The Roots of the Credit Crisis, Simplified

Are you still a little baffled about how the financial system came to be in such a mess? Here’s a very nice visualization of what happened.

By now everyone probably knows that the housing crisis has something to do with the fact that the economy has tanked, but the connection is still a bit vague if you’re not really into financial stuff.  There have been several times in the last few months when I’ve thought about trying to write a simple explanation of how low interest rates, risky mortgages, CDOs, and abysmal judgment (among other things) helped bring us into the financial turmoil that we’ve been experiencing for the last year.  But other topics have been more pressing, and it felt like doing a decent job would require multiple posts, so I kept putting it off.

But recently, thanks to Floatingdata.com, I found this video by Jonathan Jarvis that gives a visual explanation of the events and financial alchemy that got us into the present mess.  Even if you already understand the crisis, it’s cleverly and engagingly done.

The Crisis of Credit Visualized

About the author

Thomas Fisher, CFP®
Thomas Fisher, CFP®

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