Preview

ygjh

Powerful Essays
Open Document
Open Document
10042 Words
Grammar
Grammar
Plagiarism
Plagiarism
Writing
Writing
Score
Score
ygjh
We believe that everyone should be able to understand how the financial crisis came about, what it means for all of us, and what our options are for getting out of it. Unfortunately, the vast majority of all writing about the crisis – including this blog – assumes some familiarity with the world of mortgage-backed securities, collateralized debt obligations, credit default swaps, and so on. You’ve probably heard dozens of journalists use these terms without explaining what they mean. If you’re confused, this page is for you. Over time, we will be adding more explanations and more links to external sources, so check back for updates. (Some of the explanations on this page are simplified and not 100% accurate; their goal is to explain the key concepts to a general audience.)

Contents

Radio shows
Video
Other web sites
Articles on this page

Securitization, CDOs, and banking capital
Stock market vs. credit market
Crises of confidence and bank runs
Credit default swaps
Bank recapitalization
De-leveraging (or, where did all the money go?)
Separate posts

Currency crisis
Recession
Federal Reserve
Credit default swaps, herald of doom
Japan’s lost decade
Interest rates
Mark-to-market accounting: This one gets a bit technical, but the first part covers accounting in general and mark-to-market accounting
Risk management and value-at-risk
“Bad banks”
Sweden
Is saving good?
Bank capital, capital adequacy, and tangible common equity
Convertible preferred shares and the Capital Assistance Program
Nationalization
Macroeconomics of the financial crisis
Comparison of different toxic asset plans (by Mark Thoma)
Structured finance: This one presumes a basic understanding of what a CDO is.
Inflation expectations
Financial innovation
GDP growth rates and other economic statistics
Stress tests
Option and warrant pricing
Regulatory capital arbitrage (new 5/30/09)
Planet Money collaboration

National debt
Radio

This American Life, The Giant


Links: bergman | October 7, 2008 at 12:31 pm | excellent explanation. count chocula | October 7, 2008 at 1:13 pm | Awesome page! Mike | October 7, 2008 at 1:20 pm | Thanks for this site L. Shull | October 7, 2008 at 1:24 pm | I likewise saw Simon Johnson this morning and appreciate his ability to explain these complicated issues Ron Baldwin | October 7, 2008 at 1:39 pm | I was very impressed with Simon Johnson when I saw him on C-Span (one of the panel members) participating in a discussion at The Brookings Institute. stanley williams | October 7, 2008 at 5:48 pm | I cannot thank you enough for making a feared subject understandable S. Frazier | October 7, 2008 at 5:49 pm | I saw Simon Johnson on C-Span this morning Babu | October 8, 2008 at 9:28 am | Hi Darryl Cochrane | October 9, 2008 at 12:10 am | I’m another who saw Simon Johnson on C-span Babu | October 9, 2008 at 12:30 pm | Thanks for the explanation on bank runs and how asset vs liability issue has caused to the current problem James Kwak | October 9, 2008 at 3:32 pm | Babu, that’s a reasonably close analogy Babu | October 9, 2008 at 8:21 pm | James, Thanks and that helps Pingback: Scott’s Blog » Blog Archive » More Financial Crisis Info Rich | October 11, 2008 at 10:31 pm |
Continue Reading
View Writing Issues

You May Also Find These Documents Helpful

  • Best Essays

    Wk 6 Subprime Mortgage Crisis Final Team A Paper
    • 2391 Words
    • 7 Pages

    Wk 6 Subprime Mortgage Crisis Final Team A Paper

    Subprime mortgages are generally granted to borrowers who cannot obtain conventional mortgages due to insufficient or delinquent credit histories. These borrowers may be forced to take interest-only loan, which have lower monthly payment but are very difficult to pay off in the end. Problems with mortgage financing are the generally accepted cause of the financial meltdown that occurred between 2007 and 2008 (Gorton, 2009). The Subprime Mortgage Crisis, or "mortgage mess" or "mortgage meltdown," was caused by a precipitous rise in home foreclosures that started in 2006 and spiraled out of control in 2007 and 2008. The excessive use of subprime lending during the housing bubble caused an unprecedented foreclosure fallout, the effects of which caused credit markets as well as global and domestic stock markets to face a major financial crisis (Mayer, 2008). The goal of this paper is to address the subprime mortgage crisis, the effects prior to and after the crisis, and discuss who were the biggest players affected by this crisis. Finally, Team A will provide several concepts learned during the course of this class, which may help ensure that something similar does not happen again in the future.…

