasures of the world, so far as I believe, could have induced me to support an offensive war, for I think it murder; but if a thief breaks into my house, burns and destroys my property, and kills or threatens to kill me, or those that are in it, and to "bind me in all cases whatsoever" to his absolute will, am I to suffer it? What signifies it to me, whether he who does it is a king or a common man; my countryman or not my countryman; whether it be done by an individual villain, or an army of them? If we reason to the root of things we shall find no difference; neither can any just cause be assigned why we should punish in the one case and pardon in the other. Let them call me rebel and welcome, I feel no concern from it; but I should suffer the misery of devils, were I to make a whore of my soul by swearing allegiance to one whose character is that of a sottish, stupid, stubborn, worthless, brutish man. I conceive likewise a horrid idea in receiving mercy from a being, who at the last day shall be shrieking to the rocks and mountains to cover him, and fleeing with terror from the orphan, the widow, and the slain of America.There are cases which cannot be overdone by language, and this is one. There are persons, too, who see not the full extent of the evil which threatens them; they solace themselves with hopes that the enemy, if he succeed, will be merciful. It is the madness of folly, to expect mercy from those who have refused to do justice; and even mercy, where conquest is the object, is only a trick of war; the cunning of the fox is as murderous as the violence of the wolf, and we ought to guard equally against both. Howe's first object is, partly by threats and partly by promises, to terrify or seduce the people to deliver up their arms and receive mercy. The ministry recommended the same plan to Gage, and this is what the tories call making their peace, "a peace which passeth all understanding" indeed! A peace which would be the immediate forerunner of a worse ruin than any we have yet thought of. Ye men of Pennsylvania, do reason upon these things! Were the back counties to give up their arms, they would fall an easy prey to the Indians, who are all armed: this perhaps is what some Tories would not be sorry for. Were the home counties to deliver up their arms, they would be exposed to the resentment of the back counties who would then have it intheir power to chastise their defection at pleasure. And were any one state to give up its arms, that state must be garrisoned by all Howe's army of Britons and Hessians to preserve it from the anger of the rest. Mutual fear is the principal link in the chain of mutual love, and woe be to that state that breaks the compact. Howe is mercifully inviting you to barbarous destruction, and men must be either rogues or fools that will not see it. I dwell not upon the vapors of imagination; I bring reason to your ears, and, in language as plain as A, B, C, hold up truth to your eyes.I thank God, that I fear not. I see no real cause for fear. I know our situation well, and can see the way out of it. While our army was collected, Howe dared not risk a battle; and it is no credit to him that he decamped from the White Plains, and waited a mean opportunity to ravage the defenceless Jerseys; but it is great credit to us, that, with a handful of men, we sustained an orderly retreat for near an hundred miles, brought off our ammunition, all our field pieces, the greatest part of our stores, and had four rivers to pass. None can say that our retreat was precipitate, for we were near three weeks in performing it, that the country might have time to come in. Twice we marched back to meet the enemy, and remained out till dark. The sign of fear was not seen in our camp, and had not some of the cowardly and disaffected inhabitants spread false alarms through the country, the Jerseys had never been ravaged. Once more we are again collected and collecting; our new army at both ends of the continent is recruiting fast, and we shall be able to open the next campaign with sixty thousand men, well armed and clothed. This is our situation, and who will may know it. By perseverance and fortitude we have the prospect of a glorious issue; by cowardice and submission, the sad choice of a variety of evils- a ravaged country- a depopulated city- habitations without safety, and slavery without hope- our homes turned into barracks and bawdy-houses for Hessians, and a future race to provide for, whose fathers we shall doubt of. Look on this picture and weep over it! and if there yet remains one thoughtless wretch who believes it not, let him suffer it unlamented.COMMON SENSE.December 23, 1776.________________________________________Notes*(1) The present winter is worth an age, if rightly employed; but, if lost or neglected, the whole continent will partake of the evil; and there is no punishment that man does not deserve, be he who, or what, or where he will, that may be the means of sacrificing a season so precious and useful.Back to the Text3 Whom is the author praising? Whom is the author criticizing?4 What do you think of the language?3 Paine is praising those who stand “it”, it referring to “the service of their country”. In the meantime, Paine is criticizing those who shrink from the service of their country in this crisis.4 The language is plain, impressive and forceful. Paine himself once said that his purpose as a writer was to use plain language to make those who can scarcely read understand. … and to fit the powers of thinking and the turn of language to the subject, so as to bring out a clear conclusion that shall hit the point in question and nothing else.这是考验人的灵魂的时代。

