The Credit Crisis Explained in Plain English

by Jay Thompson on March 19, 2008

Stymied trying to figure out the “credit crisis”, “subprime meltdown” or whatever it is being called today?

Yeah, me too — though I’ve tried and learned a LOT lately about mortgage markets. It’s a very complicated matter, involving things like “collateralized debt obligations” (CDOs), and “liquidity puts”.

Don’t know what a liquidity put is? Don’t feel bad. Even Robert Rubin, a former Secretary of the Treasury and current Chairman of Citigroup wasn’t familiar with the term until Citi got into trouble with them. (See Fortune article on why Rubin and Citi didn’t see the subprime mess coming.)

You can read for days on end about the crisis, and still sit there scratching your head in total confusion.

Enter the New York Times.

The Times has a great article out today, Can’t Grasp Credit Crisis? Join the Club.

It explains in relatively plain English much about the credit crisis.

Hat tip to Scott Brunner at VAR Buzz.

[tags]Credit Crisis, subprime meltdown[/tags]

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Mortgage Refinancing

Well it all started when Clinton signed the no capital gain tax bill if you own for 2 years or more as your primary residence.

Also, he allowed wall street firms to package and buy loan packages from banks and lenders so guidelines became relaxed.

Bush focused on avenging his father's humiliation in Iraq, gas was $1.69 right before invasion, now it's ?

Don't mistake me for a republican...more of a die-hard liberal.. Yeah !!

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