    • 2391 Words
    • 7 Pages
    Best Essays
    Read More
  • Good Essays

    James Thurber Dialectal Journal
    • 430 Words
    • 2 Pages

    James Thurber Dialectal Journal

    The way Mr. Martin expressly did everything in a certain way and the way his thought process went with it was very interesting how it decently caught my attention.…

    • 430 Words
    • 2 Pages
    Good Essays
    Read More
  • Powerful Essays

    The Gramm-Leach-Bliley Act
    • 1796 Words
    • 8 Pages

    The Gramm-Leach-Bliley Act

    The financial crisis of 2008 is considered by many economists to be the worst financial crisis since the Great Depression of the 1930s. First signs of the crisis started to show in 2007 when the price of houses started to fall rapidly in the United States and then around the world. This financial crisis resulted in the failure of many large US financial institutions, banks to be bailout by the United States government, and the stock markets around the world were affected. One of the major issues leading to the financial crisis was the rising default on subprime lending. Large financial institutions were in completion with each other for revenue and market share,…

    • 1796 Words
    • 8 Pages
    Powerful Essays
    Read More
  • Good Essays

    Finance Study Quiz
    • 660 Words
    • 3 Pages

    Finance Study Quiz

    2. The distinguishing feature of ‘modern banking’ emerges from the financial innovation known as ‘securitization,’ namely: banks pool assets (from mortgages to car loans) and sell the repackaged assets. Securitized debt’ is one of the financial innovations at the heart of the financial crisis 2007-08, and refers to the creation of bonds of different seniority (known as ‘tranches’) that are fixed-income claims backed by collateral in the form of large portfolios of loans (mortgages, car loans, credit cards, etc.).…

    • 660 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Richelle Sutton Case Study
    • 330 Words
    • 2 Pages

    Richelle Sutton Case Study

    Richelle Sutton, the dramaturg for The Mill on the Floss, did an overall great job in directing and encouraging the post-show discussion. The first “win” she had was when she introduced herself confidently and opened up the discussion for others. The confidence was actually a huge factor in setting up an educated, friendly environment. By asserting herself and asking specific, purposeful questions, the audience immediately knew that it was an important discussion. Also, by opening the discussion up for questions, Richelle showed that she had the ability to tuck away all of her research in order to listen to what the audience had to say. Her ability to put the audience first likely allowed people to ask thought-provoking questions that they’d…

    • 330 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Taylor Westerfield Invisible Disability
    • 526 Words
    • 3 Pages

    Taylor Westerfield Invisible Disability

    I really enjoyed the talk with Taylor Westerfield about her recent onset of disability. Her talk about how it feels like to live with chronic pain and an invisible disability was insightful. I hadn’t even heard about Ehlers–Danlos syndrome (EDS) or Complex regional pain syndrome (CRPS) before. She talked about a lot of important issues like how a disability can change relationships with people, how it can make it difficult to get around, and how it’s like to be looked at and treated differently when using a wheelchair versus without a wheelchair. She mentioned how her parents initially refused to acknowledge that she needed a wheelchair to get around because they didn’t want her to rely on it, and that her parents had trouble understanding what she was going through. She also discussed that maintaining a friendship with people is difficult because she can’t go out and make plans like college students typically do. What she said about how when people keep asking someone to hang out and that person keeps refusing then they stop asking is true. It was unfortunate that the only friend she had going through the same thing as her betrayed her by stealing her medication. She…

    • 526 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Money, Power, and Wall Street
    • 333 Words
    • 2 Pages

    Money, Power, and Wall Street

    The meltdown of 2008 struck the banks when they were unable to adequately deal with the financial crisis. Banks are designed to create and protect one’s wealth, but they took advantage of the people, and let people take many loaning risks that they couldn’t afford. Banks created the credit default swap which transferred credit of fixed income products between parties. In learning about the credit default swap in class, it is understood that the buyer receives credit protection, whereas the seller guarantees the credit. Therefore, the risk of default is transferred from the holder to the seller of the swap. But swaps allowed companies to shed the risks they didn’t want to take.…

    • 333 Words
    • 2 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Phsycology
    • 525 Words
    • 3 Pages

    Phsycology

    I found the “My Language” video very fascinating. I never really thought there was a possibility of mentally or psychologically disabled people communicating with the outside world because they communicated differently. I also assumed they couldn’t, simply was not able. It put a new perspective on how I think that they think. This shows you never really know what someone is thinking just by how they are acting or “showing themselves”.…

