{"id":156,"date":"2009-03-13T09:35:16","date_gmt":"2009-03-13T17:35:16","guid":{"rendered":"http:\/\/www.scott-n-katie.com\/blog\/?p=156"},"modified":"2009-03-13T09:35:16","modified_gmt":"2009-03-13T17:35:16","slug":"day-30-financial-crisis","status":"publish","type":"post","link":"http:\/\/www.scott-n-katie.com\/blog\/?p=156","title":{"rendered":"Day 30: financial crisis"},"content":{"rendered":"

I just watched last night\u2019s Daily Show episode<\/a>, where Jon Stewart takes it pretty badly to Jim Cramer (who was to me, until very recently, just that crazy guy on that one CNBC show).  But the entire episode felt like relief \u2013 like Jon Stewart was venting for all of us who don\u2019t understand why we as taxpayers are being stuck with these huge bills for a crisis that we didn\u2019t create.<\/p>\n

Or did we?  We recently took out what I consider to be a very reasonable mortgage and Wells Fargo (our bank and mortgage lender) did a pretty exhaustive check of our financial standing.<\/p>\n

But, if several years ago, a bank had come to us and told us we could get into a house we really liked with a bad loan, would we have known it was a bad loan?  I\u2019m sure there are people who game the system, but I\u2019d suspect that the majority of average Americans wouldn\u2019t understand that a particular mortgage is unrealistic until it\u2019s too late.<\/p>\n

Regardless, the damage is done, and something has to happen.  The American banking system is too important to fail so either the government has to pump a lot of money into the system to keep them afloat or house prices will have to make a dramatic and sudden rebound.  Or the government will keep stuffing smaller amounts of money into the system until housing prices rebound.  Assuming they ever reach the levels before the crisis within a reasonable amount of time, which is not a small assumption.<\/p>\n

I\u2019ll stop here, because I don\u2019t want to seem like an expert on what\u2019s going on, but I\u2019d urge anybody who has a few hours and wants to understand what\u2019s going on to check out these three This American Life episodes, which do a great job of spelling out the causes and consequences of the crisis in a way that didn\u2019t require any economics classes:<\/p>\n