Research On The Stock Market Bubble Of US And Japan

From the Holland Tulip bubble which is the earliest one in the history, to the "Japan bubble economy" which leads to the slump on Japan economy for more than ten years, the burst of bubble economy would bring catastrophic loss to the country and the people. Bubble economy is the important reason of the economic crisis. It could arouse the financial turbulence when the bubble burst, which has provided a hotbed to economic crisis. Stock is one of the main bubble economy carrier, the stock market producing a bubble easily, and it leading to bubble economy ultimately easy to cause to the bubble of other fields. Stock market bubble is always the foreboding of the bubble economy, which would makes the stock market crash, brings heavy losses to stock holders and economic growth, then if being able to not keep within limits effectively; Even more bringing about an economic crisis that makes country economy collapse. We ought to discover stock market bubble as soon as possible, and adopting appropriate measure resolving the bubble before it is appearance. At the same time, we may face the problem that bubble economy brings about squarely, knowing among them inherent regularity well positive, makes the loss that they bring about to minimization.The stock market foam is also the real problem that the Chinese scholar shows solicitude for recently. The stock holders will suffer heavy losses when stock market take form bubble, the damage to national economic development is also comprehended without being told. The government can not press the stock market because of being afraid of the bubble economy, they also can not ignore the damage of bubble. The China stock market is adjusting violently. From the middle of 2005 to the third quarter in 2007, Shanghai composite index go up from 1000 points till 6100 points, people is happy to carry out investment, more and more money flood into stock market every day. But from the end of 2007 to now (April,2008) , the stock market felled down quickly, Shanghai composite index felled more than 45%, most of the investor doubt the future of stock market. We need to ask: What is the reason of Chinese stock market? Is Chinese stock market only one kind of amendment to high value of property, or the burst of bubble economy? And how solve the problem of bubble economy? All of these need us to research the stock market bubble to get the answer.This article takes the stock market bubble of USA and Japan as example in the 1980s, which were the first and second richest country at that time. Unfold the entire proceeding of the bubble from the beginning to the end. At the same time, we emphasize to introduce the reason of bubble come to being, and draw the valuable experience and lesson of foreign stock market. We try to find a suitable way to Chinese stock market compared with foreign market.This article consists of five parts. The first part is introduction, focusing on significance of topic, reviewed for content, the major innovation and the lack.On the second part we introduce the concept of bubble economy and stock market bubble the theory, and the analysis of the bubble economy. Including: harmful to the stable operation of the national economy; harmful to effective allocation of social resources; caused income inequality and harmful to social harmony development; through the impact of financial system to produce a serious economic crisis.On the third part we review the development of United States stock market bubble. The USA stock market came up and experienced the 1929 stock market crash and the 1987 stock market crisis since the 18th century. In this paper we analyze the bursting of the bubble of USA stock market in the 1990s. The reason of United States stock market bubble in the 1990s, I believe that includes the following factors: a serious imbalance in industrial development, intensification of economic structural contradictions, the marginal benefit of the investment dropped, the development of the IT industry in the establishment of high-risk capital, IT enterprises changed their train of thought inaccurately; the "Irrational Exuberance" of stock market; the FED raised interest rates seven times in a row.On the forth part we analyze the bursting of the Japan bubble economy on the late 1980s. The reason of the bubble economy, the author summarized as: Enterprise Income pulling increase of price, expected the increase of stock prices triggered feedback effect; The way in which changes in the financing of enterprises, keening on equity financing; prosperity under the background of ultra-low interest rates.On the fifth part we analyze the current situation of China stock market, and identify different from the United States and Japan during the characteristics of the stock market bubble, analyzing the extent of China stock market bubble, and trying to find out the crux of the development of China stock market, and make policy recommendations. First, with regard to the status of China stock market, I believe that include the following areas: Chinese changing structure of financial assets, trend of savings transferred to the capital market accelerated, institutional investors have grown, capital market is gradually opening to the outside world; Further deepen the reform of the interest; The《Company Law》and the《Securities Law》revised; Financing Securities Lending operations will be carried out. Secondly, the author expounded the problems of China stock market from the five aspects: administrative intervention and market distortions; policy market and the stock market volatility; investment products and price distortions; speculative investors and the market structure; Makers behavior and speculative frenzy. Again, the author analyzed the difference between China stock market with the United States and Japan from four aspects: the rapid economic growth of China; the particularity of RMB exchange rate; the changes of interest rates; household savings continue to increase. Finally, the author proposes a solution to the problems of the current China stock market: clear the position of government in the market, strengthen and improve market supervision mechanism; focus on the development of the system of disclose information, embody the principle of equity of the market, develop institutional investors; strengthen the opening of capital markets; rich financial investment products and tools.