Understanding the Financial Crisis

Haven't posted lately. To some extent this is because it didn't seem like anyone was reading the blog. So, if you read this post, please leave a comment to encourage me to continue posting (or ask a question, or agree/disagree, or whatever).

Thought I'd pass on this great resource for understanding the current world financial crisis: A Personal FAQ on the Financial Crisis of 2008 by Prof. Ivo Welch at Brown University. Another good resource for those without much economics background is the daily Planet Money podcast from NPR. As with most accounts of the crisis, these are both focused on the effect of the crisis in the US (after all, that's where it started).

Here in Australia we seem to be in better shape: sub-prime lending wasn't nearly so prevalent here; the banks appear to have been more conservative, leading to higher capital levels; mortgage loans are NOT non-recourse; and the Reserve Bank has more room to cut interest rates than the Fed.