The Crisis of Credit, Visualized

Having trouble figuring out what the Credit Crisis (ahem, Global Financial Meltdown, Great Depression II, Credit Freeze) really means? Media designer Jonathan Jarvis has created a simple video explaining the situation step by step. There's no alarmism here, just a straightforward explanation of the financial realities leading to our current, uh, predicament.

Discussed: treasury bills, credit, leverage, how banks make their money, mortgages (uh-oh), mortgage brokers, collateralized debt obligations (major uh-oh), credit default swaps, subprime mortgages, underwater mortgages, and more.

To be honest, there are so many steps involved in these transactions that it's all a little baffling. But I promise, if you have a cup of coffee and devote ten minutes to this video, you'll learn something.

See also: Let Public Radio Talk You Through the Financial Crisis.

(Via Daring Fireball.)