中年危机自救指南英语

中年危机自救指南英语English Answer:Midlife Crisis: A Self-Help Guide.1. Understand the Concept of Midlife Crisis.A midlife crisis is a period of intense emotional and psychological distress that typically occurs between the ages of 40 and 60. It is characterized by feelings of dissatisfaction, anxiety, and a sense of lost purpose.2. Identify the Causes of Midlife Crisis.The causes of midlife crisis are complex and can vary from person to person. Some common triggers include:Biological changes: The hormonal shifts associated with menopause and andropause can contribute to mood swings and feelings of instability.Social changes: Reaching certain milestones, such as retirement or the death of a parent, can trigger feelings of loss and a need for reassessment.Psychological changes: Midlife can be a time of increased self-reflection and introspection, which can lead to feelings of dissatisfaction with the current state of one's life.3. Symptoms of Midlife Crisis.The symptoms of midlife crisis can vary widely, but some common signs include:Emotional distress: Persistent feelings of sadness, anxiety, or depression.Cognitive changes: Difficulty concentrating, forgetfulness, or impaired decision-making.Behavioral changes: Impulsive or reckless behavior,changes in eating or sleeping patterns, or substance abuse.Relationship challenges: Difficulties in relationships with spouse, family, or friends.Career dissatisfaction: Feeling stuck or unfulfilledin one's current career or work life.4. Coping with Midlife Crisis.Coping with midlife crisis requires a multi-faceted approach that includes:Self-care: Prioritize physical and mental health through healthy eating, exercise, and stress management techniques.Therapy: Seek professional help from a therapist or counselor to explore the underlying causes of the crisis and develop coping mechanisms.Reassessment: Identify what is truly important in lifeand make changes to align with those priorities.Purposeful activities: Engage in activities that bring joy and fulfillment, such as hobbies, volunteering, or travel.Social support: Connect with trusted friends, family, or support groups for emotional support and guidance.5. Overcoming Midlife Crisis.Overcoming midlife crisis is not always an easy task, but it is possible. By understanding the causes and symptoms of midlife crisis, developing healthy coping mechanisms, and seeking professional support when needed, individuals can navigate this transformative period and emerge stronger and more fulfilled.Chinese Answer:中年危机自救指南。

六级易考范文第30篇-The Effects of the Economic Crisis.doc

2019年6月六级易考范文第30篇:The Effects of the EconomicCrisis英语六级易考范文第30篇:The Effects of the Economic CrisisThe US sub-prime mortgage crisis turns out to be anightmare for the world economy.Though it took shape in the United States, it hasalready resulted in adverse consequences for banksand financial market around the world.Affected by this crisis, the global economy wasreduced to slowdown and last to date, and no onecan see the bottom.On the one hand, many companies just go bankruptor have to tighten their budget and recruit feweremployees.Therefore, it is difficult for graduates to find a job.Even if those graduates are employed, their salaries will accordingly affected by the recessedeconomy.On the other hand, while the economic crisis is still ongoing, its impact has already extendedto our daily life.The consumer price index raises and people are experiencing the sense of desperateinsecurity.Though economic crisis has its negative impacts, we can not become pessimistic about thefuture.We college students should be urged to work harder in order to get prepared for theunexpected future.。

