If You Really Want To Understand How The Financial Crisis Happened...

from the listen-here.. dept

In my initial post on the financial crisis, I suggested listening to an older episode of the radio program This American Life, where they described how the mortgage bubble happened, called "The Giant Pool of Money." It's a great way for non-financial types to understand the basic issues involved in the mortgage industry and how things spun out of control. I also mentioned that the guys who did that show have been working on a daily blog/podcast for NPR called Planet Money, which is also fantastic. They also put together yet another show for This American Life this past weekend to explain what happened over the last few weeks and why it is a Really Big Deal, rather than a situation where we should just "let the banks fail." I finally got a chance to listen to it, and it's great. It's called Another Frightening Show About the Economy, and it gets into even greater detail, peeling backing the complicated onion of our financial system, layer by layer, in a way that non-financial types should mostly understand. It is simplified -- no doubt -- but it's by far the best explanation I've heard anywhere. If you're trying to understand concepts like leverage, credit default swaps and the commercial paper market, go take a listen. If you already listen/read Planet Money, there are some repeat clips, as well as some new ones, and the whole show pulls a lot of stuff together from the last couples weeks of Planet Money.

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