The financial/credit crisis and our recent economic woes looms large in everyone's mind these days. Even in my counter-cyclical student bubble haven, there are daily reminders (both on the news and in the flesh) of people who have been hurt by the recent economic downturn (much more trivially, my own paltry investments have taken a huge hit these last 10 days, to the point where I've stopped logging into E-trade to view the carnage). All of this has deepened my resolve to try and understand how this crisis originated, how it can be prevented in the future, and what our country's economic prospects are for the next year or two.
My usual source for this kind of knowledge is The Economist. Lately though, I've found the stuff on the financial crisis to be a bit incomprehensible (is it just me or are they being a bit too jargony?). Thus, after a steady dose of the Englishmen, I felt up-to-date on all the news (like which bank went down most recently), but the hows and whys were still unclear.
Today, I did some browsing and found three pieces that really helped me gain a conceptual understanding about the financial system and what went wrong. The links are provided below. The first two couch the crisis in the form of hokey stories. It might seem a bit Mickey Mouse, but the insights are powerful and the analogies accessible. I would classify these as must reads for anyone who wants to understand what is going on without having to decipher all the usual Wall Street gibberish. The third is a guest post on the Freakonomics blog: also very good, and goes through the key questions and players and also provides some insights into what might happen in the future.
Finally, if any of you have found other sources/websites that explain the crisis in easy-to-understand terms, please post a link in the comments. Thanks in advance.
Links:
1. Interfluidity blog: Credit Crisis for Kindergarteners
2. CNN.com: Glenn Beck
3. Freakonomics: Diamond and Kashyap on the Recent Financial Upheavals
3 comments:
not an explanation of the events, but I liked Kristoff's column on a related topic of CEO pay:
http://www.nytimes.com/2008/09/18/opinion/18kristof.html?em
Do you know what the practices are in Australia and Britain?
I also liked Krugman's column, as well as that Freaknomonics piece. I feel as though I now have a vague grasp of the crisis as it stands...unfortunately, there is little I can do about any of it!
For my own paltry investments, I'm just glad I'm not retiring anytime soon.
so what do you think, atheen - bailout = good idea? or is it like buying all the real and theoretical marbles?
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