subprimemortgagecrisis

subprimemortgagecrisis1. The subprime mortgage crisis is an ongoing financial crisis characterized by contracted liquidity in global credit markets and banking systems. A downturn in the housing market of the United States, risky practices in lending and borrowing, and excessive individual and corporate debt levels have caused multiple adverse effects on the world economy. The crisis, which has roots in the closing years of the 20th century but has become more apparent throughout 2007 and 2008, has passed through various stages exposing pervasive weaknesses in the global financial system and regulatory framework. The crisis began with the bursting of the United States housing bubble[1][2] and high default rates on "subprime" and adjustable rate mortgages (ARM), beginning in approximately 2005–2006. For a number of years prior to that, declining lending standards, an increase in loan incentives such as easy initial terms, and a long-term trend of rising housing prices had encouraged borrowers to assume difficult mortgages in the belief they would be able to quickly refinance at more favorable terms. However, once interest rates began to rise and housing prices started to drop moderately in 2006–2007 in many parts of the U.S., refinancing became more difficult. Defaults and foreclosure activity increased dramatically as easy initial terms expired, home prices failed to go up as anticipated, and ARM interest rates reset higher. Foreclosures accelerated in the United States in late 2006 and triggered a global financial crisis through 2007 and 2008. During 2007,nearly 1.3 million U.S. housing properties were subject to foreclosure activity, up 79% from 2006.[3] Major banks and other financial institutions around the world have reported losses of approximately US$435 billion as of 17 July 2008.[4][5] In addition, the ability of corporations to obtain funds through the issuance of commercial paper was affected. This aspect of the crisis is consistent with a credit crunch. The liquidity concerns drove central banks around the world to intervene by bailing out defaulting financial corporations in order to encourage lending to worthy borrowers at the expense of taxpayers. The risks to the broader economy created by the financial market crisis and housing market downturn were primary factors in several decisions by the U.S. Federal Reserve to cut interest rates and the economic stimulus package passed by Congress and signed by President George W. Bush on February 13, 2008.[6][7][8] During the week of September 14, 2008 the crisis accelerated, developing into a global financial crisis. Following a series of ad-hoc market interventions to bail out particular firms, a $700 billion proposal was presented to the U.S. Congress in September, 2008. These actions are designed to stimulate economic growth and inspire confidence in the financial markets. On 3 October 2008, President George W. Bush signed the amended version of the bill into law.。

(完整word版)TextATheLendingCrisisasCrackEpidemic

Unit Two EconomicsText AThe Lending Crisis as Crack Epidemic[1] The mortgage lending crisis “is the most serious problem that has faced this country since crack cocaine,” the Brooklyn district attorney, Charles J. Hynes, told a group of about 60 residents of the Canarsie neighborhood Monday night.[2] “When crack cocaine attacked the poor, it wasn’t very, very long before crack cocaine was the engine (that drove the crime rate through the roof),” Mr. Hynes said at a town hall meeting at the Hebrew Educational Society building, co-sponsored by Councilman Lewis A. Fidler, Assemblyman Alan Maisel and Assemblywoman Helene E. Weinstein. “Similarly, the attack (on the poor (who are in danger of losing property)) has the same kind of effect on property values and on the markets —whether it’s the real estate markets or the Wall Street markets.”[3] Mr. Hynes said the problem became apparent to him and his colleagues about 18 months ago. “It became clear to us that we were on the brink of a profound tragedy in t his country,” he said.[4] He added, “The frightening thing for me was to recognize that it is so difficult to prosecute these cases —predatory lending, subprime lending.”[5] Unless there is fraud, many of the predatory lending practices fall under the category of bad business practices, not criminal acts. Homeowners can pursue lawsuits, but Mr. Hynes and the other officials said they were hoping to educate Brooklyn residents about the warning signs for potential problems in obtaining a sustainable mortgage.[6] Mr. Hynes said he hoped to convince Brooklyn residents “that you’ve got to bescared out of your wits and that tonight you make a firm commitment that you will never be involved in a lending agreement unless you have a lawyer representing you.”[7] Mr. Hynes also called for more government action to protect people (who are in danger of losing their homes). “Certainly across the country we did something many years ago when Chrysler was nearly going belly up,” Mr. Hynes said. “If we can bail out Chrys ler we should bail out our citizens. But we’ve got to come up with something to do that.”[8] One Canarsie resident, Ivy Green, held up a plastic bag (filled with her mortgage payment records) and took the microphone to tell her foreclosure experience. She said she had sent her payments to the mortgage service company every month but that the company did not credit her account and then sent the payments back to her. The company then began foreclosure proceedings, she said.[9] “I do not owe one red cent,” she said. “I’m so angry. I can’t sleep well at night.”[10] Ms. Green said that she was fighting the foreclosure and that she had hopes that she would prevail. But she added that the stress of the situation has taken a toll on her health.[11] Richard Farre ll, an assistant district attorney, said: “This actually illustrates some of the gray area here. A servicer not properly crediting your payments doesn’t qualify as a criminal act (that I’m aware of). It’s a bad business practice. You can sue them for damag es and whatnot. But of course that’s time, that’s money. But still that’s something you have to be on top of. As soon as you see a problem you need to address it right away.”[12] Other mortgage problems (that were mentioned) included adjustable rates (thatput payments out of reach for home owners), refinancing arrangements (that increase the mortgage payment), and consolidation plans (that require the homeowner to sign over the deed to the investor).[13] A similar forum will be held at the Hope Gardens Senior Center in Bushwick at 7 p.m. Wednesday night.。

