How did the financial crisis happen?

Financial crisis refers to the sharp, short-term and super-cycle deterioration of all or most financial indicators (such as short-term interest rates, monetary assets, securities, real estate, land (price), the number of commercial bankruptcies and the number of financial institutions) in a country or several countries and regions.

The real reason is the credit expansion and the bursting of the economic bubble caused by the virtual economy. The subprime mortgage crisis is the fuse. Here is an original example to illustrate:

Two people sell baked wheat cakes, each selling 20 yuan a day (because the demand for baked wheat cakes is only 40 yuan), the price is one yuan, and the daily output value is 40 yuan. Later, the two discussed and bought and sold each other 100 (A bought 100 from A and 100 from A), but the price remained unchanged, and the turnover became 240 yuan every day.

If the price of sesame cakes traded with each other is 5 yuan, the daily transaction amount is 1040 yuan. At this time, A and B will raise the market biscuits to 2 yuan. Some people heard that sesame seed cakes 1 were sold in 5 yuan, but when they saw that there was only 2 yuan in the market, they quickly bought them. -The bubble economy came into being.

Baked sesame seeds can't be cooked at once, so buy forward cakes. A, Otsuichi increased the number of baked wheat cakes (up to 100 per day), on the other hand, it sold forward baked wheat cakes, and at the same time began to issue baked wheat cakes bonds. Buyers use cash and mortgages to buy. -Financing, financial intervention.

Some people want to buy it, and they have neither cash nor collateral, so A and B issue subordinated biscuit bonds to buy insurance from insurance institutions-subprime bonds have planted seeds for the subprime mortgage crisis.

One day, I found that I couldn't eat the biscuits I bought. If it is stored in one place and moldy, I will sell it soon, even if the price is lower. The bubble burst.

This is how the financial crisis broke out. Cookie shop layoffs (as long as 40 cookies a day)-unemployment; Sesame cake bonds become waste paper-subprime mortgage crisis

Mortgage loan (collateral is worthless) can not be recovered, the liquidity crisis of the lending bank, the bankruptcy of the insurance company and so on. -Financial crisis