The Causes , Consequences of Financial Crisis 2007-2009 ,Policy Impact
and Response, Early Warning Strategic Risk
Management :
Macro, Financial Systems Imbalance, Systemic Risks, Financial,
Credit Crisis,
Housing Price Bubble Burst , Recession Causes, Impact Simulation
Proactive structural dynamic Simulation of Monetary,
Fiscal Policy Asset Prices Impact on Global CPI, Asset Prices Bubbles, inflation :Interest Rates and
Credit, Financial Crisis,
and
1980 style Double Dip Inflationary Recession: Causes,
Onset,
Spread, Recovery, Early Warning of Financial Crisis Instability:
with
Applications to US Housing Bubble Burst Sub-Prime Mortgage Default and
Credit Crisis Early
Warning
Warren Huang OSA Intl Operations Analysis
Website :http://www.osawh.com/ / http://www.osaglobalstrategicmanagement.com/ email: wh3928@yahoo.com
Strategic
PGFCR :
Proactive
Global
Housing, Credit,
Financial
Crisis,
Recession
Operations Simulation) Forecast, complete
coverage of years, months, ahead of lat 30
years and current housing, equities,
commodities , MBS, ABS asset prices bubbles
formation, boom and bust, early warning of
derivatives hedging resulted financial
crisis, avoided betting on the wrong side of
investment resulted trillion dollar loss,
deep recession and its impact through global
macro, financial, industrial, trade economy
integration and impact on daily capital
market asset price mechanisms
Do
not miss Dr.
Warren Huang lectures, panelist speakers in
Feb, 2009 Hong Kong Provate equities
Merger/Acquisition financing summit on
Monetary, regulary ,economic stimulus policy
impact on China/US distressed asset
Acquisition and financing
and
in March 2009 and on
monetary, econoic stimulus policy impact
on China/US economic,
financial market , forex,
currency commodities, equities
derivatives price mechanism and
Trillion Dollar Recession Hedge, supply
chain cost reduction Optimal
long-short ,ultra short strategy
Phase I monetary, economic, fiscal policy
impact on Global Housing, Equities,
Commodities, Bond, Derivatives Asset Prices
Bubble Burst Mechanism and Sub-prime on
Daily Prices Dynamics , Subprime, mortgage,
Credit crisis, Financial , Systemic Risks
impact on Recession and
Phase II Global recession impact on banking,
credit, financial crisis and industrial
sectors demand, prices slump and operating
loss
for
June on Peking Univ. Int. financial
risk management conference, Beijing ,
June and Sept 2007 on Wall Street Journal market
beat blog that US housing price slump 30 % continue into 2009, drag economic
into deep recession, global stocks into bear market 50- 70 % correction
, commodities, energy, raw material, products 50- 70 % correction
Phase III China/US global economic stimulus
impact on domestic business investment,
consumer demand, GDP, export and housing,
stock, commodities, metals market prices.,
recession recovery.
US Sept. 2008 consumer confidence plunge to 38, ISM
manufacturing purchaser index plunge to 38and jobless rate to 6.5 % and Dow
Jones plunged 40 % third quarter GDP contract 0.3 %core inflation up 2.9
%, warned, predict by me Sept. 2007 on this blog that US housing slump
continue , will entering double dip inflationary recession 3Q 2008 despite rate
cuts, stimulus, bail out plan and extends into deeper recession contracting by 2
% in $Q 2008 and 1Q 2009, resulted by full impact o business,
consumer spending decline due to 6.5 % jobless and 20 % housing slump, 40 %
stocks market loss
The real causes of current global mortgage,
credit, financial crisis and recession are due to poor financial,
monetary policy decision modeling in asset pricing and risks
valuation mechanism, MBS, CDO , the burst of super housing, commodities
asset price bubbles caused by 7 year longest expansive excessive money
supply, easy credit policy .
Global central banks, financial markets financial decision still rely on
30 year old probabilistic, statistical Capital Market Asset Pricing (CAPM)
and macroeconomic modeling, ignoring asset price impact on inflation and
financial, housing , MBS, CDO prices.
