What is an asset bubble ?
Garber, P.M. (2000): A bubble is present when the price of an asset differs significantly from its fundamentals.
Kane, Edward and Kindleberger, Charles (2004): bubbles appear in the last stage of an economic boom, when expectations are irrationally optimistic.
Kindleberger and Aliber, (2005):“an upward price movement over an extended period of 15 to 40 months that t
bubble
default on mortgage repayments
Bankruptcy of financial company
Relief loan to financial institution by US government
US government aid more than 10,640million dollars for financial institution
US government prime the pump to improve the economy Many
US government was trying to boost their economies with extra spending
systematic enforcement of exit strategy
-Discussion ab
bubble burst. Yen carry assets were paid off again.
3) Japan continued to retain the zero interest rate and the U.S. rose the interest rate so that Yen carry trade began. Due to the subprime mortgage crisis, Yen carry assets were paid off.
The IMF Staff’s paper analyzes the relation between yen carry trade and subprime as below. “This figure is the scatter chart of monthly change in n
economic impact but also far greater effects on both the nation and its people. Real estate is critical for the welfare of the citizens and important for political stabilization. As such, the Chinese government has to intervene, manage and control.
When the housing prices began surging in 2006, the State Council published six regulative measures in May to adjust the structure of residence sup
II. Yen carry trade
II. 1. What is Yen carry trade?
II. 1. (1) Typical meaning
The typical meaning is “borrowing at low interest rates in yen and using the loan to buy higher yielding assets elsewhere.” During the past decade, the trade has become a “staple” for many investors. One of the most popular forms of the strategy exploits the gap between US and Japanese yields. Anyone