If you don't understand a whit about what's happening with the credit crisis and the whole subprime mortgage mess, here's a primer - in cartoon form - at Joey deVilla's Accordion Guy blog: Link
Or, if you're literary and like readin' words, the New York Times has a nice write up.
Raise your hand if you don’t quite understand this whole
financial crisis.It has been going on for seven months now, and many people probably feel as if they should understand it. But they don’t, not really. The part about the housing crash seems simple enough. With banks whispering sweet encouragement, people bought homes they couldn’t afford, and now they are falling behind on their mortgages.
But the overwhelming majority of homeowners are doing just fine. So how is it that a mess concentrated in one part of the mortgage business — subprime loans — has frozen the credit markets, sent stock
markets gyrating, caused the collapse of Bear Stearns, left the economy on the brink of the worst recession in a generation and forced the Federal Reserve to take its boldest action since the Depression?
My old boss use to say to people "good ain't cheap, and cheap ain't good." Well, cheap money proved out to be not good. Should have kept rates higher so people would only buy houses who could afford to pay.
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This affected more than just rich people. There were a lot of people who were first time buyers that this affected. In my office and circle of friends alone, about 60% of them were affected by this. It wasn't just people who bought homes, there were people who refinanced too.
Basically, a lot of people put themselves in debt or ruined their credit.