Simon Johnson, James Kwak and Peter Boone at The Baseline Scenario have been compiling a series of articles under the rubric Financial Crisis for Beginners, the latest being Financial Innovation for Beginners. Collect ’em all!
The Baseline Scenario
Financial Crisis for Beginners
What happened to the global economy and what we can do about it
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.)