Wednesday, March 19, 2008

Credit Crisis Explained


I'm a lot like John McCain. OK, not really, but neither of us know much about economics. This is a problem, given that the economy is sorta in the crapper at the moment. For a simplified explanation, check out the story below (found at AmericaBlog).

[Excerpt]

Can’t Grasp Credit Crisis? Join the Club

I’m here to urge you not to feel sheepish. This may not be entirely comforting, but your confusion is shared by many people who are in the middle of the crisis.

“We’re exposing parts of the capital markets that most of us had never heard of,” Ethan Harris, a top
Lehman Brothers economist, said last week. Robert Rubin, the former Treasury secretary and current Citigroup executive, has said that he hadn’t heard of “liquidity puts,” an obscure kind of financial contract, until they started causing big problems for Citigroup. . .

Read more at: New York Times

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