A Picture Guide to the Financial Crisis (this is pretty cool)

[girl gone mad]

Via http://www.financialarmageddon.com">financial armegedden:

David Hendrickson, a professor of political science at Colorado College has created what he calls "a picture guide to the financial crisis." David originally put this information together for his students but has since published it in a form he describes as a "blogbook."

Here is the introductory entry to http://pictorial-guide-to-crisis.blogspot.com/">Cause for Depression entitled "The Overall Idea":

Think of it as a picture guide to the ongoing earthquake in the world of high finance. Through charts, graphs, and tables, we will try to understand the dimensions of the current financial crisis--its origins and causes, its likely consequences, its potential remedies.

In seeking to understand the crisis, we need to begin with the credit mechanism. We are living through the bust of one of the greatest credit cycles of all financial history. In order get a handle on the seriousness of the bust, we must register the mania that fed the boom.

I look first at some measures indicative of the financial turmoil. For those unfamiliar with the financial markets, this provides a birds-eye view of the most important indicators, together with links for fresh updates.

The next three sections deal with the causes of the crisis, in which we examine the role of the housing boom and bust, the general growth of credit market debt, and the explosion in derivatives. The general pitch here is that the crisis has arisen above all from the extremities of debt and leverage that built up in the financial system over a long period.

Then it’s on to a consideration of consequences and remedies. The basic question--how much insolvency exists within the financial system?--is vital in assessing the wisdom of various bailouts and rescues, the opportunity costs associated with the government-mandated maintenance of the "FIRE" sector (Financials, Insurance, Real Estate), and how the global imbalances that have marked the last fifteen years are likely to change.

I conclude with some lessons and a collection of paper topics for interested students to consider.

I think this might be a good place to start for anyone who wants to get a better sense of the crisis.

You can use the table of contents: http://pictorial-guide-to-crisis.blogspot.com/2008/10/table-of-contents.html

or to view an entire "chapter" on one page, use the labels, which are in the right hand column of the the table of contents page.

[FormerDittoHead]

1. Incredible - here's a winner from that resource...

http://pictorial-guide-to-crisis.blogspot.com/2008/10/six-lessons-from-financial-crisis.html

The writing of this is profound, however, this is one line that I will excerpt:

The most egregious rates of executive compensation ever produced the biggest failures of economic leadership ever.

[upi402]

2. I like this, from 'Lessons'

"3. We move inexorably toward the socialization of credit risk and a much larger role for the state in the direction of the national economy. Courtesy of Bush and Greenspan, Marx has made a comeback. In The Communist Manifesto, the fifth proposal in Marx’s ten point plan for placing the means of production in the hands of the proletariat was the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.” Marx didn’t get it quite right; we’re getting there via the dictatorship of the kleptocracy. But hey, it's a start."

That and the author's analogy of money and credit being like oxygen. Taken for granted until it's cut-off (in the financial system).