What Happened to the Economy?
No response, Nov 11, 2008Understanding the Wall-Street and global economic meltdown is within the thinking capacity of almost every human being, but it helps to have a great teacher. Paddy Hirsch, senior editor of Marketplace, does the best job of explaining the arcane financial instruments wreaking havoc in the global markets. There are more fundamental problems at work, but he gives an excellent overview of the really tricky aspects that are driving the titanic’s plunge right now.
If you’re curious about how Lehman Brothers, AIG, and other big insurance and investment firms have failed, you could do worse than listening to Mr. Hirsch. If you only have time for a few videos, I recommend watching the pieces on Collateralized Debt Obligations and Credit Default Swaps and the excellent 60 Minute specials linked below as well. All the videos will make your knowledge quite formidable and probably help you lose sleep.
If you want to dig really deep into the fundamentals, Chris Martenson’s Crash Course is the best material you will find. I’m trying to keep the resources mentioned here relegated to the more politically neutral, as issues surrounding economics and energy can be very politically divisive, however, you’ll see some editorializing from commentators here and there. Use your own brain to make judgments though!
Understanding Collateralized Debt Obligations
Crisis explainer: Uncorking CDOs from Marketplace on Vimeo.
Understanding Credit Default Swaps
Untangling credit default swaps from Marketplace on Vimeo.
The Credit Crisis as Antarctic Expedition
The credit crisis as Antarctic expedition from Marketplace on Vimeo.
Understanding Naked Short Selling
Getting naked in short selling from Marketplace on Vimeo.
Understanding the Exchange Market versus the Over the Counter Market
Over-the-counter, over the top from Marketplace on Vimeo.
Excellent 60 Minutes specials on Credit Default Swaps and AIG (Where was this reporting two years ago?)
Wall-Street’s Shadow Market
The Bet that Blew Up Wall-Street
A Second Mortgage Disaster on the Horizon?
Where to Follow Ongoing Economic News
These sources have been much more reliable than the mainstream media, as I was following a few of these well before “The Credit Crisis” was a christened term.
- Mish Hedlock
- Michael Panzner
- Chris Martenson
- George Ure
- Automatic Earth
- Solari
- James Kunstler (Updated every Monday. Sometimes hilarious, sometimes depressing, always controversial, but usually right about Big Picture issues.)
The End
And once you feel like you’ve learned enough to be dangerous, you can read Michael Lewis’s homage to Wall-Street: The End. Michael Lewis is probably the best financial writer out there, and one of the better writers period — and this piece is mind-blowing.
Updated: 12/21/2008:
Not to be outdone, Niall Ferguson, author of The Ascent of Money, writes Wall-Street Lays Another Egg.
Also, Nassim Nicholas Taleb, author of The Black Swan, on PBS is worth the watch.