Predicted by Dr. Warren Huang, pioneer of Proactive Global Asset
Pricing Mechanism , June 2007 , Beijing, Wall Street
Journal Economic, Market Beat
Blog Aug.2007 and March 5, 2008 Pudong, China Fund World 2008
to 200 global top investment banking, fund managers that Global Housing price bubble burst, prices plunge
30 % into 2009, drag global economy into recession and stocks bond,
oil, commodities,
metals ,Derivative Asset Prices Bubbles Burst with 50 % Price Correction
Cause
Credit, Financial Crisis and Economic
Recession, ( As Dow Jones, SP 500, NASDAQ drag global stock indices
plunged more than 50 % into 2002 recession low ,( Dow Jones
after current consolidate in 8000- 9000 will test 7000, NASDAQ test
1250, S&P test 700 low,
oil price plunged 50 % from 147 to 60，Gas
oil from1300 to 650 , corn from 800 to 350, cotton from 80 to
44 as global economy enter deep recession by year end,
despite US 700 billion and ECB 2.3 trillion bail out
to stabilize credit
crisis
details on
www.osawh.com/Fedcrisab.htm
www.osawh.com/mortdefa.htm
www.osawh.com/commody.html
www.osawh.com/centmaf.html
This
paper demonstrated Huang’s 30 years pioneering low and high frequency
proactive,
structural macro, financial, industrial econometrics, economic boom and bust
recession cycles, real time
equities,
bond,
commodities,
housing
assets prices
bubbles
bursts
Operations
Simulation Analysis (OSA)
with
applications
to tracking
last 20 years
equities,
commodities pricing bubbles,
conventional housing bubble bursts, sub-prime
default crisis, structural finance mortgage bond, CDO pricing valuations and
credit crunch early warning, avoided trillion dollars market loss, loan
defaults
due to probability, statistical based CAPM asset pricing, betting on the wrong
side to investment.Thousands simulators integrating
monetary policy, asset price bubbles impact on inflation,
macro, financial , industrial economic fundamentals into proactive structural dynamic high frequency (
short term
daily
) and low frequency (long term )quantitative expert systems and E-Spline GARCH time series with Granger co-integration causes and consequences econometrics analysis models
have
been developed, implemented.
These models tracking forecast, predicted years, month ahead of last 30 years US, Asian, European, Russian central banks monetary, economic, fiscal policy impact on macroeconomic
boom and bust recession cycles,
Identifying and Resolving Financial Crises,
inflation, daily interest rates, currency, financial market equities, commodities, housing assets prices valuation
mechanism and the causes, onset, spread, rescue, intervention impact and costs to economic boom and bust recession cycles ,financial instability systemic risks, mortgage default crisis
early warning predicted with average error below 2 %, correlation constant greater than 0.92..
These proactive structural dynamic simulators have been built on last 30 years global central banking, macro, financial, industrial economic information knowledge base and implemented for
identify, and resolving, prevention of financial crisis , supporting: strategic decisions
providing the what, why, how and timing of
- Distinguishing
between individual problems and systemic crises,
crisis rescue early warning
- Theory and evidence
on the resolution of
banking, finance, mortgage
firms
- Identifying policies
that lead to overheated asset prices bubbles and contagion or correlated risk
Huang
accurately predict
on
1998
ECB conference warning Russian currency crisis, Asian financial crisis, LTCM
betting on
the wrong side of junk bonk yield and 1999 on China Peoples Bank, US Fed,
ECB,
Asian central bank governors
bond
CDO executives on US housing prices slump, economic recession,
50- 70 % bear market
correction ( with banking finance shares down 50 %) through 2008 resulted
mortgage default and structural
finance billion dollar loss
Huang directed Zhang to extend these
OSA simulators to Nobel laureate R.
Engle’s Spline GARCH and co-integrate
default and national and regional
housing prices,
global stock indices and associated corporate accounting scandals are related to
deterministic exponential spline, combination
of macro , monetary economic and asset prices time series dynamics .
Keyword
:US/China,
Economic recession cycles,
Housing price slump, default, Equities bubbles burst, identify resolving crisis, Operations
Simulations Analysis, proactive structural CAPM macro-financial instability Basel II credit, market risks , Structural finance, CDO mortgage
default. policy contagion crisis rescue
Submitted to Research
Conference "
Identifying and Resolving Financial Crises
"
Do not miss this
proactive structural macroeconomic inflation simulation and strategic investment,
trillion dollar hedging strategy workshops series by
OSA proactive solution pioneer Dr.Warren
Huang
Millions of global /China central banks, finance, investment management teams bring their
management/s operating problems into our strategic fund allocation and
wealth management workshops. take home billion dollar proactive
structural solution, avoided trillion dollar housing, stock market loss due
to betting on the wrong side of interest rates and bull/bear market trend, ready to implement
2008 China credit
tightening/US housing prices bubbles burst impact on economic, capital
markets asset pricing, IPO, financing and asset allocation
, risk diversification strategy
DO not miss
Trillion Dollar Recession Hedge by
Dr. Warren Huang will be risk management panelist and full day master class workshop lecturer for Terrapinn China Fund World
2008 conference, Shanghai Pudong Shangri-La hotel, March 6 offer Proactive structural China/global asset pricing, 2008 credit tightening, recession impact on BRIC,Optimal 1x0/x0 long-short hedging, asset allocation strategy
Dr. Warren Huang accurately warned
on Wall Street Journal Market beat Blog Sept.19,
2007 that US housing price slump
continue into summer
2008 drag economy into inflationary recession and US, gear
market recession , oil go to 100, despite Fed rate cuts
He also warned top QFII management on Peking Univ June 2007 International Financial Engineering Conference that China overheated
housing, stock market wealth gain resulted inflation over 8.7 % will lead to China Peoples Bank credit tightening to remove excessive liquidity,
housing, stock markets follow US housing price slump, recession, bear market correction, with Shanghai A testing 3000-3500- 4000 till summer 2008
Comment by
-
June 1,, 2008 Wall Street Journal Real Time Economics at
2:06pm
Fed official are getting more realistic about US economic outlook now
than earlier this year and recent stock market optimism about inflationary and
economic rebound, eased credit crisis.
