A few people have been asking me to explain exactly what the financial crisis is all about – and in particular, how a fall in US housing prices can cause so much turmoil in the global economy. But there are much smarter people who are also great communicators out there who have done this far better than I can.
- A great place to start is the Baseline Scenario, which has a very informative collection of articles called “Financial Crisis for Beginners“. There are lots of links to more resources if you’re interested, including radio pieces and videos.
- A humourous (if non-politically correct) overview of the initial sub-prime element of the crisis is the now classic “Bird and Fortune” sketch from 2008. A great clip, even if these guys are suspiciously similar to John Clarke and Bryan Dawe on Australia’s ABC television network.
- A more technical, but still very accessible, overview of how debts get securitized, rated and traded is provided by Paddy Hirsch from Marketplace in a video here.
- To get to grips with what people mean when they talk about “bad banks”, Daniel pointed me towards this great episode of This American Life on Chicago Public Radio called, appropriately, “Bad Bank”. Long, but very well done.
- For more on the “fiscal stimulus” side of the story, Paul Krugman is pretty good at explaining why he thinks the government should spend now to save the economy and where the money is coming from to do it on an interview with NPR here.
- For a “consensus view” outlook for the US and how the rest of the global economy has been affected by the crisis (as of 9/2/09), see the February edition of “the Baseline Scenario”.
What I’m looking for now is the final piece – an easy to understand link between the US situation and the spread of the crisis to the rest of the world. While I found some interesting stuff on the World Bank site about contagion, it’s all a bit too economicy. I’m looking for something that comprehensively covers the transmission of the crisis through financial instruments, macro-economic policy, trade and investor behaviour, preferably all in a humorous 10 minute video. Any suggestions?