I used to think I had a pretty fair grasp of economics and finance.  The subprime lending crisis which has now mushroomed into a full-scale credit meltdown has disabused me of any such notion.  It’s also shown pretty conclusively that no one else understands them either, including the financial sorcerers who conjured up this nightmare.

 

The best explanation of the credit mess that I’ve found so far is this May 2008 episode of NPR’s This American Life, titled The Giant Pool of Money.  It’s nearly an hour long but well worth listening to.