Recession Causes, Impact Simulation Monetary,
Fiscal Policy Impact on Global CPI inflation:
Proactive
Structural Dynamic Simulation and
Double Dip Recession: Causes,
Onset,
Spread, Recovery,
Early Warning of Financial Crisis:
with
Applications to US Housing Bubble Burst Sub-Prime Mortgage Default Crisis Early
Warning
Warren Huang OSA Intl Operations Analysis
Website
:http://www.osawh.com/
/ http://www.osaglobalstrategicmanagement.com/ email: wh3928@yahoo.com
Abstract
This
paper demonstrated Huang’s 30 years pioneering proactive,
structural macro, financial, industrial econometrics, economic boom and bust
recession cycles, 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 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 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
conferences
on 2000 rate hikes, IT bubble burst and warning on 2003 Euro-events Asian/China
finance, capital market
conferences
University
International Financial Engineering Risk Management conference, warning top
investment banking, mortgage
bond
CDO executives on US housing prices slump, economic recession, 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
into
Granger causes and casualty analysis of .
US,
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 , 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 - May 7, 2008 at 2:49 pma
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
inflationary recession
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
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 speculato 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