09 October 2008

The financial meltdown partially explained

I had a client call me this afternoon and cancel not only our next appointment, but our entire job. It seems he's lost, according to him, a half million dollars in the last week-and-a-half. Clearly and understandably, all bets are off.

So Wall Street has begun to affect my Main Street. Frankly, I could never hear that phrase again and die a happy man. So I'll personalize it even further, Wall Street has affected Seventh Avenue North. I want to believe that this will be an isolated incident, but I have a feeling that it won't be. Oh well, I kept my head through the boom and I'll keep my head through the bust.

I stay on top of financial stuff and I do it by reading the financial papers, or more accurately, skimming the financial papers. Equally helpful is a great little show on NPR called Marketplace. Marketplace has its own section on NPR's website and Marketplace's editorial staff does a great job of further exploring financial and economic concepts.

Here's a video put together by Marketplace's Senior Editor, Paddy Hirsch. Hirsch explains in very clear terms what a CDO, or Collateralized Debt Obligation is. CDO's are partially responsible for the current financial crisis. Give it a watch if you're interested in understanding some of what's going on.


Crisis explainer: Uncorking CDOs from Marketplace on Vimeo.

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