Video: The credit crisis simply explained » VentureBeat
This is an absolutely fantastic video and helps explain many things to the untrained observer. A couple things though:
- Instead of blaming subprime mortgages on Alan Greenspan’s low interest rates, the video should explain that politicians actively tried to subsidize and otherwise favor subprime lending as a way to get more people to buy homes ; that most early subprime lending was actually based not on greedy brokers and bankers, but on a better measure of risk and the fact that subprime borrowers were an underserved market ; only then did greed and poor regulation let the thing go crazy.
- The video should do a little more to explain the role that banks and investment banks play in the economy and how they’re necessary. It does mention fleetingly that “Wall Street” is linked to “Main Street” but doesn’t explain that the flow of credit running from the financial system is the lifeblood of the economy.
- Also, the video mentions CDSs at the outset, but never explains what they are (oops).
This is nitpicking, because it’s a FANTASTIC video and it’s impossible to put in all of the facts of this very complex situation in a short, easy to understand film. I’m particularly endeared to this because of the similar Flash animation I once co-produced on the French public debt. These things are very useful.