THE “MORTGAGE CRISIS” HOW CURENT CREDIT WOES “次贷危机”是当前信用危机

First time that mortgage servicing subject to NC regulations Unique language requires NC-specific procedures New pitfalls, short fuses and potential for liability Amended again in the short session of 2019 (H.B. 2188) (eff. 10/1/08) to ban yield
THE “MORTGAGE CRISIS”: HOW CURRENT CREDIT WOES AFFECT YOU
AND YOUR CLIENTS
Litigation and Dispute Resolution:
New Cases, New Causes
Jim D. Cooley Meredith J. McKee Womble Carlyle Sandridge & Rice, PLLC
Shareholder and derivative claims on behalf of classes of shareholders of investment banks, mortgage companies, homebuilders, etc. [More “Buyers Burnt”]
• First indictments (securities fraud, wire fraud, conspiracy) unsealed in E.D.N.Y. on 9/3/08 against two former Credit Suisse brokers for allegedly deceiving customers in the sale of over $1 billion in auctionrate securities by representing that the collateral of the loans was federally guaranteed student loans when they were actually backed, in part, by subprime mortgages and CDOs.

金融危机的国际经验及现实思考

Spain
UK
60
Russia
Italy France
Indonesia
50
Turkey
India
Argentina
Australia
40
30
USA
Japan
Brazil
20
10
0
-10
-9
-8
-7
-6
-5
-4
-3
-2
-1
0
Change in GDP Growth Rate [2009 projected-Avg. 2006-07] (%)
• The high dependence of international trade on US demand
3
The extent of damage so far
► Deepening recession since mid-2008 with multiple downwards revisions of growth
-4
Advanced economies
Emerging and developing economies
World
5
Both OECD and emerging markets fall – no decoupling
Annual growth GDP, 2009 (%)
12
10
8
6
4
2
0
0
-2
Worldwide Lessons from Financial Crises
金融危机的国际经验及现实思考
Vinod Thomas, Director-General & Senior Vice President Independent Evaluation Group, World Bank