I warned last Sept. on this blog that US housing price slump continue into this
summer, spread into general credit crisis and Fed rate cuts will not stop
housing price slump, but drag dollar lower and oil, commodities price resulted
inflationary recession. Current situation is getting closer to my forecast then.
Fed and banking finance decision models are oversimplified, too much rely on
interest rate, ignoring industrail sectors supply demand, boom and bust cycle
behavior. Details on www.osawh.com/Fedcrisab.htm
www.osawh.com/mortdefa.htm
www.osawh.com/centmaf.html
Comment by - May 7, 2008 at 2:49 pma
I warned since last Sept on this blog that it is premature to
speculated, merger any housing mortgage company, as housing price slump
contine into summer 2008. I indicated CFC offer at 7 is overvalued,, it may
follow housing price plunged below 4.
It is premature too to announce that the worst of credit crisis is behind
us. You may claim that he worst of sub-prime crisis is behind us,
But the housing price slump continue into summer, will spread into prime
mortgage and credit cards, we may repeat Bear Stearn hedge fund
failure on betting on the wrong side of interest rate again, As I
predicted 10 year bond yield will break 4 % Fed will swing into rate hike
cycle to fight inflation soon.
facing 1980 double dip inflationary recession With slumping housing price
and consumer confidence, soaring oil price and job cuts,
How can any one speculation on housing, banking issues declare credit crisis
is over!
details on www.osawh.com/Fedcrisab.htm
www.osawh.com/macro.html
www.osawh.com/mortdefa.htm
Fed is pleasing every one in the Wall Street and global capital and housing markets by offering surprise half point cut, even Greenspan in 2001 dare not to
do it when the oil price was only 19 dollar and gold price below 400.Dow Jones shot up 350 points heading for record 14000 again , certainly will boost the housing
prices ( July housing price already up 5 %),and It cut mortgage rate and lending cost by half point. bail out the sub-prime rate reset cost, will temporarily cut
mortgage default rate ( according to my housing prices and default rate model) but it will led to dollar plunge to new low 1.40 , it will hit 1.50 sometime next year,
Oil price already celebrating the rate cut, by shooting to 82.4 all time high and heading for 85-100, gold already 735, shooting for 850 soybean heading for 1100
wheat to 870., eventually will spread into core inflation.
As Fed job only focus on inflation ( core inflation rate exclude energy and food price) and unemployment it ignore housing, stocks, commodities asset prices bubbles.
But sooner or later, the current stocks prices will not be sustainable, start to plunge, it will drag the housing prices, and led to more default, the burst of next housing
bubble, drag economic into recession till 2008 summer ,can not be solved by any rate cuts Greenspan was much luckier than Benanke, he could go ahead with full
steam rate cut,
but we will be facing inflationary recession bear market correction ahead
detail
can be found on www.osawh.com/riskm.html Comment by Warren Huang September
18, 2007 at 5:55
pm
Dot miss Challenges and Investment opportunities,
risks in 2008 China/US housing prices bubbles burst impact on
inflationary
recession , stocks, fund, commodities markets outlook
Dr. Warren Huang accurately warned
on Wall Street Journal Market beat Blog Sept.19, 2007 that US housing price slump
continue into summer 2008 drag economy into inflationary recession and US, gear market
recession , oil go to 100, despite Fed rate cuts
He also warned top QFII management on Peking Univ June 2007 International
Financial Engineering Conference that China overheated
housing, stock market
wealth gain resulted inflation over 7 % will lead to China Peoples Bank credit
tightening to remove excessive liquidity, Housing, stock markets follow US
housing price slump, recession, bear market correction, with Shanghai A testing
3500- 4000 till summer 2008
Dr. Warren Huang will be risk management panelist and full day master class workshop lecturer for
Terrapinn China Fund World
2008 conference,
Shanghai Pudong Shangri-La hotel, March 6 offer Proactive structural
China/global asset
pricing,
2008 credit tightening, recession impact on BRIC,Optimal
1x0/x0 long-short hedging, asset allocation
strategy
Fed is pleasing every one in the Wall Street and global capital and housing markets by offering surprise half
point cut, even Greenspan in 2001 dare not to do it when the oil price was only 19 dollar and gold price below 400.
