The 88th Academy Award (216)
The 73rd Golden Globe Award (216)
The 69th British Film Academy Award (216)
The 68th American Directors Guild Award (216)
The 22nd screen actors guild awards (216)
The movie "Big!
The first sentence of Professor Sun Lijian, director of the Financial Center of Fudan University, was "I watched it twice". He admits that the first time he mainly focused on the plot, and the second time he understood some of the director's intentions from a professional perspective. This film is very commendable in its analysis of financial problems, and the reflection caused by it is also multi-dimensional.
in the film's plot, several groups of protagonists predicted that there would be problems with MBS (mortgage-backed securities) sooner or later before the collapse of the American real estate market, and gained returns by shorting.
In the traditional thinking, bears are regarded as evildoers, who led to the chaos or even collapse of the market. However, the film thinks that bears did not create the crisis, but the problem itself was there, and bears just found the unsolved problem.
Sun Lijian said that in economics class, teachers often tell students that speculation is a necessary mechanism for asset price discovery. Without speculation, prices will either rise or fall unilaterally, and it is precisely because of speculation that assets can maintain their due value in the market.
from this point of view, short selling is not only an evil, but also an element that makes the financial system run healthily. As the saying goes, "flies don't bite seamless eggs", only bears with problems will "find trouble". This is associated with the stock market crash of A shares last year. When the market fell sharply, many people pointed their finger at short selling, and short-selling tools such as stock index futures were forced to "break their hands and feet", but then people found that the market was still falling without short selling, which fully explained the problem.
Looking back, people have understood that the real reason for the stock market crash in 215 was to remove the high leverage allocated over the counter, and it was also the deleveraging of the real estate market that led to the subprime mortgage crisis in the United States in 28. In Sun Lijian's view, it was the US government and loose monetary policy that created the asset bubble game, and they let the real estate bubble blow bigger and bigger.
Shao Yu, chief economist of orient securities, said that due to the global economic and financial imbalance, funds from all countries have invested in the US bond market, which has also supported the ultra-loose monetary policy of the United States to some extent. The risk source is so much money gathered by the United States itself and other markets.
innovation should spread risks rather than hide risks
Of course, Wall Street is also to blame. They made finance extremely complicated, and after all kinds of detours, the primary market and the secondary market even became seriously out of touch.
usually, the price adjustment of basic products will affect the price of derivatives, but in reality, such transmission is distorted. I'm sure you're impressed by such a plot in the film: when the US property market began to adjust, the default rate of mortgage loans kept rising, but the financial product CDO (collateralized debt obligation) derived from mortgage loans did not have a linkage with the primary market, that is, the price did not fall, but rose, which made the bears who always insisted on their own judgment doubt themselves, and wondered if they were really wrong. This is also the cruelty of the financial market, and sometimes even if you take a clear direction, you will not win the day.
The real "evil" of Wall Street is that when peddling high-risk financial products, the risks are not fully revealed. Investors don't know what is "packaged" in the financial products they buy, and even don't know the losses they will suffer once problems occur. "People only look at the evaluation of rating agencies to invest, which is one of the important reasons why the primary and secondary markets are out of touch." Sun Lijian said that it is a moral evil to "pass on" the risks that should have been borne by financial institutions themselves to unsuspecting investors, and the returns they can get from investors are still very low.
Sun Lijian believes that the moral level is the most worthy of reflection in the 28 financial crisis. "The 28 financial crisis is not a traditional financial crisis, but a crisis of moral hazard. Wall Street knows exactly where the danger lies, but for them, as long as they sell it, it has nothing to do with themselves. And the more you sell it, the more it may lead to systemic risks, and it will force the central bank to save the market. "
So, is there anything wrong with all kinds of financial innovations and increasingly complex financial derivatives? Sun Lijian believes that the starting point of financial innovation is good, and most financial derivatives are products of risk diversification, which are neutral in themselves. The key lies in how to supervise and regulate.
In theory, risks can only be dispersed, but not completely avoided. Financial innovation such as asset securitization is a means of dispersing risks, in order to enlarge the denominator, so that the risks that each molecule needs to bear are small. A good financial system design can reduce the risks to near zero. At present, China is vigorously promoting financial innovation and developing various financial derivatives, which is operating according to the idea of diversifying risks, but remember, it is to diversify risks rather than hide them.
Will a large amount of liquidity brew a bigger short position
At the end of the film, it is mentioned that financial derivatives that caused great turmoil in the 28 financial crisis are resurgent. Why is this happening? Do we need to worry about the market repeating the same mistakes?
Sun Lijian believes that the biggest problem of the global economy at present is that we will only stimulate the economy by coping with the traditional economic recession, and put in a lot of liquidity, but it will not get results. Instead, it will create ups and downs in the financial market. Under the liquidity, various financial instruments are running, but only idling in the financial market and not serving the real economy. This is the problem, but it cannot be said that it is the fault of financial instruments. These liquidity "rampages" may indeed be brewing more dangerous big shorts.
"At present, what we are facing is an unprecedented state. All the liquidity put in is involved in the financial system instead of the real economy where it should go. The question of how finance serves the real economy deserves careful consideration. " Sun Lijian said that this vicious circle must find a solution, because the real economy needs finance, especially the high-risk business of innovation and entrepreneurship needs financial support.
Shao Yu also believes that when excess liquidity becomes the norm, the real economy can't keep up with the pace of the virtual economy, and the risks will gradually increase. "Financial innovation must return to the source of supporting the real economy".
will the "subprime mortgage crisis" stage a China version?
After watching the movie, look around us. It seems that the madness of the property market like the night before the explosion of the "big bear" is reappearing, so many people will ask, will the "subprime mortgage crisis" be staged?
"The form is different, but the essence is the same." Sun Lijian pointed out that we don't have to worry too much about complex financial products, because financial derivatives in China are far less developed than those in the United States, and products like CDS (Credit Default Clause) and CDO in movies are not available in China, but we need to be alert to the essence of the problem, that is, loose monetary policy injects liquidity, and funds eventually flow to the real estate market. Funds pile up the price, and the price effect will attract more funds to enter the market.
Shao Yu thinks that there is a bubble in the real estate market in China, but the problem is not so serious. On the one hand, the leverage of China's real estate market is not so great. At present, the overall leverage of 3% down payment is reasonable, while 5% or even zero down payment has been made in the United States. On the other hand, China's financial derivatives are not so complicated and huge, while the United States has built a derivative market hundreds or even thousands of times on mortgage loans, resulting in an extremely unstable "inverted pyramid". Asset securitization in China is still the most basic form, and there are not so many transmission chains to do harm to the financial system.
However, Sun Lijian also said that although Zhou Xiaochuan, the governor of the central bank, mentioned earlier that the proportion of mortgage loans to bank loans is not high, mortgage loans are only the primary market, and funds and trusts have also entered the field of mortgage loans through shadow banking, which is not reflected in the bank's balance sheet and its leverage is obviously higher. When buying funds can also share the real estate bubble, the problem is there.
So, from this perspective, perhaps the biggest inspiration from watching "The Big Bear" at this moment is that it is necessary for us to keep the greatest vigilance on the real estate market. As Mark Twain's golden sentence is quoted at the beginning of the film, it's not what you don't know that gets you into trouble, but what you are sure of, but it's not really the case.