More on the financial crisis

For the past few weeks, news from Wall Street have opened the evening news,  raising fears of recession and, dare we say it,  depression.  Heck,  Freddie and Fannie have even been been mentioned during an SNL skit.  Bernanke and Paulson have become familiar faces,  as welcome to see as George W.   But do you really understand the words coming out of their mouths?  What is this sub-prime crisis that everyone keeps talking about.  What are credit derivatives?  Why do people say we are just at the tip of the iceberg?

Here are some articles/links/presentations to walk you through today’s financial crisis:

1. Subprime for Dummies. A stick-figure powerpoint presentation on the snowball that started this avalanche. Disclaimer:  I didn’t make it.  =)  Time Magazine has also come out with it’s own, politically correct 10 Steps to the Financial Meltdown.

2. The Monster That Ate Wall Street – an excellent Newsweek article on Credit Default Swaps.  You should also read Daniel Amerman’s Credit Derivatives Primer.

3.  FAQs of Lehman and AIG.  An excellent explanation of what happened to Lehman Brothers and AIG.  Answers the question: Why bailout one and not the other?

4. The Warren Buffet interview.  The full three-hour transcript.  Save it and read it during your daily commute.

Now you know what happened at the macro level.  How does that impact us?  Should we panic?  Here’s what you should know….

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Motherhood has a very humanizing effect. Everything gets reduced to essentials. ~Meryl Streep

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