A few months ago, I posted my translation of a simplified explanation of the financial crisis which was originally authored by Leopoldo Abadia. Mr. Abadia has since written a book (in Spanish) about the crisis and focused much of his updates on the situation on Spain.

Jonathan Jarvis, a grad student at the highly regarded Art Center of College of Design in Pasadena, California (source of such designs as the Mazda Miata and Nissan Pathfinder, and Chip Foose’s alma mater) has created a very nice animation explaining the credit crisis and its causes in a simplified way. I think it’s easier to digest than the written explanation I provided earlier, so I’m providing it below.

If you still aren’t sure what caused our current situation, spending 10 min. to watch the two videos is probably worth your time.

I remember back in 1999 when the insanity over the dot-com boom was sorely evident. Co-workers who had no investment experience at all were buying and shorting stocks and options on margin on a daily basis. Does an equal but opposite fervor exist on the other end of the spectrum? In a recent interview I heard on NPR, a business commentator suggested that because the market had not yet hit panic mode that the worst was yet to come. What do you think? Leave a comment below.

In the meantime, feel free to fill out the following simple poll:

How much of your positions have you taken out of the stock market since October 2008?

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As you may have guessed, I’ve been on hiatus from blogging because some other things have come up in life that have taken precedence. Back in early December, our baby boy came down with a urinary tract infection at less than 5 months of age. Subsequent tests showed that he had a congenital condition called hydronephrosis due to a ureterocele, a blockage causing urine to build up in his right kidney. We’ve been in and out of the pediatrician’s office, clinics, and children’s hospitals off and on for the past few months. We should find out at the end of this week whether or not he will need surgery.

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