Just finished Ex Angel Alex’s fine second installment of his pieces for This American Life on the economy. The takeaway:
- Ever since Lehman went down, everyone is afraid to lend money, at least in the amounts (in the billions of dollars) that make our economy move.
- The reason everyone is afraid to lend money is because, well, there’s a hell of a lot more money on the books that is of the imaginary kind; that is, those credit default swaps made Wall Street into a giant casino, and we’ve pretty much crapped out.
- Everyone was in on the game, which means that all the banks and funds going down together.
- An equity stake in these companies is still alive, thanks to some heroic unknown senator.
- Still, it’s bad. Really, really bad. I mean, yikes.