The Crisis of Credit

The Crisis of CreditWhat is the credit crisis? It’s a worldwide financial fiasco involving terms you probably heard like: sub-prime mortgages, collaterized debt obligations, frozen credit markets and credit default swaps.Who is affected? Everyone. How did it happen? Here’s how: The crisis of credit brings two groups of people together: home owners and investors. Home owners represent their mortgages, and investors represent their money. These mortgages represent houses, and these money represent large investment institutions like: 1. pension funds, 2.insurance companies, 3. sovereign funds, 4. mutual funds, etc. These groups are brought together through the financial system, a bunch of banks and brokers commonly known as WALL STREET. Although it may not seem like it, these banks on wall st. are closely connected to houses on Main Street. (民生街) To understand how let’s start at the beginning: Years ago the investors were sitting on their pile of money, looking for a good investment to turn into more money. Traditionally, they go to the US Federal Reserve where they buy treasury bills believed to be the safest investment. But, in the wake of the bust andSeptember 11th, Federal Reserve Chairman Alan Greenspan lowers the banks interests to only 1% to keep the economy strong. One percent is a very low return on investment, so the investors say, no thanks!However, on the flip side this means banks on Wall st. can borrow from the Fed for only 1%, add to that general surpluses from Japan, China, and Middle East, and there is an abundance of cheap credit, this makes borrowing money easy for banks and causes them to go crazy with LEVERAGE.Leverage is borrowing money to amplify the outcome of a deal. Here’s how it works: In a normal deal someone with 10 thousand dollars buys a box for 10 thousand dollars. He then sells it to someone else for 11 000 dollars, for a 1000 dollars profit, a good deal. But using leverage, someone with 10 000 thousand dollars would borrow 990 000 more dollars, giving him 1 million dollars in hand, then he goes and buys 100 boxes with his 1 million dollars, and sells them to someone else for 1100 000 dollars. Then he pays back his 990 000 plus 10 000 in interest, and after his initial 10 000, he is left with 90 000 dollars profit versus the other guy, 1000. Leverage turns good deals into great deals. This is a major way banks make their money.So Wall st. takes out a ton of credit, makes great deals andgrows tremendously rich and then pays it back. The investors see this and want a piece of the action, and this gives Wall st. an idea: they can connect the investors to the home owners through：mortgages. Here’s how it works:A family wants a house, so they save for a down payment, and contact a broker, the broker calls up a lender, who gives them a mortgage. The family buys a house and becomes home owners. This is great for them because housing prices have been rising practically forever, everything works out nicely. One day, the lender gets a call from an investment banker who wants to buy the mortgage. The lender sells it to him for a very nice fee, the investment banker then borrows millions of dollars and buys thousands more mortgages and puts them into a nice little box. This means that every month he gets the payments from the home owners of all the mortgages in the box. The he sets his banker wizards on it to work their financial magic, which is basically cutting it into three slices: safe, okay, and risky. They pack the slices back up in the box and call it a “Collateralized Debt Obligation”, or CDO. A CDO works like three cascading trays: as money comes in, the top tray fills first, then spills over into the middle, and whatever left into the bottom. The money comes from home owners paying off their mortgages, if someowners don’t pay and default on their mortgage, less money comes in and the bottom tray may not get filled. This makes the bottom tray riskier, and the top tray, safer. To compensate for the higher risk, the bottom tray receives a higher rate of return(10%), while the top receives a lower but still nice return(4%). To make the top even safer, banks will ensure it for a small fee called a Credit Default Swap. The banks do all of this work so that credit rating agencies will stamp the top slice as a safe, triple A rated investment, the highest safest rating there is. The okay slice is triple B, still pretty good, and they don’t bother to rate the risky slice. Because of the AAA rating, the investment banker can sell the safe slice to the investors who only want safe investments, he sells the okay slice to other bankers and the risky slices to hedge funds and other risky takers. The investment banker makes millions, he then repays his loans. Finally, the investors have found a good investment for their money, much better the the 1% treasury bills, they are so pleased, they want more CDO slices. So the investment banker calls up the lender, wanting more mortgages, the lender calls up the broker for more home owners, but the broker can’t find anyone! Everyone that qualifies for a mortgage already has one! But they have an idea: Usually, when home owners default on their mortgages, thelender gets the house, and houses are always increasing in value, lenders can start adding risk to new mortgages, not requiring for down payment, no proof of income, on documents at all! And that’s exactly what they did!So, instead of lending to responsible home owners, called “Prime Mortgages”, they started to get some that were…well, less responsible, these are “Sub-Prime Mortgages”, this is the turing point…So, just like always, the mortgage broker connects the family with a lender and a mortgage, the family buys a big house, the lender sells the mortgage to the investment banker, who turns it into a CDO, and sells slices to the investors and others. This actually works out nicely for everyone and makes them all rich! No one was worried because as soon as they sold the mortgage to the next guy, it was his problem! If the home owners were to default, they didn’t care, they were selling out their risk to the next guy making millions, like playing hot potato with a time bomb!Not surprisingly, these less responsible home owners default on their mortgage, which at this moment is owned by the banker, this means, he forecloses, and one of his monthly payments turns into a house. No big deal, he puts it up for sell. But moreand more of his monthly payments turns into houses.Now there are so many houses for sell on the market, creating more supply than there is demand, and housing prices are not rising anymore, in fact, they plummet. This creates an interesting problem for the home owners who still paying their mortgages: As all the houses in their neighborhood go up for sale, the value of their house goes down, and they start to wonder why they are paying back their 300 000 dollars mortgage when the house is now worth only 90 000 dollars. They decide that it does not make sense to continue paying even though they can afford to! And they walk away from their house. Default rates sweep the country and prices plummet.Now the investment banker is basically holding a box full of worthless houses. He calls up his buddy the investor to sell his CDO, but the investor isn’t stupid and says “No, thanks!”, he knows that the stream of money isn’t even a dripple anymore! The banker tries to sell to everyone, but nobody wants to buy his bomb. He is freaking out because he borrowed millions or even billions of dollars to buy this bomb and he can’t pay it back! Whatever he tries, he can’t get rid of it.But he is not the only one, the investors have also bought thousands of these bombs. The lender calls up trying to sell hismortgage, but the banker won’t buy it. The whole financial system is frozen and the endless darkness is coming. Finally, everybody starts going bankrupt. But that’s not all, the investor calls up the home owner and tells him that his investments are wortless. And you can begin to see how the crisis flows in a cycle, welcome, to the crisis of credit.。