    • 525 Words
    • 3 Pages
    Good Essays
    Read More
  • Better Essays

    The Federal Reserve
    • 3909 Words
    • 16 Pages

    The Federal Reserve

    The world financial crisis began in 2006 in the United States housing and related mortgage markets. Soon it spread to the entire U.S. economy and then to the rest of the world. In August 2007, the turmoil moved from the securitized U.S. mortgage markets to the interbank lending market, causing it to freeze up. Before long people became concerned about the extent and distribution of the mortgage related losses, market participants lost confidence in one another’s credit-worthiness, and the market that provides U.S. banks and other financial institutions with their liquidity became illiquid as a result. Institutions such as large commercial banks, investment houses, and insurance companies are the base of the U.S. financial system and because of the crisis they lost the ability to borrow short-term from one another. The general macro economy had weakened causing debt deflation, falling asset prices, falling real estate prices, and falling commodity prices; feeding one another into a downward spiral. Finally in September 2008, the breakdown of the international banking system based on the dominance of the major U.S. investment banks, commercial banks and insurance companies amplified the turmoil, sending severe shocks through the world economy. The economic crash international in its reach was characterized by falling employment, income, and output across the globe. The entire U.S. banking and financial system collapsed as a social financial system similar to banking crisis of 1931. From this point forward, what at first appeared as a U.S. “subprime mortgage market crisis” revealed itself to be a world economic crisis of major proportions.…

    • 3909 Words
    • 16 Pages
    Better Essays
    Read More
  • Good Essays

    Reflection On El Hielo
    • 594 Words
    • 3 Pages

    Reflection On El Hielo

    Yes, but I would say that the Hielo video dazzle me. It is very emotional, and inspirational at the same time. The article about Nativist was important because I did not know what it meant. I liked how Carlos Moreno uses sarcasm, and the way he challenges people to learn about the Chicano/a meaning.…

    • 594 Words
    • 3 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Blue eyed experiment
    • 1020 Words
    • 5 Pages

    Blue eyed experiment

    I also liked the fact that she did not limit the experiment only towards racial discrimination and also touched on very important other topics such as sexism and ageism.…

    • 1020 Words
    • 5 Pages
    Satisfactory Essays
    Read More
  • Good Essays

    Death And Dying Sociology
    • 1774 Words
    • 8 Pages

    Death And Dying Sociology

    I found the section with Dr. Bartholeme particularly intriguing and educational. As a doctor for years he not only had to experience a terminal illness, he also lived the healthcare world on the other side. He pointed out in the discussion that he did not feel safe at the hospital as a patient. He also found out how valuable health insurance is a not only for when you are healthy but for the stage at the end. After a grieving period, he came to terms with the discovery of having a terminal illness. It showed how one man's will to spend his remaining life…

    • 1774 Words
    • 8 Pages
    Good Essays
    Read More
  • Satisfactory Essays

    Field Trip Reaction Paper
    • 217 Words
    • 1 Page

    Field Trip Reaction Paper

    I really enjoyed the introductions and question and answer session. It was really informational and I learned a lot from their backgrounds and experiences.…

    • 217 Words
    • 1 Page
    Satisfactory Essays
    Read More
  • Powerful Essays

    Recession in India
    • 9746 Words
    • 39 Pages

    Recession in India

    The recent financial crisis has put a major impact on all commercial sectors of India. We have covered the reason and causes of the financial crisis which emerged from U.S and impacted the entire world. Though the effect on banking sector was similar but it was corrected with proper measures and circulars. We have compiled the said report which helps in understanding what corrective steps were taken which…

    • 9746 Words
    • 39 Pages
    Powerful Essays
    Read More
  • Good Essays

    Global Economic Crisis
    • 645 Words
    • 3 Pages

    Global Economic Crisis

    The causes of the current global economic crisis are myriad as it is deemed that its reasons date back to the major transformations in the world economy in 1980s. However, there are reasons that are believed to have triggered the meltdown of the stock market. One of the major causes is the use of mortgage derivative products in selling a product that disguised the risks associated with the product. These were introduced as hedging technique and became commonly used lending criteria. The mortgages were also commonly sold for repayments of borrowings. People realized that the value of mortgage was more than that of the associated asset and defaults on mortgages became common. This resulted in a slum in property prices (www.financialcrisis.biz/what-caused-the-global-financial-crisis.php)…

    • 645 Words
    • 3 Pages
    Good Essays
    Read More

Related Topics