Dow Jones shot up 350 points heading for record 14000 again , certainly will boost the housing prices ( July housing price already up 5 %),and It cut mortgage rate
and lending cost by half point. bail out the sub-prime rate reset cost, will temporarily cut mortgage default rate ( according to my housing prices and default rate
model) but it will led to dollar plunge to new low 1.40 , it will hit 1.50 sometime next year, Oil price already celebrating the rate cut, by shooting to 82.4 all time high and
heading for 85-100, gold already 735, shooting for 850 soybean heading for 1100 wheat to 870., eventually will spread into core inflation. As Fed job only focus on
inflation ( core inflation rate exclude energy and food price) and unemployment it ignore housing, stocks, commodities asset prices bubbles.
but sooner or later, the current stocks prices will not be sustainable, start to plunge, it will drag the housing prices, and led to more default, the burst of next housing
bubble, drag economic into recession till 2008 summer ,can not be solved by any rate cuts Greenspan was much luckier than Benanke, he could go ahead with full
steam rate cut, but we will be facing inflationary recession ahead
detail can be found on www.osawh.com/riskm.html Comment by Warren Huang - September
18, 2007 at 5:55
pm
Challenges and Investment opportunities, risks in 2008
China/US housing prices bubbles burst impact on
Comment by
- May
30, 2008 Wall Street Journal Real Time Economics at 1:13
pm
Dr. Warren Huang Wall Street Journal Real Time Economic Blog. Jan 2, 2008
other
links :
Proactive global central banks monetary
policy www.osawh.com/centmaf.html
Proactive
Structural Mortgage Default Simulation www.soawh.com/mortdefa.htm
Challenges and Investment
opportunities, risks in 2008 China/US housing prices bubbles burst impact on
inflationary slowdown, stocks, fund, commodities markets
outlook
Dr.
Warren Huang will be the full day master class
workshop lecturer for Terrapinn Fund World China 2008 conference,
Shanghai Pudong Shangri-La hotel, March 6 offer Proactive structural
China/global asset pricing, 2008 credit tightening, recession impact on
BRIC,Optimal 1x0/x0 long-short hedging, asset allocation strategy
2008
Reservation,
for Shanghai, Beijing, Hong Kong, Taipei, San Francisco in-house workshop
wh3928@yahoo.com
We must tracking into the root causes of current which was caused by out dated monetary policy and unreliable CAPM financial decision models which created housing bubble burst and asset prices bubble burst trillion dollar market loss due to bet on the wrong side of macro, financial economy and investment scenario.
I have been warning global economist, market analysts in China, US, Asian, European central banks, financial market risk management conferences that global central banks, financial market decision models still using 30 year old classical monetary economic theory with monetary policy based on conventional money supply growth tie in CPI inflation and GDP , ignoring financial, industrial assets ( oil, commodities, housing, equities, bond ) prices impact on CPI, and scenario resulted underestimate the asset prices bubbles impact on macro, financial, industrial markets, resulted bubble burst, run away inflation, credit , financial crisis, recession..
While the financial market decision models supported scenario still rely on classical capital market asset price model based on statistical, probability models fail to relate macro, financial, industrial economic impact on daily asset prices, resulted betting on the wrong scenario , trillion dollar market loss
Even 100 % efficient market with all the market information can not stop speculators using daily investors sentiments ( government ,business, economic information ) to push overheated bubbles to burst and financial crisis.
Only Proactive structural monetary , economic, fiscal policy to include asset pricing mechanism into inflation, interest rates, and using top down, bottom up approach in asset pricing mechanism, tracking monetary, economic, fiscal policy and impact on macro, financial, industrial economic and daily asset prices and investors sentiment can track, predict last 20 year global financial crisis, recession.
details on http://www.osawh.co,/cnetmaf.html http://www.osawh.com/mortdefa.htm
http://www.osawh.com/econ.htm http://www.osawh.com/GCaptbj.html http://www.osawh.com/value.html