The Dummy’s Guide to the US Banking Crisis

Whenever I wade into a new topic like digital photography, gardening or what have you, I visit the local bookstore and get a "For Dummies" book to guide me. I figure that it's the best way to get up-to-speed quickly without actually looking like a dummy.

So, for those of you who want the 3-minute version of the present crisis, here it is in 20 short steps:

In 2001, following a massive stock market and capital spending bubble, Federal Reserve Chairman Alan Greenspan worried that the U.S. faced a severe recession. He began cutting interest rates down to 1% and kept them at that level until 2004, raising them slowly only 0.25% at a time thereafter.

With interest rates so low, the financial services industry sensed a lot of money could be made and went all in on r...


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