For those of you who are wondering what the hell is going on with our economy, I suggest you listen to these two episodes of This American Life.
The first episode (Giant Pool of Money) was produced about 4 months ago and gives the best explanation of the Subprime Housing Crisis that I have ever heard. I highly recommend it. It's incredible. The second episode (Another Frightening Show about the Economy) was produced last week, and gives an excellent accounting of what exactly is happening to our Financial System. These shows explain this economic mess in very simple terms.
- The Giant Pool of Money (95 Cents.)
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=355
and
- Another Frightening Show about the Economy. (Free)
http://www.thisamericanlife.org/Radio_Episode.aspx?episode=365
You can also get both episodes on I-tunes.
For those of you who have I-tunes, just pay the 99cents and buy The Giant Pool of Money. It will be the best 99 cents you ever spent.
(And then buy "Live Your Life" by TI. I love that song. I'm pretty sure it's an homage to the Numa Numa guy.)
Another Frightening Show about the Economy was a slow burn for me when I listened to it last night. It didn’t really sink in until I tried to sleep. I couldn’t. More because the whole thing was fascinating rather than frightening. I explained it to some co-workers this morning using our own company as an example. Scared the pants off a half dozen people. This thing is bad.
I don’t believe $700 billion and some cheap wooden arrows will be enough to get us out of it. It’s going to take a government audit of the banks, which is the last thing they want to do. But it’s what JP Morgan did in 1908 to stave off a similar meltdown. Until we know the extent of the mess, it’s going to be difficult to clean it up.
I totally agree. Which is why the whole “mark to marketing” change was ridiculous. We need more transparency in banks, not less.
We got into this problem through loose credit, and the government is trying to keep the economy going by maintaining loose credit. But the problem is much bigger than the US Government. So I don’t think it’s going to be enough. People and banks are just going to have to get used to higher interest rates.