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➢ First time that mortgage servicing subject to NC regulations ➢ Unique language requires NC-specific procedures ➢ New pitfalls, short fuses and potential for liability ➢ Amended again in the short session of 2019 (H.B. 2188) (eff. 10/1/08) to ban yield
➢ Servicers required to: (i) be licensed; (ii) act with “skill, care and diligence”; and (iii) file fee schedules with Commissioner of Banks
➢ Expands list of “prohibited activities” ➢ Requires 45-day pre-foreclosure notice to borrowers and gives Office of
➢ Comprehensive regulation of “mortgage servicers” (defined to include “receiving any scheduled periodic payments from a borrower,” including escrow amounts)
➢ Allows FHA to guarantee new loans for subprime borrowers if lenders reduce balance to 90% of home value
➢ Increases conforming loan limits in high-cost areas ➢ First-time buyer tax credit ➢ Provided basis for oversight and now takeover of
Shareholder and derivative claims on behalf of classes of shareholders of investment banks, mortgage companies, homebuilders, etc. [More “Buyers Burnt”]
➢ The new North Carolina servicing law imposes delays and additional procedures (e.g., in addition to the 45-day pre-foreclosure notice and OCOB’s authority to suspend foreclosure proceedings at any point in the process by 60 days, (noted above), the Emergency Program to Reduce Home Foreclosures Act (H.B. 2623) (eff. 11/1/08 to 10/31/10) gives OCOB authority to extend the foreclosure filing date up to 30 days beyond the date established in the pre-foreclosure notice).
➢ BriБайду номын сангаасgs disciplinary proceedings under the Administrative Procedure Act. N.C.G.S. Section 53-243.12 (with Attorney General’s office)
➢ May require restitution to borrowers for violations of Chapter 24. N.C.G.S. Section 53-243.12(j)
Claims against mortgage originators by or on behalf of borrowers [“Bottom Up”]
Claims arising from the securitization process by investors, by and against trusts/underwriters and against originators, including insurers, as to which group should bear the ultimate risk of defaults [“Top Down”]
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Increased Enforcement Activity (cont.)
State
• Office of Commissioner of Banks
➢ Conducts routine examination of mortgage lenders. N.C.G.S. Section 53243.12(i)
Commissioner of Banks (“OCOB”) additional powers to suspend foreclosure for 60 days
• Foreclosure moratoria enacted in North Carolina and New York, and being considered in many other states
• First indictments (securities fraud, wire fraud, conspiracy) unsealed in E.D.N.Y. on 9/3/08 against two former Credit Suisse brokers for allegedly deceiving customers in the sale of over $1 billion in auctionrate securities by representing that the collateral of the loans was federally guaranteed student loans when they were actually backed, in part, by subprime mortgages and CDOs.
Increased litigation
• By states’ Attorneys General and regulators • By local governments • By private plaintiffs
2
New Legislation
Federal
• Housing and Economic Recovery Act of 2019 (signed 7/30/08)
spread premiums (YSP) on all “rate spread home loan” transactions – N.C. first state to do so.
• Amendments to N.C. Mortgage Lending Act (H.B. 2463) (eff. 1/1/09)
➢ Compare mandatory foreclosure mediation by judicial rule (Philadelphia Court of Common Pleas; effective April 2019)
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8
9
10
11
Increased Enforcement Activity
Charlotte, NC
1
The Current Litigation Environment
New legislation
• Federal and state
Increased enforcement activity
• Federal and state • Civil and criminal penalties
announced • FTC – preparing settlements with loan servicers
Federal – criminal
• Federal-state task forces formed in several cities (New York, Philadelphia, Atlanta, Dallas, Los Angeles)
Government Sponsored Enterprises (Fannie Mae, Freddie
Mac)
• HOEPA Amendments (generally effective 10/1/09)
➢ Prohibits “unfair, abusive or deceptive” lending practices ➢ New “higher-priced mortgage loan” regulations, including
➢ Look for battles over state power to regulate mortgage subsidiaries of national banks
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Increased Litigation: The “Radiating Ripples of ‘Sub-Prime’ Litigation”
Federal – civil
• SEC – investigations into publicly-traded companies (e.g., 9/3/08 civil complaint against two Credit Suisse brokers – see below)

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